As the mortgage crisis continues to inundate the market with distressed properties, today’s house hunter has no shortage of cheap, foreclosed homes to pick through. But despite all those deals in the previously-owned home market, consumers shouldn’t overlook the potential benefits of buying a new home. “New homes usually sell higher per square foot then resale homes,” says Jack McCabe of McCabe Research & Consulting. “But their selling points, I think, are pretty strong.” To help consumers better understand the advantages of new home buying, U.S. News spoke with a handful of experts and compiled a list of 9 reasons to choose a new home over a resale:

1. Customization: Many home builders allow buyers to participate in the process of designing their property, which helps create a living space specifically tailored to the consumer’s tastes. New home buyers, for example, can often decide where their bathroom might go, choose their favorite type of flooring, or pick the color of the exterior paint. Buyers moving into a subdivision can sometimes even pick the lot they like best. “There is a lot of flexibility for [new home buyers] to kind of put their personal signature on the product,” says Patrick Costello, president of Forty West Builders. “Those kind of things you can’t do with a used house—it’s just not possible.”

Read more…

The housing market is about to see a major youth infusion from members of Generation Y moving into households of their own, but what kind of homes they will want or be able to afford are among the open questions that will be especially challenging for established builders who may be ill-equipped to respond to the magnitude of the changes likely to characterize the recovery period that lies ahead.

Turning the tables on young men, young women will be the demographic group to watch, as they come to the housing market better educated and with higher paying jobs than their male counterparts.

In an NAHB webinar on June 30, James Chung, president of Reach Advisors, cited some demographic statistics about the U.S. population that ought to have an especially upbeat ring in the ears of the developers of multifamily rental properties. However, he cautioned that the dynamics of the marketplace will be dramatically different.

“The demographic winds have clearly changed for residential real estate,” Chung said, “from massive tail winds to massive head winds ahead. The good news is that multifamily still has some tail winds ahead after the storm subsides, much more so than other sorts of real estate, but the wind in the sails will be different from the past.”

Less Money to Spend on Housing

Nobody quite knows for sure how the emerging economy will color the behavior of consumers, but as the U.S. population begins to get back on its feet financially it is unlikely that typical housing consumers will have the wherewithal they once had to spend on housing.

In terms of household income, statistics from the Census Bureau depict a decade in which the top 10% captured 50% of all U.S. earnings and the top 1% landed 25%, he said. In inflation-adjusted dollars, from 2000 to 2008 incomes were down for every age group up through the younger half of the baby boom, those aged 45 to 54, who saw their median income plunge almost 12%.

The younger baby boomers, the large majority of whom are well-established home owners, will be able to soften that blow by falling back on healthy amounts of home equity, according to Chung. But that won’t be the case for Generation Y members, who have feet planted in both the 15-to-24-year and 25-to-34 age groups, both of which experienced a decline in median household income in the 7% to 8% range through 2008.

Born roughly in the 1980s through 1990s, members of Gen Y had actually been spending more than prior generations at their age even though they had less income than those who had preceded them, Chung said. But their high-spending ways began fizzling out with the onset of the recession, he said, as the subsidies they had been receiving from their parents started “shrinking fast.”

The nation’s current job situation remains at detrimental levels for housing, Chung reminded his audience, with roughly 20% of the workforce out of work, underemployed or so discouraged that it has dropped out. Returning to full-employment will need some time, maybe not as long as the decade or more the Japanese took to recover following the collapse of their financial institutions in the 1990s, he said, but that scenario is a more likely outcome for today’s precarious U.S. economy than the rapid job creation that used to occur in the aftermath of recessions.

What young women are able to earn in the period ahead and how well they fare on their career paths will have implications for housing, he indicated, perhaps enabling them to pass more quickly than expected through the upper end of multifamily rentals into the first-time buyer market.

The amount of support that prospective renters and buyers receive from the economy remains a major unknown, but Chung laid out some demographic numbers and market research on Gen Y that builders should be digesting now.

Read more…

Walt Disney Co. plans to unveil Wednesday its first foray into residential real estate in more than a decade with a pricey vacation-home development in Florida’s Walt Disney World.

