Tuesday, August 31, 2021

FAU ECONOMIST SAYS HOMES LESS OVERPRICED IN JULY






The overheated market may be slowly cooling. Even if July numbers just reflect the usual summer slowdown, it could mean traditional patterns are starting to return. Homes in South Florida are a little less overvalued than they were a month ago, a positive sign after a year of insane pricing.




 


Homes in Palm Beach, Broward and Miami-Dade counties sold for 13% above their long-term pricing trends in July, a slight decline from the month before, when homes were overvalued by 16%, according to researchers at Florida Atlantic University (FAU).




“I’m excited about these numbers,” FAU economist Ken H. Johnson said. “I would like to see prices with a premium that is not so large, but we are going in the right direction.”


The slight dip from last month’s index could signal a slight slowdown in the market, as mortgage applications have fallen. Or it could be the typical summer slowdown as families go on vacation.


It’s still a good sign if it’s only a summer slowdown, as it would show that the real estate market could be headed to more traditional seasonal patterns, Johnson said.


Jonson and Florida International University professor Eli Beracha analyzed over 100 metro areas . . . Out of nine metros in Florida, the South Florida area ranked last in overpricing. Lakeland and the Tampa Bay area were the most overpriced in Florida, both at a little more than 31% above where they should be.


Housing values either fell or remained level from one month to the next, the researchers found.


“While we’re almost certainly nearing the peak of the current housing cycle, it’s nowhere near as serious as it was more than a decade ago, when Florida homes were overvalued by 60% or more,” Johnson said. “Prices eventually will level off or fall, and recent buyers who want to sell would be hard-pressed to earn their money back.


Median sales prices leveled out for the most part in South Florida in July, according to data from the Broward, Palm Beaches & St. Lucie Realtors. The median price stood at $500,000 in Palm Beach County for the second month in a row. It was $495,000 in Broward County, down slightly from June, and $515,000 in Miami-Dade, a slight increase.


“Because the summer months tend to be slower, many buyers I have been working with have taken advantage of this relatively quieter time and have been able to strike deals on homes that may have had more buyer demand in busier months,” said Bonnie Heatzig, executive director of luxury sales at Douglas Elliman in Boca Raton.




 


 




Monday, August 30, 2021

HUD, FHFA Team Up to Boost Fair Housing Enforcement









The Federal Housing Finance Agency and the Department of Housing and Urban Development announced that they are partnering to better enforce fair housing and fair lending regulations. The FHFA and HUD entered into what they called a first-of-its-kind collaborative agreement on Thursday, in which the two agencies have committed to sharing information and coordinating investigations and compliance reviews.


HUD is primarily charged as the government agency that enforces the Fair Housing Act. The FHFA regulates the government-sponsored enterprises of Fannie Mae and Freddie Mac as well as the Federal Home Loan Banks.


The memorandum will help strengthen their ability to enforce fair housing and fair lending requirements by promoting information sharing, coordination on investigations, compliance reviews, and the ongoing monitoring of Fannie Mae and Freddie Mac, said HUD and the FHFA in the announcement. They expect the agreement to lead to “stronger oversight that will help advance vigorous fair housing enforcement that can begin to redress our nation’s history of discriminatory housing practices.”


The memorandum “is an important and historic step to advance and strengthen the enforcement of our nation’s fair housing and fair lending requirements,” said HUD Secretary Marcia L. Fudge. “FHFA oversees entities that have significant control over a large share of the mortgage market. Stepping up our collective fair housing oversight of their activities will make an enormous impact on lives and communities.”


 






FHFA Acting Director Sandra L. Thompson (left) and HUD Secretary Marcia L. Fudge sign a memorandum



Courtesy FHFA

FHFA Acting Director Sandra L. Thompson (left) and HUD Secretary Marcia L. Fudge sign a memorandum establishing a collaborative agreement to share information and coordinate investigations and compliance reviews.


 


View the memorandum.







 


Source: FHFA.gov



Friday, August 27, 2021

Treasure Coast Weekend Happenings




Farmers Market and Craft Show at the Fort Pierce Marina


Farmers Market and Craft Show at the Fort Pierce Marina


St. Lucie County

Date: Event occurs every Saturday of every month.

Time: 8:00 am – 12:00 pm

Location: Downtown Fort Pierce

Address: 1 Avenue A – Fort Pierce

Category: Other


Come enjoy the extraordinary Downtown Fort Pierce Farmers’ Market where there are over 70 friendly vendors that offer a wonderful and diverse selection of delicious foods, exotic plants, savory spices, and much much more!


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Family Fun Exploration Day


Family Fun


Date: Saturday August 28, 2021

Time: 10:00 am

Location: Flagler Center

Category: Expo


Join us for our FIRST in-person fundraising event! Bring the whole family to Downtown Stuart and enjoy a fun day filled with good food & drinks, games, karaoke, prizes, and so much more!

We will have students from IRSC coming to speak about how these study abroad experiences have changed their lives.

We are a non-profit organization that funds underprivileged American college students to take International Study Abroad trips through their local colleges. This experience can change a student’s life and give them potential opportunities they could have never otherwise dreamed of!

We hope you’ll stop by & support us in our mission – We can’t wait to see you there!


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20th Anniversary Celebration – FREE ADMISSION


2


Date: Saturday August 28, 2021

Time: 10:00 am

Location: Smithsonian Marine Station and Ecosystems Exhibit

Address: 420 Seaway Drive

Category: Educational


SMEE is turning the big 2-0!

To celebrate, we’re offering free admission on Saturday August 28th along with sneak peeks behind-the-scenes, feeding tours at 10:30am and 2:30pm, and brand-new custom-designed permanent educational signage for the exhibit areas and the exterior!

Twenty years ago this month, the Smithsonian Marine Ecosystems Exhibit at the St. Lucie County Aquarium (then called the St. Lucie County Marine Center) opened to the public with several large dynamic aquarium displays of local marine habitats, a classroom space and a gift shop. The building’s stunning centerpiece, a 2,500 gallon living Atlantic Caribbean coral reef, had been on display at the Smithsonian National Museum of Natural History in Washington, D.C. since 1980. Piece by piece, this living coral was transported to the new aquarium building in Fort Pierce through a partnership with the Smithsonian Institution after more than a year of fundraising and construction. Although St. Lucie County provided most of the funding for the project, there were also financial partnerships with Indian River State College, the St. Lucie County School District, the city of Fort Pierce, and several corporate donors including Fort Pierce Utilities Authority and Florida Power and Light. The aquarium opened to the public on August 28th, 2001.

Join us to help celebrate this huge milestone of being a part of the Treasure Coast community for two decades. We’ll SEA you there!


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Build Up The Block: TREASURE HUNT ON THE TREASURE COAST


1


Date: Saturday August 28, 2021

Time: 3:00 pm

Location: he Lindsay School of the Arts Inc.

Address: 910 Orange Ave, Fort Pierce, FL 34950

Category: Fund Raiser


The Lindsay School of The Arts is doing another amazing monthly block party! We have great food, great vendors, great music and great organizations coming out so you can learn more about what we do and what we have planned for the Old St. A’s property!

With that being said, this month we are taking on our coolest idea and it has taken us some time to get it together and it may take a bit more but we are always open to more Vendors, New Bands and New Food Vendors!

The Treasure Hunt starts at 3pm so be there or be square!


