house hunting

Reform or Die

Posted on by catforehead

Here’s another chapter from our unpublished book about housing in Japan based on our own experience of buying/building a home. This one is about keeping up properties.

One of the most popular sub-genres of reality TV is the home improvement show. In 2002, Japan’s Fuji TV launched one called “Before/After,” where superannuated, usually cramped properties were magically transformed into marvels of modern design. The producers hit on a fool-proof hook for the show that they exploited successfully week after week, year after year, without seeming redundant. 

People with properties they wanted to fix up would contact the producers, who sift through the candidates, looking for the most broken-down or unusual cases. The best sequences highlight houses that would seem impervious to improvement due to their state of disrepair or local environment. A surefire hit is always the hovel located in one of Tokyo’s warren-like residential areas, usually dating from just after the war, when neighborhoods were constructed on the fly, and which require not just ingenious design skills to improve, but superhuman feats of logistics, since there usually isn’t any room to get heavy machinery to the property owing to narrow alleyways. The architects are lone wolves who waive their design fees and charge only for materials and labor. The recipients of their largesse come up with a ceiling amount they will pay, thus adding another layer of challenge to the architect’s task. The family is then sequestered off-site while the work is done and documented in detail by a film crew. The residents are not allowed to view the property until the “reform” is complete. The climax is dramatic, with the family entering the sparkling new house with tears streaming down their faces and the anodyne voice of the female narrator showing us the stark differences achieved by the architect. 

“Before/After” sparked a boom in home improvement TV shows but not in home improvement–or, at least, not to the extent that it made a difference in the marketability of older homes. One of the main problems with remodeling in Japan is lack of regulation and oversight. The vast majority of homeowners can’t afford the kind of architects featured on “Before/After,” but anyone can start a home improvement company. In the past, the biggest complaint with regard to remodeling was fraud, characterized by operations that over-billed elderly people for poor work. Eventually, the complaints became more general owing to greater demand by homeowners who decided it was cheaper to renovate their present houses than it was to buy new ones, even if that wasn’t necessarily the case. In 2011, the Center for Housing Renovation and Dispute Settlement Support addressed more than 4,500 claims, mainly in Tokyo. In most cases there were no contracts, design plans, or even written estimates. If a particular job costs less than ¥5 million, according to the law, the company that carries it out doesn’t have to be registered as a construction firm, though remodeling companies are supposed to be insured for shoddy work. Also, the work doesn’t need to be inspected by the relevant authorities unless “it affects the integrity of the structure.” Some years ago a Nagoya woman whose condo became virtually unlivable after a reform company replaced her floors and windows couldn’t sue because there was no contract. The National Consumer Affairs Center of Japan handled more than 13,000 reform-related complaints in 2011, or twice as many as in 2010. Since there were no regulations, the center urged homeowners who were going ahead with remodeling to record all conversations. The Japan Bar Association in April 2011 urged the construction ministry to pass new laws to cover the industry, no matter how small the company.

When it comes to home improvement, experts recommend hiring designers who understand the engineering aspects of a remodeling project and can subcontract the various jobs to tradespeople. Such projects, however, can run into the tens of millions of yen, which is why comprehensive discount remodeling companies have sprung up, offering total renovations for much less. Many are associated with major retail home improvement centers, and are thus deemed to be reliable. They cut costs by buying materials in bulk, which usually means limited choices for the consumer. As with anything, you get what you pay for. 

But most homeowners in Japan don’t renovate in any substantial way, because they’re not conditioned to think of their properties as an investment. And until very recently, there were no government incentives to improve properties. The idea that one’s house, as opposed to the land it sits on, accrues or even retains value over time isn’t widespread in Japan, so as long as people can put up with the wear and tear, they let their houses slide. So the question becomes: Do the houses not retain value because people don’t keep them up? Or do they not keep them up because they believe their houses don’t retain their value? In any case, the majority of used houses, especially those built before, say, 1990, are virtually junk. 

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Last Resorts

Posted on by catforehead

Here is another draft chapter from our unpublished book about our house-hunting adventure. This one is about second homes and so-called resort mansions. 

