Supply & Demand Drives Home Pricing

One of the key factors to success in any kind of business is supply and demand. The National Association of Realtors (NAR) agrees that this principle has boosted home pricing in the current housing market. NAR’s chief economist Lawrence Yun believes the housing market is still going strong because of the lack of inventory even though data shows a modest growth rate reduction.
Yun states,”…with homebuilding activity still failing to keep up with demand and not enough current homeowners putting their home up for sale, prices continued their strong ascent – and in many markets at a rate well above income growth.”
In the second quarter of last year the peak existing single-family home price was $229,400, this year however, the second quarter single-family home price has risen 4.9% with a median single-family home price of $240,700.

According to NAR findings, new construction cannot keep up with the demand for new homes.  In the second quarter this year 40% of the listings sold over their listing price. “Many listings in a majority of markets – and especially those in lower price ranges — had multiple offers and went under contract quickly because of severely inadequate supply,” Yun added.

This coupled with low mortgage rates have many potential home buyers wanting to purchase a new home now.  In the Northeast region there was a 7.6% increase in existing homes sales and the median home price increased to $273,600. The Midwest, though not as high of an increase, was 10.4% in total existing-home sales with a median price of $191,300. The West came in next with a 1.4% increase in total existing-home sales with a median home price of $345,500.  The South came in last with a 0.3% increase with a median home price of $214,900.

Whether you are in the market to sell a home or purchase a home, now is the right time.  The housing market is holding strong and is a great investment for your money.  Locally in St. Tammany Parish, Ron Lee Homes, a new home builder in Covington, Louisiana, is building new homes for sale as well as completely custom homes designed completely from your vision of how you would like your new home to be.  We have been keeping a steady pace of new construction for the past 2 years, and we are constantly meeting with new custom home buyers as well as buyers who are looking for homes to buy immediately.  If you are interested in building or buying a new home, Contact Us at 985-626-7619 or E-mail Info@RonLeeHomes.com.


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Land in Louisiana Still Available for Building One-Story Homes

New Orleans is a big city with many surrounding suburbs, and even though it is a populous area, there is still a lot of land in Louisiana on which to build.  The area is less dense than many cities across the country with very little land constraints.  No wonder the US Census Bureau’s Survey of Construction (SOC) reported that in 2015 that single-story new construction homes in Louisiana were the highest in the nation.

The SOC is a monthly and annual report that is organized by the National Association of Home Builders (NAHB) that surveys important information corresponding to the homebuilding industry.  Examples of data gathered include start and completion dates of new homes for sale, new homes sales prices, square footage of new houses and the number of bedrooms in new homes built. The SOC is an important factor in determining where the country’s economy stands.

Nationwide the data found that 58% of new construction houses built in 2015 were two or more stories and 42% were one story.  The country is divided between ten divisions, Pacific, Mountain, West North Central, West South Central, East North Central, East South Central, New England, Middle Atlantic, and South Atlantic. In the Pacific division 69% were two or more stories, in the Mountain only 47% were two or more stories, in West North Central 52% were two or more stories, in West South Central only 45% were two or more stories, in East North Central only 49% were two or more stories, in East South Central 58% were two or more stories, in New England 84% were two or more stories, in Middle Atlantic 80% were two or more stories and in South Atlantic 66% were two or more stories.

The Northeast had the largest number of two or more stories being built in 2015 due to high density with little land which made lot prices very expensive.  Luckily Louisiana which is in the West South Central division has reasonable lot prices making it an attractive place to buy a lot and then build a new home.  If you happen to live in St. Tammany Parish in Southeast Louisiana, Ron Lee Homes, a new, custom home builder, designs and builds new homes to your specifications on lots that we own, lots that you own, or lots that you may be interested in buying.  Land in local subdivisions is plentifully available for new home buyers interested in building their own home.  We can even make recommendations as to where you might want to build depending on your life situation, finances, and housing requirements.  Contact Us Today to get started talking about building a new, custom home on a local homesite.  Call 985-626-7619 or E-mail Info@RonLeeHomes.com.


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NAHB Works with Congress to Help Low-Income Housing Laws

Without the help of the country’s federal government, many Americans could not see homeownership in their future.  The National Association of Home Builders worked with the House of Representatives and the Senate to pass a bill in Congress that would facilitate the chance for low-income Americans to become homeowners.  On July 29, 2016, the President signed The Housing Opportunity Through Modernization Act which consists of several reforms which will increase access to affordable rental housing, provide assistance to low-income renters and facilitate homeownership.

There are many facets to the bill which is now a new law.  In the past voucher holders had no chance in competing with market-rate renters.  Because of red tape in the inspection process, voucher holders were not able to move into a multi-family unit such as an apartment or condominium immediately.  Now with the new law inspection requirements in the Housing Choice Voucher Program are more efficient and allow a quicker approval.

The contract terms of HUD’s Section 8 Project Based Housing Choice Voucher program is now 20 years instead of 15 which enables project-based vouchers to be used with the Low Income Housing Tax Credit residences.  Voucher holders will now be protected from economic influences that are out of their control, which means that when the market rental rate goes up, voucher holders will not have to be displaced because their payments are not high enough.  This also allows property owners to preserve respectable renters.

The Rural Housing Service Single-Family Guaranteed Loan Program will also be updated to compete with other government loan programs.  This will allow more low-income renters to actually be able to get a home loan.

FHA regulations that are enforced on existing condominium projects have been reduced.  This means that the purchase of a condo will be less stringent in terms of required owner occupancy for the buyer.  Buyers will now find it easier to purchase multi-family units for rental purposes, creating more rentals in the market.  Also, condo owners who are able to sell will then be able to move up to a single family detached home, if they would like.

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NAHB States Homeownership Is One of the Highest Investments

According to over 80% of Americans surveyed by the National Association of Home Builders (NAHB), homeownership is one of the highest and best investments in not only a financial future but also an emotional and mental future as well.  Home provides security in investment, security in living (the physical walls of the home), security in family (many couples dream of owning a home to rear their children), and security in equity in the future.  Homes are one of the largest financial investments that can be made that will absolutely return money to a homeowner in the form of equity loans that can be taken out of the house.

Most everyone has heard of the “American Dream” and Leonard Boswell, former U.S. Representative, described it best when he said, “The American Dream is one of success, home ownership, college education for one’s children, and have a secure job to provide these and other goals.” The (NAHB) believes this still holds true in today’s current housing market.   According to a polling done in July on over 2,800 registered voters “…..most Americans believe that owning a home remains an integral part of the American Dream and that policymakers need to take active steps to encourage and protect homeownership,” said NAHB Chairman Ed Brady.

The polling was done to explore the American peoples’ perspective on homeownership, housing production, and government programs that assist in homeownership.  Four out of five Americans still factor homeownership into the “American Dream’” believing it is still a worthy investment.  The key outcomes of the study were as follows: 82% of Americans feel that owning a home is the highest of investments, 81% of 18-29 year old Americans are planning to purchase a new home, 72% agree that the government providing tax incentives help fuel homeownership, 46% feel that now is a good time to purchase a new house and 36% of the Americans surveyed planned to purchase a new home within the next three years.

So with that said, homeownership is still a big part of the “American Dream” and to end with another quote, Maya Angelou describes homeownership as this, “The ache for home lives in all of us, the safe place where we can go as we are and not be questioned.”

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