U.S. Houses Are Still Getting Bigger

Americans want bigger houses. Or at least that’s what they’re getting.

The median size of a new single-family house was 2,467 square feet last year, the biggest on record, according to Census Bureau data out this week.

With all that floor space, homes are 61% larger than the median from 40 years earlier and 11% larger than a decade earlier.

“McMansion” may not be a popular term post-housing bust. But American homes have not only been getting larger, they’re also including more bathrooms and amenities such as air conditioning. Some 93% of new houses had air conditioning in 2015 compared with 46% in 1975. About 96% of new homes last year had at least two bathrooms versus 60% four decades earlier.

That may go some way toward explaining rising prices. The median sales price of a new home was $296,400 last year, according to Census, a new high. Even when adjusted for inflation, new-home prices hit a record last year.

More recent data suggest the housing market is gaining strength amid steady job creation and low mortgage rates, though rising prices and short supplies are constraints. U.S. new-home sales in April posted their strongest month in more than eight years. And sales of existing homes, which account for the bulk of the market, rose for the second straight month in April, the National Association of Realtors said last month.

A separate Commerce Department report out last week showed housing starts rebounded in April, leaving builders on pace to break ground on 778,000 single-family homes this year. Still, the number of starts remain well below historical norms.

Source: The Wall Street Journal, Jeffrey Sparshott
http://blogs.wsj.com/economics/2016/06/02/u-s-houses-are-still-getting-bigger/

6 Critical Questions to Ask When Buying New Construction

If you’re in the market for a brand-new home, you’ve got a ton of options. Sales of new homes surged to an eight-year high in 2015, according to data from the U.S. Department of Housing and Urban Development and the U.S. Census Bureau, and single-family production is estimated to reach 840,000 units in 2016, an 18 percent increase over 2015, according to the National Association of Home Builders (NAHB).

Unfortunately for home buyers, new residential construction is coming at a steeper price: Last year the average price of a new home jumped to $351,000, up $100,000 from 2009, reports the NAHB.

Nonetheless, there are still ways you can save when buying a new home. It’s like shopping for a new car: You need the right strategy to nab the best deal.

Ask prospective builders these six questions in order to find the right home at the right price.

“What financial incentives do you offer for using your preferred lender and title company?”

The bad news: Production builders are often reluctant to set a precedent for negotiating sales prices. (Custom builders tend to be more flexible.)

“If a new home is listed for $370,000 and it sells for $360,000, the next buyer in the development is going to want to pay that lower amount,” says Craig Reger, a real estate broker at Keller Williams Realty in Portland, OR. However, many offer handsome incentives to buyers who use their preferred lender and title company.

Some may even knock off up to $10,000 in closing costs, says Peggy Yee, a supervising broker at Frankly Real Estate in Vienna, VA. Others will sweeten the deal by negotiating prices on finishes, such as upgrading carpet to hardwood floors.

You should still shop around and get quotes from at least two other lenders before making your decision. But don’t just pay attention to the interest rates. “You need to compare each loan estimate’s terms to make sure you’re getting an apples-to-apples comparison,” says Chris Dossman, a real estate agent with Century 21 Scheetz in Indianapolis.

“Which are the standard finishes?”

When you tour a development’s model home, keep in mind that you’re previewing a high-end version of the standard home. “The model has all the bells and whistles,” says Dossman. Therefore, you need to find out from the builder which options are standard, which options are upgrades, and what each upgrade costs.

One way to cut costs: Move into the home without an upgrade, then hire a contractor to do the work. “Builders charge a huge markup on certain finishes and products,” says Reger. “The builder might charge $4,000 to $6,000 for a high-performance air conditioner, but you may be able to get another company to install that same unit for as low as $2,500.”

Granted, opting for the latter means you’ll probably need to pay the contractor in cash. “For some people, the benefit of paying the builder to do upgrades is that they can roll the costs into their loan amount,” Reger points out.

“What are your long-term plans for the community?”

Depending on the size of the land, the builder might be planning several subdivisions. This could impact your decision to buy.

For example, let’s assume that only a few homes have been built and sold. If the developer plans to construct an additional 50 homes and you’re one of the first people to move into the neighborhood, you may have to deal with loud construction crews for several months.