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Date Night


5


Date: Saturday August 28, 2021

Time: 7:00 pm

Location: Painted Frog

Address: 1906 14th Ave

Category: Crafts and Painting


Date Night:

Paint a pair of mugs with your honey! Prosecco will be served! $55 per couple for two mugs. (there will be a selection of mugs to choose from)

Call (772) 999-3763 or register online www.paintedfrogvb.com



Thursday, August 26, 2021

SOUTH FLORIDA MEDIAN HOME SALES PRICES CLIMB OVER 20%






Demand for housing in South Florida drove prices higher as the median sales prices for both homes and condos increased more than 20% in July.




 


The rapid price increases have allowed sellers to cash out big time, but has made purchasing a home more difficult for working-class families and first-time homebuyers.




Meanwhile, sales remained strong in the luxury market as many wealthy people moved to the region.


Single-family home sales in the tri-county area increased 1% to 4,827, compared to the same month a year ago. That’s a slower rate of growth than in recent months. The median sales price jumped 25% to $500,000.


Statewide, single-family home sales declined 2.1% while the median sales price climbed 20.3% to $355,000.


In South Florida, sales of condos/townhouses surged 54.7% to 5,799 compared to the same month a year ago, when many people were reluctant to tour multifamily buildings without a Covid-19 vaccine available. The median sales price jumped 22.7% to $270,000.


Throughout Florida, condos/townhouse sales increased 21.1% as the median sales price grew 20.5% to $253,000.


“The 2.1% drop in closed single-family home sales marks the first time that sales in this category have been down year-over-year at the statewide level since May of 2020, near the beginning of the pandemic,” said Brad O’Connor, chief economist at the Florida Realtors. “But remember, last year’s spring buying season was effectively postponed until the summer and fall by the pandemic, so the second half of 2020 ended up being the strongest second half for sales in at least 15 years. It’s not too surprising if sales counts over the next few months fail to surpass their totals from one year ago.


“However, looking at 2019 – the last full year of anything resembling a normal market due to COVID-19 – we find that July 2021 single-family home sales were over 9% higher compared to July 2019,” he added.


Miami-Dade County


In Miami-Dade County, single-family home sales increased 15% to 1,373 while the median sales price jumped 25.6% to $515,000. Cash deals soared 82%.


Sales of homes for $1 million and up increased 110%.


Active listings plummeted 33%, so the supply of inventory at the current sales pace was down to 2.2 months. That’s a seller’s market, with little inventory available for buyers.


Condo/townhouse sales in Miami-Dade more than doubled with a 103.7% increase to 2,259 while the median sales price soared 30.8% to $340,000. Cash deals were up 137%.


Sales of units of $1 million-plus increased 323%. Active listings fell 41%, so the supply of inventory at the current sales pace declined to 4.9 months. That’s a seller’s market. A year earlier, it was a buyer’s market.


Broward County


Single-family home sales in Broward County inched up 2.1% to 1,680 while the median sales price climbed 23.8% to $495,000, according to the Broward, Palm Beaches & St. Lucie Realtors.


Home sales for $1 million and up jumped 104%. Active listings were down 35%, so the supply of inventory at the current sales pace fell to 1.5 months. That’s a seller’s market.


Sales of Broward County condos/townhouses surged 51% to 1,999 while the median sales price increased 10.3% to $215,000.


Sales of units for $1 million-plus increased 61%. Active listings dropped 51%, so the supply of inventory at the current sales pace declined to 2.2 months. That’s a seller’s market.


“There is a silver lining for buyers,” said Karen Johnson, president of the Broward, Palm Beaches & St. Lucie Realtors. “The number of homes going under contract has dropped for the second consecutive month, a market indicator that Realtors are keeping an eye on.”


Palm Beach County


In Palm Beach County, single-family home sales fell 8.6% to 1,774 while the median sales price increased 25.3% to $500,000, according to the Broward, Palm Beaches & St. Lucie Realtors.


Sales of homes for $1 million or more were up only 13%, a slower pace than in recent months. Active listings were down 46%, so the supply of inventory at the current sales pace shrank to 1.5 months. That’s a seller’s market.


Condo/townhouse sales in Palm Beach County jumped 17.1% to 1,541 while the median sales price climbed 13.7% to $233,000. Sales were up 60% for units of $1 million or greater. Active listings plummeted 61%, so the supply of inventory at the current sales price was down to 1.5 months. That’s a seller’s market.




 


 




Wednesday, August 25, 2021

MOVING SCAMS ARE BACK WITH S. FLA. A HOTBED OF ACTIVITY




Moving “brokers” may entice relocators with low-ball estimates and promise to “handle all the details,” then subcontract the actual move to dicey third-party vendors.


 


One of the most exploitative business models in America is booming again, thanks to an exploding real estate market, the tireless audacity of some South Florida entrepreneurs – and the naivety of targets who don’t realize they’re trapped until the moving truck pulls away with everything they own.


South Florida is a hotbed for moving brokers – companies that have no trucks and employ no laborers but have figured out how to lure consumers with professional-looking websites and savvy telephone salespeople.


They hook their prey with lowball estimates and promises to handle all details of the move. Then they farm out the work to third-party haulers who hike the price and drive away, leaving owners angry and frightened and unable to reach those once-friendly brokers by phone, text or email.


It’s been three weeks since movers hired by West Palm Beach-based American Plus Moving and Storage left Lincoln, Nebraska, with Rhonda Faehn’s lifetime of possessions. The broker, who told her the load could arrive as early as Aug. 1, has stopped answering her calls, she says. And the carrier they hired won’t tell her where her belongings are or when they are scheduled to arrive at her new home in Statesboro, Georgia.


The family is making do with folding chairs and a borrowed dining table. “I can’t sleep. I can’t eat. I just feel sick,” she said, choking back tears. “People were kind enough to lend us air mattresses to sleep on and dishes to use. That’s it. We have the clothes on our back. I just want my stuff.”


American Plus did not respond to a voice mail message and an email seeking to discuss Faehn’s complaints, 55 complaints to the Federal Motor Carrier Safety Administration (FMCSA) and 34 complaints to the Better Business Bureau.


Complaints setting records


Consumers have been lodging complaints about movers at a record-setting pace this year, says Joshua Swyers, managing attorney for Move Rescue (Opens in new tab.), a nonprofit organization formed by the nation’s largest moving companies to help consumers resolve conflicts. The number of requests for help so far this year – 1,053 – should easily exceed 2019’s total of about 1,200 and probably every other year since the organization was founded in 2003, Swyers said.


South Florida holds the distinction of being home to most of the state’s moving brokers, a slice of the overall moving industry that has replaced carriers as the focus of most consumer complaints, Swyers said.


Of 238 Florida-based moving brokers registered with the Federal Motor Carrier Safety Administration, 190 are in Broward, Palm Beach or Miami-Dade counties.


So far this year, consumers have filed complaints to the FMCSA against 111 South Florida-based moving brokers, and 58 of them are each the subject of 10 or more complaints, according to data posted on FMCSA’s website.


More than 1,100 complaints about movers have been filed with the Florida Attorney General’s Office so far this year, far exceeding 2020’s total of about 890 and about 730 tallied in 2019. Exact numbers weren’t immediately available because of how they are logged in the state’s system, a spokeswoman for Attorney General Ashley Moody said.


One of those complaints was filed by Faehn, who thought she was being a smart shopper this summer when she sought multiple estimates for her family’s move from Nebraska to Georgia.


Rude surprises


The $9,950 estimate she received from American Plus Moving and Storage was around $3,000 less than the next-lowest quote, so she agreed to use the company and sent a $2,242 deposit. The balance was to have been split into two payments of $3,804 – half would be paid when the movers packed up her old house and the other half would be paid when they arrived at the destination.


