New Home Buyers Have More Selection in New Homes

Even though the housing market has been making incredible strides in its recovery since its low in 2008, one of the major obstacles that has been holding the sale of real estate back is the lack of supply for the growing demand of home buyers.  New home buyers especially have been stymied by a lack of inventory from local builders.  Builders themselves have been frustrated by the tightened funding requirements for construction loans from banks and lenders, so there is been a “stalemate” of sorts going on in the new home industry.

However, good news is on the horizon for real estate because single-family home starts have been on the rise and holding steady over most of the months of 2015.  Single-family home starts remained steady from August to September with 740,000 starts nationwide for both months.  Overall, housing starts (including multi-family housing) increased by 6.5% and reached the 1.2 million mark – the highest its been since October, 2007.

From a yearly perspective, quarter-over-quarter, single-family home starts are up 5.7% 3rd quarter from second quarter with a total of 746,000 home starts.  The numbers year-over-year show that single-family home starts are up 11% compared to 2014.

Another strong sign of new home real estate recovering is the number of housing permits for single-family home starts.  The number of permits for single-family homes went up 9.4% year-over-year and also remained unchanged compared to the previous month of August from September, 2015. Trends also show that money of the new home purchases are coming from “contingency sales” where a home buyer has a house to sell and wants to build or buy new which is excellent news for new home builders.

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Interest Rates Still Low for New Home Buyers

Real estate professionals have expressed concerns as to the state of the interest rate in today’s housing market because there are rumors that the interest rate is about to be raised by the Federal Reserve (The Fed).  Because of these fears, many homeowners have hurried up to refinance their homes with these historically low interest rates while home buyers have been “coming off the fence” more rapidly than normal to buy a new home.  These worries can be set aside for now as The Fed has decided not to raise interest rates during their last meeting citing a weak global economy, low inflation, and unstable financial markets.
However, there are some aspects to consider when deciding whether or not to buy a new home as soon as possible before interest rates “go back up.”  The first point is that even if interest rates do go up, they are not forecast to go up by much upon raising.  The increase in the interest rate will STILL be lower than any record of interest rate lows in the past.  This means that you will still be able to maximize the amount of money you use to buy your new home with lower interest rates.

The second aspect to consider is that the increase in the interest rate means that the U.S. economy and job market are getting better which means more and better jobs for home buyers interested in buying a home. Waiting until you have the right job and the financial ability to buy a home is a better choice than “squeaking by” to be able to buy a home at a lower interest rate with no stability in your financial future.

Finally, when The Fed does raise interest rates, this is good for investors and employees with retirement accounts because interest rates for these types of savings and money making accounts go up as The Fed raises the interest rate.

Even though The Fed’s decision is to not raise interest rates at this time, interest rates are expected to go up as soon as the end of 2015.  Whether they go up or not, now is the time to take advantage of the incredible financing offers to buy your home while interest rates are low, credit restrictions are easing, and down payment assistance has once more been established by the Department of Housing and Urban Development.

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Newly Built Home Sales Rose 5.4% From June

Just like summer in Louisiana is hot in July, the housing market nationwide heated up this summer with new home sales activity rising to 507,000 homes sold. The Census Bureau and HUD reported that newly built home sales rose 5.4% from June and 25.8% from July of last year. New home inventories were reported at 218,000 in July which is the highest level that has been seen in over five years.
This increase was also seen in the private residential construction spending where the highest amount spent was at an annual rate of $387 billion in July. This increase in spending verifies that the construction industry is continuing to experience strong economic growth. Single family homes have pushed construction expansion 15.8% on a year-over-year basis and multifamily new home construction spending is 21.2% higher than it was reported a year ago as well.

Developers, new home builders, and custom home builders are not the only ones that are seeing a positive growth, the National Association of Realtors (NAR) reports increase in existing home sales. Existing home sales increased in July 0.5% from June and 7.4% from July of last year. Completed transactions were reported at the highest since February 2007, which was the beginning of the downhill slide of the Recession.

Home buyer confidence stems from the strengthening economy overall with increased spending. The

Bureau of Economic Analysis reports that the Gross Domestic Product (GDP) grew to a strong 3.7% rate. These findings were based on several factors including investment, faster growth for consumption, government spending and trade components.

