Using Alternative Building Products

 The shortage of building products has been a big issue for home builders these days. With the delay in orders and shortages of home building materials, home builders are choosing alternative products for their home building projects.

The alternative materials include some such as rammed earth, adobe brick, and volcanic rock. These natural materials are great for insulation with heating and colling benefits. The downside is higher costs for skilled labor. Home inspectors and energy consultants could also have a hard time evaluating these items because they are unfamiliar with them.

An important long-term effect that builders do not want to ignore is mold. Earthen materials are made up of many organic substances that house mold. Natural building materials include cellulose or carbohydrate-based products which are a great source of food for mold.

Mold can be avoided by builders, it is important to understand the relationship between construction materials and their susceptibility to mold in the presence of moisture.  “Buildings will never be designed, built, maintained, or utilized perfectly; and weather and natural disasters cannot be predicted. The one thing we can have complete control over, the materials within the building, should be selected wisely,” reports Aaron Cooper.

The National Association of Home Builders has a guide for reviewing building materials called Assessing Building Materials. Builders can assess these materials by talking with the manufacturers and distributors. A couple of the questions they can ask do I understand the make-up of the building materials is similar to building materials available from another manufacturer that can provide more data, is the data that was provided complete, do I have confidence in the manufacturer and does another manufacturer improve my confidence in these building materials?

NAHB wants to help its members find the most important and pertinent information when it comes to evaluating new materials or products. Builders can make more informed decisions with this guide.

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Even Through Real Estate We Can Help Support Our Environment

 

The environment is precious to us and if we respect it, it will respect us. When we think of ways we can improve our footprint, most real estate transactions do not come to mind. Most realtors and those that are involved in some way with the National Associaton of REALTORS® (NAR) are familiar with the Preamble of the Code of Ethics.

"Under all is the land. Upon its wise utilization and widely allocated ownership depend the survival and growth of free institutions and of our civilization. REALTORS ® should recognize that the interests of the nation and its citizens require the highest and best use of the land and the widest distribution of land ownership. They require the creation of adequate housing, the building of functioning cities, the development of productive industries and farms, and the preservation of a healthful environment."

“REALTORS® will have to make sustainability a primary focus — because our customers and our planet demand it,” states NAR 2022 President Leslie Rouda Smith.

Every way we can, we should think about how it affects the Earth. Real estate transactions should not only focus on the clients but on the impact, they will have on the land itself. Here are three aspects to think about when respecting our environment.

First, governance.

Decision-making is the first step to take when thinking about how a real estate transaction will affect the earth. The National Associaton of REALTORS® under the 2022 NAR Leadership Team has created the Sustainability Advisory Group. The group consists of all Chairs who sit on the Public Policy Coordination Committee and the National Association of REALTORS®' Vice Presidents of Advocacy and Association Affairs. They are currently working on joining in a partnership with National Oceanic and Atmospheric Administration to help keep those in the real estate industry up-to-date on how weather events affect housing and markets.

Second, resilience.

The National Associaton of REALTORS® is working on how it can change and sustain the environment. An example of what they are currently working in is the Flood Factor on realtor.com. This provides flood risk data on each listing, allowing property owners to accurately assess their risk and better prepare for future flooding events.  Another great example is NAR's Smart Growth Grants and Placemaking Program. This program supports both state and local associations giving them the resources to build parks, trails, and community gardens. NAR is backing FEMA's Risk-Rating 2.0 which helps with rating individual homes when it comes to flooding rather the rating flood zones. By doing this, homebuyers will have a better perspective on how flooding will affect the specific property they are looking to buy.

Third is environmental stewardship.

Data has shown that homebuyers will pay a premium for homes that are certified Energy Star or the National Green Building Standard. Realtors are also encouraging healthy green communities for homebuyers of all income levels and backgrounds.

If you are in the market for a new home, contact a Realtor who can help navigate the green housing market. Everything we do from the products we use to the homes we live in can impact the beautiful earth we live in.

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Last Three Months of 2021 Saw Growth for U.S. Builders

 

December 2021 date shows that the construction of new homes climbed for the third consecutive month. Reports find that new construction homes are at a seasonally adjusted annual rate of 1.7 million units. Close to 1.6 million housing units were started at a 15.6% increase over 2020.

Even with the rising interest rates, the housing market is still going strong. The average long-term U.S. mortgage rates rose to the highest levels since March 2020 in January 2022. Lawrence Yun, chief economist for the National Association of Realtors, says economists expect to see an increase in mortgage rates this year. This is due to the Federal Reserve slowing down on purchasing monthly bonds.