Like many moving brokers’ websites, American Plus’s site gives the impression of a full-service operation. “Our movers are specialists in what they do, and they need to meet strict criteria to be considered a worker – or like we like to say, part of the household!” one statement reads. “Before our hands-on training procedure, all laborers have to pass a drug screening and background check.”


How that hands-on training takes place is unclear. A Google search of the address on the company’s website brings up a 743-square-foot residential apartment. And according to the FMCSA, the company owns no trucks.


Faehn sent her husband and sons ahead to their new home in Georgia and stayed behind to supervise the movers.


They showed up a day late, on July 28, she said. They identified themselves not as American Plus Moving and Storage, but as another company that Faehn didn’t know and wasn’t able to research prior to the workers’ arrival.


One worker’s girlfriend came along and hung out inside of the house, playing with her phone, Faehn said. The foreman sent Faehn out to buy Bubble Wrap and boxes. When Faehn objected, saying those supplies were supposed to be part of the move, the foreman got angry and insisted that she go. He became angrier still when Faehn’s neighbor came over to keep an eye on the house while she was gone.


Faehn got nervous and took a few seconds of video footage of the movers from behind the blinds of her second-floor bedroom window.


Loading the truck stretched into two days. When the packing was finally completed at 10:30 p.m. on the second night, the foreman informed her that the load exceeded the estimate by 700 cubic feet and she would have to pay an additional $5,539. He also told her he expected a $1,700 gratuity. “And he said if I didn’t pay it, I’d never see my stuff again,” she said.


At first, he refused to leave, but he finally pulled away after she called the police, Faehn said. She didn’t give him the gratuity.


Not all brokers are dishonest, Swyers said. But for the many who are, marks are easy to find among otherwise educated and cautious consumers. That’s because moving, for most people, is rare. Few of us have any day-to-day reason to learn how to avoid being taken advantage of by movers, Swyers said.


The pattern of despair


Complaints against companies that generate large numbers of them tell similar stories:




  • The experience plays out far differently than the brokers said it would.




  • Unknown companies that consumers had no time to research show up to do the move.




  • They wait until the truck is loaded before telling the consumer they have more items than what’s on the estimate.




  • They demand payment on the spot. Facing deadlines to leave their former homes, consumers usually pay up.




  • Weeks go by without delivery, and neither the broker nor the hauler returns calls from consumers frantic to know where their stuff is being stored and when it will be delivered.




  • When they do show up, they demand even more money for unforeseen expenses.




  • Finally, much of what’s delivered is broken or dirty, revealing it had been tossed with no care into a storage unit. Sometimes boxes have been opened and items taken. The relief the consumer feels upon getting their goods back gives way to disgust and sadness over how they were treated.




 


Most customers have little option but to wait to be contacted and pay what carriers demand, Swyers said.


That’s because a typical carrier’s bill of lading, which customers sign prior to trucks leaving with their goods, gives companies 21 business days or 30 days to deliver their loads. They also allow companies to add new charges for increased expenses.


Companies that breach delivery deadlines are subject to penalties and possibly even loss of their license by FMSCA. But right now, FMSCA is struggling to keep up with an increase in complaints from customers who have been waiting for months to get their stuff back, Swyers said.


This year’s real estate boom and labor shortage has overwhelmed the ability of the nation’s largest and most reputable moving companies to meet demand, he said. They’re booked up for months in advance. Many consumers’ fallback choice, small “mom and pop” haulers, are also booked up. And that’s forced consumers to settle for the brokers who refuse to stop booking moves and making delivery promises they cannot keep, he said.


“They’re continuing to sign people up and put their stuff in storage knowing they can’t meet their timelines,” he said.


While Swyers says Move Rescue usually succeeds in persuading carriers to reunite consumers with their belongings, state and federal enforcement against companies accused of fraud can stretch out over years.


Cat and mouse game


Many companies try to dodge prosecution by playing a shell game. When complaints pile up at the Better Business Bureau or FMCSA, they change their company names and the identities of officers when registering the new entity with the state. Many once-burned customers have become experts at documenting the lineage of company names and intersecting owners.


But successes are possible. Florida’s attorney general this year announced resolutions of four cases filed in 2018 against four moving brokers based in Broward or Miami-Dade counties: Finest Movers Inc., Ocean Moving & Storage Corp., Moving and Storage Accounting Inc. and U.S. Moving Services.


In all of the cases, owners were ordered to pay a total $2.7 million in restitution to customers, penalties, or both. But in three of the cases, companies were barred only from “providing artificially low quotes” in future endeavors.


Defendants in just one case were barred from future ownership, operation or participation in moving services. Those were owners of Moving Service Accounting and Storage Inc., a Fort Lauderdale-based affiliate of Moving and Storage Accounting Inc.


Currently, Moody’s office has litigation pending against two companies and is investigating at least six others. “However, as those investigations are ongoing, we cannot comment further at this time,” spokeswoman Kylie Mason said by email.


 


© 2021 South Florida Sun-Sentinel. Distributed by Tribune Content Agency, LLC.



Tuesday, August 24, 2021

MEDIAN PRICE UP, PENDING SALES DOWN IN ST. LUCIE COUNTY






Just in! Newly released market reports from Florida Realtors® detailing recent real estate activity in St. Lucie County. The reports compare year-over-year data for July. Here are statistics on single family homes.




 











“Everyone has been eagerly awaiting the release of July market reports, especially home buyers. They want to know if there’s a chance of lower pricing or more listings to choose from in St. Lucie County. Now that the numbers are in, we see once again that median price is up year-over-year, and listing inventory is down,” said Karen Johnson, President of Broward, Palm Beaches & St. Lucie Realtors®.


Median sale price is our preferred summary statistic for price activity because, unlike average sale price, median sale price is not sensitive to high sale prices for small numbers of homes that may not be characteristic of the market area.


“Even so, there is a silver lining for buyers. The number of homes going under contract has dropped for the second consecutive month, a market indicator that Realtors® are keeping an eye on. If you’re in the market for a home, seek the expertise and guidance of a local Realtor® now. This will give you ample time to feel prepared and confident about your future investment,” continues Johnson.


New pending sales are the number of listed properties that went under contract during the month. Because of the typical length of time it takes for a sale to close, economists consider pending sales to be a decent indicator of potential future closed sales.


Market Reports: Single Family (Opens as PDF.) | Townhouses/Condos





Monday, August 23, 2021

3D Printed Homes Are Gaining Consumer Interest









Press print for a home. More consumers are warming up to that idea. Sixty-six percent of more than 3,000 consumers—and 75% of millennials, in particular—say they’d consider living in a 3D printed home, according to a new survey released by realtor.com®.


3D printed homes have been touted for offering greater affordability, energy efficiency, and better resistance to natural disasters over the past year. They also make it much faster to build a new home.


“Over the past decade, as the homebuilding industry focused mainly on the upper end of housing, expecting younger generations to favor renting, the price of construction has pushed new homes out of reach for many first-time home buyers,” says George Ratiu, senior economist at realtor.com®. “With the largest generation in U.S. history embracing homeownership, and the pandemic accelerating the move toward suburban markets, new home construction plays a pivotal role in meeting the growing demand.”


The technology is advancing and 3D-printed homes can help reduce the cost of new construction and increase the number of available homes at a more affordable price point, Ratiu says. They “will help to restore balance in this strong seller’s market,” he adds.


Thirty percent of survey respondents believe that 3D printed homes will eventually replace traditional methods of homebuilding.