It’s a risky move. Disney will offer homes priced between $1.5 million and $8 million in a state where the foreclosure rate remains among the nation’s highest. In Orlando, where brokers say home values have dropped between 50% and 60% from the peak, Disney’s pricing would put its homes near the top of the market. According to Realtor.com, the average price of new listings in greater Orlando this year is just over $243,000.

But Disney believes the market for luxury homes is rebounding. Despite adding wine-tasting events and VIP park tours in recent years, “The affluent market is an area where we haven’t offered a lot of product,” says Matt Kelly, vice president of Disney resort real-estate development.

Read More…

Home buyers are close to gaining more time to obtain a federal home-buyer tax credit of up to $8,000.

President Barack Obama is expected to sign off on legislation as early as Thursday following approval in both congressional chambers earlier this week. It would extend the deadline for the home-buyer tax credit, giving buyers with purchase contracts in place three more months to close on the sale.

Specifically, buyers would have to close before Oct. 1 to be eligible for the extended credit. The closing deadline was originally June 30. To be eligible, buyers need a contract that was in place by April 30.

The National Association of Realtors has estimated that about 180,000 otherwise eligible buyers were likely to miss out on the credit if the original deadline was upheld. It’s been difficult for some buyers to get their mortgages approved on time, as lenders work through a clogged pipeline of applications

For homeowners thinking of investing in a tankless water heater, it’s time to turn that idea into action. From now until August 31, 2010, NW Natural customers can receive more than $2,200 in incentives toward a purchase that provides endless hot water, saves them money and is environmentally friendly.

NW Natural customer Jim Shores of Forest Grove made the purchase and couldn’t be happier. Jim’s wife, Amy, loves to take long showers so Jim researched natural gas tankless water heaters and settled on a Rinnai.

“Energy efficiency never felt so good,” said Shores. “It’s a great investment, good savings, and we’ve upgraded the value of our home.”

The deal
NW Natural has teamed up with Rinnai and Energy Trust of Oregon to offer NW Natural customers in Oregon and Washington up to $2,240 back with the installation of a Rinnai tankless water heater. The following are the incentives and tax credits for changing a tanked water heater to a Rinnai tankless water heater:

• $200 gas credit on their NW Natural account, courtesy of a participating Rinnai dealer;
• $200 cash rebate from Energy Trust of Oregon for installation of a tankless water heater with Energy Factor of 0.80 or greater;
• Up to $340 Oregon tax credit (25% of installation and equipment costs), with installation of a tankless water heater with an Energy Factor of 0.80 or greater (OR customers only);
• Up to $1,500 federal tax credit for installation of a tankless water heater with Energy Factor of 0.82 or greater.

Relax, it’s a Rinnai
With Rinnai tankless water heaters, there’s no tank to leak or break, thus reducing the risk of flooding. Plus, Rinnai offers a line of controllers that make it easy to set water temperatures precisely for multiple locations in the home to ensure comfort and prevent scalding accidents. Rinnai tankless water heaters heat water on demand, so users aren’t limited to a fixed preheated supply as with a tank.

With up to $2,240 back in gas credits, rebates and tax credits, and the lowest natural gas prices in five years, enjoying a Rinnai natural gas tankless water heater is really affordable. Customers can enjoy hot water when they want it, for as long as they need it, so taking showers, washing dishes and doing laundry can be done all at the same time.

Details on participating dealers and information on cash rebates found at nwnaturaloffers.com and energytrust.org.

In addition to the 34 Excellence Awards, the HBA presented Annual Awards to individual members who demonstrated exceptional commitment to the association in 2009.

“It is important that we take some time each year to applaud the individuals and companies who lead our association through their efforts,” said HBA Chief Executive Officer Dave Nielsen. “We were proud to have so many awards to issue this year, and so many difficult decisions to make when judging submissions. The Portland area’s homebuilding industry is home to some amazing talent and some outstanding professionals.”

