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Case Shiller home prices up 6.8% | South Salem Real Estate

The S&P CoreLogic Case-Shiller 20-City Composite Home Price Index in the US rose 6.8 percent year-on-year in February 2018, following a 6.4 percent advance in January and easily beating market expectations of a 6.3 percent gain. It was the steepest increase in house prices since an 8.1 percent climb in June 2014, with Seattle (12.7 percent), Las Vegas (11.6 percent) and San Francisco (10.1 percent) reporting the sharpest gains among the 20 cities. Meanwhile, the national index, covering all nine US census divisions rose 6.3 percent, up from 6.1 percent in the previous month. Case Shiller Home Price Index in the United States averaged 160.67 Index Points from 2000 until 2018, reaching an all time high of 206.67 Index Points in February of 2018 and a record low of 100 Index Points in January of 2000.

United States S&P Case-Shiller Home Price Index

 

 

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https://tradingeconomics.com/united-states/case-shiller-home-price-index

Housing starts rise | Katonah Real Estate

U.S. homebuilding increased more than expected in March amid a rebound in the construction of multi-family housing units, but weakness in the single-family segment suggested the housing market was slowing.

Housing starts rose 1.9 percent to a seasonally adjusted annual rate of 1.319 million units, the Commerce Department said on Tuesday. Data for February was revised up to show groundbreaking declining to a 1.295 million-unit pace instead of the previously reported 1.236 million units.

Economists polled by Reuters had forecast housing starts rising to a pace of 1.262 million units last month. Permits for future home building rose 2.5 percent to a rate of 1.354 million units in March.

U.S. financial markets were little moved by the data.

Despite the rebound in homebuilding last month, activity appears to be slowing. Single-family homebuilding, which accounts for the largest share of the housing market, fell 3.7 percent to a rate of 867,000 units in March.

A survey on Monday showed confidence among homebuilders fell in April for a fourth straight month. Builders complained about a lack of buildable lots and increasing construction material costs. According to the survey, tariffs imposed by the Trump administration on Canadian lumber and other imported products were “pushing up prices and hurting housing affordability.”

Confronted with these supply constraints, homebuilding will probably not increase significantly to eradicate an acute shortage of houses on the market, which is pushing up prices and sidelining some first-time home buyers.

Demand for housing is being driven by a robust labor market, which is underpinning the economy. Despite jobs market strength, wage inflation has remained moderate.

Single-family home construction fell in the Northeast, South and West, but rose in the Midwest. Permits to build single-family homes dropped 5.5 percent in March to an 840,000 unit-pace, the lowest level since September 2017.

With permits lagging starts, single-family home construction could slow further.

Starts for the volatile multi-family housing segment surged 14.4 percent to a rate of 452,000 units in March. Permits for the construction of multi-family homes dropped jumped 19 percent to a 514,000 unit-pace.

The outlook for housing inventory was mixed. Housing completions fell 5.1 percent to 1.217 million units last month, with single-family units dropping 4.7 percent. But the stock of housing under construction rose 0.3 percent to 1.125 million, the highest level since July 2007.

Single-family units under construction climbed 0.2 percent to the highest level since June 2008.

Realtors estimate that the housing starts and completions rates need to be in a range of 1.5 million to 1.6 million units per month to plug the inventory gap.

 

 

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https://www.cnbc.com/2018/04/17/us-housing-starts-march-2018.html

Current mortgage rates | South Salem Real Estate

30-year fixed mortgages

The average rate you’ll pay for a 30-year fixed mortgage is 4.33 percent, an increase of 2 basis points over the last week. A month ago, the average rate on a 30-year fixed mortgage was lower, at 4.31 percent.

At the current average rate, you’ll pay a combined $496.63 per month in principal and interest for every $100,000 you borrow. That’s $1.17 higher compared with last week.

You can use Bankrate’s mortgage calculator to estimate your monthly payments and find out how much you’ll save by adding extra payments. It will also help you calculate how much interest you’ll pay over the life of the loan.

