King County residents will have more options for owning a home thanks to a new law championed by REALTORS®. As Seattle and King County continue to experience greater demand for housing and an uptick in home prices, a coalition of housing advocates worked with the Legislature to pass a condominium reform measure that will make condo construction more attractive across the state.
The result: More housing choices for more people in King County.
More new homes entered the pipeline in May than any other month since the end of the Great Recession. Total housing starts increased 5 percent in May to a seasonally adjusted annual rate pace of 1.35 million units, the Commerce Department reported Tuesday. That marks the highest housing starts since July 2007.
Broken out, single-family starts rose 3.9 percent to 939,000 units in May—the second-highest reading since the Great Recession. The multifamily sector increased 7.5 percent to 414,000 units. Single-family and multifamily production are now 9.8 percent and 13.6 percent higher, respectively, than a year ago.
Read the article in REALTORmagazine…
Many house hunters are under the mistaken impression that new construction is flawless, a perception that may be challenging to wrestle with if a seller’s home is surrounded by brand-new development. In reality, there can be just as many inspection issues with new builds as there are with resale properties. For buyers who are interested in purchasing new, it’s important to manage expectations and know that no home—no matter what age—is perfect. On the other hand, new homes do have some advantages because they’re not worn. Here are three pros and three cons of new construction.
Open floor plans continue to reign. Eighty-four percent of builders say that in the typical single-family home they build, the kitchen and family room arrangement is at least partially open. Fifty-four percent say it’s completely open, according to responses from a September 2016 National Association of Home Builders/Wells Fargo Housing Market Index.
“Completely open” essentially means the two areas are combined into the same room. Partially open signifies areas separated by a partial wall, arch, counter, or something less than a full wall.
Seventy percent of recent and prospective home buyers say they prefer a home with either a completely or partially open kitchen-family room arrangement; 32 percent say they prefer the arrangement completely open, according to an NAHB survey.
Only 16 percent of buyers say they want the kitchen and family rooms in separate areas of the house.
As demand continues to increase for open floor plans, homeowners of existing-homes are also looking to open up their kitchen and family room areas. Professional remodelers report that 40 percent of their projects involved making the floor plan more open by removing interior walls, pillars, arches, etc., according to first quarter of 2016 data in the Remodeling Market Index.
Source: “Builders Satisfy Demand for Open Floor Plans,” National Association of Home Builders’ Eye on Housing blog
New single-family home sizes continue to get smaller. In the third quarter of this year, the average square footage of a new single-family home dropped from 2,620 to 2,602 square feet.
The gradual decrease in new-home sizes reflects a trend among builders away from mostly focusing on just the higher end of the market and a greater renewed focus on the entry-level market.
“As the entry-level market expands, including growth for townhouses, typical new home size is expected to decline,” states the National Association of Home Builders on its blog, Eye on Housing.
Following recessions, single-family home sizes typically rise as high-end home buyers, who face fewer credit constraints, return to the market in higher proportions, builders note. Home sizes then historically fall prior to and during a recession as home buyers constrain their budgets.
“This pattern was exacerbated during the current business cycle due to market weakness among first-time home buyers,” the builders’ note on the Eye on Housing blog. “But the recent small declines in size indicate that this part of the cycle has ended and size should trend lower as builders add more entry-level homes into inventory.”
Source: “Single-Family Home Size Trending Lower,” National Association of Home Builders Eye on Housing blog
BUILDER recently asked real estate professionals to share their thoughts about the top design trends their clients are currently requesting. Here are some of the top design trends that real estate pros said are in demand:
Source: “REALTORS®’ Most In-Demand Design Trends,” BUILDER and “15 Things REALTORS® Want Builders to Know,” BUILDER
We can expect a hot year for home sales in 2017, according to recent forecasts from the National Association of REALTORS®, the Mortgage Bankers’ Association, Freddie Mac and Fannie Mae, and more.
NAR is predicting existing-home sales to reach 6 million in 2017, higher than its 5.8 million forecast for this year. But other entities are even more bullish. MBA is predicting home sales to eclipse 6.5 million next year, while Fannie Mae and Freddie Mac are both predicting 6.2 million.
A huge wave of Generation Yers, who have delayed home buying, are emerging into their key buying years. They are predicted to keep home sales and condo sales strong well into 2020, according to economists.
The top markets for price appreciation likely will be in Seattle, Wash.; Portland, Ore.; Denver, Colo.; and Boston, predicts Eric Fox, vice president of statistical and economic modeling at VeroForecast. These markets’ robust economies have growing populations but a tight supply of homes for sale on the market that will likely lead to some of the largest price increases across the country.
Meanwhile, new-home construction starts likely will tick up to about 1.5 million per year to 2024, predicts Forisk Research.
Home builders likely will continue to be more subdued, despite calls for more inventory.
“Home builders behavior likely is a continuing echo of their experience during the crash,” Pantheon Macro Chief Economist Ian Shepherdson told MarketWatch. “No one wants to be caught with excess inventory during a sudden downshift in demand. In this cycle, the pursuit of market share and volumes is less important than profitability and balance sheet resistance.”
Source: REALTORmag
New-home sales in July jumped to the highest level in nearly a decade, with sales of new single-family homes climbing 12.4 percent month-over-month and reaching a seasonally adjusted annual rate of 654,000, the Commerce Department reported Tuesday. That marks the highest level since October 2007.
Low mortgage rates, improving income growth, and steady job creation have helped propel home buying for both new and existing homes. New-home sales have posted strong gains since the beginning of this year, up 13.3 percent compared to a year ago. In June, sales of existing homes also reached their strongest pace in nearly a decade, though they slipped in July, according to the National Association of REALTORS®.
Good news for first-time buyers: more starter homes are on the way. A recent analysis by BUILDER online shows the number of homebuilders offering entry-level housing rose 25 percent last year compared to the year prior.
The decorated model home may be waning in popularity as more builders look to slash it from their budgets.
“While the days are gone when a builder would feature several decorated models at each new-construction community, does that mean model homes are a thing of the past?” BUILDER Online asks in a recent article.
Some homebuilders say a model home is no longer necessary.
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