All posts by admin

Custom homebuilding: What to know

Republished from The Seattle Times Oct. 25th, 2016.

Six months after moving into their new home, Steve and Jane Nelli are still astonished every time they walk in.

“Our great room, with its panoramic view of the golf course. It’s just … impressive, every time. It came out exactly the way we envisioned – no, better actually,” Steve says.

The Nellis’ home at Suncadia Resort, which was built by Lynn Romans of WoodRidge Custom Homes, was the culmination of a year’s worth of hard work – and what felt like thousands of decisions.

“That was a surprise, as a first-time home builder,” says Steve. “How much work it was. How many decisions you have to make. From the big stuff like cabinetry and flooring to the little things like faucets and door knobs.”

Getting to make those choices is exactly what draws many people to custom home-building, says Michael Eide of Eide Homebuilders. It means a bespoke home that’s a realization of your personal vision in every way – a dream for some, and a nightmare for others.

“If you don’t have the time to invest in those decisions, custom isn’t for you,” says Jeff Hansell of Swiftwater Homes. “You should buy something move-in-ready.”

So for those who do choose to go the custom route, how do you do it right?

Eide, Hansell, and Steve all agree: the key is finding the right builder.

“You need to choose a contractor that you get along with, that you can trust,” says Hansell.  “I like to say that you’re going to get married for almost a year, so you’d better make sure this is someone you can work with.”

And like any good marriage, your relationship should be based on communication and honesty.

“Everyone needs to be upfront about their expectations from the get-go, especially around budget,” says Hansell. “I’ve had people at the end of a project tell me that they had this reserve budget set aside because they were told that everyone always goes over budget. In the end, that budget went unspent.”

Almost as important as hiring the right builder is hiring them at the right time – namely, as early in the process as possible, before design is finalized.

“Sometimes a client will come to me when everything’s designed,” says Eide. “At that point, it’s much harder to find cost savings. If we’re involved from the very beginning, we’re able to give cost estimates as the design proceeds so we can give them direction.”

Eide says this can have a huge impact on the bottom line. “When you plan and cost at the beginning, you’re able to strike a balance. What are the things that matter most to you? We might want to splurge a bit there, and we can balance that out with savings on the things that aren’t quite as important. It’s much more difficult to strike that balance when you’re making decisions as you go.”

According to Hansell, a good builder can help you establish those priorities by asking the right questions. “It’s not just a matter of, what kind of flooring do you like? A contractor considers the use of the home, where a family is in its lifecycle. We want to make sure that home is going to work for you, not just on move-in day, but for years and decades beyond. We want your home to be as future-proof as possible.”

Apple Partners With Home Builders To Accelerate HomeKit Use

Republished from appleinsider.com October 19th, 2016. Written by Roger Fingas.

 

Looking to speed up adoption, Apple is partnering with various U.S. home builders to get HomeKit-ready technology installed in some homes from the start, a report said on Wednesday.

“We want to bring home automation to the mainstream,” Apple’s VP of product marketing, Greg Joswiak,explained to Bloomberg. “The best place to start is at the beginning, when a house is just being created.”

Some partners include Lennar, KB Home, and Brookfield, but the companies haven’t said when their enhanced homes will go on sale.

The principle however is that it can be easier to sell automation technologies when they’re built into a house, especially since it doesn’t involve retrofitting anything, and the cost of the hardware can be baked into a mortgage. A KB spokesman noted that the company’s basic wireless package is $2,000, which translates into just a few pennies extra in monthly payments.

One of the main obstacles to HomeKit adoption is believed to be the upfront cost. A HomeKit-compatible Schlage deadbolt is about $200, several times the price of a conventional one. Even smartbulbs can be substantially more expensive than their ordinary counterparts.

Apple made HomeKit an important pillar of its iOS 10 upgrades in September, introducing a Home app for centralized control, and expanding the types of supported accessories. The software’s improved notifications will even let users see live video feeds, and trigger remote functions —like opening a lock —without having to open an app.

