Out and About - The horns of a dilemma

On one horn, see a condo or co-op. On the other, a single-family home. Buyers often wonder which makes the most sense. The answer comes in two parts, the most complex of them difficult to ascertain at this particular moment in the real estate market.

The conventional wisdom has been that single-family homes hold, or even, increase their value better than apartments. However, for a number of reasons, that perception was correct only before home ownership rose to unprecedented levels: Low mortgage interest rates and "creative" financing made renting an almost indefensible alternative; demographic and social shifts caused home ownership to become fashionable, even trendy; investment returns in the stock market were pallid by comparison with the annual appreciation of apartments and single-family homes; and developers responded to consumer demand by vigorously adding to supply.

Since the purchase price of condos and co-ops, which usually are smaller than single-family homes, is relatively low, the foregoing changes have propelled apartment prices upward. Their cost per square foot of living space has skyrocketed way beyond what single-family homes often command. When developers built, consumers kept on coming. It's about first-time buyers and downsizers choosing a more urban existence.

The basis of the conventional wisdom is that an apartment generally lacks distinctiveness. Homes can be actually unique, whereas most condos and co-ops are like most other condos and co-ops. There are differences, of course, but virtually each apartment in a line is going to have the same layout as every other one in that line. Building to building, there may be few differences as well. Even in small condo conversions, as regular readers may be weary of seeing in this newsletter, the sameness of granite countertops, stainless steel appliances, marble-tiled baths, gas fireplaces and recessed lighting can be blindingly boring. Yet the prices and convenience of such real estate obviously have wide appeal.

This little meditation was intended to put to rest the uncertainty about which investment is the better. But the statistics right now are, alas, a muddy mess. In the District, apartment prices in March were 3.1 percent lower than they ended last year; for single-family homes, the decline was 5.9 percent. In Montgomery County, the price of condos and co-ops in March went up 2.9 percent, but home prices increased 5.6 percent. In Alexandria, apartment prices soared 8.4 percent, and single-family homes slid by 2.5 percent.

What no one knows is which way the market is headed. Based on rising interest rates, greater government concern about easy money for the under qualified, and the mushrooming supply of new apartment buildings, the betting here is that both the prices and appreciation of condos and co-ops can only fall behind that of single-family homes. It's already starting to happen in Montgomery County, where the growth in unsold apartment inventory is substantially outpacing that of single-family homes. At the same time, last month's apartment sales were off by 8 percent compared with the preceding March, while home sales activity decreased by 6.4 percent. In D.C., condos and co-ops still in search of buyers at the end of March was up 234.4 percent compared with 113.6 percent for single-family homes, though respective sales were down 11.4 percent versus 12.2 percent. Alexandria's inventory of active listings rose by 108.3 percent for apartments and 196.4 percent for homes, and sales fell by 9.4 percent and 2.3 percent respectively.

Beneath these figures, in a period of elevating interest rates, however low by historic standards, expect demand for single-family homes to grow and that for apartments to slide.

Okay, that's the economics. Now, finally, for the answer to the second question posed at the top of the page. If it's property that a buyer plans to live in, the only answer centers on lifestyle. If apartment living appeals to the buyer more than home ownership, then that is all the analysis a buyer needs to conduct. Simple, right?

The inspiration for these comments centers on two properties seen this past week. One is a beautifully renovated corner semi-detached 1910 home with a total of four bedrooms and three baths, front porch, patio, deck, upscale in-law suite, tin ceiling, Corian kitchen counters, gas fireplace, hardwood floors an attached garage and a location northeast of Lincoln Park. Everything about this home is appealing, including the family room, efficiently designed kitchen, décor and 2,701 square feet of space. This rowhouse on a bus line to downtown from extended Capitol Hill should easily fetch its price of $664,000. Per square foot, the cost is $245.

The second property, or properties, is a pair of extraordinarily sleek loft-style condos within a handsome Federal rowhouse near Logan Circle on an unusually inviting street. Each unit has two bedrooms, two spa baths, expensive appointments throughout, gas fireplaces, European washer/dryers, recessed lighting, private patios or roof deck, secure parking for one car and abundant natural light, including skylights. Together, these stunning units total 3,510 square feet, and that includes 640 square feet of an unfinished partial basement. In an admittedly hotter neighborhood than that of the rowhouse above, these apartments are offered at reduced prices of $714,000 and $814,000. Per square foot, they average $435 per square foot, which many would think of as good value for the drama and the location.

Which property is most likely to hold its value? In which one, would you prefer to live? It's not only about money. It is, to flog a hobby horse, about lifestyle.

Some of the other properties listed by various brokers and seen in the past week:

• In Arlington's Maywood neighborhood, a modest three-bedroom, two-bath brick rambler true to its 1958 vintage. One of the most modest homes on its block, this little house has a slightly improved kitchen, small yard and opportunity for expansion only on its current footprint. But the price of $600,000 is appropriate.
  
• A modest two-bedroom, one-bath centrally air conditioned condo on the top floor of a conveniently located Dupont Circle building. Although boasting granite countertops, the small kitchen has outdated appliances and the so-called dining room is barely more than an extension of the entry hall. But the views are nice and open, and there is a washer/dryer in the 1,140-SF unit, which is overpriced at $549,000 with a $259 monthly fee.
  
• In a transitional neighborhood near Ledroit Park, a three-bedroom, two-bath home within sight of a Department of Public Works storage yard. This brick rowhouse has a small, somewhat renovated kitchen, decent baths, good closets, carpeting on the second floor, nice old floors and a pleasant, if dark, finished basement. Reduced from $529,000 when it was listed in February, the property is now offered at $499,999, plus $10,000 in closing help. Taking into account only the space and quality, it's a good price.
  
• A well renovated three-bedroom, two-and-a-half bath bungalow on a very busy Chevy Chase, Md., street. The house in Norwood Heights has an appealing front porch for folks who like to watch the traffic, a kitchen with granite counters and decent cabinets, and a lower level that would embarrass no one who appreciates the in-laws. There even is a detached garage along with off-street parking for at least four cars. But the price, reduced from its original $750 in January to $725,000, is still too high by $25,000.
  
• In Crestwood, a four-bedroom, two-and-half bath 1923 semi-detached Wardman rowhouse that now is being marketed as "reduced - what a deal!" So why has this gracious old home been sitting on the market for a 272 days? The house is a strange mix of quality updates (renovated kitchen with top-quality appliances, granite counters, maple cabinets) and poor attention to detail such as that old chipped radiator in the kitchen; rooms that technically are bedrooms but now are walk-in closets; and two of the ugliest updated baths anywhere. Walking in, the great bones create an eagerness to see more. Two steps later, the funny colors, marred paint and the mismatched parts that aren't updated are a turnoff. And then there would be the mounting dollar signs to fix it up on top of the $795,000 price tag.
  
• A truly exceptional five-bedroom, four-and-a-half-bath, three-level detached house near the Lybrook neighborhood of Bethesda. With a stone front, beautiful stained-wood garage doors, Brazilian cherry floors, peerless center island kitchen, family room with surround-sound speakers, master suite with a luxurious master bath and his and hers walk-in closets that have copious built-ins, and q media room, this brand-new house in a verdant suburb has had no detail overlooked. At $1.925 million, it's a bargain.
  
• In the Palisades Park subdivision of Arlington, a lovely three-bedroom, three-and-a-half-bath townhouse close to Key Bridge with built-ins, walk-in closets, hardwood floors on the main floor and hallways, jumbo whirlpool tub, big kitchen with unfortunate laminate countertops, and a $73 monthly fee. Even with all this, the price of $895,000, from $910,000, is way too much – which explains why it has been on the market for more than two months.
  
• A chic, modern renovation behind an authentic 1890s façade of a three-bedroom, two-and-a-half bath semi-detached rowhouse north of Logan Circle that now has been turned into two very small, separate units - essentially two pocket condos. The upstairs unit boasts a living room so tiny it's not clear where to put the sofa, although there is a beautiful fireplace with granite surround and a kitchen lacking an obvious place to eat, plus powder room on the main level. The second floor includes two little bedrooms (would a Queen-size bed fit?) and a hall bath with a view of the neighbor's gutters and downspouts. The lower level unit is a one-bedroom, one-bath English basement and is even tinier. What's not tiny is the $749,000 price.
  
• In the far reaches of Capitol Hill north of Lincoln Park, a three-bedroom, two-bath attached rowhouse that has been untouched for years, except for a new roof and central air conditioning. It is being sold with a home warranty – no doubt for a good reason. However, unwarranted, by a gaping margin, is the asking price of $595,000.
  
• A three-level penthouse condo in Chevy Chase, D.C. with two bedrooms, a den, two and a half baths, a fireplace, nine-foot ceilings and 1,740 square feet of living space, much of it wasted by staircases. Other highlights of the apartment include a stylish open kitchen, two balconies, views of Virginia, plenty of closets, very nice baths, a garage parking space and hardwood floors, but no one has been willing to pay the asking price of $1.25 million with a $645 monthly fee that omits utilities.
  
• In Arlington's popular Lyon Park, a new bungalow more or less in the Craftsman style with five bedrooms and three and a half baths within its 4,355 finished square feet, plus a 380-SF attached garage. The glamour kitchen and family room are capacious, and the master suite's oversized bath and walk-in closet are bigger together than the good-size bedroom itself. There are many thoughtful touches in this three-level home, which occupies much of the lot, including solid six-panel doors, glass doorknobs, golden oak floors, kitchenettes on both the upper and lower levels, baths with tumbled stone flooring, and two zones for heating and cooling. The price of $1.475 million ought to be attainable for the developer.
  