Second-home inspecting in Nikko

One late summer morning in 2012 we were on the Tokaido Shinkansen super express and ran into a friend we hadn’t seen in years. He asked us if we were still living in Tokyo and we said we had moved some time ago because of the earthquake. He then asked what we were doing on the bullet train and we said we were on our way to Atami on the Izu Peninsula to look at some properties we might be interested in buying. He gave us a funny look. “That would seem to be the worst place to live if you’re afraid of earthquakes.”

True. Just the day before Japan’s Cabinet Office Disaster Council had updated its projections for a major earthquake occurring in the Nankai Trough, the deep indentation in the sea bed off the Pacific coast, and Shizuoka Prefecture, which contains Izu, was deemed the worst location in terms of projected casualties, though, technically, most of those casualties would be in the western part of the prefecture, not Izu. In any case, we weren’t completely serious about buying a place there. Having been frustrated in our search for a home we could afford, we were entertaining the idea of keeping our rental and buying a cheap old fixer-upper in a location with cooler summers. If our income situation worsened and we had to give up renting, then we would at least have a roof over our heads, and if things continued as they had been then we’d have a weekend/summer place. There are plenty of old dumps in the highlands of Tochigi and Nagano, or in the wilds of Chiba that can be had for under ¥7 million, though they’d require another ¥3-5 million to make livable. And during our search we noticed there were quite a few such places in Izu, too, mainly besso (separate homes), which we had avoided so far. Second homes tend to be built in specially designated developments managed by companies that charge yearly fees. Also, besso are usually impractical for year-round living, but since we weren’t necessarily going to be living in one year-round we thought we’d see what was available. And Izu is, as they say, the “Riviera of Japan.” More to the point, it’s cooler in the summer.

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Dead houses

Posted on by catforehead

In the last year, we’ve seen a lot of headlines on social media about how you can buy a house in Japan for a song. The usual figure quoted is about $500 US, which makes us think that all these articles spring from one source that’s likely American. We haven’t bothered tracing the articles to one source, though we read a few of them and they all say basically the same thing: local governments throughout Japan are promoting the acquisition of abandoned houses in order to get people to move into their regions and lift the tax base. In some cases, they are even giving houses away, but in any situation these structures will need a lot of work before they are at all habitable. We’ve written extensively about the problem of akiya and since you get what you pay for it follows that the lower the price the more work that will need to be done. The worst akiya, it must be said, are not even on the market, meaning they were literally abandoned by the owner for any number of reasons—either because they moved out and couldn’t be bothered to try and sell it, or they did try to sell it with no success, or they simply disappeared in order to avoid having to pay property taxes, which, in all probability, were very low to begin with. Or they died—with or without an heir. There are a lot of akiya whose owners are dead, meaning they never transferred the title to anyone, and though heirs are still legally responsible in Japan they can be difficult to contact if they don’t want to be found. Those houses are probably unihabitable since they’ve been left to rot, and the local government doesn’t want to spend the money to have them demolished.

There are more than 8 million akiya and, not counting dedicated rental units, many are not livable and fewer are even sellable due to other factors such as location. So when you read an article about somebody who bought a house for nothing and fixed it up into a nice place it’s not just an exception to the rule, but almost an anomaly. Anytime a foreign person buys an old farmhouse or kominka and turns it into a monument to traditional Japanese craftsmanship they’re bound to get it featured in the news, but, again, it’s exceedingly rare. Most people prefer new homes, and because government policy has always privileged new house construction, potential buyers can always find something they can afford that’s new; and in many cases it will even be cheaper than an older house that requires extensive renovation, which describes a substantial number of old houses that are on sale. 

The reason these articles about cheap houses have proliferated in the past year is mainly the pandemic, which, for a while, cut into new home construction. People are moving out of the cities because they can now work from home, so used houses starting selling well, but, again, a lot still aren’t selling. We know of several houses in our general vicinity that are in good condition but they’ve been on the market for months, some even years. There are just too many cheap old houses that people want to sell and not enough buyers. Of course, much of it has to do with Japan’s decreasing population, but mainly it has to do with oversupply. When construction resumes apace, those old houses will become even more difficult to sell. 

