What Is Keeping You from Buying A Home?

A recent survey conducted by John Burns Real Estate Consulting, LLC offered some insight into why prospective shoppers are reluctant to purchase.  Of the more than 20,000 people who had recently visited a new home community and responded to the survey questions, 75% were current homeowners, 20% were renters, and 3% were living with their parents.

98% prefer ownership over renting for their next home. Although 20% of those who took the survey are currently renting, only 2% of them prefer to rent today.  2% said they wanted to rent for their next move but 68% of that 2% want to buy a home in the future.

Young couples and families were the most likely to choose homeownership over renting for next move.

75% said they would move for the right opportunity, 32% expect to move in the next year, and 25% do not know when they will move.  Only 24% said they are very satisfied with their current home and have no desire to move.

64% responded “yes” or “maybe” to “What obstacles? It’s a great time to buy!”

When asked about the obstacles to buying a home today, the top three obstacles cited were:

  1. Bad time to sell
  2. Down payment
  3. Lack of confidence in the market

Only 23% said qualifying for a home was a potential obstacle.  50% cited some lack of confidence in the market and, although lack of confidence in the market was most common among the older, more mature buyers; the more mature, experienced buyers were also the ones most likely to recognize that now is the right time to buy a home.

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Are you a savvy homeowner?

Your home is an investment, and the value of that investment is determined by the housing market.  According to the latest American Express Spending & Saving Tracker, nearly two-thirds of homeowners say they will invest in renovation projects this year. You can increase the value of your home as an investment by increasing its energy efficiency. Energy efficiency equates to lower operating costs. Lower operating costs mean savings and that savings makes a home more desirable to potential buyers.

Research shows that eco-friendly homes are selling faster and for more money than traditional homes. In 2010, certified green homes spent an average of 97 days on the market, compared with 123 for traditionally remodeled homes. And although the numbers vary, in general they sell for 8% to 30% more.

Despite the sluggish economy and anxiety about price, “savvy” homeowners that are aware of the benefits of sustainable building solutions are willing to pay for them. Who are the “savvy” homeowners?  Savvy homeowners are the ones who know how to protect their investment. Whether purchasing or improving a home, you should realize you are making an investment with the objective of making a profit — at some point.

In an economy that’s made money a little tighter for everyone, are green improvements really necessary?  The answer to this question is “Yes.”  Homeowners should take note of the International Energy Conservation Code (IECC) and the impending 2012 residential changes to that code because it is about to have a substantial impact on the value of your investment.

You might have heard of Bill H.R.2454 – American Clean Energy and Security Act of 2009.  H.R.2454 contained a provision that would have mandated energy audits and labeling before any home – new or used – was sold. The bill passed in the House of Representatives but stalled in the Senate because it was viewed as too stringent.  Since the “powers that be” cannot agree on how and where to build new energy plants to increase supply or even what types of plants to build, their only option is to decrease consumption.  So predictions are that mandated energy audits and labeling of homes will  eventually pass because of the International Energy Conservation Code and the 30 percent Energy Savings Goal changes to be enacted in 2012.

Regardless of what the federal government might mandate, the Idaho Building Code Act (Title 39 Chapter 41) requires all local governments in the State that issue building permits to adopt the most recent version of the International Building Code by January 1st of the year following its adoption by the Idaho Building Code Board.  And the adoption of the IECC 2012 code changes will eventually force you and other homeowners to incorporate green into your remodel projects or take a loss on your investment.

If you’re like most consumers, you are spending smart and looking for a greater ROI when it comes to home renovation.  Right now, it makes more sense to invest in your home than it does an IRA.  As a National Association of Home Builders Certified Green Professional, a U.S. Department of Energy Building America Builder’s Challenge Partner, and an Energy-Star 100% Builder Partner, I can help you protect your investment.   Call me at (208) 571-0755 or email me at chuck@chuckmillerconstruction.com.

Are you ready to buy or build a new home?

Are you ready to buy or build a new home?  If so, you probably read all the news stories and predictions that the market has a long way to go before it starts to recover and that home prices will continue to fall for months or years to come.  If you waiting for the market to improve before you buy or build your Dream home, remember that, despite all their claims to the contrary, no one can predict precisely where the market is going.  Trying to time your home purchase with the bottom of the market is futile. If you’re financially and emotionally ready to be a homeowner, it’s always a good time to buy.   All the time you spend procrastinating on purchasing or building a home, you could be building equity, getting tax deductions and enjoying the many other benefits of homeownership!