• A Logan Circle 1977 two-unit rowhouse on a busy two-way street. Hollow-core doors speak to the quality, but the three-bedroom, three-and-a-half-bath house does offer some upgrades such as granite countertops, bamboo floors and a certificate of occupancy for the dim rental unit, currently producing $1,650 monthly. There is a parking space, too. Reduced to $875,000, the asking price remains overly aggressive after two months on the market.
  
• In Kalorama, an appealing two-bedroom, two-bath apartment with two-story living area in a 1925 pet-friendly building that was renovated almost 10 years ago. Its chief liability is the three-flight climb to the condo's front door. The apartment offers 970 square feet, an okay open kitchen, skylight, bright exposures through floor-to-ceiling windows, and two-car tandem (one behind the other) parking. If you like ruby-colored walls, you'll love the second bedroom. If the price of $620,000 is obtained, the contract will represent one more instance of drama overtaking practicality.
  
• A semi-detached rowhouse on a large corner lot that is located only by a stretch of imagination on Capitol Hill, as advertised, way past Lincoln Park and much closer to Benning Road. This 1923 dwelling has four bedrooms, two baths, a cement patio below a deck, and no hope of selling after a month and a half on the market at its laughable offering price of $699,900.

Items of Interest - April 22, 2006

TITLE ISSUES ARE CROPPING UP MORE OFTEN: According to a 2005 member survey by the self-interested American Land Title Association (ALTA), title problems were found in 36 percent of all residential real estate transactions (new and resale homes, and refinances), up from 25 percent in 2000. "The most frequent curative action taken last year was obtaining releases and/or obtaining pay-offs for discovered liens such as prior or existing first or second mortgages, unpaid child and spousal support, outstanding taxes and other judgments against the property. The next most common curative action was obtaining releases for assignment on deeds of trust/and or mortgages, followed closely by recording errors of names, addresses, or legal descriptions of the property. "The booming real estate market over the last several years has increased the number of transactions significantly, which means more title problems are found," said ALTA President Rande Yeager. According to ALTA, homebuyers and regulators alike have recently questioned the value and cost of title insurance. Title insurance is required by lenders prior to the issuance of a loan, even on a refinance, to assure that the title is clear. Before a policy is issued, an extensive search is conducted to locate problems so they can be rectified and the transfer of property and/or loan can proceed. Unlike other forms of insurance that focus on possible future events and charge an annual premium, title insurance is purchased for a one-time fee at closing and protects against loss arising from title hazards and defects that already exist. Title companies often search back 50 years through manual records to find and clear up problems, usually without involving the homebuyer or borrower. Not surprisingly, ALTA advises home buyers to purchase an owner's policy of title insurance in addition to their loan policy.

D.C. EXPANDS ITS FAIR HOUSING ACT: The Office of Human Rights says the 17th and 18th categories have been added to the Human Rights Act of 1977: protection of "genetic information" and "gender identity and expression." In legislation enacted by the District Council amending the Human Rights Act and approved by Congress, employers and health insurers are now prohibited from discriminating against an individual on the basis of genetic information (i.e. DNA that may indicate a person's susceptibility to certain diseases or conditions). For employers, the measure means, among other things, that they cannot request, require or administer a genetic test to employees or applicants for employment. In another amendment to the Act, individuals in the transgender or transsexual community are protected from discrimination in employment, housing, educational institutions and public accommodations based on their gender identity or expression. The effect of this amendment is to require that entities and individuals respect a person's gender identity or expression by treating that individual on the basis of how he or she wants to appear rather than the presumed gender or sex of that individual. Anyone who believes that he or she has encountered discrimination on the basis of gender identity or expression can file a complaint with the Office of Human Rights if the alleged act occurred on or after March 8, 2006.

CUT IT OUT: In a long and informative article about cutting gardens, Joel M. Lerner notes they should include at least three types of plant forms: spires such as liatris, gladiolus and salvia; round such as roses, peonies and marigolds; and lacy such as ferns, baby's breath and dill. Some vegetables such as artichokes can look great in big bouquet, as will branches of flowering trees and trailing vines such as vinca and ivy. You can add texture to an arrangement with foliage and ornamental grasses, and Lerner says planting a cutting garden doesn't have to be a big deal or occupy a big space. But a dogwood would, wouldn't it?

BUYERS CONTINUE TO EXPECT APPRECIATION: In a survey returned to Stewart Title by 1,125 first-time and repeat home buyers, U.S. home buyers expect their home values to increase in value by a median10 percent over the next year. The single-page survey was distributed to home buyers following closings in the last eight business days of March 2006. No home buyers anticipated that that their property would decline in value. The respondents' estimates were in line with the national average as reported by the Office of Federal Housing Enterprise Oversight (OFHEO), which found a one-year 12.95 percent average increase in housing values for 2005. Asked what one facet of the home buying process needs most improvement, they sounded two distinct notes: The amount of paper involved, and the amount (or lack of) communication in the transaction. "In this day and age of technology, buyers expect much greater use of technology and less paper - and they expect better communication from the parties in the transaction," said Dr. Ted C. Jones, senior vice president and chief economist, who formulated the survey and analyzed the results. "These findings validate the title industry's push towards a paperless process with electronic signatures and transaction management via the Internet."

OR NOT (SEE ABOVE): Seventy-one percent of consumers say it is likely that a housing bubble could occur in the U.S. within the next year, according to the latest survey for the Experian credit-rating agency by the Gallup Organization. Twenty-four percent say such a housing bubble is not likely. In contrast, a much smaller number of consumers, 32 percent, expect the collapse of a housing bubble within their own area in the next year, and 65 percent say it is not likely. When the time period is extended to three years, 42 percent say such a situation is likely in their area, and 56 percent say it is not. In May 2005, a similar question found a slightly less pessimistic view, with 37 percent of consumers expecting a housing bubble to burst within the next three years and 61 percent saying that was not likely. This year, about half of all Americans (53 percent) recognize the term "housing bubble" without explanation - up from 35 percent a year ago. Has a bubble burst anywhere? Not yet. When it comes to predicting changes in housing prices in their own areas, 38 percent of consumers say they expect housing prices to stay the same (27 percent) or decline (11 percent) over the next year- up from 29 percent a year ago. Sixty percent expect an increase. Among all consumers, 41 percent expect housing prices to rise by at least 5 percent, including 20 percent who expect increases of at least 10 percent. At the other end of the spectrum, only 7 percent of all consumers expect housing prices to fall by at least 5 percent, including 4 percent who expect prices to fall by at least 10 percent.

KEVIN COSTNER IS DANCING WITH DOLLARS: He paid $28.5 million for a 17-acre oceanfront property in Santa Barbara County last month, reports the Wall Street Journal. In the town of Carpinteria about 12 miles south of the city of Santa Barbara, the ranch-style property has almost 950 feet of ocean frontage; two dwellings that contain a total of five bedrooms and three bathrooms; equestrian facilities; and a polo practice field. He's hanging onto another home in the community after listing it for $24 million, apparently until work is finished on the new purchase. Costner also owns a ranch in Aspen and last month sold for $11.5 million a house in Hollywood Hills. Those wolves don't seem to be scratching at his door, but he'd better watch out for those California coyotes.

WHERE TO MARRY A MILLIONAIRE: Imagine where the nation's millionaires reside, and you may first think of fast-paced New York City, glamorous Los Angeles, or innovative San Francisco, notes Kiplinger's. But while these areas boast some of the largest numbers of wealthy residents, you actually have a greater chance of meeting a millionaire in less obvious locales - say, Los Alamos, N.M. or Sarasota, Fla. It comes down to simple arithmetic. The Big Apple, for example, has by far the most millionaire households - 700,195. But with more than 6.8 million households in the New York metropolitan area, only one in ten boast a net worth of $1 million or more. On the other hand, in Los Alamos, you double your chance of meeting a millionaire. The town may have fewer than 8,000 households, but one in five is worth at least a million bucks. The reason: The main industry in town is the famed Los Alamos National Laboratory, a magnet for well-paid government scientists. As a whole, about 8 percent of the nation's households are millionaires. The top cities tend to fall in one of three categories: They are popular with wealthy retirees, are home to innovators and gifted talent pools, and have a high concentration of corporations and highly paid executives. Also, the wealthy also seem to gather near the country's coasts. Nine of the top ten cities on Kiplinger's list are on the Atlantic, Pacific or Gulf coasts. And Florida seems to be one of the most popular states among millionaires - three of the places with the highest concentration of über-wealthy are in the Sunshine State, which has no estate tax.

BUILDER CONFIDENCE TEETERS ON THE BRINK OF PESSIMISM: Rising mortgage rates, continued affordability issues and subsiding demand from investors/speculators are prompting single-family home builders to adjust their perspectives on the new-home market, according to the National Association of Home Builders/Wells Fargo Housing Market Index (HMI) for April. The HMI declined four points from a downwardly revised reading in the previous month to hit 50 for the latest report. The HMI gauges builder perceptions of current single-family home sales and sales expectations for the next six months as "good," "fair" or "poor." The survey also asks builders to rate traffic of prospective buyers as either "high to very high," "average" or "low to very low." Scores for each component are then used to calculate a seasonally adjusted index where any number over 50 indicates that more builders view sales conditions as good than poor. All three component indexes slipped this month, with the largest decline registered for current single-family sales. That component declined five points to 54 in April, while the component for sales expectations in the next six months was down four points to 58 and the component gauging traffic of prospective buyers declined a single point to 39.

PROBABLY HIS THEATER TICKETS WOULD SELL HIGHER: The Bel Air, Md., boyhood home of Abraham Lincoln assassin John Wilkes Booth has failed to sell at auction, according to the Baltimore Sun in Realtor magazine. Only 25 people showed up and only two were registered bidders. The auctioneers started the bidding at $875,000, but it dropped quickly until it hit $805,000, then was withdrawn. The seller Robert Baker and his wife Beth, who own a landscaping business, bought the house at auction in 1999 for $415,000.