Expect Long Waits For Post-Hurricane Home Repairs

Republished from Bloomberg.com October 13th, 2016. Written by Patrick Clark.

There will be plenty of large-scale reconstruction to do in the wake of Hurricane Matthew, which has been blamed for dozens of deaths since it made its first U.S. landfall Friday and is still causing catastrophic flooding throughout eastern North Carolina.

But in the short term, it’s also creating demand for more minor home repairs, at a time when a contractor shortage has already meant longer waits for homeowners.

On Monday, requests for installation of new windows were up 133 percent in Myrtle Beach, S.C., compared with the same day last year, according to HomeAdvisor, a website that connects homeowners with service professionals. Requests for repair work on tile roofs were up 120 percent in Savannah, Ga., and work orders for repairs on portable generators increased 241 percent in Jacksonville.

“My expectation is that we’re going to see some major labor bottlenecks,” said Brad Hunter, chief economist at HomeAdvisor. “We were already seeing labor shortages before the storm, and when there’s a spike in demand, labor becomes a bigger problem.”

The storm may have caused about $10 billion in damage, according to a recent estimate by Goldman Sachs—a fraction of the worst-case estimates made last week as the storm neared the Florida coast, but still a sum that calls to mind the wholesale rebuilding of flooded houses and neighborhoods.

Over the past three decades, spending on home renovations in response to natural disasters averaged about $10 billion per year, according to Todd Tomalak, a vice president at John Burns Real Estate Consulting. But the past three years have been easier on homeowners, with disaster-based renovation spending coming in around $7 billion a year.

Either figure is a small fraction of total spending on home renovations, which will likely approach $300 billion this year.

New demand for home repairs in the wake of Hurricane Matthew will come at a moment when a strong housing market has boosted demand for renovations, as sellers seek to make their homes more attractive before listing them and buyers seek to customize them before moving in.

Granted, clearing debris or fixing a generator requires a different skill set from hanging drywall or putting a roof on a house—but demand created by the hurricane could also overlap with labor shortages facing builders of new homes.

Before the hurricane, a shortage of qualified workers was already extending the average time it takes to build a new home in Florida by about two weeks, according to a September survey conducted by Tomalak’s firm. According to an Orlando-area builder interviewed for the survey, the cost of hiring workers to frame a house rose 60 percent from February through August.

“Labor costs should go way up, and we could see several months of really high labor costs and higher [work] cycle times,” said Tomalak. “Eventually, more labor gets attracted from other areas.”

Warning: Get Ready For A Wave Of Misleading News About Mortgage Rates

Republished from Realtor.com® October 12, 2016 Written by Jonathan Smoke.

We are bombarded by info about mortgage rates. You can’t even listen to the radio for long these days without hearing an ad imploring you to “refinance now, as rates have turned lower.”

Here’s the problem: Much of the general rate information reported to consumers is just too old and generic to be helpful to actual living, breathing people, spiffy commercials notwithstanding.

Consumer media outlets report on mortgage rates as if they move glacially and are the same everywhere, for everybody. This, simply put, is wrong. Mortgage rates are constantly changing and vary by location, by loan product and terms, and by borrower.

Most people are left with the impression that mortgage rates are less dynamic than they are. That’s because the rates are complex to follow, so most reports about them have to be overly simplified to focus on averages for the most popular loan products.

Most consumer-targeted mortgage rate stories are based on the weekly reports issued by Freddie Mac on the averages they collect by surveying lenders. These reports come out every Thursday.

Even if you accept these simple averages as representative of the overall trend—when rates are on the move—the weekly averages are slow to represent the true current levels.

The misdirection game

Last week, the news on Thursday was “Mortgage Rates Largely Unchanged.” That’s because the Freddie Mac survey average last week for the 30-year conforming rate was 3.42%, exactly the same average as the previous week.

That would make you think that rates are very calm. And in terms of the weekly series, the average reported last week was only 1 basis point higher than the lowest weekly point this year, which was reported back on July 7. (A basis point is 0.01 percentage point.)

