Pace of New Home Sales and New Home Inventory on the Rise

Both the pace of new home sales and new home inventory are up according to the numbers reported for February, 2016.  New home sales went up by 2% bringing the seasonally adjusted amount to 502,000.  Standing new home inventory also moved upward slightly to a 5.6-month’s supply of homes meaning it would take this amount of time to sell off all of the standing supply of new homes for sale nationwide.  New home inventory has struggled to rebound because of three factors: lots,

construction workers and sub-contractors, and lending standards.

Lots available for building have actually been a problem for builders in pockets around the country as builders are ready to “get back to work” and build new homes for sale.  The lack of supply of ready lots have them searching more rural locations or building completely different floorplans to accommodate certain lot plats.

Construction employment demand has skyrocketed as opportunities begin to be more and more prevalent because of the surge in new construction.  Employees and sub-contractors seem to be now flooded with work, which leaves builders waiting on certain subs’ industries to come out to work on their new homes under construction.

Lenders have found ways to ease the home buyer’s woes by offering better standards of down payments with new FHA loan packages and rural development loans.  However, the kink in the industry came in late October and the beginning of November, 2015, when the new Closing Disclosure was implemented for real estate closings.  Banks, lenders, mortgage companies, and even title companies are on a fast learning curve to master the new system and get home buyers into their new homes fast.

In reality, it is better that the real estate industry is undergoing these types of struggles rather than a complete lack of demand and over 1.5 year’s inventory on the ground like it felt during the Recession.  The lack of all of the items mentioned above are actually a good problem for new home builders to have.  If you are interested in building a new, custom home in St. Tammany Parish, Contact Ron Lee Homes today to set up a meeting regarding new home plans and construction.  Call 985-626-7619 or E-mail Info@RonLeeHomes.com to set up your appointment.


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Construction Spending Shows a Year-Over-Year Increase

The National Association of Home Builders monitors the construction industry so it can be the first to report both positive and negative news to the real estate industry and if necessary, to Congress.  Since the housing industry is one of the leaders in economic growth and development in the United States, and the national economy depends on real estate for a good portion of the GDP, the health of the real estate industry if of prime importance to those vendors, contractors, and builders who are involved in its day-to-day production.

To that end, construction spending was reported by the National Association of Home Builders (NAHB) to have grown in November, 2015.  Private residential construction which includes homeowner improvements, DIY remodeling and renovations, and other types of repairs saw an increase in construction spending of 5.9% from November, 2014.  Single-family construction spending was up 9% over the same period and multi-family construction spending was up 12%.
From November, 2015, to December, 2015, private residential construction spending increased by .12%.  Single-family home construction spending increased to $231 billion which is a 1% increase from November.  Multi-family spending increased to $53 billion – a 2.66% increase.  Interestingly, if multi-family spending levels off to a steadier pace, which it is predicted to do in 2016, the trend in real estate suggests that single-family home construction will begin to increase.

In the commercial sector, an increase of 45% in the manufacturing-related construction from December, 2014, to December, 2015, drove an overall increase of 8% year-over-year in commercial construction spending.

Since the Great Recession, the real estate industry has been on a continuous climb of recovery once the housing market started to turn around.  The numbers at the end of 2015 reflect this slow but steady progress for builders, contractors, remodelers, and renovators, as well as all of the construction employees involved in projects nationwide.

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Open Floorplans Are Popular in Today’s Real Estate Industry

The buzz word in the real estate industry today for new homes being built and existing home remodeling is an open floorplan.  What exactly does that mean?  The open floorplan refers mainly to the entire living area and possibly even the sunroom, screened-in porch, or patio area on the bottom or single floor of the home.  Open floorplans typically include the Family Room / Living Room, Dining Room, Kitchen, Sunroom, Keeping Room, Breakfast Room, and/or Porch / Patio.

Open floorplans discourage compartmentalization by encouraging each room or area to flow into the next.  Kitchens in an open floorplan can be expansive with a full working island in the middle as well as an additional breakfast bar that can have extra space for family social gatherings.  The kitchen island may have an additional sink, icemaker, dishwasher, trash compactor, or even a wine cooler. The island can also include cabinet space and drawers for additional kitchen storage of utensils, dishes and appliances.

Most of the time, the kitchen will overlook the Family Room with a view of the floor to ceiling fireplace for a vaulted ceiling floorplan and the television, letting the cook enjoy shows and games while have to cook, clean, and entertain.  The kitchen may have additional bench seating against the wall of what typically would be a Breakfast Room or Keeping Room in order to create a place for people to talk if they are not watching television.

