Archive for September, 2011

Reform or die

September 29, 2011

Change is gonna come: Old kitchen with new (cheap) cabinets

As we’ve pointed out ad nauseum on this blog, it’s becoming more and more difficult to sell older homes and apartments. Obviously, owners who want to unload their properties have to do something to make them more attractive than the next seller’s, which is one of the reasons for the “reform boom.” Though remodeling and home improvement has always been an important factor in the housing market, it’s no longer a matter of added value. It’s considered almost a necessity, given how bad most of the product is and how competitive the market has become.

During our inspections of older properties we’ve seen many that had undergone “reform” for the sake of boosting the sale potential. In most cases, the work done was purely cosmetic–new wallpaper, maybe new cabinets in the kitchen. (New tatami and fusuma are standard in all housing transactions and don’t really count as reform) Some go a little farther by replacing the flooring and putting in a new bathtub, but in almost all the instances where we inspected a reformed property the changes didn’t really amount to anything that made us want that property any more. Though the physical condition of the place is certainly important, the location, layout, environment, and general “image” of the house are, taken together, probably more important. More significantly, a house that has been remodeled just for the sake of improving its chances of being sold is, by definition, discouraging. As a potential owner, we would want to make those changes ourselves, so buying a home that’s already been remodeled in a half-hearted way based on generic tastes seems like a waste, especially if the price has been jacked up to absorb the difference.

As an example, we inspected a twenty-year-old kodan several months ago with an asking price of ¥11.6 million. It was large and sunny, and the layout was sensible. Though the apartment had not been remodeled, the asking price included “reform” that involved new walls and new floors and which would be carried out after the contract was signed. We told the salesperson that we would prefer to do the remodeling ourselves, in which case how much cheaper would the price be? She called us back that night and told us: ¥11 million. That means, theoretically, they were going to spend ¥600,000 on new walls and new floors. Based on what we’ve learned about reform, replacing walls and floors in an apartment that size would have probably cost much more, so it’s likely the remodeling would have been perfunctory at best.

In 2010, the land ministry surveyed people who had sold or were trying to sell their homes. Of those who sold their homes and had carried out home improvements in order to increase the value or simply make them more desirable, 73 percent said they sold their properties for more money than they originally asked for prior to the reform. However, the average boost in price these improvements provided was ¥1.66 million, though the average amount of money spent on said reform was ¥3.13 million. So in actuality, these homeowners lost money, since they paid more for the improvements than they received in added value. Of course, a more pertinent question is: Did the reform actually make it easier for them to sell the house? Our feeling is that they probably would have been able to sell the house anyway without the reform, but that the real estate company talked them into carrying out improvements to make it easier to do so, and then brokered a deal with a remodeling company. (We’ve seen homes that were remodeled for sale only five years after they were built!) It’s a common practice, and one that doesn’t always work. There’s one real estate company called Mount that has hundreds of properties on its website, many of which have been reformed. We know, because we’ve visited a number of them. Most were undesirable because of location and general design; the reform, which was half-assed to begin with, made no difference. And many of those houses still remain vacant after a year on the market.

Land with a catch

September 19, 2011

Thanks. A lot.

A few weeks ago we talked to the prefabricated home manufacturer Tama Home about their wares. We did so in the guise of a couple who is looking to build a house, which isn’t completely a lie because we have entertained that possibility for a number of years; but unless the salesman is really good, we never thought of buying a prefab home, which seems to be the preferred route for most Japanese people who start from scratch. Usually, these companies work with realtors and land development companies and sell homes through subdivisions, just the way they do it in the U.S. and other countries. The idea of prefab homes, meaning manufactured houses that are planned down to the last fixture, is that they’re cheaper, but once you factor in these companies’ adminstrative costs, overhead, and promotional expenses (Tama Homes uses SMAP’s Takuya Kimura in its ads) they can get pretty pricey.

