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Open House

Not a Pretty Picture for the Housing Market; Area Surrounding Ground Zero Sparks Residential Revitalization; Taking the Clutter out of your Home Office

Aired September 09, 2006 - 09:30   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

BETTY NGUYEN, CNN ANCHOR: Now in the news, it is launch or wait for "Atlantis". If the shuttle mission doesn't start today the next opportunity is in October. Yesterday's launch was scrubbed because of a faulty fuel sensor. Now previous delays were due to weather concerns. We'll keep a watch.
The hunt for fugitive and suspected cop killer Ralph "Buck" Phillips is over. He gave up without incident last night when police surrounded him in a cornfield in northwest Pennsylvania. The five- month manhunt intensified early yesterday when Phillips allegedly stole and crashed a car. Phillips is due in court in about 30 minutes.

NATO officials tell CNN more than 40 insurgents and one NATO soldier were killed overnight in fighting in southern Afghanistan. The NATO push against the Taliban in Kandahar province is being led by Canadian and Afghan troops. And CNN's Anderson Cooper is reporting live from Afghanistan, "Ground Zero and the War on Terror," that is Monday 10:00 p.m. eastern.

Your next check of the headlines coming up at the top of the hour but first OPEN HOUSE with Gerri Willis starts right now.

GERRI WILLIS, CNN ANCHOR: The housing market sinks deeper into trouble. We'll tell you what it means for you. Find out the perfect design for your home office in your house. And move over Ace Ventura, there's a new pet detective in town. Good morning everyone. I'm Gerri Willis and this is OPEN HOUSE.

More confirmation this week of what we've been talking about for months. The housing market is in trouble. This week the Office of Federal Housing Enterprise Oversight announced the sharpest quarter to quarter pull back in home prices since they even started the index more than 30 years ago. And that's not the only bad news.

(BEGIN VIDEOTAPE)

WILLIS (voice-over): Existing home sales dropping to the lowest level in more than two years. Homebuilders pulling plans for new developments. And interest rates hovering around 6 percent. For the prospective buyer it's welcome news, but for sellers like Kate and Hans Koning, it spells trouble. Their 3500 square foot home in eastern Connecticut has been on the market for more than nine months.

KATE KONING, STRUGGLING SELLER: I thought it would go really in a matter of a couple of weeks, really, or in less than a month. Because I had a lot of compliments on the house. I had done several things to get it ready and all the workmen who came to do my things, said, oh, you know, no worries, it will be gone in a second.

WILLIS: And it's got the Konings and their realtor puzzled.

SHERRI STEENECK, REALTOR, HIGGINS GROUP: I'm very surprised that it stayed on the market as long as it has because it has a great flow. Really nice house. Spacious. Has a lot of flexibility in the floor plan.

WILLIS: But their experience is not unique.

BOB FIORITU, COMM. ASSOC. OF REALTORS: Connecticut has seen a rise in inventory of, depending on the town anywhere between 15 and 18 percent. We have seen sales slow down to a number of around about 10 percent off of last year's numbers. So it's a transitioning market in which the buyers can be a lot more selective on the homes that they purchase, sellers have to be very aggressive in their pricing.

WILLIS: And that could mean Kate and Hans would have to re- evaluate their downsizing dreams.

KONING: I really have no idea because I don't know how long this is going to go.

(END VIDEOTAPE)

WILLIS: What the Konings want to know and all you homeowners out there want to know, is there any relief in sight? Nick Retsinas is with the Harvard Joint Center for Housing Studies. Hi Nick?

NICK RETSINAS, JOINT CTR. FOR HOUSING STUDIES: Nice to be with you again.

WILLIS: Do you have any good news for us in the housing market? It just seems like it's all bad news.

RETSINAS: Well, the last few weeks you're right, it's been bad news all the time. Sales down, interest rates trending up, but now being constant. Even the rate of cancellation of new home purchase is down. So in the short term the news is very, very gloomy. We have to put into perspective. The housing prosperity we saw over the last decade was really too good to be true forever. And now the tide has turned.

