When Buying, Selling and Renovating, it’s an Animal House, Say Realtors®
WASHINGTON (February 13, 2017) — When making decisions about buying, selling or renovating their homes, Americans, by and large, take their pets' needs into account, according to a new report from the National Association of Realtors®. The 2017 Animal House: Remodeling Impact report found that 81 percent of respondents said that animal-related considerations play a role when deciding on their next living situation.
"In 2016, 61 percent of U.S. households either have a pet or plan to get one in the future, so it is important to understand the unique needs and wants of animal owners when it comes to homeownership " said NAR President William E. Brown, a Realtor® from Alamo, California and founder of Investment Properties. "Realtors® understand that when someone buys a home, they are buying it with the needs of their whole family in mind; ask pet owners, and they will enthusiastically agree that their animals are part of their family."
In fact, according to the survey, 99 percent of pet owners said they consider their animal part of the family, and this becomes apparent in the sacrifices pet owners are willing to make when it comes to buying and selling homes. Eighty-nine percent of those surveyed said they would not give up their animal because of housing restrictions or limitations. Twelve percent of pet owners have moved to accommodate their animal, and 19 percent said that they would consider moving to accommodate their animal in the future.
Realtors® who were surveyed indicated that one-third of their pet-owning clients often or very often will refuse to make an offer on a home because it is not ideal for their animal. Realtors® also noted that 61 percent of buyers find it difficult or very difficult to locate a rental property or a homeowners association that accommodates animals.
When it comes to selling, 67 percent of Realtors® say animals have a moderate to major effect on selling a home. Approximately two-thirds of Realtors® say that they advise animal owning sellers to always replace thing in the home damaged by an animal, have the home cleaned to remove any animal scents and to take animals out of the home during an open house or showing.
Nearly half of all survey respondents, 52 percent, indicated that they had completed a home renovation project specifically to accommodate their animal. Of those who undertook projects, 23 percent built a fence around their yard, 12 percent added a dog door and 10 percent installed laminate flooring. Ninety-four percent of consumers indicated that they were satisfied with their renovation; 58 percent indicated they have a greater desire to be at home and 62 percent enjoy spending more time at home since completing their renovation.
When it comes to the enjoyment homeowners gain from these projects, fencing in a yard and installing laminated floors rated highest, both receiving Joy Scores of 9.4; Joy Scores range between 1 and 10, and higher figures indicate greater joy from the project. Adding a dog door came in a close second with a Joy Score of 9.2.
A majority of surveyed animal owners, 83 percent, indicated that they own a dog, which helps explain the overwhelming popularity of dog-related renovation projects. Forty-three percent of those surveyed said they own a cat, 9 percent own a bird, reptile, amphibian, arthropod, small mammal, or miniature horse, 8 percent a fish and 5 percent own a farm animal.
NAR members were also surveyed about their relationships with animals, with 80 percent of Realtors® considering themselves animal lovers and 68 percent indicating that they have pets of their own. Twelve percent of Realtors® surveyed volunteer for an organization that helps animals, and 21 percent plan to volunteer in the future.
The National Association of Realtors®, "The Voice for Real Estate," is America's largest trade association, representing more than 1.2 million members involved in all aspects of the residential and commercial real estate industries.
HUD Lowers FHA MIP by a Quarter Point
Daily Real Estate News | Monday, January 09, 2017
Mortgage insurance premiums on FHA-backed loans will be lower by 25 basis points on loans endorsed starting January 27, the federal government announced today.
“After four straight years of growth and with sufficient reserves on hand to meet future claims, it’s time for FHA to pass along some modest savings to working families,” Julian Castro, secretary of the U.S. Department of Housing and Urban Development, announced today.
NAR President Bill Brown praised the move. “Dropping mortgage insurance premiums will mean a lot more responsible borrowers are eligible to purchase a home through FHA,” he said. “That puts more money in the fund to protect taxpayers, and it puts more families in homes so they can live out the American dream.”
The new premium schedule, which takes effect for residential mortgage loans that have an insurance endorsement date on or after January 27, is expected to save the average home buyer $500 a year in insurance costs.