15-year fixed mortgages

The average 15-year fixed-mortgage rate is 3.76 percent, up 3 basis points over the last seven days.

Monthly payments on a 15-year fixed mortgage at that rate will cost around $728 per $100,000 borrowed. The bigger payment may be a little harder to find room for in your monthly budget than a 30-year mortgage payment would, but it comes with some big advantages: You’ll save thousands of dollars over the life of the loan in total interest paid and build equity much more rapidly.

5/1 ARMs

The average rate on a 5/1 ARM is 4.11 percent, sliding 10 basis points over the last 7 days.

These types of loans are best for those who expect to sell or refinance before the first or second adjustment. Rates could be substantially higher when the loan first adjusts, and thereafter.

Monthly payments on a 5/1 ARM at 4.11 percent would cost about $484 for each $100,000 borrowed over the initial five years, but could increase by hundreds of dollars afterward, depending on the loan’s terms.

Where rates are headed

To see where Bankrate’s panel of experts expect rates to go from here, check out our Rate Trend Index.

Want to see where rates are right now? See local mortgage rates.

Average mortgage rates
Product Rate Change Last week
30-year fixed 4.33% +0.02 4.31%
15-year fixed 3.76% -0.03 3.73%
30-year fixed jumbo 4.59% -0.01 4.60%
30-year fixed refinance 4.31% +0.03 4.28%

Last updated: March 21, 2018.

Methodology: The rates you see above are Bankrate.com Site Averages. These calculations are run after the close of the previous business day and include rates and/or yields we have collected that day for a specific banking product. Bankrate.com site averages tend to be volatile — they help consumers see the movement of rates day to day. The institutions included in the “Bankrate.com Site Average” tables will be different from one day to the next, depending on which institutions’ rates we gather on a particular day for presentation on the site.

 

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https://www.bankrate.com/mortgages/rates/mortgage-rates-for-wednesday-march-21/

London prices falling | Waccabuc Real Estate

House prices in some of London’s wealthiest boroughs plummeted as much as 14.9% in the year to January, dragging down the average price in the capital—and in England—according to a report Monday by real estate consultants Acadata.

Prices in the capital fell 0.8% in January from December, to £593,396 (US$825,318). That’s down 2.6% annually, the report said, the biggest fall since August 2009, when the recession was still in full swing.

Price growth across the U.K. has likely been weighed down by uncertainties surrounding Brexit, along with 2016’s 3% surcharge on second homes and buy-to-let properties. “Subsequent to the introduction of this tax, the rates of price growth have been falling, and at an accelerated rate since September 2017,” the report said.

No doubt the fall is more acutely felt in London, a hotspot for international investors.

The biggest drops were logged in the priciest boroughs.

Wandsworth saw the largest dip, with the average price declining 14.9% in the year to January, to £685,567 (US$953,514) from £805,460 (US$1.12 million) the prior year. The City of London followed, where prices are now £844,768 (US$1.17 million), down 10.8% from last January and in Islington, prices are down 8.8% to £684,869 (US$952,543).

But in the city’s most expensive borough, Kensington and Chelsea, prices rose 4.6% up to £2.16 million (US$3 million).

Combined, the most expensive 11 boroughs fell by 3.8%, while mid-priced boroughs are down an average 2.7%, according to the report.

The less expensive boroughs fared better. More than half logged price rises over the last year, led by Bexley, which saw its average price rise 4.5% to £363,082 (US$504,988). In Barking and Dagenham, which has the lowest priced property in the capital, according to the report, prices inched up 0.1% to £300,627 (US$418,124).

Brent, in northwest London and home to Wembley Stadium, logged the largest price increases, up 8.5% to £587,372 (US$816,940).

 

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www.mansionhomes.com

Rising real estate tax burden | Katonah Real Estate

The good news for some homeowners in one town: The average assessed value of a house in your neighborhood has skyrocketed by more than eightfold, climbing from about $212,000 to $1.8 million.