Applications for building permits rose 9.1% to a seasonally-adjusted rate of 1.87 million units. This is the strongest month for permits since the beginning of the year in January 2021. Applications for building permits can forecast future building activity. Housing starts in the Northeast and the Midwest rose the most at 20% and 36%.

The National Association of Home Builders and Wells Fargo monthly survey, which gauges builder sentiment, reported that it still remained stable. This is good news since builder sentiment was down slightly to 83 at the beginning of 2022.

“Demand exceeds supply, and builders are working as hard as they can to catch up, a process that was always going to be measured in years, not months, after the massive shift in demand toward single-family homes sparked by the pandemic,” said Stephen Stanley, chief economist for Amherst Pierpont.

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Ways To Home Stage on a Budget

  One of the most important parts of the home sale process is staging your home. According to industry leaders, staging your home prior to putting it on the market will not only make you more money but will also help your home sell faster.

The National Association of Realtors reported that 96% of realtors believed staging had an impact on the buyer. Here are some great tips for staging your home before you put it on the market.

Go on a Cleaning Spree

For those on a budget, this is a great way to start the process of getting your home ready to sell. Most homeowners do weekly tasks to keep their home clean like dusting and vacuuming. When getting your home ready to sell, go the extra mile by scrubbing the grout in the bathrooms, soaking faucet heads in vinegar to remove limescale buildup, clean the baseboards and deep cleaning all the remaining areas of the house.

Declutter Everything

A big room can look small and cramped when it is filled with clutter. When staging a room, remember less is more. Just think, if you declutter now, there will not be as much stuff to pack when moving.

Keep Flat Surfaces Clear

Shelves, countertops, desks and tables should be cleared. According to top professional home stagers, this is one of the top on the list.  A few decorations here and there are fine, but clean lines are a home staging staple.

Remove Personal Items

A buyer does not want to see that this home belongs to the seller. The buyer wants to be able to envision themselves in the home. Remember you want to showcase your home's potential and keep distractions at bay. Removing family photos, knick-knacks or memorabilia that can distract potential buyers is a must.

Paint Walls with Neutral Colors

Bright or dramatic paint color can give a negative impression on buyers. In order to appeal to the widest range of buyers, repaint your walls in a neutral color. Use color schemes such as white, cream, beige or light gray. Studies show that neutral paint in homes can bring a seller an average of 107% return on investment.

Refresh with Mild Scents

Another sense that buyers use when touring a home is smell. Bad odors such as pets or cigarettes can detour buyers. If your home has been exposed to such elements over time, take baking soda and sprinkle it on soft surfaces such as carpet and furniture. You will want to leave it there overnight and then vacuum it up the next day. Another trick is to wash your windows and clean the walls with mild soap and water. Steaming cleaning your floors will also help with pet odors and stains.

Remove Evidence of Pets

Not all potential buyers are pet lovers. Pets can cause damage to the home such as scratch marks, odors and stains. If these reminders are left, it can detour many buyers from purchasing your home. A tip for pet stains is to treat them with a mixture of vinegar, water, baking soda, peroxide and detergent. If a pet has scratched hardwood floors, purchase a hardwood repair kit to fix the scratches. Just like the sellers leave when someone tours your home, the pets should also.

Let in Natural Light

When looking at home listings many always talk about the open and bright spaces. Letting in the sunlight is a free staging tip and can make a world of difference in a space. Both professional home stagers and real estate photographers believe a well-lit room is a strong selling point for those looking to purchase a home.

Choose the Right Light Bulbs

Most homes still need light fixtures to brighten the rooms. Do not use fluorescent bulbs rather use soft white bulbs that some say mimic natural light. Some homeowners often use daylight bulbs which send a blue hue into the rooms. These work well in kitchens, bathrooms and home offices.

Create More Space with Mirrors

Just like magic mirrors can give the illusion of more space in a room. In order to make your square footage "stretch," you will need to strategically place mirrors. An example would be to take a large mirror and place it at eye level near a light source in a room. This makes the room feel bigger and more comfortable.

Upgrade the Cabinets

Dated cabinets can make your kitchen look old and run down. A way to fix this problem without breaking the bank is to transform your existing old cabinets. To do this you can add a fresh coat of paint and new hardware.

Organize the Closets

Buyers always look at how much storage space a home has. Storage space is one of the top features on the buyer's list. A great trick to use is to organize and clean out your closets. Clear floors and neatly hung clothes can make a closet appear bigger. You want to create the feeling that there is a lot of empty space that can be used.

Rearrange Your Current Furniture

When working on a tight budget, a good solution is to work with what you already have. Make sure your floorplan and furniture create an easy flow for potential buyers to navigate. Change your furniture around to create a nice flow to each room.