WILLIS: Tide has turned. But let's talk about this downturn for just a couple of minutes. We've already seen several cities go into negative territory when you talk about prices. How long does this last? And how extensive does it get?

RETSINAS: Well, of course the right answer is it depends. Some of the areas that have had the most significant downturns ironically have been in the Midwest, which hasn't seen sharp house price appreciation but is really suffering from a very weak and troubled economy. As we look at the numbers over time, we think it's going to be gloomy news and a grim day probably for another, anywhere from 12 to maybe 18 months. Over the long run, we're still relatively bullish but I think it's going to be a rocky patch ahead of us.

WILLIS: You know, the experts all said they predicted the troubles would be in places like Miami, San Francisco, the coastal areas where there have been such great price run-ups. Is that where the trouble is going to be next?

RETSINAS: Well there will be. There certainly are pockets. There are pockets where there has been clear overbuilding. We look at areas like Las Vegas and Phoenix where last year 30 percent of the homes were purchased by investors. That makes those areas vulnerable. Areas like California where home buyers have used some of the so- called exotic mortgages makes them sort of vulnerable. So I think it varies market to market but again it's an awfully big country. There are parts of this country where the housing market is still doing pretty well. Texas, parts of the south.

WILLIS: Nick, if I'm trying to evaluate my own market, what is the one single economic piece of information I'd be looking at to predict what's going to happen next?

RETSINAS: It's a four letter word, jobs. I think look at your local economy. Look to what extent that economy is adding new jobs. If it's good, if they are adding jobs that's good for the housing market. But I think those days of going to bed and waking up richer by sometimes double digits, those days are behind us for a good long while.

WILLIS: Now you said that the market could be down for anywhere from 12 to 18 months. Is there any way that the market could turn around faster? And what would cause that?

RETSINAS: Oh it could, I mean if the economy all of a sudden got some added sort of strength it was sort of under girded by some good economic news, we started adding even more jobs than in recent times. If interest rates started to turn the other way and started going down, that could accelerate it.

WILLIS: Well Nick thanks for your help today. We appreciate it.

RETSINAS: Nice to be with you.

WILLIS: Five years after the September 11th attacks politicians and developers are still arguing over the lack of progress at ground zero. But the area surrounding the World Trade Center has staged a surprising and unexpected recovery.

(BEGIN VIDEOTAPE)

WILLIS (voice-over): Two years after September 11th, real estate brokers Ronnie and Seymour Landau moved into a brand new apartment, in what they predicted would be Manhattan's next hot neighborhood. Just three blocks from ground zero.

BONNIE RUSSO LANDAU, DOWNTOWN N.Y. RESIDENT: And we decided that we wanted to do something very different. And one day my husband said let's go downtown.

SEYMOUR LANDAU, DOWNTOWN N.Y. RESIDENT: I wanted to be a pioneer all my life and never had the opportunity. I think that we made the move at the right time.

WILLIS: Put off by fears of terrorism damaged streets and subway lines. Many corporate offices left the financial district after September 11th.

(on camera): Here on Wall Street the heart of the nation's financial district, bankers, brokers and traders used to fill these office buildings surrounding the New York Stock Exchange. Not anymore.

(voice-over): Now these Wall Street office buildings have gone condo, attracting young professionals, families, and the services that cater to them.

ERIC DEUTSCH, PRESIDENT, DOWNTOWN ALLIANCE: By September 11th our population downtown -- residential population was about 23,000. Today it's 37,000. Soon it will be 40 plus thousand. That means retailers want to be open at night. Restaurants want to be open not only at night but on weekends. So now you have people who are here 24/7. So it is becoming that type of neighborhood.

WILLIS: Developers are hard at work to attract more residents downtown. And they've hired big name designers to draw them in. These apartments by designer Phillip Stark are right across the street from the New York Stock Exchange. The sales office for the Armani designed apartments of 20 Pine is open 24 hours a day.

S. LANDAU: It's good value here. Well priced property, good square footage, very interestingly redone, rethought space. Residential, inside of commercial. That was rethought, different ways, different shapes.