Now for the bad news: Your property taxes are going up as well, to just over $29,000 from an average of about $16,500 — and you’ll only be able to deduct the first $10,000 on your taxes.

That’s the situation facing some homeowners in Jersey City, New Jersey, as the rapidly gentrifying city performs its first round of reassessments since 1988.

The traditionally blue collar town, which sits directly across the Hudson River from New York City, is an extreme example, but it isn’t alone.

Property taxes, for instance, are up 38 percent year-over-year in Clark County, Nevada – home to Las Vegas – raising the average 2017 tax bill on a single family home to $2,445 from $1,774, according to ATTOM Data Solutions, a provider of real estate data.

Home prices there have risen by 100 percent over the last five years, according to ATTOM.

Las Vegas, Nevada

RebeccaAng | Getty Images
Las Vegas, Nevada

Meanwhile, homeowners in Williamson County, Texas — just outside of Austin — experienced a 15 percent tax increase last year. Owners of single family homes paid an average of $6,697 in property taxes, up from $5,837, according to ATTOM.

Over the last five years, home prices there have risen by 80 percent.

“The story is that people are moving to these markets, and they’re experiencing rapid home price appreciation,” said Daren Blomquist, senior vice president at ATTOM.

“It doesn’t just affect the people who are willing to pay for the homes and the property taxes,” he said. “There is a ripple effect on neighbors who might have been there for 20 years, and their taxes go up as well.”

Here’s how to contend with skyrocketing property taxes.

Monthly crunch

For Keren Vered, a Jersey City resident, community activist and fashion industry consultant, the $18,000 tax hike on her townhouse translates to an additional outlay of about $1,500 a month.

That’s on top of the $10,000 she already paid annually in property taxes prior to the city’s reassessment. Then there are other regular monthly costs she’ll need to weigh.

“For me, it’s not just the $1,500 a month, but the private school part of it, too,” said the mother of two, ages 2 and 4. “Year over year, plus private school, I worry about the long-term sustainability of it.”

The family has a lever available to help contend with the tax increase: They already rent out one floor of their three-story townhouse. Even so, tenants can only handle so much of an increase in their rent.

“I’m trying to get the city to where other families like mine would want it to be,” said Vered. “Rents going up create a barrier to entry.”

Tax strategies

Homeowners like Vered face an additional difficulty: Prior to 2018, they were able to claim all of their property tax liability if they itemized on their taxes.

With the Tax Cuts and Jobs Act now in place, residents can now only claim up to $10,000 in state and local tax deductions.

Residents in New York, New Jersey and California are among the hardest hit.

SALT in the wound. The $10,000 cap on state and local taxes are a blow to just a handful of states.

Plus, fewer filers are expected to itemize in 2018 because the new tax law has doubled the standard deduction to $24,000 for a married couple filing jointly. Under the previous law, about 49 million taxpayers — roughly 3 in 10 individuals — filed itemized returns, according to the Urban-Brookings Tax Policy Center.

Accountants point to a couple of strategies homeowners facing big tax hikes can take.

Home office break

An entrepreneur working from home can take a home office deduction in one of two ways. First, there’s the “safe harbor” method in which you deduct $5 per square foot for an office that’s up to 300 square feet.

You can also calculate your deduction based on your actual expenses, figuring out the percentage of your home used for the business.

20140928154139_1220_IMG_2341.JPG_126115

Loic Lagarde | Getty Images

This method considers the percentage of home costs, including real estate taxes, attributable to the office, according to S. Andrew Smith, a CPA and principal at Baker Newman Noyes in Portland, Maine.

The “actual expense” method also deducts for depreciation, and you will pay taxes on that when you sell your home, Smith warned.

You do not need to itemize on your taxes to grab the home office deduction, but you do need to show a profit from a home business in order to take it.

Rent it out

Whether you have a duplex or a spare room, consider taking on a tenant.

