A House By The Park

As you can probably deduce from the title, there are several unrelated things to cover in this post. Some more important than others.

First things first: I had NVL Laboratories check the house for asbestos and lead paint last week, and as expected, there’s a significant amount of both (mainly under floor tiles and on the exterior of the house). None of it is airborne, so that’s good, but it presents a bit of a challenge when taking the house down. You’re supposed to have a professional abatement team come in and dispose of the stuff in a special way.

That brings us to the subject of demolition. Build hooked me up with a great local non-profit organization called Re-Store that is actually going to “deconstruct” most of the existing house piece by piece and sell the re-sellable elements as “vintage” building materials. Not only will this option save me a significant amount of money in demolition costs but it will save 52 tons of material from going to a landfill. This is really the best type of building decision: the kind that is environmentally friendly and saves you money. As if that wasn’t good enough, I can also write off the market value of the donated materials — $8500 — and get a nice tax refund out of it. It’s a win-win-win.

With regard to the timing of deconstruction/demolition, there is an opportunity to do it as early as December but my feeling is that it should occur as close to construction time as possible (spring). I just don’t like the idea of tearing down a house before the plans for the new one are even approved yet. I also don’t want my across the street neighbors to get too used to their newly sweeping water view. I think they may actually end up with a significantly better view than they have right now by the time I’m done, but their best view is clearly when my house is just a hole in the ground.

So that brings us to the economy. I could probably do a whole post on this, but the long and short of it is as follows: the market and the economy in general have gone from bad in early 2008 to worse in mid 2008 to near catastrophic in October. I’m invested about as conservatively as you can get (mostly cash and muni bonds, very little equity exposure), but even with that conservative allocation, October and now November are really making me fear for the future of the economy. I remember clearly the 1987 crash and the dot-com bubble bursting, but in neither case did I think another Great Depression was possible. When you start to worry about whether your bank deposits are safe, how many millions of people are going to lose their jobs in 2008/2009, and how our government is going to deal with all of it, you reflexively move into “batten down the hatches” mode a bit.

My feeling as of now is that if things stay where they are at or get better, there shouldn’t be any change in my plans, but if the economy dives further off the cliff or I don’t think things have sufficiently stabilized by the spring, I may re-examine my construction schedule. I’ve prepared Build for this possibility, and they of course understand, being plenty in-tune with the markets and the economy themselves. It’s still game-on for now though. Permits are being applied for, documents are being submitted, and the project marches forward. Let’s hope Barry O. has the calming influence on the country and the economy that we think he can and let’s hope the market stops trading “like a lunatic on ecstasy”, as my favorite CNBC guy Steve Liesman likes to say.

Costs accrued during this stage:

Last Friday’s meeting was all about zeroing in on one design/floorplan and going over initial cost estimates. At this point, I’m very happy with the general floorplan and how the house looks from the back (the view side). The front of the house and the cost, however, need a bit of work. Below are the latest renderings and schematics:

Back side

Front side

Main floor

Upper floor

I think the back is looking really great. The major addition since the last renderings is the rooftop deck with the hot tub. We’re still figuring out how the roof access is going to work, but a hatch seems like the most cost-effective, least obtrusive (albeit a bit ghetto) solution.

The floorplans are also looking good, with the main floor really opening up, two flexible locations for the dining room (west edge or north edge), and an upper floor that accommodates the requisite three bedrooms. I still have a punchlist of things for Build to nudge around in the floorplans but nothing major.

The front of the house, however, is still not quite doing it for me. It just hasn’t achieved the Feng Shui that the back of the house has yet. I don’t know if it’s the angles, the paneled siding, the colors, or what, but it’s just not there yet. We’re going to experiment with some siding and color options as well as modifying the angles and lines until we achieve curb appeal nirvana.

And now for the costs.

Ohhhh the costs.

Let’s just say they are too high. It’s not Build’s fault as they are just estimating materials and labor for a house of this size and finish, but as the house is currently spec’d, it’s about $400k over my anticipated budget.

That’s a lot.

I’m not sure what we are going to do about it yet, but I’m glad we’re having this conversation at this stage rather than mid-construction. I’ve heard plenty of horror stories about architects underestimating projects only to have the homeowner vastly overextend themselves in order to finish the project. In Build’s words, they are trying to “make sure any financial surprises we run into will be positive ones”.

I like that.

We’re going to meet this Friday to discuss packages of things we can possibly save money on.

With the stock market sinking a whopping 18% last week, I have major questions in my head about what the cost of construction labor and materials will be come spring when we break ground. I have thought for the last several months that the cost of construction would decrease as the economy soured but have been told that so far, that hasn’t happened. That’s all well and good because before last week, the decline in the economy was a slow bleed, but last week was extremely damaging. It wasn’t just damaging to wall street fat cats and hedge funds. It was damaging to anyone and everyone who has any money invested in the stock or bond markets. In my opinion, it was the sort of calamity that is going to finally cause people to really watch their spending.

Everybody is always so quick to talk about how the American consumer borrows and spends above their means, but I think this episode shook a lot of people to their core. I think it canceled a lot of vacations and certainly canceled a ton of construction projects — indefinitely. When I think about how many construction projects will break ground in my neighborhood this spring, I think there is a real possibility that I’ll be the only one. Who knows.

Although the financial crisis we’re going through right now is a terrible thing, I’m hoping the cost of building a house during it will be commensurate with the reduction in wealth we’re seeing in the equity markets. If anyone has any good web sites at which to track the cost of materials, let me know. I know the cost of both lumber and copper have plummeted, but beyond that, I have no idea.