Now is the time for buyers to tap into the housing market. Sales are solid which makes the real estate market a stable vested interest. New home prices are continuing to strengthen making real estate a great investment. Interest rates continue to remain at record lows with the reluctance of the Fed to increase interest rates. The Department of Housing and Urban Development have rolled out new loan products which require a much lower down payment on FHA and some conventional mortgages. Best of all, there is a spectacular new home builder in St. Tammany Parish which builds new, custom home exactly to your specifications and design. These new homes are designed and built to withstand the test of time and elements with energy efficient green building techniques as well as the best, most quality components to ensure the strongest and best built new home in St. Tammany Parish. For More Information, Call 985-626-7619 or E-mail Info@RonLeeHomes.com.

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Employment is Rising and Single-Family Homes Are Under Construction

New jobs reports and the falling unemployment rate have brought about a positive economic outlook of many Americans in the U.S. The employment growth is a big reason for both the real estate and housing industries’ latest boom both with new construction homes for sale as well as resale homes for sale. The strong job reports have encouraged many to believe there is not a “double dip” recession looming so many are relieved and feel confident in purchasing a new home. Everything from apartment buildings (multi-family homes) to single-family homes are under construction everywhere you turn in the country.

The rise in household formation by millenials as well college grads that have finally been able to get a job has led to new houses being built which has attracted workers in the construction industry. Employment in the field of construction reflects an average of 20% of the jobs that have been recently created. The American Association of General Contractors showed 80% of construction firms planned to hire this year. JOLTS survey showed an increase of 36% in the number of construction job openings year-over-year.

Mark Vintner, senior economist at Wells Fargo Securities says, “Home building will be one of the economy’s largest upside surprises in 2015.”

This is very good news for those looking for employment in the construction industry. Contractors are desperately seeking those who are skilled in all areas of construction which include part time and full time employees as well as sub-contractors. Vintner points out that overall, nationwide, there is a shortage of skilled construction workers. The American Association of General Contractors also reports that 87% of construction firms are having difficulty filling positions. Moody’s Analytics Adam Ozimek believes the shortage is due to lack of wage growth in the construction industry. However with the decline in unemployment, the job market will soon become an “employees’ market” instead of a employers’ market, which should drive up competitive hourly and salary wages. For the construction industry, this should put many out-of-work carpenters, builders, plumbers, electricians, and day laborers back to work with a healthy salary. Ron Lee Homes has been following this construction employment trend in St. Tammany Parish by expanding its services to include remodeling as well as custom home construction. To build your new, custom home today, Contact Us at 985-626-7619 or E-mail Info@RonLeeHomes.com.

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Custom Home Builders in St. Tammany Parish

What distinguishes Ron Lee Homes from other custom home builders in St. Tammany Parish is that Ron Lee is personally involved in almost all of the custom home projects that are completed in the cities of Mandeville, Madisonville, Covington, and Abita Springs. New custom homes require an almost daily review and critique, so Ron Lee’s hands-on approach to building new homes on the Northshore is the key to his success in building custom homes. With amazingly unique interior and exterior amenities, energy efficient green building techniques, and top-of-the-line building materials, the new, custom homes built by Ron Lee Homes stand above the competition in design as well as durability.

One of the main aspects of a home built by Ron Lee is the foundation. Ron Lee takes great care with each and every foundation of his new homes because of the shifting and sometimes unreliable soil in Southeast Louisiana. These foundations have a step-by-step meticulous process that requires attention to detail and experienced sub-contractors that have worked with Ron Lee Homes for many years. Relying on sub-contractors is a huge part of being a successful St. Tammany Parish builder, and with 24 years building in St. Tammany Parish, Ron Lee has met and vetted many different types of subs. With Ron Lee personally overseeing the laying of the foundation, the framing, roofing, siding, and interior construction of your new home, you can count on the construction work to be quality as well as critiqued and corrected as the new home is put together.

Another benefit of having such a personally vested builder is that you will get to have one-on-one contact with your builder. Ron Lee answers his phone, e-mails, and requests as timely as he can. Also, he is backed up by a team of people at his home building company who have years of experience in the real estate industry as well as the St. Tammany Parish area. From the many testimonials from our satisfied homeowners, most of our new home buyers have been pleasantly surprised by the level of professionalism, communication, and follow up provided by Ron Lee Homes.