Builder of the Year: Roger Neu, Nupark Development

Annual Awards
HBA Lifetime Achievement Award: Richard Edwards and Hans Vantheuer
HBF Volunteer of the Year: Roy Abramowitz, Perkins and Co.
Builder of the Year: Roger Neu, Nupark Development
Remodeler of the Year: Steve Stolze, SLS Remodeling
Associate of the Year:Kimberly Wheeler, Bank of the West
Trade Contractor of the Year: Jamie Pepiot, Pepiot Painting
Spike Award: Kimberly Wheeler, Bank of the West (fourth year in a row)

Other Excellence Award winners included the following:

Best Website by an Associate: United Tile

Sales & Marketing Awards
Best Website by an Associate:     United Tile
Best Website by a Developer/Builder/Remodeler:   Costa Pacific Homes
Best Print Media:     Art4orm (for Legend Homes)
Best Production Media:  Art4orm (for Legend Homes)
Best Social Media/Internet Campaign:  Costa Pacific Homes
Best Overall Marketing Campaign:  Milgard Manufacturing

Ultimate Energy Performance Score without Solar under 2000 SF: Costa Pacific Homes

Green Building Awards
Ultimate Energy Performance Score without Solar under 2000 SF:  Costa Pacific Homes
Ultimate Energy Performance Score with Solar over 2000 SF:  Legend Homes
Ultimate Energy Performance Score without Solar over 2000 SF:   Marnella Homes
Best Certified Home under 2000 SF:  Costa Pacific Homes
Best Certified Home over 2000 SF:  Legend Homes
Best Development/Site Plan:  Costa Pacific Homes

Whole House Remodel under $250,000 : Stanley Home Renovation & Design

Remodeling Excellence Awards
Bathroom Remodel $50,000 and above : Neil Kelly Design/Build Remodeling
Kitchen Remodel under $100,000 : Craftsman Design and Renovation
Kitchen Remodel $100,000 and above:  Cascade Restoration & Remodeling
Open Category : Craftsman Design and Renovation
Exterior/Outdoor Living/Deck Remodel : Champion of Portland
Whole House Remodel under $250,000 : Stanley Home Renovation & Design
Whole House Remodel $250,000-$375,000 : Neil Kelly Design/Build Remodeling
Whole House Remodel $375,000-$500,000 : Metke Remodeling & Woodworking

Residential Kitchen Design : Z-3 Design Studio, Inc.

Design REX Awards
Residential Bath Design : Paolo Design Group
Residential Kitchen Design : Z-3 Design Studio, Inc.
Residential Whole House Design : Paolo Design Group

Single Family Home under $250,000 : D.R. Horton

Building Excellence Awards
Single Family Home attached under $300,000 : Costa Pacific Homes
Single Family Home attached $300,000-$500,000 :   Costa Pacific Homes
Single Family Home attached $500,000-$700,000 :  Parallel Development
Single Family Home attached $700,000-$1,000,000 : 937 Group
Single Family Home attached over $1,000,000 : Hoyt Realty Group
Single Family Home under $250,000 : D.R. Horton
Single Family Home $250,000-$350,000 : S & K Homes
Single Family Home $350,000-$450,000 : Arbor Custom Homes
Single Family Home $450,000-$550,000 : C&L Properties
Single Family Home $750,000-$1,000,000 :  Hymark Custom Homes
Single Family Home $1,000,000 and above :  BC Custom Homes

“Since 2000, despite two wars and a serious economic slowdown, the United States has made significant progress in sustainable construction,” said Sean Penrith, executive director, Earth Advantage Institute. “We’ve come from a point where the perception of green building involved remote off-the-grid homes to a point where the National Association of Homebuilders now has a green building standard in place and the federal government has invested $4 billion of its stimulus money in energy efficiency for its buildings nationwide. The next 10 years will accelerate these trends.”

Based on trends tracked over the past 5 years, Earth Advantage Institute staff has compiled a list of 8 predictions that provide a glimpse of American homes and the home industry over the next decade.

Newly built homes will use one third the energy that they do today. Progressive builders are already going far beyond the current standards to build “net-zero” homes that produce at least as much energy as they consume over one year. The techniques used in building these high performance homes will filter down to the mainstream rapidly as homebuyers see how easy it is to create energy efficient and even furnace-free homes using readily available materials and emerging technology.

Buying decisions will be based on better information about the “life cycle” impact of products. New studies are underway on the total environmental cost of building materials, from raw materials collection to manufacture, installation and eventual disposal or recycling. Homebuyers will also see data on durability and maintenance of those materials. Earth Advantage Institute recently completed a lifecycle analysis of residential building materials and practices for the state of Oregon’s Department of Environmental Quality.