3D homes have gained greater buzz over the last year. Sixty-three percent of recent buyers say they’ve heard of 3D home printing technology.


The biggest factors that would persuade consumers to purchase a 3D printed home, according to the realtor.com® survey respondents:







      • Lower cost: 54%

      • More energy efficient: 51%

      • More resistant to natural disasters: 42%

      • Faster to build: 41%

      • More customizable: 39%

      • Produces less waste than traditional building methods: 32%











 


For those who were more unsure of the technology, these are the main factors holding them back, according to the survey:












      • 36% want to wait and see how the technology pans out over time

      • 22% say they prefer the aesthetics of a traditional home

      • 22% believe it won’t last as long

      • 18% say they don’t want their home to look exactly like their neighbors’ homes











 


“While there have only been a small number of 3D printed homes sold to date, as the technology continues to advance, we could see it add more affordable homes to the housing market,” Ratiu says. “For the rising generations of digital natives, new building technology may provide a sustainable bridge toward homeownership.”


 


Source: realtor.com®



Friday, August 20, 2021

25 Markets With the Biggest Price Jumps









Home prices have risen quickly amid the pandemic. The median sales price of single-family existing homes increased in 99% of the 183 metro areas tracked in the second quarter compared to a year ago. Ninety-four percent of the markets posted double-digit price increases, according to a new report from the National Association of REALTORS®.


Inventory shortages and a large influx of buyers, particularly as mortgage rates remained historically low, have driven demand and led to higher home prices.


In the last year, Boise, Idaho, has seen the largest percentage change to its median home prices in the country, jumping 12.99% from December 2020 to June 2021. The median home price is now $410,100 in Boise.


HouseCanary, a real estate brokerage, identified the 25 metro areas with the highest median home price changes in that time (December 2020 to June 2021).


Also, “looking at the markets experiencing the highest price growth, we have seen large migration to states with no income tax, including Florida, Washington, Nevada, and Texas,” said Chris Stroud, co-founder and chief of research at HouseCanary. Ten of the metro areas in the top 25 are in Florida alone. “There is a general migration pattern toward southern, southwestern, and mountain states. While these themes were present before COVID-19 hit the U.S. in spring 2020, they have significantly accelerated as the pandemic has altered the way many Americans work and live.”


The markets with the largest price jumps over the past year are:



  1. Boise, Idaho: 12.99% (percent change from December 2020 to June 2021)

  2. Provo-Orem, Utah: 12.22%

  3. Ocala, Fla: 12.1%

  4. Modesto, Calif.: 10.92%

  5. Cape Coral-Fort Myers, Fla.: 10.31%

  6. Atlantic City-Hammonton, N.J.: 9.51%

  7. Stockton, Calif.: 9.47%

  8. Phoenix-Mesa-Chandler, Ariz.: 9.43%

  9. Visalia, Calif.: 9.21%

  10. Deltona-Daytona Beach-Ormond Beach, Fla.: 9.07%







 


View the full list in the chart below.


https://www.credible.com/blog/data-insights/home-prices-surged-in-2021-cities-largest-jump/


 


Source: “Home Prices Have Surged in 2021—Here Are the Cities That Saw the Largest Jump,” Credible.com (Aug. 10, 2021)



Thursday, August 19, 2021

Field of Dreams... Is This Heaven?




Kevin Costner Hosts Real Baseball Game at ‘Field of Dreams’ Site –And it’s Perfect


 


“It’s hard not to be romantic about baseball,” said Brad Pitt’s character in the film Moneyball—and this story unfolding last week on an Iowa farm is a great example.


For those lucky enough to have watched Kevin Costner’s enduring classic Field of Dreams as a young boy or girl signed up for little league, the sight of Costner and the real-life Yankees and White Sox walking through the corn stalks onto a regulation size baseball diamond to play an actual Major League Baseball game is, well, ‘perfect.’


The first-place Chicago White Sox faced the New York Yankees adjacent to the corn field in Dyersville, where the iconic film was shot—and it was the first MLB league game ever played in Iowa.


Appearing from a stretch of mature corn beyond the warning track in right field, Costner— who has a great baseball arm and threw his own pitches in movies like Bull Durham and Field—led the two teams onto the field in the video below, to rousing applause before throwing the first pitch at the game.


“Build it and they will come,” goes the famous line in the film, and indeed thousands of MLB fans from around the country showed up to watch on this perfect occasion.


Randy Peterson, writing for the Des Moines Registerrecapped the thoughts of Yankees manager Aaron Boone after their team lost, 9-8.


“That’s probably the greatest setting for a baseball game that I’ve ever been a part of.”


One of the fans commented, “I was in attendance and it was by far the best sporting event I ever attended. MLB hit a home run on this!”


“(The) coolest part was, in order to get to the game you had to enter through the corn in center field on the original Field of Dreams field”


“Everything was just so well planned out.”


How perfect was it?


James Earle Jones starred in the movie as author Terrance Mann, and, now 90-years-old, he honored the project by contributing his famous deep voice to read the Fox pre-game teaser.


Sports Illustrated detailed how refreshing it was to watch a ballgame without the endless inter-inning pageantry, advertisements on the jumbotron, constant requests to “make some noise,” and blaring music.


MLB commissioner Rob Manfred said the Field of Dreams game will be back next year, likely featuring the Reds and the Cubs, cementing another special date in the MLB calendar, alongside the All-Star Game, Homerun Derby, and Post Season.


“It does feel like all the teams are going to want to touch this,” Costner told MLB. “There’s going to be hot competition to play here. There’s going to be records set here as a result of Field of Dreams. I hope it does happen.”


Maybe a record wasn’t set this time, but a riveting final inning delighted the crowd.


By the top of the ninth inning, Chicago was leading 7-4, after several home runs had sailed into the cornfields surrounding the park (pictured below, next to the smaller film site).


In a nightmare for the otherwise-stellar pitcher Liam Hendricks, he allowed New York to wipe out that 3-run lead after a single by Tyler Wade led to a home run by Aaron Judge—Judge’s second of the game. With just three outs left in the game, the Sox were only down by one run.


Seby Zavala made it to first base, and then Tim Anderson proceeded to hit a walk-off homer over the corn stalks where the teams had entered three hours earlier, sealing the win, 9-8.


It’s hard not to be romantic about baseball. It was perfect; it was everything a baseball fan could want. A celebration of a simpler period in the history of America’s Pastime.


Is this heaven? Pretty much.











The Construction Conundrum




With inventory still low, more home buyers look to plan B: new builds. But that, too, has become tough with land and labor growing scarcer and supply chain struggles lingering. Help clients navigate alternatives.


As the pandemic housing boom continues, many buyers are still losing out on homes as they go up against higher bids. Some are now seeking out land and new construction to get the home they want.


But this strategy has its own set of peccadillos, including a shortage of buildable sites, which associate real estate broker Kim Cantine, with Halter Associates Realty in Bearsville, N.Y., says is not brand-new. “My area is experiencing its fifth year of low land inventory,” she says.


Land prices have also climbed and are experiencing bidding wars, Cantine says. To cope, some home buyers look to the popular 1980s alternative of tearing down a house to build a new one, says Ben Brittingham, vice president of marketing and sales with MN Custom Homes in the Seattle area.


However, that’s not a solution either since builders, architects, and contractors are swamped with requests, and building materials and appliances are priced higher and are frequently out of stock. Those performing the work can charge more or take only jobs they prefer.


What’s a frustrated buyer to do? Real estate agents and brokers can enable them to explore all options and find a big dose of patience.


