Why Energy Efficient Homes are the Norm Today

Builders conduct quite a few studies before launching a residential project because the stakes are usually high. They do feasibility studies and analyze the market. And only the most viable projects are approved. Still, all that pro forma work merely reduces the risk; it doesn't eliminate it.

Until recently, builders only needed to focus on codes for guidance on ensuring energy efficiency of their homes. However, in many markets across the country, houses with third party energy efficiency certifications are attracting more buyers. In fact, some prominent builders now only offer homes with energy efficient certifications. This has made it necessary for builders to incorporate some form of energy efficiency into their projects.

In today's housing market, the number of buyers who factor in the cost of ownership is steadily increasing. Since energy efficiency is crucial for reducing utility bills, more people are looking for homes boasting of Energy Star certifications.

What if you don't already offer energy certifications on your homes? That is no cause for major concern now because you can choose from several certification options. The National Green Building Standard is a voluntary certification developed by the International Code Council and the NAHB in 2009. This has been approved by ANSI.

Over the last 5 years, about 30,000 new houses received NGBS certification, and almost 2,000 homes are waiting for approval.

Since the certification is non-prescriptive, there is no way builders can take short cuts. That also explains why NGBS is the only green certification approved by ANSI.

There are several other competing standards and each one has its proponents and benefits.

Depending on the kind of competition you face in your local market, you need to know more about each of these certifications and choose the one that allows you to differentiate your products from your competition.

This year will be remarkable for builders in many ways. The housing sector is expected to register exponential growth in 2014. This year, buyers of all segments are expected to enter the market. In 2013, the real estate market received a major boost from investors who purchased a large number of properties. This helped dry up the existing inventory and also drove the prices up.

In 2014, the market will see the participation of more entry level buyers. And then we will also get to know more about the specific buying preferences of people aged 18 to 32. Since many of these buyers have waited several years to enter the market, they will have a decent understanding of the products. They will also be more interested in learning about ways to make their home more energy efficient and comfortable.

There is enough evidence to prove that buyers are showing greater willingness to pay slightly higher prices for homes that possess energy-efficient certifications.

In fact, energy efficiency has become the norm today, and builders can no longer ignore it. The year 2014 will be a great year for builders who have exciting projects on offer. But the risks associated with the trade are also becoming bigger. Not offering homes with energy-efficient certifications is the biggest mistake that builders can commit now.

Economic And Housing Activity Seeing Upward Movement

Good news! The National Association of Home Builders/First American Leading Markets Index (LMI) reports that the housing market in 58 out of approximately 350 metropolitan regions across the country stayed at or exceeded the last normal level of activity. This means that on average the nation is at 87 percent of the normal housing and economic activity. This is great news for every facet of the housing market, from buyers to mortgage professionals to realtors to brokers to builders and more.

Housing Market Seeing Slow And Steady Progress

NAHB Chairman Rick Judson also works as a home builder in Charlotte. He says of the report, “U.S. housing markets are continuing to see a slow and steady progress back to the normal level. As the confidence of consumers gets stronger, this increases the number of buyers that are in the market.” As a builder, he understands and sees this firsthand in his own business.

The co-sponsor of the LMI report, First American Title Insurance Company, released this statement from vice chairman, Kurt Pfotenhauer. “We are pleased to see these continuing upward market trends, which are highlighted by the signs of improvement that were seen in eight-five percent of all metro areas over the last year.” As you can see, this is a trend that is spreading across the country, which is a sign that the market may be finally recovering.

What has been the impetus to this change? NAHB Chief Economist, David Crowe, attributes it to the firming housing prices that are being found in a number of markets. He went on to say that the healthiest housing markets in the country are actually in smaller cities that have a strong local economy. Among these are the gas and oil producing states of Wyoming, North Dakota, Louisiana, and Texas. This may be due to the steady job market that is offered in the community, as well as the income levels.

Small And Large Cities Seeing Growth In Activity

Both small and large metropolitan areas are seeing significant growth in the housing market activity. In the larger cities, at the top of the LMI list is Baton Rouge, LA, which has a score of 1.41-, which means that they had an increase of 41 percent over their last normal market level. Other metros that were listed include: Austin, Houston, Honolulu, and Oklahoma City. Two areas have exceeded their previous norms. They are Pittsburgh and Harrisburg, PA.

