3 Housing Market Predictions for 2015

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Judging by the data, the U.S. housing market is finally beginning to recover from the 2008 meltdown. 2014 was the best year since the real estate slump started, and even if the trends cool down, the job growth and economic recovery are good reason to be optimistic about 2015’s housing market. Realtor.com’s chief economist Jonathan Smoke has three key predictions for the 2015 housing market:

The Foreclosure Crisis Will (Finally) End

According to Smoke, “we are on pace for foreclosure inventories to end 2014 down more than 30%, and next year should see a slightly greater decrease as foreclosures fall to normal levels.” Seven years after the housing bubble burst and foreclosure rates exploded, the situation is finally beginning to normalize. Real estate sales composition has improved, with foreclosures and short sales contributing less to the overall sales picture and sales of newly built properties making a bigger share of the total. This picture will vary from region to region, but nationwide, the sales composition is improving.

Mortgages Rates Will Climb

The rock-bottom mortgage rates we have seen over the past several years will begin to climb as the economy improves. The job growth will lead to higher, but still reasonable, interest rates. The Federal Reserve is expected to increase the federal funds rate in 2015. The rate has hovered near zero since December 2008. Even in the Fed postpones a rate increase, Smoke says that mortgage rates will rise ahead of time in anticipation of the Fed’s move. “Our forecast for housing assumes the 30-year fixed rate will reach 5% by the end of 2015,” explains Smoke, “The one-year adjustable rate will likely rise less if much at all, and accordingly, we are likely to see a shift into more adjustable and hybrid mortgages over fixed.”

Millennial Home Buying

Improved employment prospects for 2015 will begin to pull older Millennials out of the rental slump they have been stranded in since 2008. As they move from survival mode to growth mode, the older Millennials are starting families and will be looking to set up house. Smoke predicts that the majority of first-time home buyers for 2015 will be from this demographic. Smoke says that, “millennials make up around 65% of first-time home buyers,” adding, “of the millennials who are buying a home, 86% indicate that their motivation is a change in family size.” However, with the housing crunch in coastal metropolitan areas and the ongoing credit crunch in the real estate market, Smoke expects millennials to buy in the more affordable areas in the South and Midwest.

Residential Development Innovations for 2015

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According to Abigail Phillips of Construction Global, safety is the keyword for home building innovation in the coming year. Especially weather-safety. Residential construction experts know that a well-built home is a home that can stand up to all kinds of inclement weather time and again. Innovation in weather-proofing newly built homes comes from improved structural design and key finishing features. Here are the top five trends in residential construction innovation:

Improved Roofing

Excess moisture is a major threat to any home, especially moisture from rain and snow. A home’s first line of defense against snow, ice, and rain is the roof, so solid roofing is a must. The last few decades have brought major innovation in roofing materials. We’ve come a long way from terra cotta tiles and tin roof slates. Today’s roofing options include 50-year aluminum shingles and 30-year fiberglass shingles. Both materials are stronger, lighter, and more durable than traditional materials. An advanced roofing system will make the entire home stronger and safer.

Water and Rain Resistance

When precipitation penetrates a home’s siding, it begins to erode the eaves and damage the underlying wood, which compromises the building’s structure. As the moisture seeps in over time, it leads to internal water damage in the framing and foundation. One of the simplest ways to avoid this is to install gutter guard systems to redirect the water away from the house. Gutter guards use helmets and filters to keep out the clog-inducing debris that so often ruin gutter system efficiency. Not only do gutter guards save on annual upkeep expenses, they also prevent moisture from getting to the wood framing of your home.

Composites

For decades, heavier materials were considered to be superior materials. With the advent of modern composites, all that has changed. Builders are increasingly replacing heavy lumber like pine with composite woods that are lighter, stronger, and more rigid to improve a home’s structural integrity. Composite woods have the added advantage of being weather and termite resistant. The structural integrity and termite-resistance improve the longevity of the home.

Modular Building

Residential builders are increasingly embracing modular construction These prefabricated units are built to the developer’s specifications in a factory and shipped to the site for assembly. Modular construction runs between 10%-30% cheaper than conventional onsite construction, and takes an average of 25% less time to erect. Modular units are engineered for a perfect fit and the structural integrity of the units isn’t compromised by weather onsite during the construction process. The high quality control and rapid customization features of modular building are also very appealing to developers.