Buy a Stock Building Plan


One way to shorten the new construction process and pare costs is to go with an existing house plan, a process like buying off the shelf rather than developing a custom plan. Tim Bakke, director of publishing at The Plan Collection, a 30-year-old company that now has more than 22,000 plans in its inventory and continues to design new ones, says a predesigned plan can shave a few months off the process and cut the design cost by at least $7,000 to $8,000, depending on the complexity and cost of labor.


Though the design won’t be custom, choices are sufficiently varied in number of bedrooms and bathrooms, style of layout, number of levels, amount of outdoor space, and many other features. The exteriors are also diverse, from the popular modern farmhouse look to more traditional Tudors and Colonials. One drawback, Bakke says, is that substantial changes, such as structural walls being moved, can’t be made without incurring added costs. But if a buyer thinks they may want more space, Bakke suggests starting with a larger footprint to have square footage to manipulate.


Build Custom


Hiring an architect or builder to design a house from the ground up is a major undertaking that requires making countless decisions, such as the size of the kitchen, height of ceilings and windows, number of bedrooms and bathrooms, type of doorknob, and even width of hallways. The advantage of this route is it gives homeowners more of what they want for their budget. “They can put solar panels on the roof to lower costs and make it passive and environmentally friendly, for example,” says Los Angeles–based attorney Robin Finch, a real estate partner at Greenberg Glusker.


The downside to building custom is that the process takes typically three to six months for the design, time to secure permits and approvals, and, depending on the size of the project, 12 to 16 months for building under normal non-pandemic conditions, says architect Victor Body-Lawson of Body Lawson Associates in New York City. Costs are also generally higher: The architect often charges a design fee (4% to 10% of construction costs) and a 10% contingency fee. On top of this, materials and appliances have jumped by as much as 20% per month in the current frenzied climate, he says.


Go With a Spec Home


Buyers have another possibility—selecting a house that a builder is constructing or has finished as a stand-alone residence or perhaps as part of a development. Depending on when clients buy affects how many choices they get to make, says Brittingham. If the house is finished, they buy what the builder has selected. But if framing has just begun, they may be able to make choices in such categories as tiles, countertops, vanities, flooring, cabinets, lighting, and more. Some builders offer choices at different price levels, such as laminate at a certain cost or pricier marble at a higher cost.


One distinct advantage is that the price point may be 10% to 20% less than a custom home because of economies of scale—though this is not guaranteed due to COVID-19, says Brittingham, whose homes average $2 million to $6 million.


Think Prefab


Prefabricated home options have increased, with more companies building houses in a factory, says Sheri Koones, author of several books, including Prefabulous and Sustainable. Many of these companies are seeing great demand, including for houses to help house those experiencing homeless, she says.


Because of the building boom, the supply chain for this sector has been disrupted, too, says John Colucci of Westchester Modular Homes in Wingdale, N.Y. “We are not only paying top dollar for materials, but the lead times have created a slowdown. That being said, modular is still faster than stick building since we managed to keep our labor. We are all so busy, but some would-be customers are sitting on the sidelines,” he says.


Factors Home Buyers Should Weigh Before Proceeding


How much will a house cost? Buyers must be realistic—they should budget 15% to 20% more than they expect the house to cost, especially as COVID-19 has increased costs of materials, appliances, and labor, Bakke says. When a mortgage is needed, Bakke says, it’s wise to remind buyers to consider the rule of not spending more than 28% of their monthly gross income. Others think the percentage should be based on overall life goals, which is why consulting a financial planner is wise. New construction requires a construction or bridge loan that converts to a traditional mortgage when the house is completed.


How much square footage is needed? Figuring out size can be tough in the abstract. Some 2,500-square-foot homes, for example, seem larger than others, which often depends on the amount of hallway space, height of ceilings, windows, and light. It’s best for buyers to walk through existing homes to get an idea and list which rooms they want and dimensions. Architect and author Sarah Susanka started her “not-so-big house” movement decades ago to emphasize the importance of having every inch count and spaces do double duty, which may help cut costs.


Homeowners should also bear in mind that square footage is the single biggest driver in determining building costs, says Bakke. The cost varies widely in different parts of the country. According to 2019 U.S. Census Bureau data, the median price per square foot for a contractor-built single-family home was $114, but these days many cite higher prices of $300 to $400, and in certain cities like San Francisco and Boston they may rise to $600, says Madison, Conn.–based architect Duo Dickinson. Finishes also affect pricing.


How much detailing is included in a plan? After interviewing two or three architects or builders to design the house, home buyers should check references (like from a local American Institute of Architects list), licenses, insurance, and referrals and decide—or go with a design from a plan company. It’s critical to read the plan to be sure everything is included and in the right place, including windows, electrical outlets, roofing trusses, stairs, doors, and plumbing. A bank may need detailed construction drawings and a site plan, according to Bakke. If a buyer doesn’t understand how to read a plan, suggest they learn from sites such as The Basics: How to Read Architectural Plans.


Why is the site key? The spec house builder will have vetted the land choice, but a custom house requires a buyer find a suitable lot. Not all lots—even those that are the same size—meet that criterion. Some require trees to be removed, septic systems and power lines to be added, and soil to be tested, says Dickinson. Body-Lawson says the geological makeup should be studied because it may cost more to excavate a rocky or wetlands site, if allowed. Information about the area’s broadband capability is important, particularly as many people work from home.


A professional on the team also needs to check town rules about land records to be certain there are no outstanding liens and to know the setback limits. These days, some information can be gleaned from aerial photographs and mapping systems that a building department usually has, says Dickinson.


To curtail costs, Body-Lawson recommends that homeowners try to buy undervalued land, which may mean a site farther from town or with fewer features on buyers’ wish lists—such as a chance of forgoing mountain views. They should also avoid overbuilding for their area, since prices may not continue to rise.


Why secure multiple bids? For the actual design, the buyer should secure three bids that compare apples with apples. Bakke says any contractor or builder hired should have experience in the homeowner’s area, so they understand the topography and local building codes. Sometimes, a bank may ask a builder to complete a review application to be sure the person is licensed and insured and has a history of successfully completing projects, Bakke says.


Take Time to Draft a Detailed Contract


With so many details to consider, and so many different work crews involved in the process—including subcontractors and landscapers—it’s critical that a homeowner have contracts with all those involved, which a real estate attorney should review. Los Angeles–based attorney Robin Finch of Greenberg Glusker suggests bringing in an attorney early in the process, even before land is bought.


The contract should specify the amount of the down payment, how much to pay at specified time periods, how to handle change orders, the amount to hold back until everything on the punch list is completed satisfactorily, for what reasons a contract can be cancelled, and for how long a warranty guarantees work such as a house settling, says Ann O’Connell, an attorney and legal editor at Nolo, a legal publisher of books and software based in Berkeley, Calif.


At the same time, these tough COVID-19 times require flexibility, says architect Katy Flammia, design director of the Hudson, N.Y., office of New York City–based Spacesmith, an architecture and interior design firm. “We’re finding with construction that it’s almost impossible now to establish construction costs, which we used to keep the design within our client’s budget. What our clients could buy a year ago is different than what it costs now, and we’re seeing almost weekly price increases,” she says. Furthermore, she cautions clients to be flexible. “They may want to have a list of alternates in materials and scope, and even construction method alternates such as prefab components,” she says.