FORECLOSURES ARE PICKING UP, ESPECIALLY IN THE MIDWEST: As home-price appreciation has tapered off and mortgage rates have risen, foreclosure rates are rising, according to the Wall Street Journal. The rate of foreclosure - the process by which lenders can ultimately take back the properties that secure mortgages - is a key indicator that real-estate analysts and investors use as a signal of market distress. In the past several years, foreclosures across the U.S. have been hovering around historically low levels, as home prices have risen nearly 50 percent in five years. Now, a survey of the latest data confirms, that is starting to change, with an uptick across the U.S. in foreclosure rates and mortgage delinquencies (or late mortgage payments). But even the new higher rates of foreclosure and delinquencies are still low in historic terms. Nationally, the number of mortgage loans that entered some stage of foreclosure rose to 117,259 in February, up 68 percent from the same month a year earlier, according to the online foreclosure-data service RealtyTrac. Delinquencies are up as well. Data provider LoanPerformance reported that 3 percent of the most vulnerable loans - those made to borrowers with less than a stellar credit history - were 90 days delinquent in February. That is up from 2.84 percent in February 2005. Meanwhile, 90-day delinquencies for loans made to borrowers with better credit were up to 0.76 percent in February, from 0.67 percent a year earlier. The data show that three states in the Midwest consistently have among the highest rates of loan foreclosures and delinquencies: Indiana, Ohio and Michigan. Behind the change are two primary drivers, said Lou Barnes, a partner with mortgage banking firm Boulder West Financial Services in Boulder, Colo. One is family economic distress, often related to job loss or divorce. Another is a slowing pace of home-price gains.

PLEASE PASS THE BUTTERMILK: Old fieldstone walls built in the 18th century still can be found from Maine to Pennsylvania, but many are being taken down to meet demand for salvaged-stone fireplaces and front walkways, according to This Old House in Realtor magazine. Some are dismantled and sold to stoneyards by property owners; others are broken down by thieves looking to capitalize on their increased value. A palette of lichen-encrusted fieldstone currently is priced at about $210, marking a 45-percent gain from $145 four years ago. Stone Wall Initiative founder Dr. Robert Thorson calls fieldstone "the signature for the rural New England landscape." Thorson, a University of Connecticut geology professor, is encouraging the preservation of the 150,000 miles of historic walls that remain standing, underscoring their importance in guarding against erosion and providing homes for numerous animals. Thorson says consumers who want to duplicate the historic look can give new stone an aged appearance with a folklore recipe of buttermilk and moss. He didn't specify quantities.

HOW'S THIS FOR SPIN: The pace of new-home construction continued what the National Association of Home Builders (NAHB) termed "its orderly cooldown" in March, dipping 7.8 percent for the month. The results followed a brief surge earlier this year caused in part by unseasonably pleasant winter weather across the nation. Total housing starts dropped to a seasonally adjusted annual rate of 1.960 million units in March, the Commerce Department reported. The rate of construction for the first quarter of 2006 was 2.131 million units, the strongest pace for any quarter of the current economic expansion. Single-family housing starts were down 12.0 percent for the month. "The sizeable declines in housing starts for March partly reflected a return to more normal weather patterns, but it's clear that builders are adjusting their production levels to the lower levels of demand evident in the market," commented NAHB Chief Economist David Seiders. "We should see some further declines in starts as the year progresses, but we're expecting an orderly transition to more sustainable levels rather than an abrupt housing contraction. NAHB expects housing starts to decline by about 6 percent for 2006 as a whole, mainly because of a reduced role for investors/speculators." Significantly, issuance of total building permits decreased 5.5 percent in March. Single-family permit issuance was down 6.9 percent.

BUT YOU STILL CAN COUNT ON OLD BLOOD: Although the number of real estate licensees in the United States has surged in recent years, a new survey shows that real estate is far from a popular career option among college students who are nearing graduation, according to Realtor magazine. Of more than 2,700 students from 500 colleges and universities, only 131 - about 5 percent - said real estate is their top field of interest, according to the fourth-annual College Graduate Career Survey conducted by Boston-based Experience, a recruiting and career services firm. The most popular career choices for soon-to-be college grads are education, communications and media, entertainment and the arts, financial services, and nonprofit work.

IS THE GRASS ALWAYS GREENER: A recent survey from the National Gardening Association (NGA) and Organic Gardening magazine found that, while only 5 percent of U.S. households now use all-organic methods in their yards, the Wall Street Journal notes that some 21 percent said they would definitely or probably do so in the future. "It says to me that it's going mainstream," says Bruce Butterfield, the NGA's research director. The health effects of treating lawns with pesticides are hotly debated, but a growing body of research suggests that some commonly used synthetic pesticides may pose health risks, particularly to children and pets. And environmentalists are concerned about chemical runoff into streams and rivers. Nearly two dozen states, including New York and Wisconsin, now require public notification when pesticides are being applied by professionals, according to Beyond Pesticides, an advocacy group. At least 13 U.S. towns, including Lawrence, Kan. and Chatham, N.J., have pesticide-free parks, and 33 states and several hundred school districts have laws or policies designed to minimize kids' exposure to pesticides. Just last year, New York City passed legislation requiring the city to phase out acutely toxic pesticides on city-owned or leased property and make commercial landscapers give neighbors notice before spraying certain pesticides. But champions of organic lawns concede that taking the organic route may be more work and more pricey: A 3,000-square-foot lawn that costs $200 a year to maintain with synthetics might cost twice as much using organic substitutes. As with food, there's debate about how beneficial the all-natural approach truly is. Some turf experts say plants thrive equally well with synthetic and organic nutrients. Frank Rossi, a professor of turfgrass science at Cornell University, adds that organics give users a false sense of security. For instance, he says, runoff of certain organic fertilizers with high concentrations of phosphorus can harm streams and rivers. "Some people think because it's organic, there's absolutely no harm you can do with it," Rossi says. "That's a lie."

ARCHITECTS REPORT SLIGHTLY LESS BUSINESS: Although the American Institute of Architects (AIA) says billings at member firms slipped in March, results remained in positive territory for the eighteenth consecutive month according to Inman News. The Architecture Billings Index, a leading economic indicator of nonresidential construction activity, had a March rating of 50.5 (with any score above 50 indicating an increase), down from 55.5 in February. "While the index has leveled off a bit compared to previous scores, there are enough nonresidential projects slated to begin construction over the next several months that this month's numbers should not be cause for concern," said AIA Chief Economist Kermit Baker. "In terms of the nonresidential construction market, the retail, education and health-care sectors have all increased at a double-digit rate in February compared to year-ago levels."

REMODELING ACTIVITY EASES: Estimated recent growth of homeowner remodeling spending has eased substantially but still remains near its long term rate of 5 percent. According to the Remodeling Activity Indicator (RAI) devised by Harvard's Joint Center for Housing Studies, homeowners spent over an estimated $155 billion on home improvements and repairs over the past four quarters, representing a 4.5 percent increase. Said Center Director Nicolas P. Retsinas: "Rising interest rates and a cooling housing market have started to impact spending on home improvements. Delays in initiating major improvement projects are likely to moderate spending over the next year." Kermit Baker, director of the Remodeling Futures Program of the Joint Center, foresees that remodeling will follow home building "into a period of slower growth in the months ahead."

NEW FIXED-RATE MORTGAGES ARE GAINING GROUND: As rising mortgage rates drive up the costs of buying a home, the Wall Street Journal observes that consumer demand has soared for a recently introduced type of mortgage that offers the security of a fixed interest rate but with relatively low monthly payments in the loan's early years. So-called fixed-rate interest-only mortgages allow borrowers to lock in an interest rate for the life of the loan, while reducing their monthly outlays by paying interest and no principal, typically for the first 10 or 15 years. These loans, which barely existed two years ago, now account for roughly 8 percent of all new residential mortgages taken out, says UBS, a financial services firm. Borrowers took out roughly $39 billion of these mortgages last year, up from just $7.9 billion in 2004, according to UBS, which analyzed loans that are packaged into mortgage-backed securities. But these mortgages have significant drawbacks. Borrowers who make interest-only payments on a regular basis don't build up any equity in their homes, apart from any increase resulting from rising property values. And homeowners can be hit with sharply higher monthly payments once the interest-only period ends and the borrower is then obliged to repay the balance of the mortgage over the rest of the loan's term. Payments in the loan's later years include both interest and principal. What's more, the savings aren't as great as borrowers might imagine. That's partly because fixed-rate interest-only mortgages typically carry a rate that is one-eighth to three-eighths of a percentage point higher than the rate on a traditional 30-year fixed-rate mortgage.

HOUSINGS COSTS ARE PUSHING MANY FROM THE CITIES: They are driving the middle class into the suburbs and even further, according to U.S. Census data, reports the New York Times in Realtor magazine. Smaller, wealthier households are replacing larger families in many big metropolitan areas. That drives up housing prices even as the population shrinks, chasing away even more members of the middle class. Nearly every large metropolitan area had more people move out than move in from 2000 to 2004, with a few exceptions in the South and Southwest. The states that attracted the most new residents were Florida, Arizona and Nevada. The states that lost the most were New York, California and Illinois. Metropolitan areas that attracted the most new residents were Phoenix, Tampa-St. Petersburg, Fla., Atlanta and Dallas-Fort Worth.

MORTGAGE VOLUME DECLINES: The Mortgage Bankers Association (MBA) says the decrease for the week ended April 14 was 1.7 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the decline was 1.4 percent. Compared with a year earlier, loan applications went down 14.9 percent. Seasonally adjusted, purchase applications decreased by 2.5 percent from the previous week, and refinancings decreased by 0.4 percent. The refinance share of mortgage activity increased to 36.4 percent of total applications from 36.0 percent the previous week, and the adjustable-rate mortgage (ARM) share increased to 28.9 percent.

