Tag Archives: builder news

Is Housing an important political issue? Most homebuyers don’t realize that it is.

Uncategorized, , , , , ,

A recent survey conducted last month by Redfin Real Estate Brokerage, showed that most homebuyers don’t see Housing as an important political issue for this year’s elections.

36

When asked about how a newly-elected president can affect the housing market, 75% of the respondents believed that the winner won’t affect the industry that much. 15% said that the next president can worsen the current housing market, while only 11% believed that out next leader can improve it.

For the average homebuyer, an individual’s decision to purchase a house is personal, not political. 29% of the survey respondents stated that their decision to buy was brought about by a major life event such as a wedding or having kids. The second most-cited reason for buying, according to the survey, was rent fluctuations- usually, the rent is becoming too high for most people.

Issues such as rent hikes, school quality, accessible city infrastructure, sufficient parking spaces, the availability of green spaces, urban planning and zoning, property taxes… all of these factors are unquestionably political. These are the most common considerations for people before purchasing a house, and we can’t deny that they are linked to good governance.

State and local races are therefore the concern of every citizen.

But what about for the national candidates? Well, housing accounts for roughly 18% of our nation’s economy. Taxpayers back most US home loans, whether directly or indirectly. The Federal Reserve sets monetary policy, which then in turn affects mortgage rates. The US Congress determines fiscal policy and therefore has the power to decide on issues about mortgage tax deductions and tax breaks. Furthermore, national environmental and safety laws can hugely affect how and where your house will be built.

According to Redfin Chief Economist, Nela Richardson, “Housing is seen by the government as an engine of wealth creation for the middle class. With income inequality a growing concern, housing still plays a crucial role in economic well-being for most families and that’s an issue worth voting for.”

In addition, our next president will also be forced to set a national housing agenda whether he wants to or not.

So in the end, your vote still does matter. As homeowners, builders, and contractors, we all have a stake in this. As informed industry professionals, let us do our part in reminding the public about how every vote truly counts.

—

 

To know more about how builders and contractors can efficiently address stringent project management requirements, let us introduce you to SAM. 

First-time Buyers, Significant Chunk of Housing Market

Uncategorized, , , , , ,

41

August 2015 Homebuyers Trend

According to data from The National Association of Realtors, 32% of existing-home sales in August 2015 came from first-time buyers. In fact, first-time buyer share increased by 4 percentage points from July 2015. Their buyer share also increased by 3% compared to last year.

When we say first-time buyers, this means, first-time homeowners. A demographic that is relatively young. This group is typically composed of young couples, young professionals, and people who are just about to start a family. Previous renters, who now have the capability to buy their very own house, are also part of this demographic.

So what’s the reason behind the powerful spending power of first-time buyers?

This increase in the spending habits of first-time buyers is due to sustained net job creation, a low interest rate environment (with 30-year fixed rates at below four percent for most of 2015), and better pricing of FHA-insured mortgages.

Low Interest Rates for the Rest of 2015

Rates are expected to remain around 0 to 0.25 percent at the end of 2015. The Federal Open market Committee announced today that the benchmark interest rate for short-term lending will remain at its current target level of 0 percent to 0.25 percent. According to Zillow Chief Economist, Svenja Gudell, “The federal funds rate, and in turn mortgage rates, remain low and will likely end the year roughly where they started it.”

This is good news for prospective new homebuyers who will remain to have some valuable wiggle room in terms of affordable markets.

The Builder Challenge

So, if you look at the statistics closely, it says that the 32% is for existing-home sales. This means that there is an equally ripe market for first-time homeowners who want to build their homes. Today’s generation is all about customization and personalization so there’s a huge chance that they will prefer a home that’s built specifically for them, instead of an old house that’s already out there. This is regardless of size.

In addition to this, even if they do buy existing homes, there is a huge potential for renovations and personalization. So for us builders, there is still a lot of opportunity that’s waiting to be seized.

The challenge is now up to you. How can you convince these buyers to spend their resources on building a new home instead of simply buying existing property?

How can you entice them to seal the deal with you instead of with previous homeowners?

How will you make your company stand out from other competing firms in your area? Will you charm them with unique design? Attract them with affordability? Or dazzle them with how fast you can hand-over their new house keys?

It’s up to you, dear builders. The clients are out there and the market is strong. Go get ém!

BUILDER NEWS: Homebuilders Oppose New Labor Law Ruling

Uncategorized, , , , , , ,

The vast majority of homebuilders rely on subcontractors. While larger public homebuilders do have specialty workers on their staff, a significant amount of the work still goes out to subcontractors. This is why builders from all across the nation are balking at a new labor law wherein the National Labor Relations Board (NLRB), in some cases, will now deem subcontractors as “joint employees”of homebuilders.

This means that builders may now be held responsible for for issues regarding millions of subcontractors. This includes plumbers, roofers, electricians and so on.

Tom Woods, chairman of the National Association of Home Builders (NAHB) said in a press release, “The homebuilding industry, which is primarily made up of small businesses who rely greatly on the work of subcontractors would overwhelmingly be harmed by the new standard.”

He added, “It will cripple small businesses across the country, including the homebuilding industry as it is in its fragile recovery.”

The NLRB however explains that the revised standard is designed “to better effectuate the purposes of the [Joint Employment] Act in the current economic landscape,”. The  NLRB board further explains that the previous joint employer standard has failed to keep pace with changes in the workplace and economic circumstances.

The NLRB’s ruling was based on a case in another industry (Sanitation), so it remains to be seen exactly how it would apply to the builders.

“It obviously depends on the facts of each case, but in the construction industry in particular, these kinds of relationships have been in place for decades, and so even before the test tightened in the 1980s not every contracting relationship in the building industry was considered a joint employer,” said Wilma Liebman, a former chairman of the NLRB.

Builders are on high alert as to how this ruling will affect future construction related cases. Subcontractual relationships are an integral part of the industry and compliance will be an entirely complicated issue.

READ MORE ABOUT THE CASE IN DISCUSSION: NLRB Ruling Redefining ‘Employer’ Could Have Big Impact If It Stands