Wind-Resistance

In coastal areas and tornado alley where high-wind events are common, wind-resistance is a major feature that home builders plan for. Wind-resistant safety features such as storm strapping, all-thread tie-rods, and hurricane clips which increase structural integrity are becoming standard features on newly built homes. They can also be retrofitted onto existing structures to increase a homeowner’s peace of mind.

 

HBW Serves 3 of America’s Hottest Housing Markets

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According to Realtor.com’s recently released market data, HBWeekly serves three of America’s ten fastest-growing housing markets: Atlanta-Sandy Springs, Georgia, Dallas-Fort Worth-Arlington, Texas, and Houston-The Woodlands, Texas. Realtor.con’s chief economist Jonathan Smoke explains that, “If access to credit improves, we could see substantially larger numbers of young buyers in the market,” he says of millennial homebuyers, but that “given a high dependency on financial qualifications, this activity will be skewed to geographic areas with higher affordability, such as the Midwest and South.” Building trades professionals in these areas will find their building permit activity data and residential construction job lead demands well met by HBW’s world-class building permit activity reports, cloud database, and white papers.

 Atlanta-Sandy Springs, Georgia

Atlanta is growing rapidly, and is soon expected to lead the country in population and household growth. The housing market in the area is affordable despite a projected home price appreciation of 5% over the next year, according to Smoke. The city itself made headlines when it outsourced the majority of city maintenance tasks to private companies via service agreements, which have kept the city from accruing long-term debt or increased liability costs. The median home price for a 2,522 square-foot-condo with four bedrooms, two full baths and one- half-bath is $201,289.The key metric to watch in this market is the five-year household growth forecast, which currently sits at 11%.

Dallas-Fort Worth-Arlington, Texas

The DFW area is blooming with energy and tech jobs, and the  housing market is expanding as well. The record-setting employment rates for 2014 are expected to grow 3% in 2015. This is also a strong market for new construction, which keeps supply inventory at elevated but reasonable levels for new homeowners. Smoke predicts a 3% increase for median home prices and 7% growth in home sales. The median price for a 1300-square foot house is $246,000. The market metrics to watch for Dallas are the household growth forecast, which places Dallas at the top of the market growth list, and the forecast of home sales volume, which is expected to rise by 7%.

Houston-The Woodlands, Texas

The Houston market has been very strong for the last several years and consistently makes a top five slot in every housing market category. Although the Houston market is becoming less affordable in comparison to other Texas markets, the Houston housing market is projected to increase 2% in 2015, with a 5% increase in home sales, according to Smoke. The median price for a 2822-suqre-foot house in the Houston market is $259,985. The metrics to watch for the Houston market are its 3rd highest ranking on the household growth forecast over the next five years, its 4% projected employment rate increase (twice the national rate) and the home sales volume rate of 5%.

HBW serves builders in Texas, Georgia, Oklahoma, Alabama and Florida. In addition to our Building Trend Activity for Residential Construction Reports, HBW can create a number of custom reports for any need you might have. To show you how we can help your business succeed, HBW is glad to provide you with complementary building data report or one of our specialized White Paper reports. Contact us today and start making your business more profitable!

 

 

 

 

 

 

 

Miami’s WorldCenter Phase One Timeline Unveiled

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For months, HBW subscribers in the Miami area have been using our building permit activity reports to follow the progress of the Miami WorldCenter, one of the nation’s most distinguished commercial developments. On November 12, the Miami Herald’s Andres Viglucci reported that developers had unveiled their plans for the megaproject, which will be located in the old Park West district. Balazs Szekely, of Commercial Property Executive, reported the December 7 release of the construction timeline for phase one of the project.

The timeline was unveiled shortly after the City unanimously approved a rezoning package and development agreement to facilitate the project. This ambitious project will spread across 27 acres of the downtown area, making it one of the biggest private real estate developments to be built this century. Building professionals in the Miami seeing commercial construction job leads have much to look forward to with this development.

The much-anticipated development unveiled its plans for Phase I, which includes a 60-story luxury living comprised of 470-units. The living space will be embedded into a three-level shopping mall. This section of the development is expected to encompass a 3-and-a-half block area. The project will eventually feature nearly 1,000 housing units, with luxury residences and boutique condos offset by market-rate apartments. The residential part of the development will break ground in Q1 of 2015 with vertical construction set to start in summer 2015. Pre-sales for the 466-unit Paramount luxury condos started in November.