Some of the former ways that homeowners could protect themselves in their contract may no longer be included. Because of COVID-19 work delays, shutdowns, and price increases, it may be impossible to convince an architect and general contractor to agree to include financial penalties, known as liquidated or punitive damages, if someone gets sick and is off the job for a while or if prices rise higher than they expected, Finch says. So much is market driven, she adds. To resolve any potential problems on either side, it’s best if mediation can be stipulated as a recourse rather than litigation, due to lawyer and court costs and time, says O’Connell.







What About Those Rising Lumber Prices?


Lumber prices—plywood, hardwood, and softwood—have soared across the board. In fact, costs are up 130% since the start of the COVID-19 pandemic more than a year ago, adding $30,000 to the price of a new home, according to the National Association of Home Builders.


Because of the prices, as well as significant shortages, many architects, builders, and home buyers are asking two key questions: How long will the surge continue and why did it happen in the first place? Tony Uphoff, president and CEO of Thomas, which provides analysis and tools that reflect the buying process, says his company data shows a steady surge in sourcing activity for lumber over the last year.


“The situation,” he says, “has been long in the making. As a country, we have relied on Canadian forest lumber whose supply has diminished in recent years.” Part of the problem is also due to tariffs going up, which resulted in further withering demand in the U.S. due to the increased prices. As a result, Canadian mills began to shut down locations to protect themselves against lost revenue, he says, adding, “This initial step was magnified as we entered the early stage of the pandemic. Then, with many working from home, they began to evaluate their living quarters. Some sought more space, which drove a spike in residential housing prices and new construction. And many already owning a home spent more time and took on more projects.” The upshot, he explains, was “exacerbated demand on an already fragile lumber supply chain, which drove prices to an all-time high.”


And there’s more, he says. “The continued result is that some builders are pausing their work on new construction projects due to the high lumber prices. Other construction companies report that even at high prices, they are having difficulty sourcing supply through their established supply chains.”


But some good news has been emerging for several weeks. Sawmills have increased output over the last year and another increase is expected, according to Alex Hickey in her “Morning Brew” report. Most recently, prices started to fall, though what will happen over the long term is anybody’s guess. Homeowners and the professionals working on their homes are wise to keep an eye on prices and anticipate a possible seesaw effect, especially as COVID-19 numbers ramp back up.







 


Barbara Ballinger Barbara Ballinger– Barbara Ballinger is a freelance writer and the author of several books on real estate, architecture, and remodeling, including The Kitchen Bible: Designing the Perfect Culinary Space (Images Publishing, 2014). Barbara’s most recent book is The Garden Bible: Designing Your Perfect Outdoor Space, co-authored with Michael Glassman (Images, 2015).



Wednesday, August 18, 2021

Battle Royale Set for NAR’s iOi Technology Summit




The real estate technology world turns its eyes to Dallas this week, where startups promoting promising tools for practitioners are hoping for a national launching pad, at the National Association of REALTORS®’ Innovation, Opportunity & Investment Summit. The conference, which takes place Tuesday and Wednesday, brings together real estate pros, technology developers, and investors to collaborate and grow new cutting-edge innovations for the industry.


The iOi Pitch Battle, a popular event hosted by Second Century Ventures, NAR’s strategic investment arm, will give 12 tech startups a chance to compete in a “Shark Tank”–style competition. The battle, which will be livestreamed on Facebook and LinkedIn starting at 2:45 p.m. Central time Tuesday, has the potential to identify the next big innovation for real estate. Viewers may also vote on their favorite pitch of the event. Curbio, a company aimed at revolutionizing presale home renovations, won the grand prize at the Pitch Battle in 2019, which included $15,000 and a booth at the REALTORS® Conference & Expo that year. The 2018 winner was BoxBrownie.com.


The iOi conference, which also includes educational sessions and technology forecasts from thought leaders in the space, was not held in 2020 due to restrictions associated with the coronavirus pandemic.


“The iOi Summit Pitch Battle is an exceptional platform for startups to share their ideas not only with the judges but also with potential investors, clients, and REALTORS®,” NAR CEO Bob Goldberg said in 2019. “Our goal with this competition is to identify and showcase concepts poised to help drive the real estate industry forward.”


Learn more about the 12 startups competing this year:



  • Docitt: examines a consumer’s debts and credit to orchestrate the optimal credit profile and the best solutions to improve the consumer’s purchasing power.

  • Parafin: a cloud-based design platform for real estate developers to instantly generate building designs, budgets, and pro formas for their next construction project.

  • Renter Mentor: a platform that provides a centralized, secure, and automated way to list, manage, and find affordable housing.

  • Milestones: a customer-experience platform real estate pros can provide to their clients for buying and selling property as well as managing homeownership.

  • Matrix Rental Solutions: a fintech digital application that provides deeper insight into credit profiles of would-be tenants by automating the application process and providing all necessary data through a single platform.

  • UnderTheDoormat: a business professionalizing the short-term rental industry and transforming both the property and hospitality industries with three unique products.

  • Restb.ai: a suite of AI-powered solutions that enable real estate companies to instantly extract insights (room type, home features, styles and condition analysis, and more) from their property imagery.

  • Otso: provides A-rated insurance coverage for lease security, an alternative to traditional cash deposits and letters of credit, which provides landlords increased protection against default.

  • Zipi: reimagines a fractured system to easily facilitate and transact real estate with their back-office, accounting, and digital payment offerings.

  • Remarkably: a marketing and business intelligence platform that aggregates disparate marketing and leasing data, monitors and analyzes performance, forecasts future trends, and more.

  • HighNote: a platform that streamlines the sales pitch process for agents’ listing presentations, offers, new buyers, and agent recruiting.

  • Feather: a next-generation furniture and home decor rental service that makes it possible for people to find beautiful furniture quickly, without the upfront cost and commitment of traditional retail.


Watch for the announcement of the Pitch Battle winner in REALTOR® Magazine’s Daily News.


Monday, August 16, 2021

Bidding Wars Aren’t the Big Problem Anymore









Many would-be home buyers say they aren’t having much luck in finding a home. Sixty-six percent of buyers who were actively engaged in searching for a home in the second quarter say they’ve spent three months looking without success.


In the fourth quarter of 2020 and the first quarter of this year, active house hunters blamed being outbid by other offers as the most common reason for their inability to make a purchase. But the top reason changed in the second quarter: More would-be buyers said that high home prices are sidelining them lately, according to The Housing Trends Report, a survey from the National Association of Home Builders.


Thirty-nine percent of active buyers surveyed said the inability to find an affordably priced home was the main reason they couldn’t buy.


 






A line graph showing the four reasons would-be buyers cannot find a home to purchase.





 


Forty-three percent of surveyed buyers said if they continue to be unsuccessful, they will expand their search area while shopping for a home. Forty-two percent will remain persistent and continue looking for the “right” home in the same location.


Overall, most long-term house hunters aren’t willing to give up. The share who are likely to put off their home search until next year or later has declined over the last two quarters, dropping to 20% in the second quarter. Home buyers continue to search for the right home, even if it takes more than three months to finally find one in their price point.







 


Source: “High Prices Are (Again) Most Common Reason Active Buyers Can’t Buy,” National Association of Home Builders’ Eye on Housing blog (Aug. 3, 2021)












Friday, August 13, 2021

This Weekend on the Treasure Coast














Comedy Corner – Joey Medina


The ultimate Starred in Paramount Picture’s “The Original Latin Kings of Comedy”, SHOWTIME Comedy Special “Joey Medina: Taking Off The Gloves”, Comedy Central and much much more!!!