The rising cost of clean water will drive most people to stop using it to water lawns and flush toilets. Many homes will use graywater (domestic wastewater from any source except toilet and garbage) and rainwater for these purposes. Many states, including Texas and the Southwestern and West Coast states, have passed legislation authorizing the use of graywater by households for yard irrigation. Arizona, for example, allows up to 400 gallons per day of graywater use on lawns and gardens.

Lenders will demand energy efficient buildings because they are more stable investments. Sustainable homes are built durably to protect the homes from moisture, excessive heat and cold, and airborne toxins –  all of which can cause unhealthy conditions for occupants or decomposition of building materials. Equally important, efficient homes cost less to operate, so occupants have more cash available to pay rents and mortgages. 

Communities will become denser, making better use of pedestrian walkways, bicycle paths and mass transit. The 2010 New Partners for Smart Growth conference documented the growing preference among today’s young people and today’s older citizens to live in denser, more convenient urban environments offering easy access to cultural activities, dining, entertainment and green space.

In the future, not just buildings will be certified, but neighborhoods and entire cities will be certified. This verification work will not only cover eco-friendly structures and materials, but will ensure that unique bio-regional conditions, water conservation, green space preservation, access to public transportation, and ongoing resident sustainability education are addressed.

All buildings will have baseline energy scores based on home design and the physical properties of the house. Home owners will have a better idea of where they stand with regard to energy efficiency and will understand how to upgrade their homes cost-effectively. Buyers will know more about energy performance when they shop for a home. The U.S. Department of Energy and the Environmental Protection Agency will create a voluntary national energy scoring system for homes by October of this year.

All homeowners will know significantly more about their energy and water use and their energy habits. The use of stand-alone or online home energy displays will enable them to monitor consumption in real time. Consumers will know how many times they opened their refrigerator door, when the hairdryer was used, how many gallons of water their teenager used during their shower, and the approximate dollar cost of each activity.

From Portland Business Journal, by Wendy Culverwell

Portland home sales soared in April as buyers rushed to take advantage of an expiring federal tax credit, according to new data from the Regional Multiple Listing Service.

The credit was worth up to $8,000 for homes under contract by April 30. The deadline helped propel Portland metro sales to a 49.1 percent increase over the same month in 2009. Pending sales rose 60.8 percent and new listings rose 23.8 percent as sellers sought to take advantage of time-sensitive buyers.

There were 1,941 closed sales, 2,991 pending sales and 4,713 new listings in April. In a sign that first-time home buyers dominated the market, the average sale price in April decreased 3.1 percent from a year ago, to $282,100. The median sale price fell 4 percent to $240,000.

Year to date, closed sales rose 41.4 percent to 5,900, pending sales rose 46.3 percent to 8,476 pending sales and new listings rose 15.4 percent to 17,918.

At April’s pace, the current inventory of for-sale homes would last for about 7.3 months, giving buyers a slight advantage. However, because the tax credit, worth up to $8,000 for first-time buyers and $6,500 for returning buyers, is no longer available, sales will likely drop in coming months.

Looking ahead, May closings will likely be up thanks to contracts written by the April 30 federal deadline to qualify for the tax credit. However, pending sales will begin to drop to normal market levels starting this month but could be offset by a seasonal uptick in residential sales activity.

More than twice as many women purchased a home for the first time in 2009 than men, according to a survey by the National Association of Realtors (NAR).

The first-time homebuyer share of the market increased to 47% in 2009 from 41% in 2008. Single women made up 25% of all first-time homebuyers, while single males made up 12%. Married couples were 49% of all first-time buyers, with unmarried couples taking up 12%.

More single women, 17%, became repeat homebuyers in 2009 than men, 8%. Married couples made up 69% of all repeat homebuyers. Unmarried couples made up 5% of repeat buyers.

“Several developments during 2009, including record affordability and the availability of the first-time home buyer tax credit, drew first-time buyers to the market,” according to NAR.

The West region of the US saw the greatest increase in first-time homebuyers, from 41% to 51%. The South and Midwest saw 6% and 7% increases respectively, and the Northeast had a 2% increase.

The median age for the first-time homebuyer was 30, and among repeat buyers, it was 48.

Despite the recession, incomes among first-time and repeat homebuyers did not change much from 2007 and 2008. The median income for first-time homebuyers increased $1,000 to $62,600. The median income for repeat buyers dropped $100 from 2008 to $88,000.