“You’ll pay the property tax one way or the other, but at least you have some rental income to help pay for it,” said Tim Steffen, director of advanced planning for R.W. Baird’s private wealth management group in Milwaukee.

High-tax states on 'SALT' diet after tax reform

High-tax states on ‘SALT’ diet after tax reform  

As a landlord and a small business, if you become a pass-through entity— an LLC or an S-corporation — you may be eligible for a 20 percent deduction for qualified business income.

If you rent out your home, be sure to track your expenses and talk to your insurance agent. “If you use it as a rental property, even partially, your insurance coverage needs will change,” said Smith.

Report your rental income or loss on Schedule E when you file your taxes.

On the other hand, if your rapidly appreciating property is in a prime destination, consider that you won’t have to claim the rental income if you rent your space for less than 14 days over the year.

Fight back

Finally, if you disagree with your municipality’s assessment on your home, you can contest the findings.

Get to know your city’s appeal’s process, which can be deadline sensitive and will vary from one town to the next.

Expect to gather evidence of your home’s market value, too.

You can hire an appraiser to provide your city’s tax assessor with reports and comparable property values to back up your findings, said Brigid D’Souza, a CPA and founder of Civic Parent, a website that follows property tax developments in Jersey City.

The national average cost of hiring an appraiser is about $329, according to HomeAdvisor, a home improvement website.

You can also hire an attorney on a contingency basis to represent you through the appeals process, which typically costs one-third to one-half of your first year’s tax savings, D’Souza said.

While a licensed realtor can’t give you an appraisal, he or she can provide you with comparative sales which can act as evidence of market value, said D’Souza.

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https://www.cnbc.com/2018/03/02/your-property-taxes-just-jumped-by-more-than-50-percent-now-what.html

The high rents in San Francisco | Katonah Real Estate

private jet“Rent is so high they can’t even afford a car,” a partner at Patterson and Sheridan told The New York Times.Justin Sullivan/Getty Images

  • San Francisco’s median rent is $4,450, nearly three times that in Houston.
  • Instead of hiring expensive talent in the Bay Area, one Houston-based law firm flies its lawyers in on a private jet once a month to meet with clients.
  • The firm uses the jet — which costs $2,500 an hour to operate — as a tool for recruiting top talent.

Rent and home prices in the Bay Area are so high that one Houston-based law firm is using an alternative to hiring expensive local talent: a private jet.

Patterson and Sheridan, an intellectual-property law firm headquartered in Houston, bought a nine-seat plane to shuttle its patent lawyers to clients in the Bay Area once a month.

Though the jet cost $3 million, the Houston Chronicle’s L.M. Sixel reports, it’s cheaper than hiring local lawyers, and even less expensive than relocating the Texas lawyers with business in Silicon Valley to the area.

“The young people that we want to hire out there have high expectations that are hard to meet,” Bruce Patterson, a partner at the firm, told The New York Times. “Rent is so high they can’t even afford a car.”

According to Zillow, the median rent in San Francisco is $4,450, while the median home price is just under $1.2 million. Rent in San Jose, a nearby city popular among Silicon Valley workers, while lower, is still more than double the median rent in Houston.

Each flight for the firm costs about $1,900 a passenger — adding up to $2,500 an hour in operating costs — but since the lawyers are working in-flight, the three-to-four-hour ride is billable, the Chronicle described Todd Patterson, a managing partner, as saying. Plus, private flights protect any confidential work and save the firm’s lawyers about 36 collective hours they would spend arriving early, waiting in security, and checking bags on a commercial flight.

The firm says it’s “still able to offer companies and inventors lower costs because most of the patent work is done in Houston, where commercial real estate is 43% cheaper, salaries 52% lower, and competition for technical talent far less fierce,” according to Sixel, who rode on the jet last summer while reporting the story.

“We fly it full,” Patterson said. “It’s not a luxury item.”