Masks optional, but strongly recommended. Sunrise Theatre will continue to adhere and adjust our operating protocols as public health guidelines evolve. Ticket purchasers will be notified by email of specific safety requirements prior to the individual event. If any precautions necessitate a change in seating, ticket holders will be contacted in advance with available options. Read more >>


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EVENT DETAILS



Come out this weekend for our Reggae, Rock & Pop Free Outdoor Concerts in The Loop! This Friday enjoy authentic Caribbean Island vibez with Rainfall Reggae. And on Saturday Jesse and the Thieves will be playing radio hits from yesterday and today! Come hungry for tasty food from our grill & fryer, cold beverages, beer, wine, cocktails, frozen drinks, soft pretzels, root beer floats and ice cream! Live music is 5:30-9pm, rain or shine. Sit at a table or bring lawn chairs. We recommend getting a reservation online for guaranteed seating at 5:30pm. Or check-in at the gate for any available sitting areas after 6:30pm. No cover charge. Call 772-231-6990 or click: https://www.riversidetheatre.com/live-in-the-loop


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AUDITION DATE:  August 14, 2021






TIME:  8:30 AM – 1 PM


LOCATION:  Jensen Beach High School Band Room






Important!  Please read the information below carefully!





For specific requirements for audition preparation, please read the information below and then visit the following links.  Be sure to get the correct materials for your instrument and grade in school.  If you are able to audition well with the higher level of materials, you may do so.



MANDATORY PARENT/GUARDIAN MEETING for selected musicians: Monday, August 16, 6:00 PM

First Rehearsal:  Monday, August 23, 6:00 PM


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EVENT DETAILS



COME HUNGRY FOR OUTDOOR LIVE MUSIC! Almost every Friday & Saturday night (rain or shine), Riverside Theatre’s Live in the Loop outdoor grill & music bar becomes the local hot spot where some of the area’s most talented musicians perform. Enjoy burgers, chicken, bbq, seafood, salads, ice cream, frozen drinks, beer, wine & cocktails from our casual grill and bar.


Saturday Live in The Loop: Jesse & The Thieves play radio hits from yesterday and today, a lot of dance numbers, artists including: the Beatles, Mumford and Sons, The Weeknd, A-Ha, Blink 182, Violent Femmes, Billie Eilish, Billy Joel, Maroon 5, Cake, Modern English, Bruno Mars, CeeLo Green, The Killers, and Toto.


Reserve where you want to sit in The Loop. Sit at a table or bring a lawn chair. For guaranteed entry and seating, get free reservation passes online here: https://www.riversidetheatre.com/live-in-the-loop


Or walk-up, best after 6:30pm and ask for any available tables or bring lawn chairs to sit near the stage.


QUESTIONS?

Call 772-231-6990 or email: TicketHelp@RiversideTheatre.com


Please support us by purchasing food and drinks at our outdoor grill. Grill opens at 5:30pm and music begins around 5:45pm.


Keep The Free Concerts Alive and Rockin’. Please donate to our COVID-RELIEF-FUND at: riversidetheatre.com/donate


Learn more about the comedians, musicians, menu and new safety policies here: https://www.riversidetheatre.com/nightlife


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EVENT DETAILS



Join us this and every Saturday night for family movie nights at the Drive-IN!


⏰Movie will start at 8:30 PM! Gates open at 7:15 PM!


🔈Sound will be transmitted through your FM radio, 87.9 FM


🎫Tickets are $10.70 plus processing fees PER VEHICLE online or $10.00 cash at the gate. Tax included.


🎫 Tickets are now available online.


🚙 Located at 601 Seaway Dr, Fort Pierce, FL 34949


⚡ In the event of severe weather we will postpone until next weekend


***NO OUTSIDE FOOD OR DRINKS PERMITTED***  🍿CONCESSIONS WILL BE ON SITE!


🚽Public Restrooms will be available!























Thursday, August 12, 2021

The Construction Conundrum







With inventory still low, more home buyers look to plan B: new builds. But that, too, has become tough with land and labor growing scarcer and supply chain struggles lingering. Help clients navigate alternatives.





 


As the pandemic housing boom continues, many buyers are still losing out on homes as they go up against higher bids. Some are now seeking out land and new construction to get the home they want.







But this strategy has its own set of peccadillos, including a shortage of buildable sites, which associate real estate broker Kim Cantine, with Halter Associates Realty in Bearsville, N.Y., says is not brand-new. “My area is experiencing its fifth year of low land inventory,” she says.


Land prices have also climbed and are experiencing bidding wars, Cantine says. To cope, some home buyers look to the popular 1980s alternative of tearing down a house to build a new one, says Ben Brittingham, vice president of marketing and sales with MN Custom Homes in the Seattle area.


 






MN Custom Homes





However, that’s not a solution either since builders, architects, and contractors are swamped with requests, and building materials and appliances are priced higher and are frequently out of stock. Those performing the work can charge more or take only jobs they prefer.


What’s a frustrated buyer to do? Real estate agents and brokers can enable them to explore all options and find a big dose of patience.


Buy a Stock Building Plan


One way to shorten the new construction process and pare costs is to go with an existing house plan, a process like buying off the shelf rather than developing a custom plan. Tim Bakke, director of publishing at The Plan Collection, a 30-year-old company that now has more than 22,000 plans in its inventory and continues to design new ones, says a predesigned plan can shave a few months off the process and cut the design cost by at least $7,000 to $8,000, depending on the complexity and cost of labor.


Though the design won’t be custom, choices are sufficiently varied in number of bedrooms and bathrooms, style of layout, number of levels, amount of outdoor space, and many other features. The exteriors are also diverse, from the popular modern farmhouse look to more traditional Tudors and Colonials. One drawback, Bakke says, is that substantial changes, such as structural walls being moved, can’t be made without incurring added costs. But if a buyer thinks they may want more space, Bakke suggests starting with a larger footprint to have square footage to manipulate.


 






The Plan Collection





Build Custom


Hiring an architect or builder to design a house from the ground up is a major undertaking that requires making countless decisions, such as the size of the kitchen, height of ceilings and windows, number of bedrooms and bathrooms, type of doorknob, and even width of hallways. The advantage of this route is it gives homeowners more of what they want for their budget. “They can put solar panels on the roof to lower costs and make it passive and environmentally friendly, for example,” says Los Angeles–based attorney Robin Finch, a real estate partner at Greenberg Glusker.


The downside to building custom is that the process takes typically three to six months for the design, time to secure permits and approvals, and, depending on the size of the project, 12 to 16 months for building under normal non-pandemic conditions, says architect Victor Body-Lawson of Body Lawson Associates in New York City. Costs are also generally higher: The architect often charges a design fee (4% to 10% of construction costs) and a 10% contingency fee. On top of this, materials and appliances have jumped by as much as 20% per month in the current frenzied climate, he says.


Go With a Spec Home


Buyers have another possibility—selecting a house that a builder is constructing or has finished as a stand-alone residence or perhaps as part of a development. Depending on when clients buy affects how many choices they get to make, says Brittingham. If the house is finished, they buy what the builder has selected. But if framing has just begun, they may be able to make choices in such categories as tiles, countertops, vanities, flooring, cabinets, lighting, and more. Some builders offer choices at different price levels, such as laminate at a certain cost or pricier marble at a higher cost.


One distinct advantage is that the price point may be 10% to 20% less than a custom home because of economies of scale—though this is not guaranteed due to COVID-19, says Brittingham, whose homes average $2 million to $6 million.