More to the point, people who do sell their homes almost never make back what they paid for them. The exception is certain areas of big cities, but even in those cases it isn’t guaranteed, and then the seller will be even less likely to see a profit, especially when you factor in the interest they paid on their loan. (You’re more likely to make a small profit if you bought an old condo in a popular area of Tokyo and resell it later.) At this point, we think most Japanese people know this, despite all the talk about “maintaining property values” at all cost. We certainly know it. Almost as soon as we moved into our new house in 2014 the assessed value dropped by almost two-thirds—and that’s for property tax purposes, which tends to be higher than market assessed value. (Assessed value for land is a different matter) So we know we will never be able to make money on this house, which is one of the reasons why we had it built the way we wanted—meaning few other people would probably want it. But the problem as we get older is: What can we do with it when we reach the age where we can no longer live here? There’s a very good chance we won’t even be able to sell it. Since we don’t have children, there’s no one to inherit it. We’ve already brought up the possibility with some younger relatives that any of them can have it for free, and while they sound interested, we’re not sure if the idea of taking on a property is something they have the wherewithal to carry out. We’ve even thought of donating it to some organization, but that might run into problems with neighbors who find out about it beforehand. 

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The burden of expectations (1)

Posted on by catforehead

What we have to work with

What we have to work with

Once you embark on a certain course of action, even if the motivation is basically speculative, matters often progress of their own accord. Though we hadn’t yet secured the plot of land we liked, the fact that for a month it was ours for the taking made us feel strangely possessive of it. It is only a ten-minute bike ride from our apartment, and in the weeks after our visit to A-1 we would drop by just to have a look at it and imagine what a house might look like sitting on it. Sometimes we would address a pressing consideration, such as: What is the Internet capability in this leafy corner of the city? It was a real consideration since our work depends on online access, and one day we asked the carpenter next door, who just happened to be outside puttering around, what sort of access he had. He didn’t, and didn’t seem to know anything about it since he didn’t need the Internet for his work and wasn’t a technophile. While we admired his resistance to the irresistible pull of modern life we also felt slightly taken aback. Were we thinking of moving into the Ozarks?

Later, we met another neighbor who assured us that optical fiber connections were available in the area, but the seed had already been planted. What about the water we’d be consuming from the well we’d have to dig? The carpenter said it tasted terrible and that he only used it for washing, while the other neighbor thought it tasted better than the city water he used to drink. We knew there was no accounting for taste, but that’s quite a gap in perception. The realtor said something about the depth of the wells: that the carpenter’s was shallow and the other neighbor’s much deeper, but that information only made us more confused and obligated to do even more research into the matter. In other words, coming to a decision about the land was going to be even more complicated than we’d thought. Read More

Back to the land (3)

Posted on by catforehead

CIMG2494Having lost interest in the land in Makinosato, we felt as if we’d retreated to square one. There was still that lot near Shimosa-Manzaki station, but besides being really cheap it didn’t offer anything we could get excited about. Our disinterest was rooted in the same feeling that made it easy to drop the Makinosato plan: We didn’t really want to live in a subdivision, though we also understood that if we wanted to remain in this particular stretch of Chiba Prefecture and weren’t going to pay more than ¥5 million, the only lots we could afford were in subdivisions. This feeling turned to something like despair when several large tracts of land close to our train station were suddenly opened for development. As mentioned elsewhere in this blog, we live in what is called Chiba New Town, which stretches across parts of three cities in northern Chiba Prefecture. As a housing and commercial project developed by the government housing authority in the 1960s and 70s, management eventually fell to the authority’s semi-private successor, UR, which was stuck with a lot of land that was never developed because Chiba New Town didn’t attract residents and businesses in the numbers the government originally envisioned. But the government has also given UR a deadline to get out of the land development business and that deadline is next March. So suddenly, all these overgrown fields bordering the Hokuso Line are being bulldozed and subdivided, and several weeks ago housing companies and real estate agents started advertising the plots, which start at about ¥11 million for 200 square meters. So even though there will be hundreds of plots made available soon in subdivisions we would probably prefer not living in, we at least have to double our land purchase budget in order to buy one.