Led by principals Art Falcone and Nitin Motwant, this massive mixed-use development is a collaboration between the Miami WorldCenter Associates and a team of design, engineering, and development firms. Internationally-renowned shopping mall developers Taubman and The Forbes Company have landed Macy’s and Bloomingdale’s as the anchors for WorldCenter upscale shopping complex, which will also feature an array of dining and entertainment options. An 1,800-room Mariott Marquis Hotel will anchor the convention, expo, and event spaces being developed by the Miami-based MDM Group for the WorldCenter. Phase 1 of the project is expected to bring more than 2 billion in new investment to what was once a derelict stretch of the city, with the hotel and expo space slated to break ground in late 2015.

4 Major Reasons Owners Buy New Construction

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It’s no secret that buying a newly built home means paying a premium pricetag, but aspiring homeowners are increasingly willing to pay more for a brand-new home. This is due in part to the array of options available to customize new homes, but the biggest reason is that paying more upfront go a newly built home is actually a solid financial investment in the long run. Of the many benefits that come with buying new construction, here are the four biggest:

Built-to-Order Customization

Buyers usually need to budget to update and renovate any dated features in the kitchens and bathrooms of pre-owned homes. Updated cabinets, light and water fixtures, flooring, and appliances are often necessary to make those spaces appealing for the new residents, and the costs of renovation after closing on a new home are often on par with what a newly built home that is tailored to the homeowners’ taste would have cost. Homeowners who have specific needs such as ADA-compliant accessibility features often find that the necessary alterations to make a pre-owned home liveable cost more than the price difference for a new custom home. Because these changes need to happen before the new owners can settle in, it can take a while for a pre-owned house to really feel like home. Because banks have different lending standards for home buying and for home renovation, homeowners who want to remodel their new home often have to pay out-of-pocket to have the home they really want. In the case of new construction, the cost of having a custom home are all absorbed into the home buyer loan.

Home Warranty

It is pretty common for a pre-owned home to pass a house inspection with flying colors, yet still have serious hidden issues that need to be fixed. Months after moving in to such properties, the new owners discover a problem that the inspector didn’t catch. Which brings another problem, because now the new homeowner has to pay out-of-pocket for unexpected repairs. Newly built homes typically include a warranty for the first year. If the slab cracks, the water heater explodes, or the HVAC fails to work properly, the cost of repairs is covered by the home builder, who will return to fix the problem.

Economical Home Maintenance

For the first several years of the homes life, a newly built house costs less to maintain than pre-owned homes. Because everything is brand-new it could be a decade or more before the roof, windows, appliances, or flooring need to be replaced. For owners who emptied their savings accounts to make the down payment and closing costs, this is a major perk. Lower maintenance costs make it easier for new homeowners to rebuild that nest egg.

Developer Incentives

Home builders and development companies usually offer incentives to buyers who purchase newly built homes. Mortgage companies that build their own properties may offer paid closing costs or materials quality upgrades free of charge like replacing laminate counters with granite or switching laminate floors for tile. For owners buying a new condo, the developer might subzidize the first year of condo association fees for the first year. Buyers seeking a custom-built home often get to choose their lot and landscaping features as well.

Green Trends in New Homes

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New homeowners want to live in healthier, greener, homes. According to Tara Campbell, founder and blogger for Power House Growers, “homeowners are starting to place health high on the priority list when looking at real estate investments. Families are looking for long-term healthy options. As a society we now have a better understanding of the impact that our homes have on our wellbeing. Our homes are where are stories begin and end so quality of life is essential in creating a healthy living environment.”

Homeowners are increasingly interested in having environmentally healthy and ecologically conscious options for their homes. A healthy home is one that maximizes the health and wellbeing of the family that lives in it. As more people become aware of the dangers posed by hazardous building materials and toxic construction chemicals, the market for homes built without such materials and chemicals has boomed.

To capitalize on this desire for green home building, it is important to have the right metrics. Home eco-metrics and wellness real estate consultants Delos Living has made it possible for residential construction experts as well as homeowners to measure the health of a home’s built environment. They have also grown the entire industry’s expectations about what a healthy house can be. The experts at Delos can help design air, energy, power, water, and light options that keep a home free of stagnant air, contaminated water, wasteful appliances and inefficient doors and windows.