Think Prefab


Prefabricated home options have increased, with more companies building houses in a factory, says Sheri Koones, author of several books, including Prefabulous and Sustainable. Many of these companies are seeing great demand, including for houses to help house those experiencing homeless, she says.


Because of the building boom, the supply chain for this sector has been disrupted, too, says John Colucci of Westchester Modular Homes in Wingdale, N.Y. “We are not only paying top dollar for materials, but the lead times have created a slowdown. That being said, modular is still faster than stick building since we managed to keep our labor. We are all so busy, but some would-be customers are sitting on the sidelines,” he says.


 






Westchester Modular Homes





Factors Home Buyers Should Weigh Before Proceeding


How much will a house cost? Buyers must be realistic—they should budget 15% to 20% more than they expect the house to cost, especially as COVID-19 has increased costs of materials, appliances, and labor, Bakke says. When a mortgage is needed, Bakke says, it’s wise to remind buyers to consider the rule of not spending more than 28% of their monthly gross income. Others think the percentage should be based on overall life goals, which is why consulting a financial planner is wise. New construction requires a construction or bridge loan that converts to a traditional mortgage when the house is completed.


 






Duo Dickinson Architects





How much square footage is needed? Figuring out size can be tough in the abstract. Some 2,500-square-foot homes, for example, seem larger than others, which often depends on the amount of hallway space, height of ceilings, windows, and light. It’s best for buyers to walk through existing homes to get an idea and list which rooms they want and dimensions. Architect and author Sarah Susanka started her “not-so-big house” movement decades ago to emphasize the importance of having every inch count and spaces do double duty, which may help cut costs.


Homeowners should also bear in mind that square footage is the single biggest driver in determining building costs, says Bakke. The cost varies widely in different parts of the country. According to 2019 U.S. Census Bureau data, the median price per square foot for a contractor-built single-family home was $114, but these days many cite higher prices of $300 to $400, and in certain cities like San Francisco and Boston they may rise to $600, says Madison, Conn.–based architect Duo Dickinson. Finishes also affect pricing.


How much detailing is included in a plan? After interviewing two or three architects or builders to design the house, home buyers should check references (like from a local American Institute of Architects list), licenses, insurance, and referrals and decide—or go with a design from a plan company. It’s critical to read the plan to be sure everything is included and in the right place, including windows, electrical outlets, roofing trusses, stairs, doors, and plumbing. A bank may need detailed construction drawings and a site plan, according to Bakke. If a buyer doesn’t understand how to read a plan, suggest they learn from sites such as The Basics: How to Read Architectural Plans.


Why is the site key? The spec house builder will have vetted the land choice, but a custom house requires a buyer find a suitable lot. Not all lots—even those that are the same size—meet that criterion. Some require trees to be removed, septic systems and power lines to be added, and soil to be tested, says Dickinson. Body-Lawson says the geological makeup should be studied because it may cost more to excavate a rocky or wetlands site, if allowed. Information about the area’s broadband capability is important, particularly as many people work from home.


A professional on the team also needs to check town rules about land records to be certain there are no outstanding liens and to know the setback limits. These days, some information can be gleaned from aerial photographs and mapping systems that a building department usually has, says Dickinson.


To curtail costs, Body-Lawson recommends that homeowners try to buy undervalued land, which may mean a site farther from town or with fewer features on buyers’ wish lists—such as a chance of forgoing mountain views. They should also avoid overbuilding for their area, since prices may not continue to rise.


Why secure multiple bids? For the actual design, the buyer should secure three bids that compare apples with apples. Bakke says any contractor or builder hired should have experience in the homeowner’s area, so they understand the topography and local building codes. Sometimes, a bank may ask a builder to complete a review application to be sure the person is licensed and insured and has a history of successfully completing projects, Bakke says.


Take Time to Draft a Detailed Contract


With so many details to consider, and so many different work crews involved in the process—including subcontractors and landscapers—it’s critical that a homeowner have contracts with all those involved, which a real estate attorney should review. Los Angeles–based attorney Robin Finch of Greenberg Glusker suggests bringing in an attorney early in the process, even before land is bought.


The contract should specify the amount of the down payment, how much to pay at specified time periods, how to handle change orders, the amount to hold back until everything on the punch list is completed satisfactorily, for what reasons a contract can be cancelled, and for how long a warranty guarantees work such as a house settling, says Ann O’Connell, an attorney and legal editor at Nolo, a legal publisher of books and software based in Berkeley, Calif.


At the same time, these tough COVID-19 times require flexibility, says architect Katy Flammia, design director of the Hudson, N.Y., office of New York City–based Spacesmith, an architecture and interior design firm. “We’re finding with construction that it’s almost impossible now to establish construction costs, which we used to keep the design within our client’s budget. What our clients could buy a year ago is different than what it costs now, and we’re seeing almost weekly price increases,” she says. Furthermore, she cautions clients to be flexible. “They may want to have a list of alternates in materials and scope, and even construction method alternates such as prefab components,” she says.


Some of the former ways that homeowners could protect themselves in their contract may no longer be included. Because of COVID-19 work delays, shutdowns, and price increases, it may be impossible to convince an architect and general contractor to agree to include financial penalties, known as liquidated or punitive damages, if someone gets sick and is off the job for a while or if prices rise higher than they expected, Finch says. So much is market driven, she adds. To resolve any potential problems on either side, it’s best if mediation can be stipulated as a recourse rather than litigation, due to lawyer and court costs and time, says O’Connell.


 






Spacesmith





What About Those Rising Lumber Prices?


Lumber prices—plywood, hardwood, and softwood—have soared across the board. In fact, costs are up 130% since the start of the COVID-19 pandemic more than a year ago, adding $30,000 to the price of a new home, according to the National Association of Home Builders.


Because of the prices, as well as significant shortages, many architects, builders, and home buyers are asking two key questions: How long will the surge continue and why did it happen in the first place? Tony Uphoff, president and CEO of Thomas, which provides analysis and tools that reflect the buying process, says his company data shows a steady surge in sourcing activity for lumber over the last year.


“The situation,” he says, “has been long in the making. As a country, we have relied on Canadian forest lumber whose supply has diminished in recent years.” Part of the problem is also due to tariffs going up, which resulted in further withering demand in the U.S. due to the increased prices. As a result, Canadian mills began to shut down locations to protect themselves against lost revenue, he says, adding, “This initial step was magnified as we entered the early stage of the pandemic. Then, with many working from home, they began to evaluate their living quarters. Some sought more space, which drove a spike in residential housing prices and new construction. And many already owning a home spent more time and took on more projects.” The upshot, he explains, was “exacerbated demand on an already fragile lumber supply chain, which drove prices to an all-time high.”


And there’s more, he says. “The continued result is that some builders are pausing their work on new construction projects due to the high lumber prices. Other construction companies report that even at high prices, they are having difficulty sourcing supply through their established supply chains.”


But some good news has been emerging for several weeks. Sawmills have increased output over the last year and another increase is expected, according to Alex Hickey in her “Morning Brew” report. Most recently, prices started to fall, though what will happen over the long term is anybody’s guess. Homeowners and the professionals working on their homes are wise to keep an eye on prices and anticipate a possible seesaw effect, especially as COVID-19 numbers ramp back up.







 


 













Barbara Ballinger Barbara Ballinger Barbara Ballinger is a freelance writer and the author of several books on real estate, architecture, and remodeling, including The Kitchen Bible: Designing the Perfect Culinary Space (Images Publishing, 2014). Barbara’s most recent book is The Garden Bible: Designing Your Perfect Outdoor Space, co-authored with Michael Glassman (Images, 2015).