There’s also the risk that the builder loses funding and another company takes over the development. Dossman advises proceeding with caution: “If the builder changes and a lower-quality builder takes over, that could affect the value of your home.”

“What are the homeowners association rules and regulations?”

Each homeowners association (HOA) has its own Declaration of Covenants, Conditions, and Restrictions (CC&Rs) and bylaws. Get these from the builder and review them carefully.

“I’ve seen HOAs that don’t allow storage sheds in the backyard, solar panels, or private fences,” says Reger.

In most cases, the HOA can assess a homeowner penalties for infractions, and some associations are more restrictive than others.

Also, look into when you’re required to start paying HOA dues. Many builders cover the costs until at least 50 percent of the homes in the development are sold, says Yee.

“What warranties do you provide?”

Most builders offer a one-year workmanship warranty and a 10-year structural warranty, says Reger. Make sure the warranties you receive explicitly state what is and isn’t covered, and what the limitations are for damages.

You should also receive manufacturer’s warranties on the washer and dryer, hot water heater, air conditioner, kitchen appliances, and roof.

“Can you connect me with some of your past clients?”

Always check references when vetting home builders, says Dossman. Ask past clients questions such as, “How responsive was the developer when you expressed concerns?” and “Would you use the builder again?”

Caveat: Most builders will only provide glowing references, so you should still scout out some past customers on your own. You can find these people through reviews on Angie’s List, or knock on doors of homes in the neighborhood that have already been built.

Source: Zillow Pourchlight, Daniel Bortz
http://www.zillow.com/blog/buying-new-construction-196960/

Milpitas council to review future housing, retail near Great Mall

A problem of growing concern for businesses and residents here in the Silicon Valley is the lack of housing. It seems that there are too many people, many of whom are recent imports to this valley due being high tech workers for the likes of Google and Apple, and this growing influx of new people is pushing our housing needs to its limits thus driving up prices on what available housing there is. So city leaders for many of the cities that make of the silicon valley are doing whatever they can to have more housing built such as the case with the city of Milpitas as the article from the Mercury News points out.

Milpitas City Council on Tuesday, Nov. 17 is to consider approving high-density housing and retail commercial projects near the Great Mall.

Up for review will be changes to three projects: the McCandless Drive proposal for 83,842 square feet of retail, a hotel with 175 rooms and a 423-residential unit building; a Centre Pointe Drive proposal for 241 units; and a Houret Drive proposal for 114 condominiums along Houret Drive and Houret Court.

Bill Ekern, the city's interim planning director, said the developer is Newport Beach-based Lyon Communities.

He added that Lyon is currently constructing a project known as District One -- located north of McCandless along Great Mall Parkway -- which involves a 175-room hotel.

"They are still negotiating with hotels for the current project under consideration," he said.

In addition, the District One project may see a grocery store anchor. Ekern said Lyon has not released the name of possible chains with whom it's negotiating.

"It's one of those 'any day now' discussions," he added.

Similarly, Milpitas Economic Development Manager Edesa Bitbadal confirmed Lyon is working on a deal with "a reputable grocery store."

"I know which one but I cannot disclose it either," Bitbadal said. "However, I am personally pleased with the high quality of produce, variety and service it may bring to our city."

Milpitas Planning Commission voted 5-0 on Oct. 28 to recommend the council approve a requested general plan amendment and a conditional use permit for these same projects.

According to Ekern, if the council approves the projects Tuesday, the developer may then sell the three project sites -- two at Centre Pointe and one at Houret -- to other for-sale housing developers.

"They intend to develop the other three lots as rental as well as all of the commercial and hotel product," Ekern said. "They have two years to pull the trigger on the projects, though they can ask for a one-time extension of a year from the city. There are no timelines yet, but they intend to move quickly to meet market demand."

The council meeting will begin 7 p.m. on Nov. 17 inside Milpitas City Hall's Council Chambers, 455 E. Calaveras Blvd.