It’s also “a selling point to recruit young lawyers” who want to work with top tech companies but can’t afford Silicon Valley’s cost of living, Sixel reported. The firm’s frequent visits to California have also brought in new clients including Intuit, Western Digital, and Cavendish Kinetics.

Perhaps some companies looking for talent in Los Angeles, Silicon Valley’s neighbor to the south, could benefit from this strategy.

A report from the University of Southern California and the Los Angeles Business Council published earlier this year found that exorbitant housing costs in Los Angeles were inhibiting employers from attracting “high performers” or top talent to their companies.

About 60% of the employers surveyed said Los Angeles’ high cost of living affects employee retention, with 75% naming housing costs as a specific concern. And nearly all said they viewed high housing costs as a barrier to hiring new mid- and upper-level employees.

Fall garden fix-its now save problems next spring | Katonah Real Estate

Here’s what you DON’T want to say next spring: “I wish I’d taken care of that in the fall!” To avoid giving yourself a dope-slap a few months from now, follow this fall fix-it checklist.

The last of the leaves – Promise yourself not to put away the rake and the leaf blower until all the leaves have fallen from your trees. It’s tempting to allow the final leaves to form a carpet over your lawn, but even though grass “rests” over the winter, it still reaps benefits from sunlight. A final raking now will pay dividends in the spring when your lawn comes back fresh, green and perky.

Buzz cut – Okay, the lawn doesn’t need that “jar head” look, but a final trim is a good idea. Set the blades to cut the grass to a height of 1.5″ to 2″. While you’re at it – and if the rake is still handy and your back can stand it – rake off that dry tangle of “thatch” one last time.

Can’t take no mow – When you decide you’ve run the mower for the last time, carry out a few maintenance must-do’s before you put it to bed. Run the engine until the gas tank is empty. Why? Because gasoline that is allowed to sit in your mower over the winter will become gummy, making it much harder to start in the spring. Slightly less important but still a good idea: drain the oil reservoir and fill with fresh oil.

Getting pruney – If your deciduous trees and fall flowering shrubs are beginning to get out of hand, now is a good time to prune them, if you haven’t done so already. It’s better not to prune evergreens or spring-flowering plants in the fall.

It’s for the birds – Don’t leave it too late to hang your bird feeders and get them filled with seed. Establish your yard as a feeding station early in the season and you’ll enjoy flying visitors all winter. If you’re using an established feeder, be sure to clean it out thoroughly before filling. Mold and debris need to be completely removed to avoid contaminating the new chow. There are some excellent bird feeders available now, if you’re in the market for a new one.

Put away the toys – If you love gardening and landscaping, then tools are your toys. Admit it: you treat yourself to a new one from time to time! It’s just about time to put the tools away until the spring, but before you do, take a few minutes to give them the once over. Knock off crusted dirt and wipe clean. Using a cloth, lightly coat the metal parts with vegetable oil and wooden handles with linseed oil. A good tip: Thoroughly wipe the handles afterwards to prevent them getting sticky during the winter. I found a really comprehensive online article with full details on cleaning and caring for every type of garden tool. The site is http://www.bmi.net/roseguy/gtcare.html. 

Avoid the hose-cicle! – Don’t forget the garden hose. Disconnect it from the spigot and try to drain out as much water from the hose as possible. Water expands when it freezes, and your hose is likely to split if you leave it outside with water still in it. Ideally, put your hose on a reel and store it in a garage or shed. Once under cover, hanging the hose reel on the wall or placing it on a bench is preferable to leaving it on the floor.

 

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https://www.greenwoodnursery.com/7-fall-garden-fix-its-now-save-problems-next-spring?utm_source=newsletter%2012/01&utm_content=fix%20it%20article

US building permits up | Katonah Real Estate

Privately-owned housing units authorized by building permits grew 5.9 percent in October to seasonally adjusted annual rate of 1,297K. This is the strongest number since January. Single-family authorizations in October were at a rate of 839K; this is 1.9 percent above the revised September figure of 823K. Authorizations of units in buildings with five units or more were at a rate of 416K in October, 13.4 percent above September figure of 367K. Building Permits in the United States averaged 1356.10 Thousand from 1960 until 2017, reaching an all time high of 2419 Thousand in December of 1972 and a record low of 513 Thousand in March of 2009.