Use Existing Items

As mention earlier, use what you got. If you need to purchase something on a budget a great place to find items is at estate sales, garage sales, thrift stores, antique stores, Facebook Marketplace or Etsy.

Place Decor Using the Rule of Three

A great insider tip is to group decorative pieces by three. For example take a large, medium, and small decor piece and place it next to one another on a coffee table. Another great idea is to take a tall vase and place it with two smaller candles.

Buy New Bedding

Worn bedding or mismatched bedding can mess a whole bedroom design. A well-made bed is a plus in staging a bedroom. Use neutral color bedding when staging.

Put Slipcovers on Furniture

Give your outdated or dirty sofa and throw pillows a lift. An easy way to do this is by putting slipcovers over the sofa and throw pillows. A tip is to always choose slipcovers that match the room decor. This is a much less expensive way to update a room over buying all new furniture.

Try Virtual Staging

Sometimes it is hard for buyers to envision a room when it is vacant. A vacant property can still be stage without bringing in furniture and decor. Virtual staging is a great way to stage a home on a budget. Virtual staging makes the area look really staged and can be completed by a virtual stager at $50 per photo.

These tips won't break your bank and will help you get more bang for your buck when you sell your home. It is still wise to hire a Realtor that is experienced in selling a home in your area.

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May 2021 Home Sales Highest Level Since 2005

The past year has been a whirlwind for the housing market in a good way. There has been a boom in sales

as seen in pending home sales up the highest level of sales for May since 2005. According to the National Association of Realtors, May 2021 was up 8% compared to April 2021 and 13% from the sales in May 2020.

“May’s strong increase in transactions – following April’s decline, as well as a sudden erosion in home affordability – was indeed a surprise,” said Lawrence Yun, NAR’s chief economist. “The housing market is attracting buyers due to the decline in mortgage rates, which fell below 3%, and from an uptick in listings.”

All four regions saw an increase in pending home sales in May. The Northeast had a 15.5% increase, the Midwest climbed 6.7%, the South rose 4.9% and the West increased to 10.9% month over month.

Although the market is still hot, weekly mortgage demand did take a 7% downturn in May 2021.

“While these hurdles have contributed to pricing out some would-be buyers, the record-high aggregate wealth in the country from the elevated stock market and rising home prices are evidently providing funds for home purchases,” Yun said.

The could have stemmed from the home price increases. The S&P Case-Shiller National Home Price Index rose 14% year over year in April 2021. This increase was the largest gain in its 30-year history. The median home price has also increased which has made it harder for first-time homebuyers.

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Spring A Great Time To Sell A Home

Photo by Andre Furtado from Pexels

 

Spring brings new flowers, animals, and warm sun. Many say that spring is the time for changes. The housing market also sees a rise in home sales during this time. Here are five reasons why springtime is the best time to sell.

1. There's high demand from homebuyers.

Showingtime, an app that tracks showings on homes, reported that buyer showings are up 51.5% from this time last year. The housing market is hot and buyer demand is strong.

“As anticipated, demand for real estate remains elevated and continues to be affected by low levels of inventory…On average, each home is getting 50 percent or more requests this year compared to January of last year. As we head into the busy season, it’s likely we’ll push into even more extreme territory until the supply starts catching up with demand,” says Daniil Cherkasskiy, Chief Analytics Officer at ShowingTime.

2. There aren't enough houses for sale.

Inventory is on a record low, and buyers are high on demand. “Nationally, the inventory of homes for sale in February decreased by 48.6% over the past year, a higher rate of decline compared to the 42.6% drop in January. This amounted to 496,000 fewer homes for sale compared to February of last year,” reported Realtor.com.

According to the National Association of Realtors (NAR) "sales are skyrocketing" and the existing inventory is "continuing to drop dramatically". The average house is only staying on the market for only 21 days.

3. You have a lot of leverage in today's market.

Low inventory and tons of buyers make this a seller's market. The seller currently has the upper hand in the market and can negotiate the best deals. NAR reports that bidding wars have increased on average by 3.7 offers per house.

4. It's a great way to use your home equity.

CoreLogic reported that the average homeowner gained $17,000 in equity over the past year, and that number continues to grow as home values appreciate, in the third quarter of 2020. During this market, homeowners will find that they have a lot of equity in their homes. Equity is a type of forced savings that grow during your time as a homeowner and can be put toward bigger goals like buying your next dream home.

“As homeowners gain equity in their homes, they are more likely to consider using that equity to purchase a larger or more attractive home – the wealth effect of rising equity. In today’s housing market, fast-rising demand against the limited supply of homes for sale has resulted in continued house price appreciation,” says Mark Fleming, Chief Economist at First American.