WILLIS: More than 5,000 apartments have been added downtown since 9/11. With construction just starting at ground zero, the new residents are changing the character of lower Manhattan. Overlooking the future World Trade Center memorial, another building of luxury apartments is almost complete.

(END VIDEOTAPE)

WILLIS: I used to live in that neighborhood and it's remarkable to see the difference five years after 9/11. Amazing. Monday is of course five-year anniversary of the 9/11 attacks. And on Monday beginning at 8:30 a.m. eastern, CNN Pipeline will play CNN's original coverage, uncut, unedited as it happened live on CNN five years ago. Just log on to CNN.com.

Coming up on OPEN HOUSE, all you need to know about rules collection agencies must follow.

Plus, how to clean up a mess like this and get your home office in order. And when your pet goes missing, this woman springs into action. Meet a real live pet detective coming up.

But first, your tip of the day.

(BEGIN VIDEOTAPE)

WILLIS (voice-over): The time is now to take steps to prevent a catastrophe in case your pet goes missing. Take clear identification photos and note any unique markings or scars. Make sure your furry friend is always wearing tags with its name and proof of vaccination. Include your name and contact information as well. You can also take your animal to the vet to get microchipped. It's a tiny chip implanted right beneath the skin and contains information on the off chance your dog or cat loses his or her tags. Or get your pet tattooed with a unique id. And then register that number. And remember --

BOB BARKER: Help control the pet population. Have your pet spayed or neutered.

WILLIS: And that's your tip of the day.

(COMMERCIAL BREAK)

WILLIS: Every year "House and Garden" magazine sponsors the Designer Showhouse in Bridge Hampton, New York. Here's what happens when you give 30 top designers a multimillion dollar mansion to work with.

(BEGIN VIDEOTAPE)

WILLIS (voice-over): Twenty-five of the nation's best designers strut their stuff in a massive 18,000 square foot house, custom built for the event.

SUSANNA SALK, EDITOR, "HOUSE & GARDEN": There are eight family bedrooms and two staff and 10 full bathrooms. There is a game room, a media room, an amazing three car garage. A wine cellar that holds almost 4,000 bottles.

WILLIS: To find out what inspired some of the designs we went straight to the designers themselves.

PHILIP GORRIVAN, SHOWHOUSE DESIGNER: I'm calling this room the new outdoors. The goal was to bring outdoor furnishings and fabrics to a new level of luxury, taking the luxuries of interior space and bring them to a virtually outside environment.

ERNEST DE LA TORRE, SHOWHOUSE DESIGNER: I wanted to achieve an art collector's rhythm and so I assembled a world class collection of art. And then I wanted to create furnishings that were worthy of the art. So a lot of them are collector's pieces or interpretations of collector's pieces from the last century. The room is all about bridging the past and the present, and bringing the old and the new together. WILLIS: The new in this room, a ceiling made entirely out of cork. And that's not ordinary wallpaper, either. It's pressed corn. Next, a living room with many functions.

PRISCILLA OLMANN, SHOWHOUSE DESIGNER: We tried to design a room that was both elegant as well as casual. You can put your feet up on the coffee tables, it's perfectly fine. You can lay down on the sofas, make yourselves feel comfortable. And while you're there you can look at some pretty spectacular items. A fabulous chandelier, some very good artwork over there.

WILLIS: If pinks and greens are your cup of tea, take a look at this room.

DENNIS ROLLAND, SHOWHOUSE DESIGNER: I wanted to achieve a happy room where guests would come to this house and have to stay here for a weekend or a week. We did a lot of details such as the shell motif on the headboard. The headboard was custom designed just for this room. I designed it to put here and by incorporating the shell motif with sea scrolls under the shell and then the S scrolls which come down the side. And then we echoed all those same motifs in the border on the curtains. It's summery beach motifs, but done in a very fresh new way in the pinks and greens and whites.

WILLIS: Some other highlights of the tour, a bathroom inspired by Van Gogh's famous starry night painting. And a tangerine and cream dining room with a ping-pong chandelier. And this dream home is up for sale for a whopping $25 million with one catch, you'll have to furnish it yourself.