Family Room space flows into what would have been the formal Dining Room, so homeowners have the option of buying a bigger living room set or adding built-in bookshelves, an informal office, or even a kids play area.  If there is enough room in the open floorplan, a screened-in or glassed-in porch may be easily accessible from the Family Room, or custom home buyers may choose to insulate a sunroom for a greenhouse effect for those that are plant lovers.

The obvious point here is that the days of separating out the “Formal Dining Room, Formal Living Room, Family Room, and Kitchen” are pretty much over – much like the disappearance of the “Parlor” in the ’50’s.  Home buyers and homeowners love their sprawl and space and having access to everything in the main living area of their home.

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Trends That Are Showing Up in Remodeled or Newly Built New Homes

Whatever type of home construction you are planning – a new, custom home or a complete remodel / renovation of your existing home – you will want to pay attention to the trends that are showing up in remodeled or newly built new homes.  Below are several trends that are popular among contractors, builders, and homeowners.

1. Luxurious garden tubs or jetted garden tubs have held steady in home construction for years, but for 2016, the trend is shower stalls or walk-around showers with shelving and seating.  There are some really unique shower designs that include multiple shower heads and even massage sprays.

2. For your backsplash, trim, or even walls and floors, ceramic tile is not as popular now among renovators and builders as glass tile.  The glass tile comes in many different colors as well as designs with multiple colors, so choose your matching design and go crazy!

3.  When stepping up to the gourmet kitchen or luxurious master bath, granite countertops used to be the ultimate material that reflected the type of construction of your new home or remodel.  There is a new material that is called engineered quartz that is not only tougher than granite and lasts longer, but it has the same timeless, classic, and upscale design for your custom counter work.

4.  Toilets naturally came in lower to the floor sizes for decades, but now there are choices of toilet heights that are available to new home buyers, and buyers are choosing height over flow.  The new, higher toilets are also more water efficient and modern, saving some homeowners on utility bills.

5.  Along with ornate, custom-built, real wood cabinetry; home buyers and remodelers now have a choice of painted, stained, and dark wood cabinetry vs. the traditional oak cabinets that were standard for new home construction projects.  Choose and contrast these colors as well with a two-toned look in the kitchen or bathroom.

6.  Even though, we as a custom home builder still encourage you to buy reliable appliances throughout your home, the industry has caught up with technology, so some home buyers and home renovators are now going with a mid-range level of appliance vs. a high-end appliance package.  The appliances themselves seem to have the same duration of service, and you can also purchase upper end looking fixtures, such as stainless steel to achieve the look you want without all of the cost.

7.  Back to the basics – homeowner and savvy new home buyers know to renovate and build their homes with real wood flooring such as solid oak or pine instead of engineered flooring.  While the look and cost of an engineered floor is great for the first few years, the results after many years of wear and tear don’t stand the test of time, weather, and constant use.  Homeowners and new home buyers will be looking to find affordable real wood choices for their flooring.

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Home Buyers Seeing Upward Trends in Real Estate

During the first month of the year 2016, home buyers have a lot to be excited about when considering buying a new home for sale.  Home pricing, consumer confidence, and home construction starts and permits are all up!  The housing market has been seeing a steady incline since it bottomed out between 2009 and 2011.  With sharp, record-breaking price increases in 2012 and 2013, the housing market almost seemed to be expanding too fast for consumer demand, consumer affordability, and consumer credit.  However, home pricing trends have “flattened” in 2014 and 2015 creating stability in the real estate market.
During the month of October, 2015, home prices rose at 6% and 11% depending on which report buyers were seeing.  The Case Shiller (CS) National Home Price Index released by S&P Dow Jones Indices showed an 11% increase in October while the more conservative Home Price Index from the Federal Housing Finance Agency (FHFA) rose 6%.  Either way, home pricing has stabilized and is on the upswing which is good for both buyers (a smart investment) and sellers.

Meanwhile, the vote of confidence from consumers showed an increase of approximately 4 points in December after 2 months of declining numbers.  The Consumer Confidence Index by the Conference Board rose from 92.6 to 96.5 from November to December.  The index shows that consumer confidence is growing back to pre-Recession levels.

Finally, construction housing starts and permits for 2015 were up 10.8% year-over-year to equal to 1.11 million.  Single-family home starts were up 10.4% and multi-family housing starts were up 11.4%.  The single-family home starts numbers came to 715,300.  Increases were seen in all 4 reported regions of the United States for single-family homes.  Housing permits were also up compared to 2014 by 12% with a total of 1.18 million.  Single-family home permits were up by 7.9%, and multi-family home permits were up by 11.4%.  In December, single-family home permit numbers were up by 1.8% compared to November as well.