United States Building Permits
Calendar GMT Actual Previous Consensus TEForecast
2017-10-18 12:30 PM Building Permits 1215K 1272K 1245K 1190K
2017-11-17 01:30 PM Building Permits MoM 5.9% -3.7% 2.0% 2%
2017-11-17 01:30 PM Building Permits 1297K 1225K 1240K 1245K
2017-12-19 01:30 PM Building Permits MoM 5.9%
2017-12-19 01:30 PM Building Permits 1297K  

 

Building Permits refer to the approvals given by a local jurisdictions before the construction of a new or existing building can legally occur. Not all areas of the United States require a permit for construction. This page provides the latest reported value for – United States Building Permits – plus previous releases, historical high and low, short-term forecast and long-term prediction, economic calendar, survey consensus and news. United States Building Permits – actual data, historical chart and calendar of releases – was last updated on November of 2017

 

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https://tradingeconomics.com/united-states/building-permits

Futuristic solar home hidden inside 18th-century stone ruins | Katonah Real Estate

The stone ruins of an 18th-century Scottish farmhouse have been brought back to life as the envelope for a surprisingly modern solar-powered home. Nathanael Dorent Architecture and Lily Jencks Studiocrafted Ruin Studio with layers like a palimpsest, from the 200-year-old farmhouse frame to futuristic and tubular interior shell. In addition to the use of photovoltaics, the dwelling was built to near passivhaus standards and boasts a super-insulated envelope.

Ruin Studio by Nathanael Dorent Architecture and Lily Jencks Studio, adaptive reuse farmhouse, Scottish passivhaus, farmhouse ruins turned into modern home, Ruin Studio in Scotland,Ruin Studio by Nathanael Dorent Architecture and Lily Jencks Studio, adaptive reuse farmhouse, Scottish passivhaus, farmhouse ruins turned into modern home, Ruin Studio in Scotland,

This unusual home located in the remote Scottish countryside retains an outwardly rural appearance with a pitched roof and exterior stone walls. Instead of using timber for the pitched envelope, however, the architects clad the structure in black waterproofing EDPM rubber. Stranger still is the pair of interior curved shells, inserted inside the rubber-clad envelope, made of insulating recycled polystyrene blocks and covered with glass-reinforced plastic. These white futuristic “tubes” serve as hallways connecting the centrally located communal areas with the bedrooms located on either end of the home.

Ruin Studio by Nathanael Dorent Architecture and Lily Jencks Studio, adaptive reuse farmhouse, Scottish passivhaus, farmhouse ruins turned into modern home, Ruin Studio in Scotland,

Ruin Studio by Nathanael Dorent Architecture and Lily Jencks Studio, adaptive reuse farmhouse, Scottish passivhaus, farmhouse ruins turned into modern home, Ruin Studio in Scotland,

“Emphasizing the narrative of time, these three layers also reflect different architectural expressions: the random natural erosion of stone walls, an archetypical minimalist pitched roof, and a free form double curved surface,” wrote the architects. “These three layers are not designed as independent parts, rather, they take on meaning as their relationship evolves through the building’s sections. They separate, come together, and intertwine, creating a series of architectural singularities, revealing simultaneous reading of time and space.”