Or maybe you’re just not sure if you are financially ready.  Here’s a little quiz that might help.

Which one of the following do you NOT need to purchase a home:

  1. A decent credit record.
  2. A big down payment.
  3. Enough money to make monthly mortgage payments.
  4. Enough income to pay property taxes and homeowner’s insurance.
  5. The ability to maintain the property.

Check back in a few days for the answer.

Chuck Miller

The Happiest Careers in America – Where’s Homebuilding?

Forbes published an article today titled “The Happiest Careers In America.” The article highlights the results of a new survey from job site CareerBliss.com that revealed the top ten happiest professions in America. The survey results measured nine factors of workplace happiness, including the individual’s relationship with their boss and co-workers, their work environment, job resources, compensation, growth opportunities, company culture, company reputation, daily tasks and job control over the work that they do on a daily basis.

Homebuilding was not one of the ten happiest careers. As I read the article and viewed the slideshow of the “10 -Happiest Jobs in America”, I realized that they had obviously made a mistake. Why do I say that? Let me explain.

I teach the National Association of Home Builders “Business Management for Building Professionals” course. One of the slides from that course contains a picture of 14 different hard hats – each one representing a different role or job within a small volume building company. The building professionals in the class are asked “How Many Hats Do You Wear?”

According to the Census Bureau, as of 2007, there were almost 2.6 million nonemployer residential construction and specialty trade contracting firms, including foundation, framing, siding, masonry contractors, stucco, electrical, plumbing, heating, air-conditioning, drywall, painting, flooring, and landscaping contractors. So, naturally, the typical small volume builder wears many hats and fills many roles in his company. As I viewed the slideshow of the “10 -Happiest Jobs in America”, I realized that a career in home building typically encompasses 7 of the 10 careers listed as the happiest.

No. 2 – Customer Service. Customer service professionals enjoy working directly with customers, helping people, managing conflict, and problem solving.

No. 3 – Education. Home builders are educators. We educate our customers about the building process and we educate our trade contractors on how we prefer our homes to be built

No. 4 – Administrative – Clerical.  These professionals simply feel good about their daily tasks. They keep things running smoothly.

No. 5 – Purchasing – Procurement.  These professionals are responsible for purchasing the materials and goods for their companies. Their satisfaction stems from relying on their superior negotiating skills to secure the best deals possible.

No. 6 – Accounting.  The professionals hold the purse strings and ensure that their companies are run efficiently, that records are kept accurately, and that taxes are paid properly and on time.

No. 7 – Finance.  These professional handle transactions and provide guidance to make sound investment decisions.

No. 8 – Non-Profit Employees.  According to the National Association of Home Builders latest “Cost of Doing Business Study,” the average small-volume builder in 2008 had a net loss $53,000 or 1.4%. Non-profit employees derive satisfaction from doing good. Abraham Lincoln said that “The strength of our nation lies in the homes of its people.” Seeing a family move into a new home you built just feels good.

The only careers not encompassed by home building were No. 1 – Biotechnology, No. 9 – Health Care, and No. 10 – Legal. So, if you’re chosen career in home building, you’ve chosen one of the happiest careers in America. Don’t you agree? I do.

Chuck Miller GMB CGB CGP CAPS MIRM CMP MCSP CSP

President / Builder – Chuck Miller Construction Inc.

(208) 229-2553

http://www.chuckmillerconstruction.com

Building material prices continue to rise

Single-family housing starts in 2010 totaled 475,000 – a 7 percent increase over 2009 but still substantially below the 1,256,000 average starts per year from 1995 through 2003.  .Think the decrease in demand for new home construction has resulted in lower prices for building materials.  Think again.

Prices for materials used in construction actually increased 5.4 percent in all of 2010.  Prices increased at double-digit rates over the year for four key construction materials. Diesel fuel prices climbed 28 percent in 2010; steel mill product prices rose 12.5 percent (think rebar, nails, kitchen sinks, appliances, etc.); copper and brass mill shape prices were up 12 percent (think electrical wiring, water supply valves and fittings); and prices for aluminum mill shapes rose 12 percent over the year.  Other items that contributed to the climb included lumber and plywood, 5.7 percent; architectural coatings, primarily paint, 1.5 percent; brick and structural clay tile, 1.0 percent; gypsum products, 3.4 percent; asphalt, 4.6 percent; and insulation materials, 4.4 percent.  The National Association of Home Builders predicts single-family housing starts will increase 21 percent to 575,000 in 2011.  Although the demand for construction in the United States will remain relatively weak, the price increases are likely to intensify in 2011 as global demand for construction materials grows.