THE QUESTION ISN'T WHY, BUT HOW: The Riverside County Sheriff's Department is investigating fraud allegations against Haydee Jerez Verdugo, a Palm Desert real estate agent, according to news reports cited by Inman News. Several former clients have said that Verdugo sold all of them the same vacant lot in North Palm Springs. They have filed legal complaints charging that she took thousands of dollars from them, the Desert Sun newspaper reported. Sheriff's deputies searched Verdugo's former business and residential addresses last month, the newspaper said. And lawyers for many of Verdugo's former clients said this week that Verdugo failed to file paperwork in time to meet a court deadline in a civil case filed against her. One lawyer is representing 21 buyers who allege they have learned that Verdugo was selling them the same piece of property, and another lawyer is representing 18 others who say they also lost money to Verdugo, according to an online report by news station KESQ. The civil lawsuit was filed in February at Riverside County Superior Court in Indio. No criminal charges have yet been filed against Verdugo, according to the reports, which carried no response from the agent.

WEALTHY CONSUMERS ARE TURNING TO MARGIN ACCOUNTS: As borrowing costs rise, wealthy consumers are taking another look at margin loans - borrowing against securities to buy houses and boats and meet obligations, says the Wall Street Journal in Realtor magazine. These loans come with unique risk. If the value of the investor's portfolio declines by 30 percent to 50 percent, the brokerage firm can call the loan, demanding additional cash to restore the account. But rates and terms are so attractive - less than 4 percent in many cases - that borrowers are willing to give margin loans a try. On a margin account, investors can typically borrow 90 percent or more of the value of U.S. Treasurys but just 50 percent of the value of large-company stocks. The loan is tax deductible only if it is used to buy additional investments.

MORTGAGE RATES ARE LOOKING UP, AGAIN, TO FOUR-YEAR HIGH: The 30-year fixed-rate mortgage (FRM) averaged 6.53 percent this week, up from 6.49 percent, reports Freddie Mac. Last year at this time, it was 5.80 percent. The 30-year FRM has not been higher since the week ending July 12, 2002, when it averaged 6.54 percent. The average for the 15-year FRM was 6.17 percent this week, up from last week's 6.14 percent and last year's 5.36 percent. The 15-year FRM has not been higher since the week ending June 13, 2002, when it averaged 6.17 percent. Five-year Treasury-indexed hybrid adjustable-rate mortgages (ARMs) were 6.16 percent this week compared with 6.13 percent last week and 5.22 percent one year earlier. One-year Treasury-indexed ARMs averaged 5.63 percent this week, up from 5.61 percent last week and 4.26 percent last year. "Mortgage rates drifted upward this week following the release of the Consumer and Producer Price Indexes for March, which came in at the upper end of market expectations for inflation," said Frank Nothaft, Freddie Mac vice president and chief economist. "Even though lenders are offering greater interest rate discounts on ARMs, the interest rate savings has declined relative to fixed-rate mortgages. . . If the Fed continues to raise short-term rates, the ARM share will likely decline further."

YOU CAN RECYCLE RESPONSIBLY FOR EARTH DAY: The District's spring e-cycling program offers residents a safe way to dispose of hazardous household waste and electronic equipment on Saturday, April 22 from 9 a.m. to 3 p.m. at the Carter Barron Amphitheatre. More info: dpw.dc.gov.

Market Update - It ain't no bursting bubble

Condos and co-ops

March's inventory of newly listed apartments was 74.4 percent higher than in the same month last year, 858 condos and co-ops as opposed to 492. The sole decline by price level was relatively insignificant – 43.8 percent, to 9, for those offered between $100,000 and $150,000. Most other price levels posted strong double-digit increases. The total of 249 apartments put on the market was twice what occurred in the previous March, and all other price levels above $150,000 posted high double-digit increases. Consider these statistics: 183 new listings at $200,000-300,000; 249 at $300,000-400,000; 141 at $400,000-500,000; and 222 above $500,000.

Compared with last year at the same time, supply jumped by 234.4 percent of those still seeking buyers by the end of the month, with triple-digit increases as high as 421.4 percent at every level above $200,000. Of the 1,341 apartments available, there remained 292 at $200,000-300,000; 335 at $300,000-400,000, 201 at $400,000-500,000 and 365 at $500,000-600,000. A one-month decline in supply, in December, is history as the number of condos and co-ops on the market reached a higher point than at any time in the preceding 12 months.

Meanwhile, sales fell 11.6. percent from March to March, owing to decreases at every price level but $150,000-200,000, which grew a negligible 2.4 percent –from 41 to 42 apartments that went under contract. Units offered between $400,000 and $500,000 registered a decrease of 21.4 percent, to 66. Sales of condos and co-ops above $500,000 slipped 9.2 percent, to 89. Nonetheless, the volume of apartments that found buyers was substantially higher than it has been since June. March's showing failed to bring up the year-to-date sum, however; with 992 units sold, results were 9.7 percent smaller than at the same time last year. The biggest declines were below $150,000 (51 percent at $100,000-150,000) and above $400,000 (off 22 percent at $400,000-500,000 and 14.4 percent above $500,000).

The market absorbed just 23.2 percent of the apartments available for sale during March versus 21.4 percent in February. That was hardly better than January's weak 21.4 percent and below December's 23.2 percent. By contrast, it was 53 percent in April, followed by lower rates in successive months, dropping to 43.5 percent in July and 38.7 percent in August.

Not surprisingly, prices have actually eased below the 2005 average. The average is now at $413,195 in comparison with $426,429 and, in 2004, $364,425. The March average represents the first slippage to date; in February, the average was $437,195 for condos and co-ops. At the same time, the median is falling somewhat away from the average. Now at $350,000, the median was $375,000 in 2005 and $325,000 in 2004.

Single-family homes

Gains in new listings started to accelerate in March. February had 12.9 percent more homes put on the market than did February of 2005, but last month's total was 36.6 percent greater. Inventory went up in the solid double digits at every level above $300,000, including a 74.2 percent change at $450,000-600,000. Of the 728 new listings, nearly half (341) were offered between $300,000 and $600,000.

By contrast, the number of homes still on the market by the end of the month was more than twice that at the end of March, 2005; there 1,160, a 113.6 percent increase caused by triple-digit changes at the three levels between $300,000 and $750,000. The biggest percentage growth was at $600,000-750,000 (219.6 percent to 147). With 297 active listings, the $450,000-600,000 category had more than any other. Of those that lingered on the market, 118 were between $750,000 and $1 million (up 93.4 percent) and 168 were above $1 million (up 50 percent. Supply continued to head up again from December and is about equal to last fall's 12-month peak.

Sales activity sank by 12.2 percent from the 484 homes that went to contract in March 2005. Volume declined at every single price level but $450,000-600,000, where it was even with the previous March. Of the 425 ratified contracts, 84 were at $150,000-200,000, 111 were at $300,000-450,000 and 78 were at $450,000-600,000. Other price points registered lower numbers. As for year-to-date activity, it fell by an average of 15.5 percent to 1,083 by as much as 69.2 percent (up to $150,000) and as little as 5.1 percent ($750,000-$1 million). A drop from a total of 607 last year to 495 between $300,000 and $600,000 obviously dragged down the average considerably. But March sales were above every month since June.

With an absorption rate of 26.8 percent, sales activity showed somewhat more strength than February's 25.8 percent. Buyers went to contract on more than one out of every four homes on the market. Such returns compare with January's 26.1 percent and December's 21 percent, which was significantly lower than it had been during all of 2005. For example, in November, it was 24.9 percent. It was 26 percent in October, 28.1 percent in September, 35.8 percent in August and 35.5 percent in July. Earlier in 2005, the rates were far higher.

Prices in March were below last year's average, the first drop in years. It was $590,914 last month in comparison with $628,096 last year and $510,279 in 2004. The median is noticeably far from the average. It was $462,000 in March versus $489,450 last year and $381,080 in 2004.

What it all means

Forget about the bubble. This market is one that economists have been predicting for many months – a gradual easing of prices. Just because they aren't as high as last year, doesn't mean they aren't high. Buyers appear to be cherry- picking. They are paying respectable prices for the most desirable – and, sometimes, most expensive - properties. Especially, in the mid ranges, they are demonstrating a high degree of skepticism about prices and a discernibly discriminating eye about quality. As inventory continues to grow, they are in a position to flex their muscles and are taking advantage of their strength in this changed market. If prices are going down, does anyone hear a loud bang or a resounding thud? Although prices have edged below the unprecedented highs of last year, there is no reason, with so much employment growth, to believe that real estate will not continue to be worth buying. Property can command prices that represent not so much records but amounts that are, from a historical perspective, still mind boggling.

Items of Interest - April 15, 2006

THIS YEAR'S HOME SALES ARE FORECAST TO BE THIRD HIGHEST: They should generally level out and remain at historically high levels, according to the National Association of Realtors (NAR). Says David Lereah, NAR's chief economist: "Economic growth and job creation are providing a favorable backdrop for the housing market, but rising interest rates have an offsetting effect. Home sales will move up and down somewhat over the remainder of the year but stay at a high plateau, meaning this will be the third strongest year on record." He expects the 30-year fixed-rate mortgage to rise to 6.9 percent by the end of the year. Existing-home sales are projected to drop 6.0 percent to 6.65 million this year, while new-home sales are likely fall 10.9 percent to 1.14 million. Lereah forecasts housing starts to be 2.00 million in 2006, 3.2 percent below the total starts last year. The national median existing-home price for all housing types is likely to increase 6.4 percent this year to $221,700, and the median new-home price is expected to rise 2.3 percent to $242,700, according to the economist.