Ruin Studio by Nathanael Dorent Architecture and Lily Jencks Studio, adaptive reuse farmhouse, Scottish passivhaus, farmhouse ruins turned into modern home, Ruin Studio in Scotland,

Ruin Studio by Nathanael Dorent Architecture and Lily Jencks Studio, adaptive reuse farmhouse, Scottish passivhaus, farmhouse ruins turned into modern home, Ruin Studio in Scotland,

Ruin Studio by Nathanael Dorent Architecture and Lily Jencks Studio, adaptive reuse farmhouse, Scottish passivhaus, farmhouse ruins turned into modern home, Ruin Studio in Scotland,

Related: Barn ruins transformed into contemporary home with spa

Natural light fills the predominately white interior and large windows frame views of the Scottish countryside. The furnishings are kept minimalist and are mostly built from light-colored wood; gridded timber bookshelves located in the tube adhere to the curved walls. Portions of original stone walls are brought into the home.

Via ArchDaily

Ruin Studio by Nathanael Dorent Architecture and Lily Jencks Studio, adaptive reuse farmhouse, Scottish passivhaus, farmhouse ruins turned into modern home, Ruin Studio in Scotland,

Ruin Studio by Nathanael Dorent Architecture and Lily Jencks Studio, adaptive reuse farmhouse, Scottish passivhaus, farmhouse ruins turned into modern home, Ruin Studio in Scotland,

Ruin Studio by Nathanael Dorent Architecture and Lily Jencks Studio, adaptive reuse farmhouse, Scottish passivhaus, farmhouse ruins turned into modern home, Ruin Studio in Scotland,

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http://www.thenewsfunnel.com/real-estate-news/0dG5mbnA1L25vZGUvNDE5Njcx6?utm_source=daily-email&utm_medium=email&utm_campaign=daily-email-2017-10-20&track_id=03fa2f7502f5f6b9169e67d17cbf51bb&utm_content=news-item

Lots Account for 17% of New Home Sale Prices | Katonah Real Estate

Earlier this month we published two blogs highlighting record-small sizes and record-high prices of new single-family lots. Extending this analysis and incorporating data on new home sale prices shows that, on average, lot values accounted for less than 17% of sale prices of new single-family homes started in 2016, the lowest share since at least 1999. Regionally, the share of new home sale prices attributed to lots varied from 26% in New England to 14% in the East South Central division.
Nationally, the share of lot values in new home prices fluctuated around 20% during the housing boom years, peaked at 21% in 2009 and has been declining ever since, despite the rising and record-setting lot prices. The declining share of new home sale prices attributed to lots suggests that other construction costs, including cost of labor and materials, are outpacing the rising lot values. These findings are consistent with the results of NAHB’s proprietary construction cost survey last conducted in 2015. Even though, NAHB’s survey shows slightly higher share of finished lots in single-family home sales prices and the declining share trend starting in 2007.

The similar pattern – with the share of sale prices attributed to lots declining after the housing boom years – is visible across all regions of the United States. Most divisions registered their highest shares in 2009, but the New England and Mountain divisions hit their peaks earlier in 2007, while the West North Central division – in 2006.

New England stands out for having the largest and most expensive lots that account for more than a quarter of sale prices, the highest share in the nation. New England’s strict zoning regulation undoubtedly contributes to high lot prices and their remarkably high share in sale prices of new single-family homes.

The Middle Atlantic and Pacific division are next on the list, with about one fifth of new home prices reflecting lot costs. The East South Central division established the lower bound on the contribution of lots to sale prices of new single-family homes – 14%. Remarkably, the rest of the country does not show much variation with lots accounting for about 16% to 17% of sale prices.The shares considered in the above analysis are averages. To make sure these are not heavily influenced by extreme outliers or Census Bureau’s masking procedures, the entire distribution of the shares of sale prices attributed to lot values is analyzed. The results are consistent and summarized in the chart below.Looking at all new single-family homes started in New England in 2016, more than half of the homes have lots accounting for a quarter or more of the final sale price. There are barely any homes with lots accounting for less than 16% of the sale price. In stark contrast, more than half of single-family homes started in the East South Central division have lots that account for less than 16% of the sale price and there are barely any homes with lots accounting for a quarter or more of the sale price.

 

 

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http://eyeonhousing.org/2017/10/lots-account-for-17-of-new-home-sale-prices/