(END VIDEOTAPE)

WILLIS: For 25 million bucks I should get all of those furnishings. Seriously, though, all of the proceeds from the Showhouse event went toward a good cause. The South Hampton Hospital. Now the Hamptons might be known as a vacation hot spot for the rich and famous but I'll bet you didn't know this. The Hamptons are also becoming a hot spot for lost pets. One woman is trying her best to keep a leash on this fast growing problem.

(BEGIN VIDEOTAPE)

JIM CAREY: Excuse me, gentlemen, Pet Detective.

WILLIS (voice-over): In "Ace Ventura", Jim Carey is a goofy pet detective. But for this woman, finding animals is serious business. Meet real life pet detective Pat Lillis.

PAT LILLIS: PET DETECTIVE: I like to catch, I prowl around the edge of things.

WILLIS: Like any detective, Pat's job involves legwork.

LILLIS: What happened to chipmunk?

WILLIS: Hard work. LILLIS: I like this because I can whack it.

WILLIS: Patience.

LILLIS: I mean I deal with idiots. Idiots. Idiots every second of the day.

WILLIS: And a sense of humor.

LILLIS: As a woman said to me, I beat all the bushes around here. I said well I wouldn't be under a bush either if you were beating it.

WILLIS: Pat's work is a labor of love, reuniting pets with their lost owners.

LILLIS: My kitty. And this poor thing is -- We find far less people than we do animals. The owners we don't find.

WILLIS: And the other way around.

UNIDENTIFIED FEMALE: We lost our cat on Sunday. She was spotted in the Hamptons.

WILLIS: The Hamptons are best known for beautiful beaches, people and summer homes. But as Pat Lillis knows only too well, there is a dark side. Each summer she says hundreds of pets are lost or abandoned. Left to fend for themselves. Tired, scared, hungry.

LILLIS: People tend to bring their animals on vacation with them and they don't put collars and tags on them, and don't microchip them, but they do tend to lose them.

WILLIS: Pat Lillis has made it her business to stop this from happening. Her methods are not high tech. A flyer here, a phone call there, a visit to the local vet. But they do get results.

UNIDENTIFIED FEMALE: We got our little kitty back and we have a happy home now. Ok. Thank you. Bye.

WILLIS: In Pat's case it's not hope that motivates her, it's merely what she calls her Irishness.

LILLIS: We've been brought up to see everything through to the bitter end. You don't give up because your backbone isn't spineless and pathetic if you give up.

(END VIDEOTAPE)

WILLIS: For more information on Pat Lillis, go to elsasark.org.

Still ahead it's time to get your house in order. Maybe, well, just the home office. Weekend project is coming up.

Plus, the IRS decides to start using collection agencies. But did you know collection agencies have to follow strict rules? We'll tell you all about it when we come right back.

(COMMERCIAL BREAK)

WILLIS: I don't know about you, but my home office is what I like to call organized chaos. Ok, it's a mess. And it's no way to work. And now with moms and dads trying to get things accomplished and the kids tackling school work, an organized home office is a necessity. "Real Simple" Suzanne Rust is going to tell me and you how to clean up the clutter. Suzanne good to see you.

SUZANNE RUST, EDITOR, "REAL SIMPLE": Good to see you, too.

WILLIS: All right. So, my home office is a jumble, there's bills, there's work stuff. All kinds of projects and it's all kind of mixed together. So how do I get started?

RUST: How many people share this problem? I think it's one of the central problems we have now. And now it's getting back to school mode. Everyone is trying to get things in order, so "Real Simple" we're going to help you conquer the clutter in your home office. You know it's just about having the right frame of mind and the right equipment. And you can get started, you can get a lot done on the weekend.

WILLIS: My frame of mind is it scares me, so I've got to get past that obviously.

RUST: Fear not. You can start by looking through all those piles and sort them accordingly. You know you've got your home office stuff, you have your business stuff, maybe some things for the kids, back to school, mortgage. Make neat piles of each thing and then get yourself some of these document boxes. You can get them in any home stores. You know, sort them first by that so at least you know where everything is, you're not ambushed when you're trying to pay some bills. Ambushed by some other piece of paper on your desk. So start with that.