All signs point to a solidly recovering housing market nationwide, and here in St. Tammany Parish, the custom home business is thriving with many new exciting projects for 2016.  If you are interested in building or buying a new, custom home, Contact Us at 985-626-7619 or E-mail Info@RonLeeHomes.com.

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Building a Raffle House for Charity in St. Tammany Parish

The Northshore Home Builders Association (HBA) in St. Tammany Parish is once again, in 2016, building a Raffle House for Charity called Raising the Roof for Charity.  A new home is constructed by member of the Home Builders Association of St. Tammany Parish on the North Shore, and then, this home is auctioned off to raise funds for several chosen local charities.  This year’s recipients include Boys and Girls Club of Southeast Louisiana, the Covington Food Bank, Habitat for Humanity-St. Tammany West and the Tammany Trace Foundation.

The new Raffle House is being built by Integrity Builders in Spring Haven Subdivision in Madisonville, Louisiana.  Tickets are sold by members of the Northshore Home Builders Association

to colleagues and associates in order to raise funds.  The HBA will be having two early drawings for Raffle House tickets – one on March 19th and one on April 16th.  Winners of these two drawings will receive a $1,500 reward.  The final Raffle House drawing will be held at the new, custom home in Spring Haven on June 4, 2016.  Special events will be held in the months leading up to the Raffle House drawing where opportunities to win a free raffle ticket will be available.

The new, custom home being built by the St. Tammany Parish builder member is a 2,600 square foot home of living space with 4 bedrooms and 3 baths which was designed by DesignTech Residential Planners.  The value of the home is estimated at $422,000.  This open floorplan includes a flowing design throughout the living room, dining, room, and kitchen.  The living room also has a gorgeous fireplace and coffered ceiling.  The kitchen includes an oversized kitchen island with breakfast bar and undermount sink.  Granite countertops, real wood cabinetry, and stainless steel appliances complete this deluxe kitchen setup.  The master suite features an oversized walk-in closet off of the sumptuous master bath, complete with centered tub with a separate shower flanking.  For outdoor entertainment, this new, custom home has a huge, covered outdoor patio, complete with outdoor kitchen setup.

In addition to the grand prize of the Raffle House being given away to a lucky recipient, there will be other prizes given out on the day of the drawing to winning raffle ticket holders.  The Raffle House is an important part of raising money for local charities as well as rewarding a St. Tammany Parish resident with a new home.  Don’t miss out on your opportunity to view this new, custom home in Madisonville, Louisiana.

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Krewe of Tchefuncte “Sails” One Day Early in Madisonville

Good news for Northshore Mardi Gras attendees comes in the form of two holidays colliding the weekend of February 6th and 7th.  The final crescendo to Mardi Gras weekend happens to fall on the same weekend as the Super Bowl, so parade goers on the Northshore get a treat to an exclusive Northshore Mardi Gras Parade on the Tchefuncte River in Madisonville, Louisina.

The Krewe of Tcheufuncte Boat Parade will “sail” on Saturday, February 6th at 1pm.  In addition to being a parade on water on the North Shore, as well as the only Saturday parade on the Northshore,

the Krewe of Tchefuncte also has judges available to judge participants in the parade on their boat decorations and costumes.  This year’s theme is Shaken, Not Stirred, and boater participants are expected to dress up and decorate in the theme of James Bond.  There are still available spaces left on the Krewe for $150 for a year’s membership which also includes a krewe T-shire and commemorative martini glass.

On the ground for parade goers and watchers, the Madisonville Community Benefit Organization, a new organization in St. Tammany Parish will be providing food and music on the riverfront of the Tchefuncte before, during, and after the parade.  Participating local restaurants will also be selling their wares and food to parade attendees.  Ironically, the Krewe of Tchefuncte is technically a boat parade, but people who attend will actually walk down the riverfront to the DOCKED boats to receive beads and trinkets thrown from the boat floats.

“I certainly am looking forward to a great time on the riverfront for the Krewe and the parade goers. We are praying for good weather. It’s carnival time and I’m happy to be a part of the Krewe of Tchefuncte,” said Parade Captain, Keith Dennis.

To participate in the boat parade contact Dennis at wkeithdennis@yahoo.com or call him at 985.264.8886. Co-boat Captain Lynn Haas can also be reached at 985.966.5619.
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