Source: The San Jose Mercury News, Ian Bauer

http://www.mercurynews.com/milpitas/ci_29104436/milpitas-council-review-future-housing-retail-near-great?source=infinite-up

8 Things You Need To Know About Buying A New Home

I see new construction going up all over the place here in the Silicon Valley and in the bay area in general. Just about all the homes I have sold were resale homes - non new homes. But for some buyers, buying a new home my just the option that is right for them. If you're one of these buyers, the below article is for you.




Buying a new home can be a truly exciting experience. Choosing your lot and floorplan, picking out all your fixtures, watching the progress from foundation to framing to finishes. Makes me want to run out and tour a model home right now!

Through all the excitement, though, there are a few realities that may be surprising for those buying new for the first time.

1. You probably won't be able to negotiate the price

New homes are not like resale, where there is the expectation of price negotiations back and forth. The price set by the builder is most likely the price you're going to pay. The exceptions are when there are just a few homes left and when there is standing inventory that needs to be sold.

"Look for builder inventory homes that have been on the market for 45 days or more," said Inman. "These are the homes in which a buyer might be able to get a good deal."

2. But you may be able get some upgrades at no cost

More typical in a new-home community is getting some upgrades thrown in—things like window coverings or nicer flooring. Negotiating a few must-haves into your deal can help offset your costs. Some builders may also help with closing costs as an incentive to buy.

3. There might also be incentives to using the builder's in-house lender

Many builders have an in-house or preferred lender they work with to provide financing for buyers. There may be advantages to using this lender—better terms or a rate that's bought down. By law, the builder can't make you use their lender, so if you feel pressured, be sure to discuss with your real estate agent.

4. Use a REALTOR®

Speaking of Realtors…you can use your agent to buy a new home, and, in fact, you should.

"In general, builders' model homes are staffed by agents who work directly for and represent the builder. A buyer also needs to have a real estate agent who represents them and looks after their best interests," said Inman. "Keep in mind that most builders will require that the real estate agent accompany and register the buyer on their first visit to the builder's model home or community."

5. Your home will not look like the model

When you tour a model home, it's decked out with pretty walls and floors and lighting and countertops. The furniture is to scale and the fabrics are custom and the pictures are hung perfectly. It's pretty seductive. But the empty shell you buy won't look like this if you go with all the standard configurations and finishes. Be realistic about what you want, what you need, what you can afford, and how that translates to what you are seeing. The salesperson can point out which of the items you love in the model come standard and which are pricey upgrades.

6. The price of the home as advertised is not what you'll pay

Typically, it will take many tens of thousands of dollars in upgrades and options to get the home you buy to look like the model. This can be a rude awakening for buyers who are trying to stick to a strict budget. The good news is rolling some of those upgrades into the mortgage can make good financial sense, according to Money Crashers.

"Upgrading during the initial construction phase is generally cheaper than updating your home later on. For example, if you choose to upgrade from laminate flooring to hardwood, you'll pay the difference in material costs—but you won't necessarily have to pay extra for the installation itself, since your builder needs to install floors in the first place. The same goes for things like windows and bathroom features."

7. You'll be dealing with construction noise and traffic. For a while.

The peaceful life you envision can be a reality, but probably not from the get-go. Depending on the community, it may take time to complete construction. Which means dealing with congestion and hassle for the time being. Amenities like pools, sport courts, and trails may also not be built out by the time you move in. Asking ahead of time about the construction schedule can help you manage expectations.

8. Not everything will work perfectly

In any house, there are bound to be issues. New homes are no different. Builder warranties will help.

"Warranties for newly built homes generally offer limited coverage on workmanship and materials relating to various components of the home, such as windows, heating, ventilation and air conditioning (HVAC), plumbing, and electrical systems for specific periods. Warranties also typically define how repairs will be made," said the FCC. "The duration of coverage varies depending on the component of the house. Most warranties on new construction cover siding and stucco, doors and trim, and drywall and paint during the first year. Coverage for HVAC, plumbing, and electrical systems is generally two years. Some builders provide coverage for up to 10 years for "major structural defects."

Source: RealtyTimes, Jaymi Naciri
https://www.blogger.com/blogger.g?blogID=2960093120680893838#editor/target=post;postID=6913392641697043568