5. It's a chance to find a home that meets your needs.

The COVID-19 pandemic has changed the way homeowners see and live in their homes. The stay-at-home orders meant spending a lot of time at home. This extra time at home caused homeowners to re-evaluate the top desires they want in a home.

The home office, outdoor spaces and flex rooms became a must in the 2021 home search. With so many people working from home, or virtual schooling flex rooms and home offices are in high demand.

If you are in the market to sell your home, contact your local Realtor. A Realtor will not only help you navigate the market, getting you the best price and deal for your home, but will also take most of the pressure off of you from this fast pace market.

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2020 National Green Building Standard: Understanding Land Use Updates

 The ICC 700-2020 National Green Building Standard® (NGBS), had important updates to a couple of key sections regarding land use and housing development. According to the National Association of Home Builders, it is important for builders to take notice of these changes. Although there is continuity from the 2015 NGBS in many areas, understanding the changes and new offerings will enable developers and builders to determine the compliance path that works best for their project.

In Section 4 of the 2020 National Green Building Standard site design and development are defined. This section will give points for sustainable land development that is ultimately planned for residential construction. This section was created to help reduce detrimental environmental impacts by enhancing the natural features and improving the quality of the site.

A builder can earn between one to four stars for the number of points earned by the certification defined in Section 4. In the spring 2020 edition, changes were made to Subsection 403.6 Landscape Plan, Subsection 403.7 Wildlife Habitat and Subsection 405.11 Insect Mitigation.

Subsection 403.6 Landscape Plan allows up to an additional 28 points. The new categories in the 2020 update include points for spray irrigation and third-party qualified water-efficient grasses. An example is Turfgrass Water Conservation Alliance (TWCA) which limits water and energy use anywhere turf is planted.

Subsection 403.7 Wildlife Habitat allows up to an additional 6 points. Points are awarded on the design of sites abutting wildlife corridors, fish and game parks, or preserved areas. An example of this would be the outdoor lighting that would be close to the wildlife habitat.

Subsection 405.11 Insect Mitigation is a new category that has been added to the 2020 NGBS. A builder can receive up to 19 points for landscaping that helps reduce insect-borne disease.

Section 5 includes lot design, preparation and development. The points earned in this section have increased in the 2020 NGBS in subsection 503.1 Natural Resources, 503.4 Stormwater Management and 503.5 Landscape Plan to 19 points. Also, the following subsections have been added in 2020, 505.7 Multi-Unit Residential Compressed Natural Gas (CNG) Vehicle Fueling which allows 4 points, 505.8 Street Network gives an additional 5 points and 505.10 Exercise and Recreational Space gives up to 9 points.

Other notable changes made between 2020 and 2015 NGBS are that 2020 verifies practices via the Environmental Protection Agency, the International Wildland Urban Interface Code and the Turfgrass Water Conservation Alliance (TWCA). The 2020 National Green Building Standard® is a great tool for builders to work with and helps improvements on the development of land and lots. The standards give builders and land developers the flexibility needed to develop land and lots that are sustainable, cost effective and appropriate for their geographic location.

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Three Trends That Changed in 2020 When It Comes to What New Construction Buyers Want

 Zillow Consumer Housing Trends Report 2020 data shows some changes from what buyers want in a new construction home. More buyers are purchasing new construction homes now more than last year. The survey revealed that 40% of new construction buyers that were surveyed only were interested in new construction homes. Here is what has changed in a new construction buyer's mindset in 2020.

Smaller, less expensive options gaining appeal

Those new construction buyers surveyed showed that they are choosing smaller homes. A small home is considered a home with less than 1,000 square feet. In 2020, 9% of new construction buyers purchased a small home which is 6 percentage points higher than in 2019.

This change might have stemmed from more houses being built in urban areas or home builders swapping size for more upgraded options. One definite catalyst is the price buyers want to pay for a home. In 2019 9% of new construction buyers paid less than $100,000 for a new construction home and in 2020 this jumped to 19%. The growth in households buying less expensive new construction homes coincides with a 10-point drop in the share of buyers who pay between $200,000 and $299,000 — 21% of NC home purchases fell in that range in the 2020 survey, compared to 31% in 2019.

A shift in home feature preferences

In 2020 many homebuyers are still looking for many of the same top features as in 2019 such as air conditioning, the preferred number of bedrooms and bathrooms and preferred floor plans. There were some changes to new construction buyers' preferences in 2020. Buyers were looking for rental income, smart technology and space for cars.

Close to 32% of new construction buyers are looking for a home that will generate rental income. Those that only wanted to rent a portion of their home (home-sharing) grew to 27% in 2020.