So after a short respite we resumed our seemingly endless Internet search, checking portal sites for anything–land, condos, used houses–that might offer us something appealing. In terms of land, we increased the budget to see what was available. Portal sites have series of buttons you check to narrow the search, and land prices are normally tiered in multiples of ¥5 million. In the past we’d input the very smallest amount, but now we broadened the search to ¥10 million in the areas we were interested in. There was a lot more available, obviously, and since we’ve been at this thing a while we’ve become better at rejecting properties without looking too closely at them. Read More

Back to the land (2)

Posted on by catforehead

CIMG1994For a short time we were very interested in a small piece of land in Abiko along the Narita line near Kohoku Station. It was in a tightly packed subdivision called Nakabyo surrounded by older neighborhoods whose winding streets and oddly shaped plots of land indicated it had once been an agricultural community. Nakabyo itself was not as distinctive. It was a typical subdivision of the late 80s, with large houses in varying degrees of disrepair situated on lots that were a little too small for them. The community was laid out on a gentle, long slope that ascended south to north, so that houses positioned on the north sides of the parallel streets had a slight advantage over the ones positioned on the south sides, whose own southern exposures were quite close to their southern neighbors. The land that interested us was at the bottom of the slope and positioned on the south side of a street but its own southern exposure faced a large park. Moreover it was on the corner of an intersection, meaning streets bordered the land to the east and the north, not buildings. Only to the west was there another house.

And it was cheap–¥4.3 million. In fact, the realtor implied that we could probably get it down to an even ¥4 million if we paid cash. Apparently, the owner was desperate to unload it, and we wondered why it was so difficult to do so. Abiko is quite popular owing to the many train lines that run through it and the fact that Ueno is a little more than 30 minutes away by express. This was not in central Abiko, but it was close enough. Moreover, the clear prospect on three sides, including a park to the south, made it one of the few truly attractive lots we’d found in a conventional subdivision. The only reason we could see for its relative unpopularity was its size, slightly less than 100 square meters. Since the occupancy rate was 50 percent and the capacity rate 100, it still meant you could build a two-story house of up to 100 square meters, but because the shape of the land was slightly trapezoidal, the orientation of the house was limited. Read More

Unsellable

Posted on by catforehead

usuidai

A room with a sorta view

Several months ago we looked at house in Sakura, Chiba Prefecture that was built in the early 90s. It was on the side of a fairly steep hill and commanded a view of Inba Marsh to the northeast; or, at least, that was what the info at various real estate portal sites implied. The place had already been on the market for almost six months, and when we noticed that the price had been cut for the second time we thought we might take a look at it. Originally, it was about ¥18 million and now it was ¥13 million.

The owners were still living there, but the agent said it would be no problem to look at it. Inspecting properties where people still live isn’t much fun and usually not very helpful. Though you can get some idea of the functionality of a place by seeing how people live in it, those people’s mode of living is always very different from our own, so there’s nothing to gain from it. We have to imagine ourselves in this place without all their stuff.

This particular house was even worse than we could imagine, since the photos on the web didn’t include interior shots. The residents didn’t even bother to clean up and we walked through bedrooms (they have two kids) with laundry thrown on the floor and a kitchen so cramped and cluttered there didn’t seem to be anywhere to stand. Even the “view” that the portal site had publicized turned out to be nothing. The only vista was from one of the bedrooms. It was impossible to tell how much work the place would need since it was difficult to see the floors and walls.

We promptly crossed it off our list and would have forgotten about it completely but it remained on the market and thus on all the portal sites we checked regularly. Last week we noticed that the owner had decreased the price again, this time to ¥8.9 million, which is quite a drop. That means the asking price is now about half what it was when it first went on sale. The agent let on that the family couldn’t move until they sold this house, but if that’s the case they are going to have to do something more than just keep cutting the price. Maybe the house is unsellable anyway, but in this market, which is filling up with older homes all the time, a low price isn’t enough. This particular house isn’t that close to the station. Would a better “presentation” help? It couldn’t hurt, but in any case it’s hard to imagine that there is a buyer out there who would want to buy such a place.