If you are not sure where to begin your new home building experience, Contact Ron Lee Homes today for a custom home consultation to learn more about the new home design and building process. Call 985-626-7619 or E-mail Info@RonLeeHomes.com.

Traditional Neighborhood Development (TND) Port Marigny in Mandeville

They say that “imitation is the sincerest form of flattery” and that is the plan Steve Oubre, Project Designer at Architects Southwest, says about the lakefront traditional neighborhood development (TND) Port Marigny on the Mandeville lakefront. Port Marginy will be patterned after the “historic character” of Old Mandeville. The 78-acre project site is located on the former Pre-Stressed Concrete

Products plant just east of Lake Pontchartrain Causeway.

The waterfront development’s updated figures and renderings were presented to the Mandeville Planning and Zoning Commission July 28, 2015, and the project will only be allowed to proceed with the City Council’s approval. The City Council will hold several more meetings to allow Mandeville’s resident’s opinions to be heard before voting their final approval.
Mandeville’s residents, who attended the standing-room-only, meeting July 28, 2015, were able to ask important questions about the project’s density and potential traffic problems the new development could create. Many believe the developers of Port Marigny plan to build too many housing units which will cause traffic congestion in the area. The proposed development plans include building 429 “New Urbanism” new

homes for sale which include apartments (multi-family housing), condominiums and single-family homes on large home sites. In addition to the new construction housing units there will also be 60,000 square feet of commercial space, a 150-slip marina, a 120-room boutique hotel, a park and a town center that would feature a statue of city founder Bernard de Marigny. Traffic Consultant Rich Hall will address these concerns and has already taken preliminary traffic counts. He plans to take additional counts once school begins in August.

Richard Muller’s, attorney for Marcus Pittman owner of the property which the abandoned concrete plant sits on and who is providing guidance for the proposed project, described the focus of the project is to “facilitate the development of a vibrant, walkable, mixed-use, waterfront development that provides strong fiscal benefits for the city.” Residents who will own a new construction unit in the residential community will have narrow setbacks, large lots, sidewalks, service alleys with back access garages, streets no longer than 650 feet, and the multi-family homes will be four stories high including commercial space on the first floor.

Oubre is confident in the project. Oubre stated that his goal was to “build to the historic character” of neighboring Old Mandeville. “Old Mandeville was done right,” Oubre said. “We’re trying to replicate it.”

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Housing Market is Still on the Rise

The housing market is still on the rise and continues to improve according to the findings by the NAHB/First American Leading Markets Index (LMI).  The LMI was developed to record and monitor the recovery of select markets throughout the United States due to the Recession. There are three components (average permit, price and employment levels) that are scored in more than 360 metro areas over a 12 month period.  The scores for these components are then divided by each of their annual averages over the last period of normal growth.  The three component averages are then averaged together giving the overall score for each market.  For single-family permits and new home prices, 2000-2003 is used as the last normal period, and for employment, 2007 is used for the last normal period.

What all of this means in a nutshell is that major metro cities throughout the United States are being monitored for an increase or decrease in real estate activity following the Recession.  The percentages are calculated each month by the National Association of Home Builders and distributed amongst the public and real estate markets so that investors have an idea of how the real estate recovery is progressing nationwide.

Baton Rouge, Louisiana is one of the top recovering cities on the list of major metros on the LMI and is doing 47 percent better than the last findings recorded for the normal market level.  Southeast Louisiana shows an 85 to 92 percent recovery to the normal market level.  In fact, 75 markets out of the 360 metro areas beat their last normal levels of economic and housing activity during the second quarter this year which showed a year-over-year net gain of 13 markets (66% of markets have shown an improvement year over year).  This quarter’s LMI shows that more than half the markets nationwide have reached a 90% or above their normal market level. We are almost back to 100% of normal economic and housing activity that we had before the recession.

“The markets are gradually improving and economic and job growth continue to strengthen, which bodes well for housing for the remainder of the year,” said NAHB Chairman Tom Woods.

Out of the three components of the LMI, housing prices have shown the strongest recovery with 345 markets at the same or above their last normal level. Behind that is the economic level where 64 markets are at their normal market level or have exceeded their normal market level. Housing permit level is lagging behind with only 26 markets at normal or above normal market level.

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