In the smaller metro areas, the top of the list is Bismarck, ND, Casper, WY, and Grand Forks, ND. Odessa and Midland, Texas have an LMI score of 2.0 or better, which means that the housing market is now at double the strength that it was before the recession.

This is good news for all segments of the housing market. Beginning to see upward movement is almost certainly a trend that will continue to grow in other metro areas, both small and large. Continuing to watch the LMI, as well as other reports, can enable us to stay on top of the market now and in the future.

Green Building That Is Out Of The Box

As a builder, you want to build high-performance homes that will stand the test of time, be beautiful, and give your clients maximum function. It is important, however, to do your part in being more sustainable as well. That is why you want to consider taking existing homes and turn them into products to build a new home, which is good for the environment and can offer materials that you may not even be able to get anymore.

Rethinking Building A Green Home

Most people think of a green home as one that is energy and water efficient, but it can be so much more than that. Reusing materials, such as bricks, flooring, windows, and molding, can be a way to be sustainable and green as well. Deconstruction can be more expensive and time consuming than a classic home demolishment, but its benefits to the environment, homeowner, builder, and the community more than outweighs the extra cost. You may even be able to get a tax deduction for donating materials that were saved.

What is deconstruction and how is it different than demolishment? It is when a building is permanently dismantled in a way to salvage as much of the materials possible. From windows to bricks to wood flooring to moldings and more, most any material can be saved to allow it to be reused in another home or to serve another purpose. Demolishment does not concern itself with salvaging and takes the broken and unusable materials to the dump.

The best benefit to deconstruction and reusing materials is that many materials, such as those found in a 100-year old home, may not even be available anymore. Bricks from long closed down brickyards and old-growth wood cannot be purchased at your local home improvement store. They offer not only a functional purpose, but also a richness and beauty that cannot be found with new materials.

Builders Should Think Green

What if there is not an existing home to deconstruct? A builder should be thinking about green long before the site is even cleared. Whether they purchase reclaimed materials from a supplier or include more environmentally friendly materials found at the building supply, being green is not just a color for St. Patrick’s Day. It is a way of life that many clients are choosing to espouse not just in their everyday life, but in their building choices as well.

By finding a deconstructed material store or site in your community, you can not only build with materials that have stood the test of time, but also save the environment by decreasing the distance that they will be transported and the energy used in manufacturing new materials. This is an important consideration for many buyers, which is why you want to be sure that you consider adding this to your business practice.

If you are looking for a way to bring new clients to your building business, think green. It may be the key to taking your company to a new level with an entirely new demographic of clients. Consider deconstruction for your projects. You may find that it can make your homes even more beautiful, as well as green and environmentally friendly.

How to Save Money on Building Costs

Who doesn't like to live in a house that has not been occupied by another family? However, the cost of building a new house can be unaffordable. That is the main reason people turn to the resale market. But there are ways to cut costs and save money.

Use thin bricks

Bricks are known for their strength and endurance. They also add a touch of elegance to the building. But bricks are expensive. If you are trying to cut costs, you should consider cheaper alternatives.

Bricks don't play much role in ensuring the structural integrity of the house, so it is possible to get away with something less costly. For example, thin bricks, a popular alternative, are not as thick as regular bricks. They are also much less expensive. By substituting regular bricks with thin bricks, you can give your home the classic beauty and elegance of brick housing. And these affordable housing materials won’t burn a hole in your pocket.

Use stock house plans

Getting a custom plan drawn up can be expensive. There is one way out - use a stock plan available with builders. There will be plenty so finding a beautiful plan is not all that difficult. Be sure to choose a plan that is more or less similar to the one in your dreams. When you use a stock plan, you can save several thousands of dollars. There is yet another advantage to choosing a stock plan. These are designed by experienced engineers and may be structurally and conceptually more sound than your plan.

Be your own contractor

If you know a thing or two about construction, you could perhaps be your own contractor. This is perhaps the most effective way to cut building costs. There are some downsides as well. You will have to be present at the construction site most of the time. You will need to choose and buy building materials on your own. You will also need to supervise the works done by your subcontractors. As you may have already imagined, this is not easy and requires a lot of skill. But the monetary benefits make it worth your time and efforts.