In any event, once we toured a couple of models and listened to the safety spiel (Tama does have a pretty convincing countermeasure for land that is “soft” or subject to liquefaction) we had to get down to brass tacks, which is the matter of land. Obviously, there wasn’t going to be a sale of a house until there was a sale of a plot, and we admitted that we were “still looking.” No problem, because the salesman introduced us to a realtor who just happened to be in the office. He heard our story and our ridiculously low budget and then pulled out a book of land diagrams in the vicinity that might fit our financial terms. In the back of our minds, of course, there was no way we would be able to accommodate both the land and the house in our budget, and of course these two guys knew that (and knew that we knew that), but they kept making their pitches, which were soon veering off into the matter of loans, which we hadn’t talked about yet. The strategy was obvious, though: They would show us how easy it was to borrow money so that we wouldn’t have to worry about the tightness of our budget.

But there was another matter that came to our attention when looking at the lots being proposed. They were all joken lots, meaning they came with “conditions,” the main one being that if we bought them we would be obliged to build a Tama Home on them. Some of them happened to be in already developed subdivisions, but a few were on land that had yet to be properly prepared (meaning sewage, water, etc.). And we wondered later: If you actually bought the land and afterwards decided to use another housing company or builder, would it be illegal? A friend of ours who is an architect told us he didn’t think it would be, since once you had the title to the land you should be able to do anything with it that you want to do. We’re not sure, but considering how many vacant lots-for-sale have “joken” attached to them, it’s worth finding out.

Home Truths #3

September 6, 2011

Here’s this month’s Home Truths column in the Japan Times, about UR housing. The article is mainly a how-to piece and doesn’t really get into the details of what the buildings and apartments themselves are like. We’ve written about UR a lot in this blog, as well as in our sister blog Yen for Living, since we’ve been living in UR units since 2000. Below are links to some of these posts that provide more specific information.

Security deposits / Tour of Nouvelle Akabanedai / Amenities / Tour of UR Ogikubo / Matsudo public housing / Japanese needed? / Low-income housing / Tour of Heart Island Shinden / ‘kudokushi’ savings / Tour of East Core Hikifune

The awful truth

September 1, 2011

We often go out in the field to do research, but it’s always a two-pronged activity. On the one hand we study the housing situation and the market in an up close and personal manner. On the other hand, we’re still thinking about buying property ourselves someday, and though after more than fifteen years of searching off-and-on we haven’t bought anything, it doesn’t mean we never will. Still, the longer this goes on and the more we learn, the more frustrated we become, especially as our income situation remains precarious owing to the ongoing recession. Having a permanent abode that we can’t be kicked out of, regardless of our job circumstances, is a vital consideration, but looking at what we can afford we invariably fall into a funk wondering why we have to settle for such places. Inevitably, you prevaricate: This may be livable.

Our latest subject is old danchi/kodan for sale, which have become semi-popular due to media coverage of “danchi moe,” or fans of old public housing. We’ve written before about enterprising people who’ve bought old apartments in buildings constructed during the 50s-70s and remodeled them as attractive modern spaces, which they often sell for a profit. Because they only cost a few million yen to buy and a few million yen to fix up, they can be had quite cheap in the end, but most of the units that have been covered on TV and in magazines are small; fine for a single person but still a bit cramped for a couple and certainly not big enough for a family, though in all likelihood they were occupied by a family when they were new.

When you get out of the main cities, these danchi and kodan get bigger and even cheaper. And in most cases they’re also newer, which means more amenities. However, they still look like danchi, meaning they’re usually contained in dull concrete buildings of three to five stories without elevators. The fact that they are designed with these parameters in mind means that the apartment layouts tend to be more sensible than those in newer buildings. The classic kodan design has a staircase and apartment entrances on each side of the landings, which means you usually enter at ninety degrees to the length of the apartment. That allows for windows on both ends of the apartment, which means there is not only more sunlight, but cross-ventilation, an important consideration until the 1980s, when air conditioning started to become a fixture of apartment life. It also means the rooms are more practically positioned, unlike modern apartments where the entrances open up to a common outside hallway or light well, which means all the light and air comes from only one direction. In order to maximize space for commercial purposes, the rooms are basically carved out of a boxy shape, thus creating what is often referred to as “kamaboko” living spaces. Kamaboko are those rectangular fish paste loaves that you divide into smaller rectangular pieces.

So discounting the unappetizing exteriors, older danchi, especially when they’ve been fixed up, can be quite desirable, and in this spirit we called a few real estate agents and had them show us some in northern Chiba. (more…)


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