But this weekly view gives you the false impression that rates are stable and have been all summer and fall. In reality, rates have been fairly volatile. By my calculations of daily averages of lender rate offers, mortgage rates have moved an average of 5 basis points within each week since the last week in June. Five basis points affects a monthly payment amount by 0.6%, so this is anything but calm.

Over the past 15 weeks, we’ve had seven down weeks and eight up weeks in rates. That’s why they seem unchanged.

And last week saw the single biggest amount of weekly change during that time period—upward movement.

So here’s the most confident forecast I can give you about mortgage rates: We’ll see many news reports on Thursday about how rates have jumped in the past week. The average for the 30-year conforming rate will likely be reported on Thursday as being up more than 10 basis points and possibly up by as much as 14 basis points.

The current upward movement in rates is a reflection of financial markets globally expecting less quantitative easing from the European Central Bank and another hike by the Federal Reserve this December.

It is tough to predict exactly where rates will be in any given day, week, or month, but the general consensus from here is that we are likely to see a gradual movement upward.

When the media begin to focus on this, expect a lot of focus—and rightfully so—about the impact of higher rates to borrowers. But to understand the impact on your circumstances, get a current read on local rates that apply to your situation. Look upcurrent local mortgage rates on realtor.com® or visit local lenders.

We may see rates pull back again if the economic data point to differing views of monetary policy or strength, but the most likely outcome in the weeks and months ahead is moderately higher rates. Got that?

That means if you are in the midst of a purchase or refinance, it might be a good time to lock. And if you are thinking of purchasing or refinancing in the near term, you might want to act while rates are still very close to the lows for the year. Another few weeks like this one, and we’ll find ourselves waxing nostalgic about just how low rates were in the summer of 2016.

Talking About The Budget Doesn’t Have To Be Awkward. Really!

Republished from Houzz.com August 15th, 2016. Written by Michael Lowe.

Talking about money with clients can be a sticky subject, but it’s important to have this discussion early to make sure you can complete the proposed project on time and on budget. Being confident about your pricing and process shows you’re a seasoned professional and you’re not afraid to have the tough conversations up front. The budget discussion is an essential one to determine whether or not the person matches your ideal client profile.

Here are five tips from industry professionals.

1. Discuss Using Actual Numbers

Coming to the table with actual numbers from past projects can help you ease into the conversation. Showing anonymized past contracts can reassure your potential clients that they are getting a fair deal, while giving you something concrete to refer to when crunching numbers.

When prospective customers bring a photo of one of his projects, Christopher Awadalla of Sanctuary Kitchen and Bath Design in Denver makes sure to show a copy of the contract from that exact project showing the actual cost. “I walk through the different materials and fees and discuss their own project versus the one in the picture,” he says. “Our customers appreciate that we share information that is ‘real,’ and it sets budget expectations at a realistic level from the very beginning.”

2. Give a Quote and Be Flexible

Many professionals are worried they might scare interested homeowners away by giving a quote that’s too high. However, Agnese Purvinska of Aggie Designs in Brooklyn, New York, recommends giving your quote and using it as a jumping-off point for additional discussions.

“Usually my estimate is at least 50 percent higher than what they thought it would be,” Purvinska says. “When they tell me their budget, I adjust the scope to fit their budget. This way I am not out of a job, and they are getting a good value for their budget.”

3. Understand What Works for You

Finding what works for you and sticking to it can be a great way to streamline budget discussions. Telling potential customers up front how you prefer to handle project pricing will ensure that you’re both on the same page from the beginning.

“I charge on an hourly basis, and though I am asked regularly if I will consider working for a flat rate, I have decided what works best and don’t falter on it,” says Jodie Rosen ofJodie Rosen Design in Toronto. “When I change the way I charge, it never goes well, for them or for me — it’s not worth it! Not making exceptions to the way I charge for my services eliminates any problems that could come up during the process — nothing is ‘gray.’”

4. Offer a Range

Offering clients estimates of the high and low ends of the budget spectrum gives them a general idea how much they should budget without tying you to an exact price.