After going to the trouble of building green, healthy real estate, it is important to list the property with green-certified realtors. These certified professionals know how to attract the buyers who will be interested in making a solid investment in a healthy home, even if the median prices is somewhat higher than it is for conventionally built homes. There are four major green realty organizations in the U.S., so make sure that your realtor is registered with one of them. If you are seeking a green-certified realtor, these organizations will help you locate one.

1. EcoBroker grants the EcoBroker Certified® designation

2. The nonprofit National Association of Green Agents and Brokers grants the Accredited Green Agent™ and Accredited Green Broker™ certification through its GreenRealestate™ program.

3. Earth Advantage (US), which grants the Sustainability Training for Accredited Real Estate Professionals (S.T.A.R.) certification

4. Leadership in Energy & Environmental Design confers the LEED Green Associate or LEED AP certification through a rigorous exam process

It’s important to realize that te trend in green and healthy building provides an opportunity to improve the resale value of a newly built home. Green fixtures and appliances, along with chemical-free building materials and a health-conscious home design, add value that does not significantly depreciate over time. Buyers can expect that such a home will maintain its healthy condition for much longer than conventionally built structures.

TAR Releases Glowing Annual Housing Report for Texas

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According to the Texas Association of Realtors’ annual housing report, the state has maintained its role as a national leader in population, economic, and housing market growth throughout 2014. Dan Hatfield, TAR chairman, says that “it’s a great time to live in Texas.” According to Hatfield, “the high demand for Texas real estate is not being fueled by speculation and investment activity – it’s driven by the thousands of people who move to the Lone Star State daily…People are moving to Texas from across America and around the world to take part in our state’s booming economy, business-friendly environment and quality of life.” 

Currently ranked #1 in population growth from out-of-state relocations, Texas also leads the market in home sales to international buyers. Over 584,000 people relocated to Texas in 2013, according to the 2014 Texas Relocation Report released in October. The Texas International Homebuyers report, published in September, indicated that 2013 saw Texas experience the highest level of international home buyers in five years. International buyers contributed an estimated $11 billion to the state economy that year.

The improvement of the job market has improved the state’s economy, which has positively impacted the state housing market. TAR’s 2014 Homebuyers and Sellers Report showed an increase in median household income during 2013, with an increase of 9.6%, which equals about $91,700. Texas outperformed the rest of the nation, which saw only a 5.6% increase to about $83,000 during the same period.

These numbers echo what Hatfield has observed during the last year. According to Hatfield, “Virtually every segment of the Texas housing market has benefitted from our state’s continued growth.” He also noted specific market sectors beginning to recover from the recession, adding that “over the last year, however, we saw several areas of Texas real estate that were still recovering from the recession in 2012 really begin to take off in 2013 and 2014, including luxury home sales and housing development.”

The rapid market growth belies the tough lending standards new homeowners face. These challenges led many Texans to remodel their current homes rather than buy new ones. These remodeling projects, however, tended to add value to the existing homes by enhancing the kitchen and bath areas and boosting curb appeal.

“The Texas housing market will likely continue to be highly competitive in 2015, but rising housing development and inventory levels as well as greater access to homebuyer education programs like those promoted through Get Ready Texas will help make the dream of homeownership attainable for all Texans.,” Hatfield concludes, adding, “ This has been a glowing year for Texas real estate, and 2015 is on-pace to be just as bright.”

“Go Build Alabama” Nabs High Praise at Industry Conference

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The Alabama Construction Recruitment Institute’s efforts to promote construction industry workforce recruitment have not gone unnoticed. ACRI’s “Go Build Alabama” program nabbed a Construction Users Roundtable (CURT) Award of Excellence at this year’s celebration, which was held in Houston. The program was one of only eight, nationwide, to receive such an honor this year.

ACRI executive director Jason Phelps is very excited about the win. “It is an honor to receive national recognition for the success of Go Build Alabama,” he says, adding that, “Our campaign provides students with information about a viable career option in the construction industry. We see the need for a training pipeline to fill the future needs of our industry and are working ahead to get students into training in Alabama.”

The Go Build Alabama program began in 2010, and immediately set out to recruit young professionals into the building trades through recruitment and training efforts. During the last four years, Go Build Alabama ambassadors have attended over 200 college and career fairs across the state, reaching an estimated 256,000 students. These efforts have yielded a 51% increase in enrollment for the first-year career technical education (CTE) programs during the 2013-2014 school year. 33% of new enrollees said that the Go Build outreach programs directly influenced their decision to enroll in construction technology and program management courses. Go Build outreach efforts included campaigns specifically geared towards women and the younger demographic.