Go vertical

Land cost is perhaps the biggest cost involved in building a new house. If you already own the land, this is not a problem. But if you have to purchase a lot, you will have to shell out tens of thousands of dollars.

The only viable solution, in this case, is to buy a small lot and build up. A two-story building of 3000 square feet will cost much less than a single story house of the same size because you need much less land when you go vertical. However, be sure to use simple and clean construction lines. If you use complex geometry, building a multi-story house can be much more costly.

Paint the home yourself

If you have got a few spare hours, you could perhaps paint your own home and save up to $10,000. If you can get the help of a few friends or family members, you will need only a couple of days to finish painting a full house. In addition, you can save money on materials and paint.

Building a new home is possible, even if you are on a tight budget. You just need to be really handy and a little more involved in the work.

Home Building Increases Signal Economy Recovery

Great news! Home building is on the rebound at last. In almost every time of economic recovery, the housing market has led the country’s economy out of recession and into recovery, except for the most recent time. That is why it is good news for not just builders and those who work in construction, but also for the economy as a whole, because it signals that the economy may be on an upward swing after several years of upheaval and decrease.

Hope Is Increasing In the Home Building Market

Normally, a little over 1.5 million homes are begun each year. This includes single-family homes, as well as apartment units. When the housing market was at its peak, this number was at more than 2 million to try to keep up with the demand. The last few years, however, an average of less than 600,000 homes were started and, in 2013, the number increased to 900,000. This year, that number is expected to climb to over 1 million, which is a sign of hope in the real estate and construction world.

Even though we are beginning to see good news, it will take a while before it will get back up to the normal range. The housing market collapse was immense, and its effect upon the economy was immense as well. While ups and downs are a normal part of the economic cycle, this event contributed to the entire collapse of the financial market and affected not only our economy, but also economies all over the world. The key is to gradually begin building more homes until you are sure that the demand is there.

Housing Market Recovery Will Be Slow

The recovery from this collapse has already taken five years and it will most likely take several more. Even though the rate of housing construction grew in 2012 and 2013 at double-digit rates, this was largely due to the fact that the numbers were at a very low level to begin with. Recovery seems to be on its way, which is the good news. We are on a course to see great growth in the next two years, due to:

·         Demand from young adults beginning home ownership & from existing homeowners

·         Job growth increases

·         Net worth replenishment, due to increase in home values and revival of stock market

·         Government economic situation more stable

While this is all good news, it is important to note that we are just at the beginning of the upswing. However, it is better to be in the midst of it going up, than at the bottom, which is where most homebuilders were just a few years ago. It may be time to amp up your marketing efforts to connect with more clients who may be thinking about building a home in the near future.

With home construction numbers on the rise, it is important to rethink how you are reaching clients and make plans to reach even more. With the younger adults entering the workforce and beginning families, and existing homeowners beginning to feel better about building, you have the opportunity to grab your ride on the upswing and reach the peak in great condition.

 

U.S. Cities without Affordable Homes

The scene is getting tougher for home buyers with more complex home loan procedures and prices moving upwards.  

According to a recent study, for middle-income families, purchasing middle-priced homes is affordable in only 8 out of the country’s 25 biggest metropolitan areas.

Here are the top 5 cities where buying a home is not an affordable option anymore for most people:

Baltimore

This city has become 16% more unaffordable than the previous year. Buyers prefer Baltimore because of its proximity to Washington D.C. Last year there was a fall in the median sales price of homes in the metro area which led to a surge in demand and a spike in prices. Buyers were planning to stay put in homes long term and didn’t mind paying extra. In many cases, buyers were willing to up their offers if sellers received better offers.

Phoenix

The affordability of homes here has come down as compared to last year. The housing meltdown is warming up again. In Phoenix, many buyers are investors intending to rent out homes. This is bringing down inventories and increasing prices. Institutional investors such as private equity firms and hedge funds are causing prices to increase by purchasing many properties and refusing to resell them.

This trend has led to an increase in values of existing homes. Homeowners are waiting for their home values to go up further before deciding whether or not to sell their homes.

Los Angeles

Homes in L.A. are 17% less affordable as compared to last year. In the county area, the median sales price this year has been considerably higher than last year. This is because investors have been making a large number of purchases and many young adults have entered the region due to a growing tech industry. Bidding wars among buyers have almost become the norm. Some buyers are removing offer contingencies in an attempt to get past other offers.