“We present a budget range for the project immediately after our first meeting,” says Neal J.Z. Schwartz of Schwartz and Architecture in San Francisco. “This method gives the client a good idea of costs before the client puts in a lot of time and energy toward building their dream or we invest time in working up estimates. It also injects a potentially needed dose of reality into the equation early on.”

What budget discussion tips do you have? Let us know in the Comments section below.

Expect High Demand But Lower-Than-Normal Supplies In The Fall Housing Market

Republished from The Washington Post Oct. 4th. Written by David Charron.

This year has been a busy one for real estate, but that trend will reverse course as we head into fall. A real estate slowdown this time of year is normal, of course. But this year in particular saw such huge numbers of sales during the spring and summer that we have had a large enough drop in inventory that there may not be enough homes to meet the buyer demand this fall.

The Washington metro area began the 2016 real estate season with about 700 more homes on the market compared to the year before — a first-quarter total of 9,744 listings vs. 9,015 (or approximately an 8 percent increase) and each of the early spring months continued to add even more new listings to the market. However, buyer activity was so strong during the spring and summer that we are entering the fall with a 16 percent lower volume of inventory compared to last year.

When we looked back to September 2015, there were almost 13,000 homes for sale. But at the end of August 2016, there were just over 10,000 active listings on the market. While that is better than those very lean years when we saw the number of active listings decrease to about 6,000, it still suggests the likelihood of a slowdown in activity while buyers wait for more homes to come on the market next spring. All this activity earlier in the year means that so far in 2016, the total volume of homes sold is 7 percent higher than the same time last year for the Washington region and 5.3 percent higher in the District.

As one would expect, the strong demand for homes helped drive up sale prices, making some of this year’s prices the highest on record. Within the District, the January through August year-to-date median sold price reached $545,000. When we add the suburbs into the mix, the median price comes to $417,000. Surprisingly, the median price for the District increased in August, topping $575,000 making it the highest on record. Since prices don’t usually go up in August, this might indicate buyer demand is so strong that homes will continue to be snatched up even though there aren’t as many to choose from.

Part of this surge in demand was driven by the rush to close on a home resulting from the threat of interest rates going up. Now that the Federal Reserve has decided to defer any increase until December at the earliest, my guess is that buyers won’t feel as much pressure to purchase as quickly. Despite the busy summer, I’m still going to give a slight preference to my prediction for a seasonal slowdown.

Of course, the upcoming election is on everyone’s mind, but this rarely has the deep impact that those outside the Beltway often perceive it does. Anyone who is going to undergo a job change because of a new administration has months of warning that it is going to happen, as do the new employees who are hired from outside the area. The consequential impact on the local real estate market takes place over such a long period of time that we are unlikely to see any major spikes on either the buyer or seller sides.

So far, 2016 has been the best year for real estate since the housing crisis. More new listings have gone on the market and more have gotten snatched up. Even though prices are increasing, the good news is this is the time of year when sellers are more open to negotiation as the busy summer has come to an end. If you are still looking to buy a home, don’t rule out finding one that fits your budget before the end of the year.

Housing Affordability At The Worst Level In Seven Years

Republished from Housingwire.com Sept. 29th, 2016 written by Brena Swanson.

Home affordability is at the worst level in seven years, with 24% of the U.S. county housing markets less affordable than their historic affordability averages in the third quarter, the most recent ATTOM Data Solutions Home Affordability Index for third quarter 2016 recorded.

This level is not only up from 22% of markets in the previous quarter, but it is up from 19% of markets a year ago.

The only other time affordability came in worse than this was in third quarter of 2009 when 47% of markets were less affordable than their historic affordability averages.

The affordability index is based on the percentage of average wages needed to make monthly house payments on a median-priced home with a 30-year fixed rate and a 3% down payment — including property taxes and insurance.