In its announcement, HUD said the reduced premiums reflect the healthy state of HUD’s mutual mortgage insurance fund, which is the agency’s principle fund for insuring FHA mortgages. “We’ve carefully weighed the risks associated with lower premiums with our historic mission to provide safe and sustainable mortgage financing to responsible homebuyers,” said Edward Golding, HUD principal deputy assistant secretary for housing. “This conservative reduction in our premium rates is an appropriate measure to support [home buyers] on their path to the American dream.”
Under the new schedule, a home purchase with a base loan amount of up to $625,000, with an 85-percent loan-to-value ratio and a 30-year loan term, will require an annual mortgage insurance premium of 55 basis points, down from 80 basis points. A 15-year loan of that same amount and with a 90-percent LTV ratio will require an MIP of 25 basis points, down from 45. Access the full schedule.
NAR is calling on FHA to take even more steps to help home buyers, including eliminating FHA’s “life of loan” mortgage insurance requirement, which forces borrowers to maintain mortgage insurance regardless of their equity position. Borrowers with traditional mortgage insurance can typically extinguish their mortgage insurance once they reach 20 percent equity in the property. “Our work continues, but we’re encouraged by today’s announcement,” Brown said.
—By Robert Freedman, REALTOR® Magazine
NEW YORK – Jan. 18, 2017 – Millennial first-time homeowners are showing more willingness than previous generations to complete do-it-yourself projects around the house or wait until they can afford to make the improvements they desire, a new survey by Better Homes & Gardens magazine finds. Fifty percent of those surveyed said that their current home required some degree of repair or remodeling at the time they moved in.
Only 50 percent of first-time millennial homeowners say they are willing to spend top dollar to get exactly the features and quality they want in a home, the survey showed.
"These first-time millennial homeowners are focused on building equity, not debt," says Jill Waage, editorial director of Digital Content and Products at Better Homes & Gardens. "They are strong believers in being able to afford their dreams as they achieve them and not over-stretch themselves."
Eighty-five percent of first-time millennial homeowners say they view homeownership as a sound investment.
Their housing wish-list is for a mid-sized home (about 2,000 square feet) with a renovated kitchen and bathroom, as well as a deck or patio space.
The DIY projects that landed the highest on their to-do lists are installing light fixtures and tile, and painting walls, the survey found.
"Millennials and millennial 'firsts' [first-time homeowners] are paving their own paths in homeownership based on their own budgets, timeline and needs," Waage says. "These 'firsts' are replacing big-budget homes and expensive renovations with patience, frugalness and practicality."
Source: "Millennials Patient, Thrifty When It Comes to Homeownership," RISMedia (Jan. 11, 2017
© Copyright 2017 INFORMATION, INC.
WASHINGTON – Jan. 17, 2017 – In some markets, the land is more valuable than the home that stands on it.
Case in point, in San Francisco's Sunset District, a fire destroyed a home for sale leaving it inhabitable. Despite that, last February, the home sold quickly for just under $1 million. Seven months later, the home was transformed into a four-bedroom home and sold for $1.77 million.
In San Francisco, land is a premium, and buyers often pay more for the land than the home is actually worth.
"Over time, the physical structure usually depreciates in value, while land appreciates," realtor.com notes in a recent article. "That's because the property is in limited supply. Developers can stack more homes onto lots by building high-rises, but they can't produce more land. And that's why the value of land naturally goes up when population growth creates more demand."
Lincoln Institute of Land Policy data provides a snapshot of the 10 housing markets where land comprises more than half of a home's total value. The majority of the cities are in California, where buildable land tends to be scarcer. For example, in San Francisco, the average home value was $1.35 million in 2016. But about $1.09 million of that was attributed to the cost of the land, or 81 percent of the total price, the study found. On the other hand, in St. Louis, Mo., land is only about 10 percent of a home's total value.