Nowadays smart technology is a big part of society in many aspects. New construction home buyers have placed importance on smart technology in their homes. In fact, 45% of new construction home buyers felt that having smart home capabilities was extremely important. Homebuyers want devices that provide everything from security to temperature control.

Having a place for a car has become a must in 2020. Seventy-four percent of new construction buyers say that off-street parking or a garage is one of the top must-haves and 67% said a parking space is also on the list. These items came in 6 points higher in 2020 than reflected in 2019's data. As mentioned before, urban new construction is on the rise and there is always a scarcity of parking in the city.

Top reason for buying new construction

In 2020 new construction home buyers place the top reason for purchasing a new construction home is for the free builder upgrades. In the survey, 14% of new construction buyers said free builder upgrades swayed their decision to purchase new construction. Still in the top reasons were desirable location at 39%, appealing home features at 38% and everything new and never used at 37%. Buyers want to have the ability to customize features on their new home.

If you are in the market for a home, consider a new construction home. Always use a Realtor who can help you with the building process as well as the purchasing of your new home.

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Home Sales Higher Than This Time Last Year

The National Association of Realtors reported good news for home sales this fall. According to their data, home sales were 4.4% higher annually. This stems from the boost in newly built home sales,

lower 30-year fixed rates and an overall increase annually in pending home sales.

Across the country for-sale inventory has fallen but the demand has increased. October 2019, showed a major spike in sales of newly built homes compared to those reported in October 2018. Builders across the United States are focusing more on construction of more affordable homes.

Lower rates throughout this year has definitely pushed an increase in demand for new construction. The average 30-year fixed mortgage rates reached almost a full percentage

point lower this October than it was a year ago. Reports are showing an increase in mortgage applications and this will continue as the lower interest rate holds.

All the regions reported an annually higher percentage in pending home sales. The Northeast reported a 3% higher increase, the Midwest was 1.8% higher, the South reported a 5.1% increase from this time last year and the West was a 7.5% increase.

“There is no shortage of buyers seeking homes,” said Lawrence Yun, chief economist at the NAR.

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Lower Mortgage Rates Encourages Gains In Existing Home Sales

New home sales are on the rise but the existing home sales are keeping up. According to the National Association of Realtors (NAR) total existing home sales reported a seasonally adjusted annual rate of 5.42 million.

The NAR reported that on a year-over-year basis, existing home sales were 0.6% up than a year ago which included single-family homes, townhomes, condominiums and co-ops. This is the first year-over-year gain in almost a year and a half.

Homes stayed on the market 29 days in July 2019 with 51% of homes on the market selling in less than a month. All-cash sales composed 19% of transactions up from June 2019. Median sale price of

existing homes in July was up 4.3% from a year ago at $280,000 and existing condominium/co-op prices were up 2.5% with a median price of $254,300.

Sales by regions saw an increase, except for the Northeast and West, for existing homes sales in July 2019. Existing home sales in the Midwest grew 0.8% and in the South existing homes rose to 2.7%.
NAR has encouraged the market to add more inventory which is a good sign. The falling mortgage rates, July 2019 at 3.77%, and lower home prices are a big plus.

“We are optimistic that the latter part of this year and the early months of 2020, at least, will see a significant upturn in sales. That, in turn, will boost construction activity in due course,” wrote Ian Shepherdson, founder and chief economist of Pantheon Macroeconomics, in a research note.


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Spring Uptick For Housing Market

Spring always brings warm weather, sunshine and an upbeat attitude. The home market started off slow for the beginning of 2019, but analyst believe there will be a rise in home sales Spring 2019.

The beginning of the year wasn’t what the National Association of Realtors hoped for. Pending home sales did jump 4.6% this January, however sales were 2.3% lower than a year ago. January marked the 13th straight month of year-over-year declines.

The pending home-sales index (the NAR’s tracking system that records home contract signings) did go up in January to 103.2.  Analysts believe the reopening of the partial government shutdown caused

the boost from the nearly five-year low it saw in December of 2018. In the Northeast pending sales increased 1.6%, in the Midwest 2.8%, only 0.3% in the West and 8.9% in the South. The market should see the home sales from these pending contracts right around Springtime. Contracts usually stay pending on average for about 45 days until they close.

“February existing home sales should now rebound handily and with new home sales likely to head higher too, given the rising trend in mortgage demand, the gloomy housing narrative in markets and the media is set to change quite dramatically over the next few months. The market is not rolling over, and it is not a harbinger of recession in the broader economy,” said Ian Shepherdson, chief economist for Pantheon Macro.


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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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