“The improving affordability trend we noted in our second quarter report reversed course in the third quarter as home price appreciation accelerated in the majority of markets and wage growth slowed in the majority of local markets as well as nationwide, where average weekly wages declined in the first quarter of this year following 13 consecutive quarters with year-over-year increases,” said Daren Blomquist, senior vice president at ATTOM Data Solutions.

“This unhealthy combination resulted in worsening affordability in 63% of markets despite mortgage rates that are down 45 basis points from a year ago.

According to the report, out of the 414 counties analyzed in the report, 101 counties (24%) had an affordability index below 100 in the third quarter of 2016, meaning that buying a median-priced home in that county was less affordable than the historic average for that county going back to the first quarter of 2005.

Key counties highlighted include: Harris County (Houston), Texas; Kings County (Brooklyn), New York; Dallas County, Texas; Bexar County (San Antonio), Texas; and Alameda County, California in the San Francisco metro area.

Despite the negative news, Blomquist did point out one positive area.

“Some silver lining in this report is that affordability actually improved in some of the highest-priced markets that have been bastions of bad affordability, mostly the result of annual home price appreciation slowing to low single-digit percentages in those markets,” Blomquist continued.

He explained that this is an indication that home prices are finally responding to affordability constraints — a modicum of good news for prospective buyers who have been priced out of those high-priced markets.

This infographic from ATTOM Data Solutions shows the U.S. home affordability affliction and some possible antidotes.

The Corbo Group—Custom Design Homes Since 1977

Owners Ralph Corbo and son Colin Corbo have become known throughout the Connecticut and New England area as expert builders in the custom home industry. What sets homes crafted by The Corbo Group apart from other custom homebuilders is their attention to taking into account the overall natural surroundings of the communities in which they build. Each of their custom homes enhance the existing surroundings of the land while providing homes of remarkable value.

Featured on The DIY Network’s “Raising House”, The Corbo Group has been the recipient of over a dozen coveted building awards including 2015’s CT Home Builders HOBI Award for Best Custom Home 8,000-9,000 square feet.

Continue reading

Speak Like You’re Right. Listen Like You’re Wrong

Mary Adams, Director of Sales for FPG shares the top three communication errors in sales as well as her top tips for instilling confidence in potential buyers.

In this video, learn to:

  • Avoid the body language errors that decrease confidence in potential buyers.
  • Speak with confidence to transfer your certainty to potential buyers.
  • Communicate confidently not just with your words, but with your body language, too.
  • Listen intently.

Watch to communicate confidently, avoid common errors and increase your sales success.

Single-Family Homes Are a Buyer’s Best Friend

Republished from National Association of REALTORS® Sept. 23rd, 2016. Written by Amanda Riggs.

Overwhelmingly, home buyers have purchased detached single-family homes more than any other type of home in the last 35 years. Since 1981, the Profile of Home Buyers and Sellers has collected data on the types of homes purchased throughout the three-and-a-half decades. Consistently, 74 to 88 percent of home buyers purchased single-family homes each year. Home buyers purchased townhomes and condos each at roughly 10 percent of the time and other types of homes less frequently.

In 1981, 76 percent of home buyers bought detached single-family homes, eight percent bought townhomes, and 16 percent bought condos. By comparison in 2015, 83 percent bought detached single-family homes, seven percent bought townhomes, and three percent bought condos.

Single-family homes were the top home choice in 1985 at 88 percent, and again at 87 percent in 2002 and 2004. From 1985 to 2002, four in five buyers steadily purchased single-family homes. From 2005 to 2012, three in four buyers bought single-family homes. Townhome purchases hovered around nine percent for the majority of the 1990s and early 2000s and then dropped one to two points since 2008. Condo purchases were most popular from 1997 to 2007 at 11 percent for several years, but also dropped a few percentage points starting in 2008. By 2015, only three percent of homes purchased were condos. Other home types started gaining popularity in 2003 at two percent and have grown in market share to seven percent by 2015.

To follow this series as we discuss the findings of 35 years of profile data, check out the hashtag #NARHBSat35 on your social channels. NAR Research will be releasing trend line data since 1981 to celebrate 35 years of home buyer and seller demographic research.