Here are the cities where land costs exceeds property values by the highest amounts:
- San Francisco, Calif.: 81%
- San Jose, Calif.: 77%
- Santa Ana, Calif.: 76%
- Oakland, Calif.: 71%
- Los Angeles, Calif.: 71%
- San Diego, Calif.: 66%
- Boston, Mass.: 60%
- Miami, Fla.: 54%
- Seattle, Wash.: 53%
- Portland, Ore.: 51%
Source: "Not Dirt-Cheap: 10 Cities Where Land Is Worth More Than the Home on It," realtor.com (Jan. 11, 2017)
© Copyright 2017 INFORMATION, INC.
NEW YORK – Jan. 16, 2017 – The supply of buildable lots is shrinking. That has prompted home builders to return to the abandoned lots left behind during the housing crisis in efforts to revive dwindling inventories of homes for-sale, The Wall Street Journal reports. A surplus of vacant lots and half-built subdivisions still remains across the country, serving as reminders of when the housing boom took an abrupt halt.
Nearly two-thirds of builders reporting low to very low supply of available lots in their markets, according to a survey conducted last year by the National Association of Home Builders. The supply of vacant developed lots has dropped by more than 20 percent across more than 80 major U.S. markets since 2011, according to Metrostudy, a housing research firm. Notably, markets like Nashville, Tenn., and Charlotte, N.C., have seen inventories of vacant lots plunge by more than 40 percent over the past five years.
Shortages have caused median single-family-home lots to surge to record highs of $45,000 last year, according to NAHB data.
In Cobb County, Ga., a subdivision known as Cameron Springs had become a place of dying landscape and plagued with abandoned lots that were left behind in the 2000s. Only a fraction of the homes that were to be built had been. Investment firm Drapac Capital Partners purchased the 101 remaining lots in the neighborhood for $375,000. The firm spent $550,000 to finish half-built lots as well as upgrade the pool and clubhouse. It hoped the renovations would be enough to attract homebuilders back to the neighborhood and to finally finish it.
The firm's gamble paid off. Drapac received 12 bids in the summer of 2016 for the neighborhood. It eventually sold to D.R. Horton for $6 million.
"I think they're all panicking," Sebastian Drapac, chief operating officer of Drapac Capital Partners, told The Wall Street Journal. "They're trying to get lot positions wherever they can."
Some developers and investors are changing the name of developments to remove any stigma left behind from the abandoned neighborhoods. Drapac Capital Partners, for example, tweaked the name of the neighborhood from "Brightwood – Established 2007" to "Brightwood on the Lake, Est. 2016."
Source: "With Lots in Short Supply, Builders Revive Abandoned Projects," The Wall Street Journal (Jan. 3, 2017)
© Copyright 2017 INFORMATION, INC.
GREENSBORO, N.C. – April 19, 2016 – The Rev. Nelson Johnson knows regulators don't like the $20,000 solar panel system on the roof of his Faith Community Church in Greensboro, North Carolina. But the minister says he's willing to go to court to protect it.
"This is something that just makes moral sense, spiritual sense and financial sense," Johnson said. The sun, which God has given everybody, shouldn't just enrich powerful utility companies, he said.
Sunny Southern states have plenty of solar energy potential, and utilities across the region have begun to build large solar projects as the technology's price has dropped. But few homes and businesses sport solar panel systems largely because states in the region haven't embraced policies that support a residential market.
Utility companies say residential solar systems like Johnson's cost them money because solar owners pay less in monthly electricity bills yet expect their utility to step in and deliver power whenever their system doesn't. Solar advocates, on the other hand, say residential solar systems save utilities money by taking pressure off the electrical grid.
The solar system on the broad, flat roof of the nondenominational Faith Community Church was put there by NC WARN, an environmental advocacy group, to challenge state regulators. The group owns the system and charges the church for the electricity it produces – an ownership structure that is popular in other states but illegal in North Carolina.
Just seven states, all below the Mason-Dixon Line – Alabama, Florida, Kentucky, North Carolina, Oklahoma, South Carolina, and West Virginia – ban such third-party power purchase agreements, according to the North Carolina Clean Energy Technology Center at NC State University. Alabama, Georgia, Mississippi and Tennessee don't have rules governing how utilities reimburse customers for the excess electricity they generate.
