Should I Buy a New Home?

There are many things to consider when buying a home – should you buy something that has been lived in before or should you splurge and buy something new? New homes are usually more expensive than their resale counterparts, but is it worth it?

Aside from the possibility of being able to customize your new home with the finishes (counters, back-splash, flooring, and sometimes floor plan) and colors you like, buying a new home can actually save you money each month.

According to the National Association of Homebuilders, a home is considered “new construction” if it was built within the last four years.  The NAHB recently cited the 2009 American Housing Survey in evaluating what homeowners spent on maintenance expenses per month. The survey found that 26% of all homeowners spent $100 or more per month on home maintenance expenses. But of the homeowners who owned a home classified as “new construction,” only 11% of owners paid this amount. What is a more startling figure? 73% of new homeowners spent less than $25 per month on maintenance.

So what about utilities? According to the survey, all homeowners spent about $.78 per square foot per year on electricity. This means for a 2000 square foot house, $1560 ($130/month) was spent on electricity. However, compare this with “new” homeowners who spent only $.65 per square foot per year ($1,300 per year or $108.33 per month for the same 2,000 square foot house).

A big difference was seen in homes with natural gas. Homeowners on average spent $.53 per square foot per year (for a total of $1,060 per year or $88.33 per month for a 2,000 square foot house) while owners of new homes paid $.38 per square foot per year ($760 per year or $63.33 per month).

And new homes that are ENERGY STAR® certified strive to be 30% more energy efficient than typical new homes. Using our example “new” 2,000 square foot home which could cost $1,300 per year in electricity, a comparable ENERGY STAR® certified home may cost $910 in electricity per year.

There are currently over 550 listings in the Tri-Cities which were built between 2009-2013 (classified as “new construction”). If you are in the market for a new home, an existing lovingly “used” home, or if you want to start completely from scratch and create something all yours, you owe it to yourself to learn your options and determine the best fit for you – and your budget. We can help! Please call Jessica at (509) 947-2230 or Jennifer at (509) 947-5670. We can show you all the costs and benefits of buying a used home versus buying a new home.

Housing Affordability in the Tri-Cities

According to the National Association of REALTORS®, 2012 was a record year in terms of housing affordability. The Housing Affordability Index is measured by the relationship between median home price, median family income and average mortgage interest rate. A higher index indicates the more purchasing power buyers have.

An index of 100 is the point at which a median-income household has exactly enough income to purchase a median-priced existing single-family home with a 20% down payment and 25% of gross income allotted for monthly mortgage principle and interest.

December’s Index numbers are not yet available, but at the end of November, it stood at 198.2 while it stood at 194 for the year overall – the most affordable on record since the Index was developed in 1970. This is an increase over 2011 when the index was 186 overall (which was the previous record).

Although the Federal Reserve has promised to keep interest rates low and wages are steady and moderately on the rise, interest rates will likely increase slightly in 2013, and with median home prices increasing, the National Association of REALTORS® has predicated the Housing Affordability Index will average 160 during 2013 –  still the third-most-affordable year on record.

Here in the Tri-Cities, the median home price ending third quarter was $184,700, a 1.9% increase over the previous year. And although we have seen unemployment rates rise locally, the ratio between monthly income and mortgage payment remains better than most markets during the third quarter at 10.1% (nationally this ratio is at 13.8%).

This is still a great time to buy a house if you are a first-time homebuyer, or ready to upgrade to something bigger! With interest rates still low and prices have not increased significantly, buyers have more buying power than almost any other time in history. Couple this with bankers lightening their lending requirements in 2013 and it is a phenomenal time to buy. Give us a call to learn more about just how much home you may be able to afford. You may be surprised! Call us:  Jennifer (509) 947-5670 or Jessica (509) 947-2230.

Source:

http://www.realtor.org/topics/metropolitan-median-area-prices-and-affordability/data

Tri-Cities Housing Market Update

The National Association of Home Builders/First American released their Improving Markets Index in January, and the Tri-Cities made the Index due to home price appreciation, an increase in employment, and an increase in building activity.

The Index measures improvements from “troughs” in building permits (measured from the U.S. Census Bureau), home prices (measured from Freddie Mac), and employment (measured by the Bureau of Labor Statistics). Each metro area has different trough dates depending on the lowest point in each of those individual areas. Cities that made the Index are those who have shown improvement from their trough over the last six months. Here is how the Kennewick metro area shaped up:

Let’s take a closer look at the new housing permit data from the U.S. Census Bureau. As you can see in the chart below, building permits for each month were higher than the previous month for each month in 2012 with the exception of April of 2012.

Total permits for 2011 were 1598 and increased by 28.84% in 2012 to 2059 (measured from January – November for both 2011 and 2012).

We have  a few more months until spring when the new home construction season starts and we at Devoted Builders and Referred Real Estate are looking forward to being a part of it!

If a move is in your future this spring, we would love to help! Please give us a call – Jessica (509) 947-2230 or Jennifer (509) 947-5670. We would love to get you into the home of your dreams!

SOURCES:

Multi-Generational Housing Making a Comeback

Studies have been done on it. Books have been written about it. And now homes are being built or remodeled to accommodate it. What is it? A return to the multi-generational household!

While the last few decades have seen a decline in multiple generations living under the same roof, that trend tends to be reversing as more and more adult children are moving back home and homeowners are taking in their aging parents.