MARK YOUR CALENDARS FOR THIS SPECIAL EVENT: It's the prestigious juried Smithsonian Craft Show, of which our own Alix Myerson is this year's chairwoman. Featuring 120 artists and their wearable art, basketry, glass and ceramics, among numerous other media, the show has netted some $7 million over 24 years to improve the Smithsonian's family of 18 museums and nine research facilities, plus libraries and numerous outreach affiliates. It begins with a preview night gala April 19 and runs days and evenings through April 23. Aside from the gala, two highlights are the raffle of a $15,000 original celadon porcelain by Cliff Lee ($5 per ticket) and an online auction, which opens April 16. For details, do check out smithsoniancraftshow.org or call Alix at 202-537-6000.

REPORTS FINDS DISCRIMINATION IN REAL ESTATE: The National Fair Housing Alliance contends that racially-motivated steering and unequal treatment of African-American and Latino home seekers are commonplace practices by some realty agents, according to Realty Times. The nonprofit fair housing group says it conducted "paired sales tests" in 12 metropolitan areas between early 2003 and mid-2005. In each foray, the teams were assigned similar information about housing needs, financial qualifications and employment history. In every instance, "the African-American or Latino teams were slightly more qualified than the white teams" in terms of income, down payment availability, outstanding debt loads and length of employment tenure. A total of 145 paired tests were completed for the study in 73 sales offices in metropolitan New York, D.C., Chicago, Atlanta, Austin, Birmingham, Philadelphia, Pittsburgh, San Antonio, Dayton and Detroit. According to the report, "almost 20 percent of the time, African American and Latino testers were refused appointments or offered very limited service" in comparison with white testers. Whites were shown more homes – an average of eight homes per test, while minority testers were shown five. Finding "blatant" discriminatory behavior, the report said: "In every metropolitan area tested, some agents told testers that they knew it was illegal for them to steer or make comments based on race or national origin, but the agents in question then went on deliberately to steer or make illegal comments." The study also added that minority home seekers were more likely than whites to be required to bring pre-approval letters from lenders before agents would show them homes; minority testers more frequently were told to do their own additional searches for homes; white testers were offered far more financial incentives such as closing cost reductions or lower mortgage fees compared with minority buyers; steering frequently made "use of schools as a proxy" for the racial or ethnic composition of neighborhoods – "instead of making blatant comments about the racial composition of neighborhoods, many real estate agents told whites to avoid certain areas because of the schools."

PAINT THE TOWN(HOME) GREEN: Homeowners are giving a new look to paints that either promise fewer fumes and toxins or have been recycled from leftover paint cans, the Wall Street Journal observes. Though so-called eco-friendly paints have long had a rap as inferior to the old-fashioned stuff – for tepid colors, uneven consistency and questionable durability – makers are rolling out what they say are improved versions. Ingredients include everything from reformulated chemicals to doughnut powder and yogurt. Yummy! The category is a bright spot in the $20 billion a year paint business, which has seen slowing growth lately. Standard paint contains solvents called volatile organic compounds, or VOCs, that help give it consistency and texture when wet. The new paints are more expensive – on average, $3 more a gallon, according to manufacturers. It's the paints from Anna Sova Luxury Organics that include yogurt protein, doughnut powder and bamboo fibers among its ingredients; it costs up to $69 a gallon. "We don't recommend eating it," says a spokeswoman, "but you could."

GO AHEAD, LIVE DANGEROUSLY, BUY A REALLY NEW PLANT: Nursery experts interviewed by the Washington Post are recommending a new variety of coral bells called Caramel, tall bearded irises that now repeat bloom in the fall, coneflowers in yellow, orange or nearly pink, even edible Oriental persimmons, some of which grow to only 10 feet. Two new varieties of crape myrtles that bloom in mid-to late summer in white or red are available at specialty nurseries and at the National Arboretum's upcoming garden fair.

BUT MAYBE NOT IF YOU'RE A BOOMER: AARP observes that the gardening craze has hit a rough patch. Nursery sales have been slowing significantly over the last three years, and experts attribute part of the change to the aching backs and knees of those folks born between 1946 and 1964. See, they are, in fact, becoming their parents.

AND IN STILL MORE GARDENING NEWS: The Washington Daffodil Society will display more than 2,000 show-quality varieties this weekend at Brookside Gardens in Wheaton. More info for this free event: brooksidegardens.org.

OH THAT RASCAL GEORGE: He did sleep around, didn't he? One house where he may have done so is a 1733 stone dwelling in Doylestown, Pa., where certainly he dined and maybe he spent a few nights – unless he used a tent pitched on the property, according to the Wall Street Journal. With three bedrooms, two baths, original doors and window trim, exposed-beam ceilings and a four-car garage (presumably not original), the house on 2.24 acres was purchased for $425,000 in 1999 and since has had a reported $650,000 in renovations. It has failed to sell in the past for $1.78 million, so now it's up for auction. For details, do give a shout to Sheldon Good & Co. Auctions NorthEast, 212-213-9770.

YOU MAY BE ABLE TO FIX IT UP AT A DISCOUNT: Retailers are using special credit card deals to encourage home owners to spend money on spring fix-up projects, according to Reuters in Realtor magazine. For example, Citibank is currently offering some credit card customers 5 percent cash back on purchases made at home improvement and furnishing stores. J.P. Morgan Chase and Reader's Digest Association have launched a card that gives holders three points for each dollar spent on home improvement items and one point for other purchases. Once a consumer accumulates 2,500 points, he or she gets a $25 gift card to use at home-goods and electronics retailers. Lowe's is offering a special project card with a six-month, interest-free grace period and a $35,000 cap on the balance, so buyers with otherwise limited credit can fix up their homes.

RETRO IS IN, AGAIN: So proclaims the Wall Street Journal, which says a house's architectural style has become a significant factor in the property's value -- particularly if it is a midcentury modern (or "MCM") home. This style is characterized by strong horizontal lines, large open spaces, plenty of windows and skylights, and flat or low-pitched roofs, according to MileHiModern.com, a site that posts real-estate listings of homes with the style. Real-estate professionals in metropolitan areas such as Denver, Los Angeles, Chicago and Phoenix say properties with modern design are highly sought after and sell for more, reports The Denver Post. In one south Denver neighborhood, residences in one Frank Lloyd Wright-inspired subdivision have increased 27 percent in price in a year's period, whereas more traditional houses on adjacent blocks have appreciated 10 percent in the same period, the Post says.

MORTGAGE LOAN VOLUME DROPS: For the week ended April 7, it fell by 5.5 percent on a seasonally adjusted basis from one week earlier, reports the Mortgage Bankers Association. On an unadjusted basis, the decrease was 5.1 percent and was off 14.7 percent compared with the same week a year earlier. Seasonally-adjusted, purchase applications went down by 4.7 percent from the previous week, and refinancings declined by 6.6 percent. The refinance share of mortgage activity decreased to 36.0 percent of total applications from 36.6 percent the week before, and the adjustable-rate mortgage (ARM) share inched up to 28.6 percent of total applications from 28.5 percent the previous week.

IN MOSCOW (NOT IDAHO), REAL ESTATE PRICES SOAR MORE : The region's housing shortage continues to send real estate prices skyrocketing, rising at a rate of 2.5 percent a week, according to an Izvestia report cited by the New York Times.

HIS CREDIBILITY IS GOLD PLATED: "We don't see a bubble," says Samuel Lieber, who directly manages or helps oversee some $3 billion of assets through nine mutual funds, including chart-topping Alpine U.S. Real Estate Equity, Alpine International Real Estate and Alpine Realty Income & Growth. In an interview with Barron's in the Wall Street Journal, the portfolio manager says that he won't retract his horns unless the job market tanks and he sees little chance of that happening soon. Eschewing pricey real-estate investment trusts for the most part, Lieber has guided the U.S. fund to an annualized 29 percent return in the past five years, through April 4, beating 99 percent of his rivals, according to Morningstar. His International offering was up 26 percent over five years, while Realty Income, managed by Robert Gadsden, is up 23 percent for that span. "Historically, home prices just don't go down nationwide unless we are in a significant recession," Lieber opines. "The last time home prices fell nationwide was in 1990. It's employment that really counts. The underlying fundamentals of real estate are still very positive. Job creation and household formation drive housing." Optimistic about rates, the fund manager adds: "An 8 percent mortgage rate would be a problem. My guess is that the Fed will stop short of crippling the housing market. They simply want to slow it down. We've seen a number of [housing] cycles globally, and this one is not that different. We've just gone through a 14-year up cycle for housing, and prices were up because of supply-demand considerations. But, fundamentally, we'll get to a point where, all of a sudden, the market will say: 'The Fed is basically done. They will go from a tightening mode to neutral.' When that happens, the bond market will do well, and housing will start to take off again. That is going to happen, in all likelihood, within the next nine months."

THROUGH A GLASS CLEANLY: No one who has filthy windows reads this newsletter, but perhaps a friend would benefit from knowing that elbow grease and a sponge are a good start. Use warm water and ammonia or white vinegar and a squeegee, spot-clean with a baking soda-and-water paste, avoid cleaning windows when they are in direct sunlight, and stick with paper towels, not newspapers, which can stain white frames.