Advocates like Johnson are pushing policymakers to create a friendlier environment for solar power, and several states have begun to do so. But utilities, worried that they may be crowded out, are pushing back.
"It's not really about solar at all," Duke Energy Corp. spokesman Randy Wheeless said of the partnership between Faith Community Church and NC WARN. "It's more about someone trying to set themselves up to be an electric utility when they're not."
Up and coming sector
Less than half a percent of the U.S.'s electricity comes from solar power. However, the sector is growing rapidly. Two-thirds of all solar photovoltaic installations in the country went online in the past three years, according to the latest data from the Solar Energy Industries Association and GTM Research, a firm that analyzes the electricity industry.
Utility-scale solar farms and solar thermal projects comprise about 60 percent of the nation's solar capacity. But small-scale solar is also catching on. By the end of 2014, some 600,000 U.S. homes and businesses had a solar system, according to GTM Research.
And the South is a good place for solar. Thanks to close proximity to the equator and lack of cloud and snow cover, more radiation from the sun hits states like North Carolina and Georgia than, say, upstate New York (although less than the desert Southwest). The U.S. Department of Energy calculates that both states receive 5-5.5 kilowatt hours of solar energy per meter per day, compared to upstate New York's 4-4.5.
Solar power only recently became low-cost enough to compete with other energy sources in the South, said Lauren "Bubba" McDonald, a member of the Georgia Public Service Commission. "What's making it happen is the technological advancement in solar energy – the panels, the price. That's what's making the difference."
In 2013, McDonald and his fellow regulators asked Georgia's major investor-owned utility, Georgia Power, to start planning more solar projects.
Nationwide, policymakers have used financial incentives and regulation to propel utility-scale construction and create a rooftop solar market. Federal and state tax credits, for instance, have made solar investments attractive.
As of October, 29 states required utilities to generate a certain share of their electricity from renewable sources such as solar power, hydropower and biomass, according to the NC State clean energy center. North Carolina is the only Southern state to have such a requirement, excluding Texas in the Southwest. It requires that by calendar year 2018 at least 0.2 percent of electricity sales to retail customers must come from solar.
North Carolina currently ranks fourth in the nation for total installed solar capacity – driven overwhelmingly by utility-scale projects – and investor-owned utility Duke Energy is planning more solar projects there, in South Carolina and in Florida.
The residential model
While utility-scale solar is spreading in the South, residential solar isn't. Just 7 percent of North Carolina's solar capacity comes from small-scale installations.
Small systems remain too expensive for most homeowners and businesses. Cheap electricity from fossil fuels and nuclear power gives property owners less reason to buy a system, and state laws haven't opened the door to the kinds of third-party ownership arrangements offered by companies like SolarCity Corp. and Sunrun Inc.
An analysis of data from solar panels representing four-fifths of U.S. solar capacity in 2014 found that almost two-thirds of residential solar systems were owned by a third party.
SolarCity's most popular option is called a power purchase agreement, and it works like this: The company installs a solar system on a customer's property, for no money down, and commits to maintaining the system over the length of the 20-year contract.
The company pockets tax credits for the installation, sells the customer the electricity (usually at a lower rate than she'd pay her utility) and sells excess electricity back to the grid. If all goes well, the customer saves money and the company makes money.
"It's the kind of business that people in business school dream about," said Richard Sedano of the Regulatory Assistance Project, a nonprofit that advises public officials on the power sector.
But no Southern state has lined up all the incentives and regulations needed for the model to work, said SolarCity spokeswoman Suzanne Merkelson. "It all has to be economically efficient. So you sort of have to have the right recipe to get the meal cooking," she said.
Georgia legalized third-party ownership of solar systems last year. But the state doesn't have a statewide mechanism, called net metering, for reimbursing customers for excess electricity generation. Florida allows net metering but not third-party ownership. South Carolina, one of the seven states that prohibits third-party power purchase agreements, passed a law in 2014 that allows customers to lease solar panels.