Sharon Graham Niederhaus, co-author of Together Again –  a book about multiple generations living under the same roof,  interviewed over 100 families who are living in this manner. She noted, “The balance and proximity and privacy is the key to success,” and indicated that “independence” and “separate facilities” such as a kitchen, bathroom, and separate entrance are essential to living together in harmony.

For hundreds of years it was not uncommon for several generations to live together although the trend towards smaller family units began to take hold after WWII. According to USA Today, the number of multi-generational households in our country is currently the highest since the 1950s.  The current trend is directly related to the economy, but many have noted the positive impact of having either their parents or adult children move back home.

PulteGroup Home Index (done by PulteGroup Inc, a national homebuilder) recently did a survey of homeowners with children 16-30. Fourteen percent indicated that they have one adult child who has moved back in with them and a whopping 31% expect that an adult child will return back home in the future. They also interviewed homeowners with living parents and found that 15% indicated a parent was already living with them and 32% expected that at some point they would be living with a parent.

In both cases, the number of multi-generational homes will double in the future if those numbers are correct. So how will current homeowners accommodate the additional people? Of the homeowners who were currently living with a parent or planning on it in the future, 72% planned on either renovating or purchasing a home with a floorplan that would work more effectively for the expanded family. 49% of the homeowners who were either living with adult children or planned to expected to renovate or move.

Builders across the country are beginning to see and provide floorplans which reflect this trend, and Devoted Builders is no exception. In fact, in 2011 the National Association of Homebuilders did a survey of builders and what they expected homebuyers would want in terms of new home amenities by 2015. They determined that 60% of custom new construction homes would have two master bedroom suites by 2015.

Here in the Tri-Cities, we have had several clients in the last few years who have had several generations living in the same household. We have seen adult children living with aging parents so they can help take care of them ensuring a higher quality of life and care. Also recently we have seen younger adults moving into Mom and Dad’s house to either go back to school or save money for a new house or simply due to loss of employment.

In our area most homes with multi-use spaces are in high demand, command higher prices and see a shorter time on market, especially if priced in a price range which is seeing a high turnover.

Our advice? If you are thinking you might need some extra space in the coming years, plan for it now. With interest rates and lower prices, it is a great time to either buy the home you will need in the future, begin planning for a remodel,  or even begin thinking of building. We are here to help and advise. Please call Jessica a call at (509) 947-2230 or Jennifer at (509) 947-5670 – we would love to hear about your plans!

SOURCES:

ENERGY STAR® certified homes – leading the way in smart new home construction

Energy Star Logo

You might have heard the term ENERGY STAR® in the context of new home construction and assumed the reference was regarding the appliances or lighting. However, did you know that some builders who are focused on developing more energy-efficient building science are building entire homes that carry the ENERGY STAR® seal of approval? These homes are built to standards which well exceed other homes on the market today. Typically, these homes are more than 30% more energy efficient as compared to an average new home.

In the Tri-Cities, there are 17 ENERGY STAR® “Builder Partners” – builders who are committed to building at least one new ENERGY STAR® certified home every 12 months. Devoted Builders is pleased to be one of those few builders and to have built 79 of the 893 ENERGY STAR® certified homes in the Tri-Cities.

According to the ENERGY STAR® website, www.energystar.gov, ENERGY STAR® certified homes built in 2011 are the equivalent of:

  • Eliminating emissions from 117 vehicles
  • Saving 705,432 lbs of coal
  • Planting 193 acres of trees
  • Saving the environment 1,383,494 pounds of CO2

So what does it take to become an ENERGY STAR® certified home?

  • Specialty Engineering: The engineering of new home systems including heating and cooling, foundation and wall construction undergo scrutiny up front to make the most out of energy efficient advances before the foundation is even poured! ENERGY STAR® building science includes:
      • Complete thermal enclosure system  – an air-tight envelope!
      • Complete heating and cooling system – more comfortable, great air quality, and quiet operation!
      • Complete water management system – both indoors and out!
      • Energy-efficient lighting and appliances – of course!
  • Climate-Specific Recommendations: ENERGY STAR® builder partners work with a ENERGY STAR® Home Energy Rater to determine the specific energy-saving techniques and features that are most effective for each climate. For example, an area whose climate is subject to severe winds (such as ours) would require a different climate-specific energy-saving solution than one that doesn’t have a wind challenge, but extreme temperature extremes.
  • Extensive Inspections: To verify ENERGY STAR® homes meet the stringent energy efficiency requirements, Home Energy Raters conduct inspections of the homes which include a blower door test to check for an air-tight seal, duct blaster test to check for duct leakage, and a wide range of other parameters.

If you have been thinking about shrinking your carbon footprint – or just want a home with cleaner air and lower utility bills, an ENERGY STAR® home may be just what you are looking for.

Come and see the almost-complete newest ENERGY STAR® certified home in Mediterranean Villas (and learn how I.C.F. Construction is paving the way in exciting energy advancements) or come and talk with Devoted Builders and Jessica Johnson and Jennifer Cowgill with Referred Real Estate, as we can help you find the perfect lot for your custom-built ENERGY STAR® certified home.  So whether you fancy a hip urban contemporary pad or a historic-feeling home in the woods, we are a perfect match for your needs. Please give Jessica  a call at (509) 947-2230 or Jennifer at  (509) 947-5670 to learn more about your options.