In partnership with the Alabama Department of Education and the Alabama Power Foundation, Go Build Alabama recently introduced a revamped website, interactive e-textbook and mobile app. The app networks job seekers with community colleges, technical training institutions, and apprenticeship programs. The website now features an portal for educators featuring classroom teaching and learning resources. To learn more about job opportunities through Go Build Alabama, please visit Go Build Alabama.com.

1/3 of America’s skilled master trades professionals are over 50, and seeking to retire from the industry, and there are not enough younger workers to replace them. To forestall the looming labor shortage in the professional building trades created by older workers leaving the business, the Alabama Construction Recruitment Initiative launched the Go Build Alabama campaign in 2010 to recruit and train new trades professionals.

Indiana Limestone Offers AIA-Accredited Architectural Education Program

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The popularity of architectural stone masonry has waned in recent years, but the Indiana Limestone Company aims to help change this situation. The company will offer in-depth professional programs on the use of limestone in building design and construction. Geared toward architects and building trades professionals, the “Lunch-and-Learn” program format meets the continuing education credit requirements of the American Institute of Architects.

The program addresses many aspects of building with limestone, and highlights Indiana Limestone’s commitment to supporting the architectural community. Course sessions will focus on the beauty and durability of limestone, environmental impacts of quarrying the stone, comparing cast-stone alternatives with natural limestone, and the tremendous value limetone has for architectural design and construction.

In addition to continuing education about limestone, the Indiana Limestone Company offers advanced project assistance to architects in the critical early stages of the design process. ILCo’s in-house experts collaborate with architects, fabricators, masons, quarries, and freight companies to discover the best way to design using limestone. This support is designed to help keep the cost of including limestone in the project at a more reasonable level, without having to sacrifice design aesthetics or construction quality.

Architectural Sales Support Specialist

 

Daryl Robinson says of the new program, “Architectural drawings can arrive at a fabricator as detailed as the fabricator needs to price without unknowns and submit accurate shop drawings that can be quickly approved by the architect,” adding that, “the time and money saved by having stone well detailed and ‘fabrication friendly’ in the contract documents are invaluable.”

2014 marked the first time that the Indiana Limestone Company offered these courses to architects across the country. In 2015, ILCo will expand into Canada and push farther into the East Coast. For more information on the company’s AIA-accredited educational programs, contact Indiana Limestone Company at 812-275-3341.

 

Tampa Airport Renovtion Starts Next Week

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Florida is red-hot for new construction across all market segments, but one of the biggest commercial construction projects to hit the state is renovation of Tampa International Airport. The $943 million renovation will continue through 2017, and airport patrons can already feel the impact of these big changes.

Beginning today, taxi and bus stands on the east side of the lower level baggage claim area will be closing tomorrow. The closing is necessary so that construction can start inside the main terminal. Travelers who need taxis or bus service will find both options to the west of the baggage claim area, here operations have been temporarily relocated.

To make sure that the changes aren’t too hard for travelers, the airport hired new customer service representatives to help airport patrons adjust and to redirect traffic. Drivers picking up on curbsides to the west of baggage claim should watch out for more taxis and buses merging into the throughway and onto George J. Bean Parkway.

The Tampa Airport’s main terminal will be expanding by 55,000 square feet. The will be revamping all of the shopping and dining areas in the main terminal as well as all the airsides. In January, work will begin on the east side of the third-floor terminal.

The main terminal and sides of the airport where the shuttles are located will be blocked by a construction barrier. Only one shuttle will be operational during the renovation phase. Patrons seeking terminals A & C will experience doubled wait times of two minutes between shuttle trips.

The most expansive part of the renovation involves the constructionof a 2.3-million-aquare-foot consolidated rental car facility to the south of the main terminal. The rental facility will be connected to the main terminal via a new 1.3-mile automated people mover system.

Several design/build contractors were hired to participate in the Tampa International Airport renovation. Austin Commercial will oversee the rental car facility construction. Kimmins Contracting will handle the South Terminal Support Area renovation, which involves pavement reconstruction, signage and lighting. The Taxiway J bridge connecting the main terminal to the rental care facility will be built by Cone and Graham. Skanska is responsible for the main terminal transfer level expansion and alteration as well as the concessions spaces in the airsides.