WILLIS: So it's sorting first.

RUST: Sorting first with these, big bins also work well or these. Whatever -- for how much mess you have. You know they're attractive and that helps also.

WILLIS: Pretty works.

RUST: Pretty works.

WILLIS: Ok, I like that. So it's you sort first, but I have to tell you, every inch of the desk is covered with stuff. And I'm kind of visual so I put little post-it notes on everything. I don't even remember what they mean. I mean that's the embarrassing part about it. They're all over the front of the computer.

RUST: I know, I know.

WILLIS: What's the next step? RUST: Just get the stuff off your desk however you can. We suggest different things like these trays are perfect for things that you use frequently that you need to get to. You know like computer printer paper or documents that you use regularly. And you can also put things in files, bills, invoices, any mortgage payments, get them in file folders is helpful. Magazines, any kind of flyers, things like that. You don't need them every day. So get something like the magazine folders. Those files that you can put on the shelf.

WILLIS: These are awesome.

RUST: Yeah, you want to go vertically when you can because you're getting a desk clear, you're getting things in order. And if it's in a place where you can get to it you're more likely to put it back. It means you have space and it's not crammed.

WILLIS: So it's a vertical organization you're getting everything arranged so that you can see it and what you need most closest to you.

RUST: Right, you can reach it but it's not like all over the place. You can actually find what you needed to do to begin with.

WILLIS: All right, ok, one big problem for both me and my husband. The mail, there's so much of it. There are the catalogs, there are the bills, oh it's terrible.

RUST: It doesn't stop, so you need to find the system that's going to work for you. And we really like the in and out baskets. They are transparent, you can see through them. In the top you want to put things you're going to be paying directly and filing hopefully on the top and anything that's outgoing. Outgoing bills, a movie that you have to take back or like any kind of notice that needs to go back in the bottom. And that way you don't have a place for it. It's not like in a pile. You know it's somewhere visually clean and neat where you can see it and get rid of it.

WILLIS: What other tips do you have for the organizationally impaired? That's how I like to talk about myself.

RUST: Well there are lots of things. We have this wonderful caddy that you can kind of bring from room to room. Like let's say you want to keep it under your desk or on top of your desk, it's so pretty. For the most part to sort bills and payments and whatever else you need. But you can also take it to the office if you need to or to another room of the house. That's helpful. In a home office you really want to be organized. You want to give a sense of professionality to it as well. A good task light is perfect, it just keeps you focused on what you're doing on your nice clean desk.

WILLIS: Suzanne thank you so much.

RUST: Thank you.

WILLIS: As always, if you have an idea for a weekend project, send us an e-mail to OpenHouse@CNN.com. And you can watch past weekend projects on our Web site, CNN.com/OpenHouse.

Straight ahead, straight talk on how to handle the collection agencies and the rules they must follow. That's next on OPEN HOUSE.

(COMMERCIAL BREAK)

WILLIS: The IRS announced this week it's handing over private information to debt collectors on people who owe less than $25,000 and have not disputed their debt. But did you know debt collectors have to follow rules. You can only be contacted between the hours of 8:00 a.m. and 9:00 p.m. No midnight calls. And your cell phone and your work phone is off limits. Debt collection agencies cannot ask or accept payment and of course be on the look-out for scam artists who pose as collection agents. You should have already received a letter from the IRS stating your account has been turned over to a special collections agency. And remember, the IRS does not ask for pin numbers, passwords or other information related to your financial accounts. If you suspect fraud call the agency's toll free helpline at 800-829-1040.

And if you have any questions or tips you want to share with your fellow OPEN HOUSE viewers, send us an e-mail, to OpenHouse@CNN.com. And you'll find more on today's guests and topics on our Web site, CNN.com/OpenHouse.

As always, we thank you for spending part of your Saturday with us. OPEN HOUSE will be back next week, right here on CNN, and you can also catch us on Headline News every Saturday and Sunday at 5:30 p.m. Eastern time. Don't go anywhere. Your top stories are next on "CNN SATURDAY." Have a great weekend.

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