RATES ARE AT HIGHEST LEVEL IN NEARLY FOUR YEARS: The 30-year fixed-rate mortgage (FRM) averaged 6.49 percent for the week, up from last week's 6.43 percent and last year's 5.91 percent, according to Freddie Mac. It has not been higher since the week ended July 12, 2002, when it averaged 6.54 percent. The 15-year FRM this week was 6.14 percent, up from 6.10 percent last week 5.46 percent a year ago. The 15-year FRM has not been higher since the week ending June 13, 2002, when it averaged 6.17 percent. Five-year Treasury-indexed hybrid adjustable-rate mortgages (ARMs) were 6.13 percent this week in comparison with last week's 6.11 percent 5.31 percent in 2005. One-year Treasury-indexed ARMs averaged 5.61 percent, up from 5.57 percent. At this time last year, they were 4.30 percent. "Mortgage rates continued to creep up following the unexpected drop in March's unemployment rate. That drop indicated there may be some upward pressure on wages in the near future, which could lead to a rise in inflation," said Frank Nothaft, Freddie Mac vice president and chief economist. "And the threat of a higher rate of inflation, as we all know, invariably leads to higher mortgage rates. With that said, Freddie Mac's outlook for 30-year mortgage rates for 2006 continues to expect that rates will fluctuate somewhere between 6.25 percent 6.75 percent over the course of the year."

LATEST TREASURY NOTE RATE WILL AFFECT BORROWERS: The 10-year Treasury note, which crossed the 5 percent threshold this week for the first time since June 2002, serves as a touchstone for a variety of borrowers, from consumers to corporations and governments, observes the New York Times. But it is most closely tied to mortgages and is likely to play a role in slowing home price increases and curbing the home-buying frenzy in many parts of the country. "Where you are going to feel the pain the most is on the housing market," said Brian J. Carlin, a vice president at J.P. Morgan Private Bank. Carlin estimated that recent homebuyers with adjustable rate mortgages could experience a jump in interest rates of 3-4 percentage points in the next two years, as the typical 3 percent introductory rate is adjusted higher in annual increments. For a family with a $400,000 mortgage, that could translate into an increase of as much as $1,000 in monthly interest payments. Mortgage delinquencies have already started climbing, although they remain at relatively low levels. In the fourth quarter of last year, 4.7 percent of all home mortgages were delinquent, up from 4.4 percent in the third quarter, according to the Mortgage Bankers Association of America. A delinquent loan is one in which monthly payments are past due for 60 days or more. The Mortgage Bankers Association estimates that the burden of higher interest costs would fall on about 7 percent to 8 percent of all homeowners. The rest have either paid off their mortgages or face no immediate increase because they took out fixed-rate mortgages or refinanced their earlier loans to mortgages that hold rates steady for 5-10 years.

Out and About - There is no mistaking an estate sale

When you walk in, the aura is unmistakable. Everything is clearly dated. The stairs creak. The plumbing may shriek. Not only are the walls painted unfashionable colors, but every surface needs attention. Of course, the floors need refinishing and the garden, replanting. And let's not dwell on the musty odor, the shabbiness of bygone elegance and the inescapable gloom of a home fallen into disrepair.

Such is the lot of a property on the market as an estate sale. One of them is now once again on the market, reduced from last fall's $5.35 million to $4.5 million today. The home has been in the same family for more than half a century. It encompasses nearly 8,000 square feet on more than an acre of land in a Cleveland Park enclave. Expanded from a farmhouse, this is a place built for entertaining. It has a 30' x 45' living room and 30' x 20' dining room, a master suite with two dressing rooms and inelegant bath, servants' quarters, guest rooms and so on.

This is where lived the political journalist Joseph Alsop, who died in 1989, leaving his widow alone in the dwelling, which reverberates with the echoes of dinners enjoyed by historic figures, even presidents. Photos from those days portray a glorious home, one now with its potential to be realized all over again.

According to the Columbia Encyclopedia, Alsop joined the New York Herald Tribune as a staff reporter in 1932 and moved to its Washington, D.C., bureau in 1936. His Washington political column, written (1937-40) with Robert E. Kintner under the title "The Capital Parade," was later renamed "Matter of Fact." After World War II, Alsop resumed the column, writing it with his brother Stewart from 1946 to 1958. Stewart went on to write for the Saturday Evening Post and Newsweek. When Joseph Alsop retired in 1974, the column was believed to be the longest-running nationally syndicated opinion column, appearing thrice weekly in 300 newspapers. Although consistently anti-Soviet, the column expressed opposition to Senator Joe McCarthy's "Red scare" tactics. Stewart described himself and his brother as "very square, New Deal liberals," but Joseph was a conservative on foreign issues and supported the war against Vietnam.

For history, perhaps the cracked bathroom tiles and laminate kitchen counters can be forgiven. For today, though, everything, but everything, needs to be improved. The cost will be astronomical. But to many with the resources, the patina of perished souls may well be worth the price.

Some of the properties listed by other agents and seen in the past week:

• A curious 1920 Takoma Park, Md. Home that is part bungalow, part Craftsman, part colonial. On nearly a quarter acre, this property boasts nicely landscaped grounds, an 18' x 18' detached studio without running water beyond a free-form heated in-ground swimming pool. It is the main house, which has an inviting front porch that will appeal only to a narrow segment of potential buyers. Additions have made for odd flow upstairs, where the master bedroom and bath are jammed into what may have been a sunroom beyond what certainly was one of the three other bedrooms and now serves as an awkward sitting room. But this is a home that draws you into unusually airy rooms on the main floor, including a very large dining room, a marginally updated kitchen and warmly welcoming family room, which has a wood stove sans hearth and lovely deck with wide steps to the backyard. There is no central air conditioning, and the price of $785,000 seems about right.
  
• In Brightwood, a gut renovated condo conversion with 14 one-bedroom apartments and a single two-bedroom apartment that range between the mid-500 square feet to the mid-700 square feet. There are five parking spaces separately available for $17,500. The apartments are decent with high ceilings, open floor plans, gas fireplaces, washer/dryers, recessed lighting (some of it edging into the crown molding), high-end stainless appliances, granite countertops and good-looking baths. The prices range from $259,900 to $364,900, and anyone rash enough to buy one of these condos, which have monthly fees below $200, deserves the inconvenient commute by almost any means of transportation.
  
• A four-level, four-bedroom, four-and-a-half-bath Victorian rowhouse that has been splendidly renovated in Dupont Circle. This 1885 dwelling has gorgeous original pine flooring, very high ceilings, custom stained glass, three-car parking (at the expense of any yard at all), a deck, a one-bedroom rental unit so nice that an owner might well be happy there, and a location par excellence. Among the home's numerous assets or a 20' x 20' living room, an expansive open center island kitchen, first-rate appliances and finishing, ample closet space, baths dripping with marble, and two zones for heating and cooling. Withal, the asking price of $1.689 million is pretty steep.
  
• In Silver Spring's North Hills neighborhood, a three-bedroom, two-bath colonial with a terraced backyard, small dated kitchen, hardwood floors, period knotty pine recreation room complete with bar, and small rooms. There are, as well, central air conditioning, built-in bookcases, a sunroom and slate patio. Perhaps the biggest asset of the house is also its biggest drawback: such proximity to I-395 that the traffic noise is readily audible. But the price, reduced from $589,000 to $569,000, is within reason.
  
• A Chevy Chase, D.C. red brick colonial on close to a quarter acre with four bedrooms, two and a half baths, an updated kitchen, screened-in porch and an expanse of lawn and gardens. But those four bedrooms are on the second floor with a single bath, and the family room downstairs is straight out of the 1950s with its dry bar and knotty-pine paneling. Still, it's a lot of space and a lot of land, making the price of $899,900 within reason.
  
• In Mount Vernon Square near the Convention Center and central business district, new construction containing what are described as four high-end condos being sold with 46" flat panel LCD televisions, exceptionally stylish features and unstintingly expensive details – from the travertine marble floors and mosaic stone tile showers to the hot tubs on balconies and full-size laundries. But . . . the developer must be from Mars and his sales team from Venus. The admittedly breathtaking penthouse, which comes with a parking space, one bedroom, a second-level unenclosed loft termed a second bedroom and two balconies is listed at $799,900 with a $295 monthly fee. "Make me an offer," says the agent. "Everything is negotiable." It better be.
  
• An ordinary two-bedroom, two-bath condo renovated in 2004 in Petworth. On the first floor, this low-ceilinged 829-SF apartment with some hardwood and some carpeted floors is more than adequate, coming as it does with gated parking, updated appliances and free laundry. It is listed realistically at $315,000 with a $231 monthly fee that does not include utilities.
  
• In Columbia Heights, a newly converted building with 19 apartments that are being very well done a few blocks from the Metro and the Tivoli development. The units (the biggest of which is 750 square feet), feature nine-foot ceilings, open floor plans, fancy kitchens and baths, depending on upgrades, in-unit washer/dryers and good use of space. But their prices – from $249,900 with a $145 monthly fee for a basement one-bedroom condo to $364,900 with a $167 fee for a two-bedroom unit on the third (and top) floor – need to come down.
  
• A quaint three-bedroom Cape in the Highland View subdivision of Silver Spring. Facing a highly trafficked street, this brick home built in 1936 has a detached garage, very large rear yard and only a full bath upstairs and half bath in the basement, which has a so-so family room with new Berber carpet and lots of storage space. The main floor has small living room, dining room, sunroom and an outdated kitchen. It is offered at an appropriate $500,000, which takes into account its location and the absence of central air conditioning.
  
• In Logan Circle, a three-bedroom, one-and-a-half-bath attached Victorian on two levels, plus a storage basement and a carriage house (now garage) with essentially unfinished second floor. Among its features: 11-foot ceilings, original southern pine floors and stairs, period ceilings and built-ins. Although the main floor has been respectfully opened up and kitchen decently updated, the bath shortage is a significant drawback, and that carriage house may sound more romantic than it is in reality. The price of $945,000 is too high.
  
• A Mount Pleasant attached rowhouse with a hard-to-find front entrance, a pleasant in-law suite, covered parking, four bedrooms on the second floor along with two dual-entry baths, and a choppy layout yet an eccentric charm. Built in 1930, this home, which also has two heating/cooling zones, is slightly overpriced at $724,000.

