February 15, 2006: Reading Room
sell, or rent?
By Louis Jacobson ’92
June Fletcher ’73 has been in love with houses since she was a youngster living in an old Queen Anne Victorian home on the oceanfront in Long Branch, N.J. The house — originally built as a summer home for “very rich people,” she says — had 11 bedrooms, nine bathrooms, and a fireplace in every room. “To live in a place like that gave me a lifelong appreciation for beautiful architecture and craftsmanship,” says Fletcher. That appreciation led, many years later, to a career reporting on real estate, first with Builder, an independent trade publication, and later with Homes Today. Now she writes about real estate for The Wall Street Journal and pens a housing advice column for an affiliated Web site, www.RealEstateJournal.com.
Fletcher poured her know-how into House Poor: Pumped Up Prices, Rising Rates, and Mortgages on Steroids: How to Survive the Coming Housing Crisis, published by Collins in November. Fletcher’s aim is to deliver readers a dose of reality about the nation’s housing market — and to help people weather what she predicts will be a significant downturn over the next few years.
Buyers and sellers can outsmart their competitors, she writes. When undertaking renovations, homeowners should make the most cost-effective fixes, such as installing multiple showerheads instead of a Jacuzzi. They should also consider pricing their home 10 percent below the market price, to lure bargain hunters and create a bidding war. Buyers could consider factory-built, or “modular,” homes, which are assembled on site but can cost 10 to 15 percent less and appreciate in price just as fast as traditional homes.
In the near term she expects condos to sell better than suburban single-family homes, given the two biggest demographic trends at work — the aging of the baby boomers and the entry of the boomers’ children into the housing market. “This may not be the time to buy an enormous house in exurbia,” she says.
Perhaps most strikingly, Fletcher urges people thinking about buying to consider a course that’s generally heretical in real estate circles: renting. On the verge of a possible housing collapse, she says, the best strategy may simply be to wait until the dust settles.
For anyone thinking about dabbling in real estate as an investment, Fletcher urges caution. Do a gut check to make sure you have the expertise and patience to renovate a fixer-upper or flip a foreclosed house bought at auction.
Fletcher has made money on each of the three houses she has owned in the Washington area. Today, Fletcher, who majored in English and earned a master’s degree in English from Oxford, lives in Vienna, Va., and has a winter home in Naples, Fla. A new empty nester, she is deciding whether to sell the Virginia house. If she does, she says, she’ll heed her own advice. “When I fix up the house, I want to think not just about what I like, but what other people like.”
Louis Jacobson ’92 is deputy editor of Roll Call newspaper in Washington, D.C.
Assignment Algiers: With the OSS in the Mediterranean Theater — Erasmus H. Kloman ’43 (Naval Institute Press). In this memoir, the author, an officer in the Office of Strategic Services (OSS) during World War II, recounts his training and role in operations, including preparing OSS teams to parachute into southern France. After serving with the OSS and the Central Intelligence Agency, Kloman worked for the State Department and was a corporate executive.
The Battle for the Soul of Capitalism — John C. Bogle ’51 (Yale University Press). The founder of the Vanguard mutual fund group, Bogle looks at the failures and abuses of the American financial system, including excessive executive compensation and faulty accounting. He points a finger at mutual fund companies that focus on short-term results instead of long-term investment; he suggests reshaping mutual fund boards to better serve the interests of shareholders.
Loving Søren — Caroline Coleman O’Neill ’86 (Broadman and Holman). This historical novel about 19th-century Danish existentialist philosopher Søren Kierkegaard explores a love triangle involving Kierkegaard, his fiancée, Regina Olsen, and her former teacher, Fritz Schlegel. Set in Copenhagen and the Danish West Indies in the 1840s and 1850s, the novel explores not only the great philosopher but also Olsen’s coming- of-age. A former lawyer, O’Neill currently writes fiction.