Move on up

Posted on by catforehead

CIMG2287Of the three prefectures adjoining Tokyo, Chiba is by far the cheapest in terms of real estate. It tends to rate on the dowdy end of the desirability index. Kanagawa remains the hippest because of places like Kamakura, Shonan, Yokohama; while Saitama, though often derided in popular culture as a suburban backwater (“Dasaitama”), was developed rather quickly owing to its size and convenient proximity to the capital. In fact, property values in northern Chiba along the Noda and Joban lines are comparable to Saitama’s. It’s when you get farther out on the Keisei and Sotobo/Uchibo lines that the suburbs become sparser and less expensive. Chiba is viewed as the sticks, which is just as well for us because it offers more affordable places within striking distance of where we live now.

Interestingly, one of the most expensive housing developments in Japan is in a relatively remote corner of Chiba. The Azumigaoka New Town is part of Chiba City’s Midori Ward, but the nearest train station is Toke on JR’s Sotobo Line, which means it’s practically in Ichihara. The exclusivity of portions of the new town development, coupled with the unusually large plots of land contained therein, have earned at least two subdivisions in the area–Prestige and One Hundred Hills–the nickname Chibaley Hills, a takeoff on Beverley Hills. We’ve never seen this neighborhood with our own eyes since, as with the real Beverley Hills, the residents discourage tourists and gawkers by restricting access. When it first opened the development got a lot of media attention, which in turn attracted motorcycle gangs, so now they have a patrol that politely keeps out pedestrians who have no business there. Nevertheless, you can find properties in the area on sale at almost any real estate portal site, and they remain pretty expensive, though certainly not as high as they were when they were first built during the bubble era. What’s considered a super luxury in Japan would be more or less upper middle class in the U.S., essentially backyards big enough to provide privacy, two or more bathrooms, and lots of windows and open floor plans. We even saw one property at a realtor’s site with a swimming pool. Read More

Cheaper than dirt

Posted on by catforehead

shiroi4A few weeks ago we learned that a house we had been interested in was sold. We had first seen the house last fall and wrote about it here, and then did some research because the realtor who showed it to us couldn’t answer our questions about the structure and the land. Obviously, other people looking to buy were less apprehensive about the property. Another reason we hesitated for so long was the price. When we first inspected the house we thought ¥15 million was reasonable considering the size, the layout, and the unobstructed view to the south, but then we noticed that in the same general vicinity a developer was selling brand new houses of a comparable size for only ¥16 million, and some were even closer to the train station. Looking at these houses on the web we realized that the reason they were so cheap was because the developer had bought a tract of land in an undeveloped corner of town and just filled it with as many structures as it could. These were not houses ordered by people who first chose a plot and then a model from a list of designs to build on the plot. The developer divided up the tract and went ahead and constructed identical houses on all of the plots, with perhaps minor differences determined by light exposure or shape of the land. By doing it in a mass way, the developer could save money. Though we could tell by just looking at the photos on the web they were not for us, we also thought it would appeal to a lot of potential buyers simply because the houses were brand new, and thus it would be much more difficult for the realtor selling the house we’d been interested in to unload it, but we were wrong.

The existence of such new homes made ¥15 million seem like a lot for the house we had been interested in, so we did a search and found several developments in northern Chiba where brand new homes were being sold at prices below what we had come to think was the average for used homes. Two were in Shiroi on the Hokuso Line, each about 15-20 minutes from the nearest station. In one development they were going for as low as ¥13.7 million and the other as low as ¥14.8 million, which is dirt cheap considering that new homes in the same area with the same floor space and land area, and probably less in terms of fixtures and amenities, were likely going for ¥30-40 in the early 1990s. Of course, comparing anything real estate-wise to the late 80s/early 90s in Japan is a chump’s game, but it does provide a perspective that’s instructive when it comes to making priorities. Read More