Items of Interest - April 8, 2006

ECONOMISTS DEVELOP NEW WAY TO VALUE A HOME FOR SALE: Having guided two years of research into "the bubble," professors Gary and Margaret Hwang Smith of Pomona College conclude that the Los Angeles region was not in a bubble and that many markets called overpriced probably were underpriced, according to the New York Times. In a paper the two presented at the Brookings Institution, "Bubble, Bubble, Where's the Housing Bubble?" they said that even though prices had risen rapidly and some buyers unrealistically expected the trend to continue, "the bubble is not, in fact, a bubble in most of these areas." They argued that the value of a home is determined by the rent it could fetch. Calculate the future rents, subtract mortgage payments, taxes and other costs, factor in a good annual rate of return of 6 percent or more, and one should be looking at the proper price of a house or condo. Their bottom line: "Buying a house at current market prices still appears to be an attractive long-term investment." Richard Peach, a vice president at the Federal Reserve Bank in New York who studies home prices and their relation to income, echoed that view, saying, "This is an important paper." Karl E. Case, a Wellesley College economics professor who has been studying real estate prices for more than 25 years, calls the paper's method "absolutely the correct way to think about it." Analogous to stocks, the intrinsic value of a house is the rent that it can generate. "It's not that houses are like stock," Gary Smith said, "but if you think about them as you do stocks, you start thinking about it correctly." The Smiths' solution was to look for "matched pairs" of similar houses, one rented, one owned, but both in the same neighborhood. They did this in 10 cities in which they could find enough real estate data and matched pairs. Once they had established what rent was for a certain house, they used software they created to compute the flow of rents over time, factoring in the outflow of mortgage payments, maintenance costs and taxes. Then they had to determine what those future payments would be worth today, which economists call the net present value. If the net present value is a positive number, the house is worth the price. If the result is a negative number, the buyer would be better off renting it. One-third of taxpayers do not itemize their deductions and many more are getting hit with the alternative minimum tax that removes some of the advantages of home ownership, said Christopher Mayer, a professor of real estate at the Columbia Business School. Still, he agrees with the Smiths that there is not a housing bubble and he was impressed by the effort they made in finding matched pairs of houses. But he also said that they lacked an understanding of what drives the economies of cities. For instance, he says, Indianapolis looks undervalued because, unlike the Northeast and West Coast cities, land there is inexpensive. The supply side of the supply-demand relationship that determines prices seems to be overlooked. In some cities, zoning and other restrictions limit the building of homes. Elsewhere it is relatively easy to build houses when demand rises because most of the cost of a home is in construction. That is one reason there is a greater expectation of price appreciation in California than in a place like Indianapolis, he said.

FREE RENT CAN BE AVAILABLE . . . IF YOU ARE: In Atlanta, an online ad offers a room in exchange for "sex and light office duty," notes the Associated Press in Realtor magazine. In Los Angeles, a one-bedroom pool house is free "to a girl that is skilled and willing." And in New York City, a $700-a-month room is available at a discount to a fit female willing to provide sex. On Craigslist.org, some landlords and apartment dwellers looking for roommates are offering to accept sex in lieu of rent. And in most states, prostitution laws apply only if the ads are followed by e-mails, phone conversations or other acts that advance the proposition. "The mere posting itself is absolutely not illegal," said Anthony Lowenstein, a defense lawyer in San Francisco, "unless the guy who posts it or the person who answers it does something that makes it a little closer to happening."

MANY RETIREES CHOOSE TO STAY IN METRO AREAS: Most retirees don't end up relocating after all, says the Wall Street Journal. In fact, even among those who do make a move, most usually choose to live in a major metropolitan center, loath to give up the cultural attractions and other conveniences that are hard to find in more placid settings. Said Elinor Ginzler, director for livable communities at AARP: "The reality is . . . most people don't move. Community is incredibly important to our older citizens. They feel connected to their community." A quieter part of a major metropolitan area anchored by a large city, often in a warmer climate, is a popular relocating-retiree choice. "Generally, people are moving from metropolitan counties where there are dense populations to other metropolitan counties that are less dense," said Ron Manheimer, director of the University of North Carolina's Center for Creative Retirement in Asheville, N.C. Seventy-one percent of people age 60 and over who have relocated to another state in the five years leading up to the 2000 Census settled in metropolitan counties, Manheimer said, citing statistics from a forthcoming book that he edited: the second edition of "Retirement Migration in America," by Charles Longino. "People want all the amenities of the big city; they just don't want to live in it," Manheimer noted, saying that the availability of shopping, major airports, cultural attractions and medical services figure into the decision on where to relocate. Retirees who do relocate often seek warmer climes. Of those 60 and older who moved to a new state in the five years before the turn of the millennium, the top 15 counties nationwide in terms of net migration of those older folks all were in Florida, Arizona and Nevada, according to Longino, also a professor of gerontology at Wake Forest University, in Winston-Salem, N.C. Other retirees choose to go back to their hometowns. In 2000, 17 percent of Americans over age 60 who had moved across state lines in the previous five years had moved back to their earlier hometowns. Still, most retirees don't move. Over the five-year span, 76.1 percent of those 60 and older stayed put. Of the rest, 18.5 percent moved within their states, 4.6 percent moved to other states and 0.8 percent moved abroad.

YOU, TOO, CAN HAVE A PIECE OF A SCANDAL: Conseco, the insurance company that guaranteed its executives loans, thus triggering a scandal three years ago, is still trying to unload properties with which it got stuck, according to the Wall Street Journal. In Miami Beach, Fla., the company is selling a 9,800-square-foot mansion for $13.9 million that belonged to Ngaire E. Cuneo, a former Conseco director and executive vice president. The sale follows the conclusion of a court battle that just ended in December. The details are sealed. And not far from its headquarters in the Indianapolis suburb of Carmel, Ind., Conseco is hoping to sell the 25,500-square-foot home of Stephen C. Hilbert, who purchased it in 2000. Among its amenities is a separate 15,000-square-foot replica of Indiana University's gymnasium, home to its famed basketball team. The property's on the market for $20 million.

TAKE A BREATH – NOT: Massachusetts has become the latest state after Vermont, Connecticut and New York to require carbon monoxide detectors in homes. The trend is expected to spread to all 50 states, says Doug Troutman, government relations counsel for the National Electrical Manufacturers Association. Although the movement to require detectors began about five years ago, it really didn't gain momentum until the last three years. Currently, nine states require carbon monoxide detectors in all homes, and a number of others, such as Connecticut, require carbon monoxide detection equipment in newly constructed single-family homes and in multifamily units. "We're beginning to see an increasing number of states and municipalities introducing similar legislation," says Debbie Hanson, director of External Affairs for First Alert, a manufacturer of detection equipment.
WHAT'S IN NAME: These days, it may not be much, as some high-end developers are learning, according to the Wall Street Journal. Daniel Libeskind, famed for his plan to rebuild Ground Zero, designed an angular, 56-unit building in downtown Denver, yet the project hasn't recorded a sale in seven months, leaving 15 apartments unsold. Architect Robert A.M. Stern's name tops the marketing brochures for a high-rise in Stamford, Conn., but half of the 91 apartments remain available 18 months after sales began. And after two years of high-profile promotion, the newest Manhattan tower by Richard Meier, architect of Los Angeles's Getty Museum, has sold just 15 of its 31 units (not counting five bought by its developers). Two years ago, developer Frank J. Sciame hired Pritzker Prize-winning Spanish architect Santiago Calatrava to create one of the most highly stylized apartment houses ever envisioned for New York. The building in lower Manhattan would consist of 10 cube-like apartment units, each 45 feet high, cantilevered one atop each other around a central axis. Yet none of the units - asking $29 million to $45 million each - has even received a bid, let alone sold; construction hasn't started. Other high-profile Manhattan projects have been scrapped outright, including costly condos that were to be designed by architects Frank Gehry and Zaha Hadid. In Miami, a tower designed by Meier also hasn't broken ground. Real-estate brokers with knowledge of the development say the 101-unit structure, Beach House, may soon be canceled because of a lack of preconstruction sales. Despite the languid market, however, more architect-linked apartments are in the works. Astor Place developer Related Cos. has begun working with Mr. Gehry on a 50-story condo complex across from the architect's Disney Concert Hall in Los Angeles. Phillip Johnson and the Swiss firm Herzog & de Meuron, which designed London's Tate Modern museum, have been hired for condo buildings in Manhattan. Mr. Libeskind has signed on to design condos in Covington, Ky., and Sacramento, Calif. And Mr. Stern's firm has apartment projects under way in Dallas, Atlanta, and Los Angeles.

REAL ESTATE FUNDS OUTPERFORM OTHERS IN THE FIRST QUARTER: They returned 13.74 percent on average, easily beating every other category of domestic stock fund tracked by market research firm Morningstar Inc., according to the San Francisco Chronicle in Realtor magazine. Since early 2000, real estate funds have posted a cumulative return of 237 percent, handily trumping the S&P 500 stock index, which has lost 2.82 percent in that time span. While most real estate funds invest the lion's share of their assets in real estate investment trusts (REITS), some also invest in publicly traded home builders and mortgage REITs that purchase securities backed by home loans. These funds rose to prominence following the market crash of 2000 that saw many investors shy away from tech and growth stocks in favor of commercial real estate investments. On the downside, REIT dividends average 4.5 percent today compared with 7.71 percent at the end of 2000, prompting some investors to be concerned that REITs are overpriced.

