Tag Archives: Builders

First-time Buyers, Significant Chunk of Housing Market

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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!

Trend Alert: Let’s Talk Tiny Houses

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What’s a Tiny House?

There’s a new trend that’s slowly taking the nation by storm and it’s all about tiny houses. And when we say tiny, we do mean really small and compact houses. All around the country, more and more people are trading in space for simplicity.

But first, let’s define what a tiny house is. Simply put, tiny houses or tiny homes refer to a small house that typically measures around 100 to 400 square feet. This is a stark contrast to the typical American home which is around 2600 square feet.

Tiny houses are also known as: micro houses, compact houses, mini houses, or little houses. Most of these structures feature an open floor plan for the first floor (living room, kitchen and bathroom), and usually, a bedroom or sleeping area up on a loft.

Small homes come in two kinds, the permanent standalone ones and the portable or movable ones on wheels. Obviously, the second type is inspired by RV living.

The typical demographic of tiny house owners are 1) young couples, 2) retirees-people over 50 years old, 3) college grads.

Buyer Motivations

While many people make tiny houses as their main residence, others purchase or build them in order to have: 1) a home office, 2) a guest suite, 3) a home for returning adult children, 4) a mobile home that will facilitate interstate travel.

Here are other reasons why buyers are going small:

  • Little to no debt (affordable)
  • Reduced carbon footprint, environmental reasons
  • Self sufficiency
  • Lower taxes
  • Fast build-time (2 months on average)
  • Lower cost for maintenance
  • Simpler lifestyle

The tiny house phenomenon is quickly catching on. According to studies, 68% of tiny house owners have no mortgage, compared to 29.3% of all U.S. homeowners. In addition, 78% of tiny house buyers completely own their home, compared to 65% of the owners of traditional houses.

People have even coined a term for the rising trend in smaller homes- they call it the Tiny House Movement.

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Would you consider building tiny homes?

What about you, fellow builders? Would you consider adding tiny homes to your portfolio? They’re very easy to build and are attractive to various customer demographics.

It’s also a fun challenge in terms of design- managing good aesthetics with limited space and functionality. Is this feasible to your company as add-on side projects? If so, will you be able to juggle it efficiently with your major home projects?

7 Surprising Facts About Working in Teams

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No man is an island! At one point or another, we’ve all been part of a working team. But today, we’re sharing some team-related facts that may surprise you. Jot these down because we all know that excellent and highly-efficient teams are essential to any builder’s business.

1. The ideal team size is somewhere between 5 and 9

According to studies, the most ideal team size is between 5 to 9 people. Some people assume that any problem can be fixed by adding more people to a team, but the truth is, larger team sizes actually adds more challenges to the project.

2. Too much “good chemistry” actually makes teams less effective

When the members of a team are too comfortable or familiar with each other, the entire team tends to fall into predictable ruts. Having a good working relationship is not bad. But having a team with members that are too similar to each other, or have similar ways of thinking is not good either. For best results, promote diversity in culture and ways of thinking.

3. The most effective teams don’t have “leaders”

A team works best when its members listen and talk in equal measure. If one of the members takes control and starts to dominate the discussion, resentment arises in the other members. Nobody likes a dictator.

4. Managers are still important though!

However, since diverse teams tend to get more creative, they do need a manager whose full-time job is to facilitate discussions and help the entire team to work together in harmony.

5. Small teams will outperform solo geniuses

It’s the same concept with basketball. A team with 5 members who are all in top-notch shape and performance will likely outperform another team who relies on just one superstar player. Brilliant people work best when working with others, especially when they are all equally brilliant.

6. Creative abrasion is a good thing

Teams thrive best when there is a bit of creative abrasion. By this we mean, healthy conflict. It’s a good sign when there are a lot of great ideas flying around. You just have to ensure that these conflicts don’t get personal and that each side gets to point out their reasons and rationale.

7. Mixed-age teams are better than that with a homogenized age range

Despite the stereotype that youthful energy trumps all practical business experience, having a mixed-age team is actually more ideal. This way, you will get people with various work experiences, skill sets, and ways of thinking. It’s a great way to start that delightful creative abrasion.

Remember, on top of all these, there should always be good communication among your team members. Regardless of team size, age, or skill set, without good communication and proper work delegation, the team will crumble in the blink of any eye.

Want to ensure that your team communicates well regardless of location and inspire of a hundred deadlines? Check out SAM and VIC today.