Sacramento

Homes here are 19% less affordable against last year’s figures. Sacramento is witnessing rising prices due to a spillover effect. With prices in the bay area of San Francisco continually rising, many buyers are unable to afford real estate there. Instead, they’re looking east towards the Central Valley which is more affordable. There’s been a significant spike in luxury real estate prices during the third quarter in the Sacramento metro area as a result of increased demand and reduced inventory.

In the first part of this year, almost all homes in the market were sold within a week. In a healthy market, there’s usually about six months inventory for sale. Sacramento saw listings of just under a month which pushed prices upwards.

Detroit

Detroit has become 28% percent more unaffordable than last year. Though Detroit had a bankruptcy filing in July, real estate prices have picked up and are getting out of reach for many buyers. July saw a spike of 17% in home prices in the Detroit metro area as compared to this month a year ago.

Most of the price increase can be attributed to many car manufacturers getting back into business. This has helped in boosting consumer confidence and more buyers are entering the market. Many other large companies have also moved their offices out of the suburbs into downtown Detroit. This has boosted real estate demand and brought down supply.

Why Lot Size Matters in Real Estate

Buying a home before studying the lot where it is located is never advisable. Many home buyers seem to believe that the lot is not important if the house is good enough to grab attention. Agreed, the lot is merely a piece of land, but in real estate it matters. Here is why:

 The Value Factor       

The value of your lot is often determined by the size of the lots adjacent to it.  So if you are going to buy a lot which is much smaller or bigger than other lots in the neighborhood, you need to realize that its size will have a major impact on its original and resale value. So you might think that bigger lots are more valuable than smaller lots, but this is not always the case. Of course, it is safe to assume that a lot which is larger than adjacent lots will be more valuable.

However, if that extra acreage consists of unusable terrain, the lot could be worth much less than neighboring lots. Interestingly, a smaller lot could be worth more for several reasons including its location, landscaping, views and the size and value of the house built on it. When it comes to corner lots and lots located on a dead end, there are several other factors that could affect the value.

The Size

The relation between lot size and property value is not exactly clear. In fact it tends to be governed by area and neighborhood, rather than anything else. In a city, a lot that measures a quarter acre should be considered as a large lot. When it comes to the suburbs, an acre tends to be the norm for relatively expensive homes.

Large pieces of land that cannot be divided into sub plots rarely increase the price of the house. Consider this example. A lot comes with additional seven or eight acres of land. But if this extra piece of land is undevelopable because it is a rocky land or swamp, it will not enhance the price of the property. It might even turn off some potential buyers because few people are interested in paying property tax on a piece of land that they can't use in any way. In fact, some owners of such unusable lands have dedicated it to the town where they live. By giving away land, they not only reap tax benefits, but also reduce their property taxes.

 

The Position

If you run a business, you will definitely want to purchase a corner lot. These are considered the most desirable locations for shops and businesses. However, when it comes to residential property, corner lots are not exactly popular. Since these lots are more exposed, they might require high fencing or trees for privacy. Families with very young children may prefer Cul-de-sacs or dead ends.

Effect on Lifestyle

Now that you have factored in the price of lots in the community, you need to consider the impact the lot will have on your lifestyle. You need to ask yourself a few questions:

 

Do you think your family will need lots of outdoor space? If your family prefers to spend a lot of time outdoors, you will probably need a larger lot. You also need to remember that the size of the lot may affect the type of landscaping you can have. Your chosen lot should ideally be close to community amenities. You will probably also want to know how far the lot is from the community entrance.

You can view the lot map before buying property in a community. However, if it is possible, drive to the neighborhood and see the lots and homes in person. It will help you make a more informed purchasing decision.

Smart Green Retrofits for Managing Energy Bills

When it comes to energy savings and green home improvements, instead of expecting huge returns, understand the latest bottom line – you can hold against skyrocketing energy costs by going in for some smart retrofits.

In general, energy prices have increased substantially in the last 10 years, especially in certain parts of the country. Even though there was a slight fall in natural gas prices since 2008 and there was stability in electricity prices for a while, there have been upward trends in prices of both since 2011.