Have you been waiting to build your new home or remodel your existing home hoping prices will continue to fall?  You might have already waited too long.

Chuck Miller GMB   CGB  CGP  CAPS  MIRM   CMP   MCSP   CSP

President / Builder – Chuck Miller Construction Inc.

(208) 229-2553

chuck@chuckmillerconstruction.com

Building material prices edge up again

Think the decrease in demand for new home construction is resulting in lower prices for building materials.  Think again.

According to the September 16 producer price index (PPI) report by the U.S. Labor Department, prices for construction materials edged up 0.2% in August. Prices are 3.6% higher than one year ago.

Nonferrous wire and cable prices increased 1.8% for the month and are up 8.7% compared to August 2009. Prices for plumbing fixtures and fittings were up 0.6% in August and up 1.2% from the same time last year. Prices for concrete products inched up 0.5% for the month, but are down 1.1% from August 2009 levels.

Softwood lumber prices slid for a third straight month, down 3.1% in August. However, prices are still 6.8% higher on a year-over-year basis. Iron and steel prices were down 1.5% in August, the third straight monthly price decrease. But, prices are still 18.2% higher than they were one year ago. Steel mill product prices were down 3.9% August, but were still up 17.1% from last August. Prepared asphalt, tar roofing and siding prices slipped 0.9% in August, but were up 8.6% over the last twelve months. Prices for fabricated structural metal products decreased 0.2% for the month, but were up 2.8% compared to August 2009.

Overall, the nation’s wholesale prices increased 0.4% last month and are 3.1 percent higher from August 2009.

Are you waiting for the price of that new home you’d like to build to drop further?  I wouldn’t.

Chuck Miller GMB   CGB  CGP   MIRM   CMP   MCSP   CSP

President / Builder – Chuck Miller Construction Inc.

(208) 229-2553

chuck@chuckmillerconstruction.com

Building an energy-efficient home in Boise, Idaho

The 2010 AVID Home Design Driver Research Survey showed that the majority of home buyers rated energy efficiency as a “Must Have” for their new homes.  Although Boise and southwestern Idaho have some of the lowest power rates in the nation, home buyers still want their new homes to be energy efficient. 

How do you build an energy-efficient home in Boise, Idaho and how much more does it cost?  The U.S. Department of Energy’s Building America Program has shown that new homes can be both energy efficient to live in and cost effective to build.  In fact, the energy consumption of new houses can be reduced by 40% or more with little or no impact on the cost of ownership.

Building America works with members of the home-building industry to produce quality homes that use less energy without costing more to build.  The goal is to develop cost-effective solutions that dramatically reduce the average energy use of housing while improving comfort and quality.  This is accomplished through a systems engineering approach to homebuilding.

Systems engineering

The systems engineering approach considers the interaction between the building site, envelope, and mechanical systems, as well as other factors, throughout the design and construction process,  It recognizes that features of one component in the house can greatly affect others and it enables builders to incorporate energy-saving strategies at no extra cost . Systems engineering allows builders to identify improvements to the design of a home that will ultimately save money.  For example, the design might incorporate advanced framing systems that require less wood and labor.  The saving on lumber and framing labor can then be reinvested in improved insulation or high-performance windows.  Controlling building envelope leakage by tightening the building envelope enables builders to install smaller, less expensive heating and cooling systems. These savings can then be reinvested in higher-efficiency equipment..

Other examples of systems engineering cost-saving trade-offs include:

Proper placement of heating and cooling systems allowing shorter duct runs saving material and installation costs.

Locating ducts in the interior, conditioned space of a home (as opposed to in exterior walls or unconditioned attic spaces) eliminates loss of conditioned air to the exterior allowing the use of smaller, less expensive heating and cooling systems.

Future articles will discuss each of these cost-effective solutions in more detail. 

Next, Advanced Framing.

 

Chuck Miller GMB   CGB CGP   MIRM   CMP   MCSP   CSP
President / Builder – Chuck Miller Construction Inc.
(208) 229-2553 or (208) 571-0755