7 Trends That Will Drive the Future of Housing
1. Big builders are wringing the extras out of construction costs and dropping the national average cost-to-build 36 percent to $52 per square foot.
2. Starting in 2011, Energy Star will ramp up its efficient design and quality installation standards. To get Energy Star certification, builders will have to install the right insulation, HVAC systems, and other features related to energy efficiency correctly every time.
3. Sheds are the next evolution. As homes get smaller, a separate shed will become a popular home addition.
4. There are 81 million “Echo Boomers” who were born from 1981 to 1999, compared to just 78 million Baby Boomers born from 1946 to 1964. These children and grandchildren of Boomers will drive home-building for years.
5. By 2015, demographers say, more than two out of every five households occupied by Generation Y people born between 1981 and 1999 will be WINKs (women with incomes and no kids).
6. Make room for the “Sandwich Generation” – Baby Boomers living with both their kids and their parents. These families like having two master suites, a second cooking area, and lots of storage.
7. Baby Boomers want to keep working and continue to live where they have always lived. They want a first-floor master bedroom near the washer and dryer and lots of convenient storage.
Source: ProSalesOnline.com (October 2010)
Credit Score Requirements Stifling Borrowers
Despite record-low interest rates, an increasing number of Americans can’t afford to buy a house. The nation’s two largest mortgage lenders, Wells Fargo & Co. and Bank of America Corp., have raised the minimum required credit score on FHA-insured loans.
At Bank of America, its minimum credit scores are 620 for purchases and 640 for refinances.
Requiring a 640 credit score excludes about 15 percent of FHA borrowers, FHA commissioner David Stevens said.
Such a high limit will further delay a recovery in the real estate market, says Ron Phipps, president of the National Association of REALTORS®.
Source: Bloomberg, Jody Shenn and John Gittelsohn (11/17/2010)
NAR Bars Sexual Orientation Discrimination
The change to Article 10 of the REALTORS® Code of Ethics passed in a roll-call vote by a greater than 9-to-1 margin. It had been previously approved by the Professional Standards Committee and the Board of Directors at the 2010 Midyear Meetings in Washington D.C. Here is the amended language of Article 10 (additions are underlined):
REALTORS® shall not deny equal professional services to any person for reasons of race, color, religion, sex, handicap, familial status, or national origin, or sexual orientation.
REALTORS® shall not be parties to any plan or agreement to discriminate against a person or persons on the basis of race, color, religion, sex, handicap, familial status, or national origin, or sexual orientation.
REALTORS®, in their real estate employment practices, shall not discriminate against any person or persons on the basis of race, color, religion, sex, handicap, familial status, or national origin, or sexual orientation.
A related recommendation amending Standard of Practice 10-3 was approved as well:
REALTORS® shall not print, display or circulate any statement or advertisement with respect to selling or renting of a property that indicates any preference, limitations or discrimination based on race, color, religion, sex, handicap, familial status, or national origin, or sexual orientation.
The amendment was discussed prior to the vote. A few of the questions raised were:
1. Is “sexual orientation,” without qualifiers or any further explanation, the right phrasing?
2. Is NAR denying private property rights (ostensibly, the right of property owners to refuse to do business with people of a certain sexual orientation due to their moral beliefs)?
3. Should NAR precede the federal government in adding sexual orientation as a protected class?
In response to the third question, a delegate from Minneapolis pointed out that the purpose of the Code of Ethics was to hold REALTORS® to a higher standard. Another delegate who approved of the amendment said the Code of Ethics was a living document.
Delegates approved the Code change by voice vote, but one delegate called for a vote by ballot. In ballot voting weighted by size of local association, the amendment passed by more than 93 percent.
- Brian Summerfield, REALTOR® Magazine
Builders Diversify to Survive During Slowdown
Builders are finding that their survival in the weak new-home market depends upon creativity.
Builders increasingly are branching out into interior renovations, especially as firms consolidate numerous locations into a single building.
High-end custom builders are serving homeowners who have decided to stay put, erecting trellises, arbors, potting sheds, and other structures for them.
Additionally, some builders now serve as consultants, helping real estate agents identify and fix structural defects that impede home sales.
Source: Wilmington, N.C., Morning Star, Wayne Faulkner (09/19/10).
Fannie, Freddie in the Home-Selling Business
Fannie Mae and Freddie Mac repossessed more than 191,000 homes during the first six months of 2010, twice as many as a year earlier.
The mortgage financiers must act carefully to avoid flooding the market with foreclosures, which tend to depress neighborhood home prices in the process.
As an alternative, Fannie Mae has launched a pilot “lease-and-hold” program in which foreclosures are rented rather than sold; the move could pose challenges, however, as the firm takes on the new role of property manager.
Source: The Wall Street Journal, Nick Timiraos (09/17/10)