WILL THE LAST ONE OUT OF THE ROOM, TAKE NOTE: Does it cost more to turn the lights off when you walk out of the room than it does to leave them on? The Wall Street Journal says it is smart to turn off lights when you're not using them. Incandescent bulbs, the cheapest but least efficient kind, do last longer if they're left on but burn through enough electricity to make it worth flipping the switch. With fluorescents, especially the bulky institutional tubes, you'll save less but turning them off won't cost you anything. Switch to bulbs with a lower wattage where you can. Halogen bulbs are more efficient than traditional incandescent ones and compact fluorescent bulbs cost 10 to 20 times more but last 10 to 15 times as long and use far less energy. Many electronic appliances - DVD players, stereos, video-game consoles - draw power even when off. You can cut down on the draining of "idle" energy by hooking your appliances to a power strip and flipping the power switch on the strip when you turn your gizmos off. There are even "smart" power strips that cut the power automatically. Although you may be tempted to leave you computer on since most now come with a sleep mode, even in sleep mode, your computer will use 30 percent of the energy it uses when active. Or buy Pepco.

INSURANCE COMPANY SEES WIDESPREAD RISK OF PRICE DECLINES: Forty-eight of the nation's 50 largest metropolitan statistical areas (MSAs) face a greater risk of declining home prices this quarter, PMI Mortgage Insurance said. But it suggested that the once red-hot housing market will cool gradually. Appreciation has slowed in nearly half of the MSAs as compared with last quarter. A study by the company additionally shows that between 1986 and 2005, based on the home price index provided by the Office of Federal Housing Enterprise Oversight (OFHEO), owning a home in one of the 50 largest MSAs generally resulted in a positive return on investment, with the chance of a positive return increasing the longer the home was owned. "What we found was that across the nation's 50 largest MSAs, owning a home for 10 years or more resulted in a positive return in 100 percent of the cases," explained Mark Milner, Chief Risk Officer of PMI Mortgage Insurance Co. "This dropped to 95 percent with a seven-year ownership term and to 92 percent with a five-year ownership term - still a pretty impressive rate." U.S. Market Risk Index scores increased for all of the top 50 MSAs except Chicago, IL, for which the decline was one point, and New Orleans, which was not scored. Fourteen of the top 50 MSAs now have risk scores above 500, meaning they face a 50 percent or greater risk of home price declines in the next two years, up from 11 MSAs last quarter. The average score has increased from 261 last quarter to 287. The biggest change was in Minneapolis, which gained 90 points, taking it to a score of 350 and up two spots in the ranking to No. 19. Other MSAs that saw significant increases in risk were Virginia Beach, (+65 points to 274), Baltimore. (+62 to 279), Newark, N.J., (+61 to 427), New York, (+58 to 506), and D.C., (+56 to 401).

WILL HE EVER STOP: Real estate mogul Donald Trump is in the process of establishing Trump Mortgage LLC, a new company that will make both residential and commercial mortgages, reports New York Newsday in Realtor magazine. The Manhattan-based firm is expected to complete $3 billion in loans this year, with an eventual goal of issuing $100 billion in loans annually within the next decade. The plan is for Trump Mortgage to offer loans that range from $30,000 home equity lines of credit to commercial mortgages for as much as $300 million. The new company has already signed on to work with 60-70 banks, with more expected to be added soon.

YOU CANNOT TRUST THE STAR: Unfortunately for millions of energy-conscious Americans, these ratings can be meaningless, according to the Wall Street Journal. The reasons run from outdated test procedures to a simple lack of policing of the program. A SmartMoney investigation found that the Energy Star label often is little more than a marketing gimmick. Ask an appliance salesperson what the Energy Star designation means, and he or she may well tell you that it's issued by either the Environmental Protection Agency or the Department of Energy and is awarded only to the most energy-efficient products. The truth is a little hazier. While participation in the program is voluntary, more than 1,400 appliance makers submitted test data on their products in 50 categories last year - some 32,000 in all. It's easy to see why: Products bearing the Energy Star logo sell better than others and often fetch a higher price - as much as 20-30 percent more. Although the designation was originally supposed to apply to the 25 percent of products in any category that were most energy-efficient, the label is on 85 percent of all new dishwashers and 98 percent of desktop computers, suggesting the testing takes place at Garrison Keillor's Lake Wobegon, where all children, too, are above average.

HOW DO YOU SPELL LOW INTEREST RATES: Sales of vacation homes and investment homes set new records in 2005, with the combined total of second-home sales accounting for four out of 10 residential transactions, according to the National Association of Realtors (NAR). The annual report, based on two surveys, shows that 27.7 percent of all homes purchased in 2005 were for investment and another 12.2 percent were vacation homes. All together, there were 3.34 million second-home sales in 2005, up 16 percent from 2004. The market share of second homes rose from 36.0 percent of transactions in 2004 to 39.9 percent in 2005. Vacation-home sales increased 16.9 percent last year to a record 1.02 million, while investment-home sales rose 15.7 percent to a record 2.32 million in 2005 Commented David Lereah, NAR's chief economist: "To begin with, the baby boom generation is driving second home sales . . . [While] vacation-home buyers are making lifestyle choices and purchasing primarily for their own enjoyment, investment-home buyers are seeking rental income and portfolio diversification, although vacation-home buyers also mentioned diversification." The median price of a vacation home in 2005 was $204,100, up 7.4 percent from $190,000 in 2004. The typical investment property cost $183,500 last year, up 24 percent from $148,000 in 2004.

YOU CAN, IN FACT, CREATE A SILK PURSE: Ranch-style homes, Cape Cods and split-levels wooed people from cities to suburbs after World War II, but now those homes often lack the open floor plans and convenient amenities that buyers demand, notes Realtor magazine. As a result, "vintage" homes stagnate on the market, even in neighborhoods that offer extensive services and an easy commute. Some Midwestern communities are seeking to make these homes more appealing to buyers by bringing 21st-century lifestyle features to vintage designs. A regional coalition of 19 local municipalities in Missouri and Kansas is leading the way, publishing a book filled with modern solutions for decades-old homes. The publication, called First Suburbs Coalition Idea Book, shows adaptations for four common vintage home styles. Designed to look like a set of blueprints, the oversized folio was created by Eric Piper of Piper-Wind Architects, a planning and design firm in Kansas City, Mo., for the First Suburbs Coalition of the Mid-America Regional Council. Revamped interiors feature more open designs, updated kitchens, main or second floor laundry areas, and large decks. Garages are expanded to accommodate two cars while new baths turn bedrooms into master suites.

LOAN APPLICATION VOLUME RISES, BUT REFINANCINGS ARE OFF: For the week ended March 31, it went up 7.2 percent on both an unadjusted and seasonally adjusted basis from the previous week. Unadjusted, applications dipped 4.6 percent compared with the same week one year earlier. Purchase applications increased by 8.4 percent from the prior week. Although refinancings grew by 5.3 percent on a week-to-week basis, their share of mortgage activity decreased to 36.6 percent of total applications from 37.3 percent the previous week. It was the lowest share since the week of July 30, 2004, when 35.8 percent of applications were for refinancing. The adjustable-rate mortgage (ARM) share of activity decreased to 28.5 percent of total applications from 28.7 percent the previous week.

LOOK INTO THIS TREND: With mirrors making a comeback in interior design, a handful of designers and companies are starting to reflect on a new niche: How to convince homeowners their looking glasses need an upgrade, observes the Wall Street Journal. The products and services range from $35 do-it-yourself kits to $1,000 in-home consultations. MirrorMate, a two-year-old company based in Charlotte, N.C. has kits in 28 styles such as Charlotte Gold Leaf and Cherokee Marbled Maple; buyers glue frame pieces onto the glass and they set almost immediately. Owner Lisa Huntting says sales reached $600,000 last year, triple her 2004 levels. In Boca Raton, Fla., seven-year-old Mirr.Edge says sales of its mirrored and woodgrain-finished frame strips are growing about 40 percent a year. The trend comes as mirror sales are rising - part of the decade-long building boom. Unframed mirror sales totaled $337 million in 2005, up 15 percent over five years earlier, partly owing to an increase in the number of bathrooms in homes, according to research firm Leading Edge Group in Commack, N.Y. You didn't see that coming, did you?

JOIN THE CROWD: Be among the anticipated 8,000-10,000 folks who visit the 2006 Design House at the Washington Design Center now through June 24. The work of 10 local design firms will be on display for this latest semi-annual event at 300 D St. SW. Admission is free, and hours are 9 a.m. to 5 p.m. weekdays and 10 a.m. to 3 p.m. Saturdays. More info: merchandisemart.com/dcdesigncenter.

SI USTED HABLA ESPAŅOL, USTED PUEDE LEER ESTO: Actually, if you speak any of 12 languages besides English, the Missouri Association of Realtors is translating all of its listings into Spanish, Brazilian Portuguese, French, Italian, German, Polish, Russian, two Chinese dialects, Japanese, Korean, and Vietnamese. Une bonne idée, n'est-ce pas?

MORTGAGE RATES KEEP ON CLIMBING: The 30-year fixed-rate mortgage (FRM) averaged 6.43 percent for the week, up from last week's 6.35 percent and 5.93 percent a year ago, according to Freddie Mac. The 15-year FRM this week was 6.10 percent compared with 6.00 percent the previous week and last year's 5.48 percent. Five-year Treasury-indexed hybrid adjustable-rate mortgages (ARMs) averaged 6.11 percent, up from last week, when it averaged 6.02 percent and 5.33 percent last year. One-year Treasury-indexed ARMs were 5.57 percent this week, up from 5.51 percent. At this time last year, the one-year ARM averaged 4.23 percent. "In the first quarter of 2006, it appears that economic growth picked up relative to the last three months of 2005. There is concern that the continued high level of energy cost may lead to inflation in other sectors of the economy," observed Frank Nothaft, Freddie Mac vice president and chief economist. "And fear of inflation leads to higher mortgage rates, like the ones we see this week." He added that Freddie Mac's forecast for the year as a whole is for economic growth of 3.8 percent in 2006, above the 3.2 percent in 2005. That "may warrant even more Fed rate hikes than previously expected," Nothaft continued. If that is the case, mortgage rates may continue their gradual upward trend."