Florida also raises property taxes on buildings that install solar systems, making it harder for property owners to justify the investment, according to SolarCity.
The fight over rooftop solar
A small but vocal set of advocates – including pastors, environmental activists and tea party conservatives – are calling on lawmakers to let residential solar systems proliferate.
"I believe solar equals freedom. I believe that the [utility] monopolies in Georgia violate the U.S. Constitution," said Debbie Dooley, a tea party activist who championed Georgia's third-party ownership law. Ideally, she said, she'd like homeowners to be able to sell electricity to each other.
But utilities often have the upper hand in policy conflicts across the South.
Last year, a coalition of environmental and libertarian groups, Floridians for Solar Choice, launched a ballot initiative that would have lifted all kinds of restrictions on rooftop solar. It would have allowed third-party ownership and prevented utilities from charging system owners additional fees.
Utilities, in response, backed a rival ballot initiative that emphasized the right to own or lease a solar panel but also the right governments have to regulate solar ownership.
Screven Watson, a Democratic political consultant working on behalf of the utility-backed initiative, says it would allow regulators to protect consumers from solar installation scams. "We have seen evidence of unscrupulous practices in the solar industry already in Florida."
The coalition's initiative didn't gather enough signatures to qualify for the ballot this year. The utilities' did.
Last spring, North Carolina state Rep. John Szoka, a Republican, tried to legalize third-party ownership through his Energy Freedom Act. "If you can generate some of your own energy, why not?" he said.
Szoka tried to convince his colleagues that residential solar could introduce beneficial competition into markets currently monopolized by companies like Duke Energy. But he had little success, he said. The bill never made it out of committee, and he doesn't think it will move forward this session.
Asked about the company's position on his bill, Szoka said: "Duke is like any other corporation. They need to maximize profits for shareholders."
Wheeless, the Duke spokesman, said the company would have been more likely to back Szoka's bill if it had addressed several related issues, such as the state's expired renewable energy tax credit, or how utilities would interact with a rooftop solar market.
The company supported South Carolina's comprehensive 2014 solar legislation, Wheeless noted. And he pointed to Duke's new small-scale solar programs in the Palmetto State, which include customer rebates for homeowners who buy solar systems.
Now it's up to regulators to decide whether Faith Community Church's solar panel system breaks state law. Regardless of the North Carolina Utilities Commission's decision, Johnson is bracing for competing lawsuits from Duke and NC WARN. "We're happy to be an advocate for this," he said.
In the meantime, he'll keep talking about solar and its benefits. In a few weeks, he'll meet with about 20 other area faith leaders who are interested in building a solar farm.
WASHINGTON (AP) – April 19, 2016 – Construction of new homes fell in March by the largest amount in five months, with weakness in all regions of the country except the Northeast.
Home construction dropped 8.8 percent to a seasonally adjusted annual rate of 1.09 million units, the Commerce Department reported Tuesday. It was the third decline in the past four months and left construction at its slowest point since October.
Applications for permits to build new homes, a good indicator of future activity, dropped 7.7 percent in March to an annual rate of 1.09 million units.
Construction activity has been volatile this year, dropping in January and March but posting a 6.9 percent rise in February. Housing construction has been helping fuel the overall economy, and economists expect the sector to rebound in the coming months.
Construction of single-family homes declined 9.2 percent in March to a seasonally adjusted 764,000. Apartment construction was down 7.9 percent to a rate of 325,000 units.
The overall drop of 8.8 percent was the biggest one-month decline since a fall of 11.3 percent in October.
The National Association of Home Builders/Wells Fargo builder sentiment index released Monday was unchanged at a reading of 58 in April, reflecting an overall optimistic outlook for new homes as the industry heads into the all-important spring sales season.
By region of the country, construction jumped 61.3 percent in the Northeast in March, following a big drop in February. Sales were down in all other areas, led by a 25.4 percent fall in the Midwest, a 15.7 percent drop in the West and an 8.4 percent decline in the South.