According to the estimates of the Energy Information Administration of the US, there will be an average yearly increase of 2.3 per cent of the costs of residential energy right through 2035. If these projections are accurate and your average annual energy bill is $2,200 today, an increase of 2.3% works out to $50 more in the first year if your consumption pattern stays constant. In such a scenario, you’ll have a bill close to $4,000 by the time you get to 2035. Ouch, that’s going to pinch.

Dependable energy saving retrofits

When the sole reason for making retrofits is managing energy bills, look out for projects that offer the maximum returns for your investment.

As a rule of the thumb, try to fight the 2.3% yearly average by going in for green home improvements which reduce your energy usage by 5% or above and require a reasonable initial investment. Remember to find out whether your state government or utility offers tax credits and rebates for such improvements.

Some suggestions:

1. Insulate and seal ductwork running through spaces without heating. Though it may not appear glamorous, doing this in places like the attic and garage can improve heating system efficiency by 20% and you might manage a 5% overall bill reduction. A few hundred dollars of investment will be required for hiring an HVAC pro for the job and labor and material costs.

2. Get a programmable thermostat. If you don’t have one already, getting it and programming it correctly can help you save about 8% on your energy bills on an average.

3. Seal air leaks and add attic insulation. This is one of the soundest energy-saving improvements. By sealing and insulating your home, you can bring down energy bills by almost 10%. Regard upgrading attic insulation and sealing air leaks as a combination job for maximum benefits.

 

The bottom line

Don’t expect huge savings in your energy bills when you opt for green home improvements. It makes better sense to go in for green retrofits that are likely to offset increasing energy prices.

 

How to Save Money by Building a Low Cost Home

Even if you are not an expert, there are still ways to save money on home construction. Here are some cool tips to keep your home building budget within reason.

Split the costs

If you feel that you can’t afford the property because it is too large, you should consider buying it with a family member or friend. After purchasing the lot, you can split it into smaller lots. This saves money. Better still, you will be able to get a great lot for an attractive price.

Choose a problem lot

Some lots are less desirable than other lots. For example, a narrow lot or a hillside lot will have fewer takers. As a result, these lots are usually sold for much lower prices. If you can find such a 'problem lot' for a great price, don't hesitate to buy it. With the right floor plan and a great contractor, you can build the house of your dreams on any lot.

Waterfront lots

If you are looking for a waterfront property, you should opt for a lot facing a bay or a canal. These lots are much less expensive than lakefront or oceanfront properties. You will still have easy access to a water body.

Use low cost materials

Choose building materials that require less maintenance. Examples are: metal roofing and vinyl siding. Of course, these materials are more expensive, but they will easily recover their costs because you will not have to spend money on repairs or replacement.

Visit demolition sites

You will be able to collect used bricks, wooden doors and old barn wood from demolition sites. These materials are perfectly usable and usually don't cost anything. Of course, you will have to haul them away on your own.

Don't splurge

Avoid the temptation to splurge except for those truly important items. You can't, for example, skimp on doors or windows because they are important for the safety of your home.

Bigger isn’t necessarily better

Don't build a house that is bigger and better than any other house in the neighborhood. These monster homes are unlikely to command a good price when you decide to sell them.

Monitor all the materials used for construction

Don't let the contractor use low quality materials unless they are ready to make a cost adjustment.

Hire a certified contractor

An experienced will have established good relationships with subcontractors and suppliers.

Avoid site preparation

Site preparation can be expensive. Avoid lots that require extensive preparation work. Blasting rocks and clearing trees can be expensive.

Don’t alter blueprints

Don't change materials or blueprints during the building process. These changes can cost a lot of money.

Add width not depth

If the depth of the home is more than 32 feet, you will have to use specially designed roof trusses. This can be expensive. If you want a large house, add width or extra stories.

Consider vinyl flooring

If you feel that you can't afford to have hardwood flooring or ceramic tile at the moment, use vinyl flooring. You can add tile or wood directly on top of vinyl at any time.

Use a stock plan

Getting a plan custom-drawn can be expensive. Instead, choose one of the readily available stock plans. You will be able to customize it to get what you want.

Don’t build huge garages

If you have just two cars, you probably don't have to build a garage that can accommodate three or more vehicles. If you are looking for storage space, you should consider putting up a shed in the garden.