The National Association of Home Builders’ (NAHB) Multifamily Production Index (MPI) dropped three points to 50 in the second quarter of 2016 (Exhibit 1). This is the 18th consecutive reading of 50 or above, which means that more builders and developers report that current conditions in the apartment and condominium market are improving than report conditions are getting worse.
Exhibit 1: NAHB Multifamily Production Index (MPI) and Multifamily Starts (in thousands)
The MPI is comprised of three key sub-components: construction of low-rent units, market-rate rental units and “for-sale” units, or condominiums. Low-rent units decreased two points to 52 in the second quarter, while market-rate rental units dropped five points to a level of 53, and for-sale units fell three points to 45.
The NAHB Multifamily Vacancy Index (MVI), which measures respondent perceptions of vacancies in the multifamily housing market, increased three points to 42, with higher numbers indicating more vacancies (Exhibit 2). However, the MVI is still below the breakeven point of 50, which means that more respondents perceived a reduction in vacancy rates than perceived an increase.
Exhibit 2: NAHB Multifamily Vacancy Index (MVI) and 5+ Rental Vacancy Rate
After peaking at 70 in the second quarter of 2009, the MVI improved consistently through 2010 and has been fairly stable since 2011. Historically, the MVI has shown to be a leading indicator of Census multifamily vacancy rates, which is displayed in Exhibit 2 as well.
Imagine you are considering working with a potential client who seems apprehensive and possibly needy. Imagine you get the project. What might you wish you had considered and/or asked the potential client or yourself before deciding to work with them?
Here are some suggestions:
Why are these folks good clients for your company? Over time, all companies have at least a gut level feel for what is a good fit regarding clients. Use that filter all the time. Ignoring it can put you, your people, and the company through thankless grief.
Why do these folks think we are the right contractor to work with? Ask this question early on. The worst case is they expect something from your company that you simply can’t deliver. Better to find that out as soon as possible.
Have they been through a remodeling project in the past? If so, how did it go? If they have never experienced the challenges involved in being a remodeling client, you are likely to be viewed negatively if you work for them. There are simply so many things that can go wrong during all phases of the planning and the actual remodeling. If they have been through a remodeling project and it did not go well, question them thoroughly about why they think that happened. If all they do is blame the contractor then get clear about what they think the contractor did wrong. If you think the potential client was the real problem, not the contractor, then don’t work for them!
What are the client’s expectations about the process, in general? Do those expectations align with your company’s idea of what reasonable expectations are? If so, great. But if not, what are the specific gaps? Are the gaps large or small? It’s better find out sooner than later. There is the distinct likelihood that they don’t align with yours. Talk it through. If there is not a meeting of the minds, refer another remodeler who might be a better fit.
Can the client listen to what your company says? Will they allow your company to be in control? If they won’t listen now, they likely won’t listen when it all hits the fan. If you can’t be in control you will rue the day you decided to work with them.
In honor of Earth Day, Custom Home and BUILDER take a look back at five Builder’s Choice Custom Home Design Award-winning projects that are as environmentally-conscious as they are commendable. These projects, designed with the planet in mind, are dynamic and innovative—some powered by the resources they produce.
The Builder’s Choice Custom Home Design Awards (BCCHDAs) honor excellence and innovation in residential design and construction across 13 categories including project of the year, modular, multi-family, and architectural interiors. With this year’s extended deadline fast approaching—May 2 for early submissions, and May 6 for late submissions—we encourage you to submit your own best work here.
Excerpts from the awards coverage highlighting the projects’ sustainable features are included below. Follow the link in each project’s title to view more photos and information. Tucson Mountain Retreat, Tucson, Ariz., designed by DUST The layout is keenly attuned to the Sonoran Desert site. The long side faces south to allow the sun to passively heat the concrete floors, and the building’s deep overhangs and thermal mass keep it cool in the summer. A large kitchen/dining/living space is flanked by an acoustically designed music room/recording studio on one side and two bedrooms on the other. Each volume is fitted with glass walls that dematerialize to take in views and breezes.
RainShine House, Decatur, Ga., designed by Robert M. Cain, Architect As an exercise in green design, this LEED Platinum–certified house puts a check in every column: passive solar, active solar, rainwater collection, natural daylighting and ventilation, energy-efficient electrical and mechanical systems, resource-conserving materials, a tight building envelope, low-VOC finishes, and no-irrigation landscaping. What got the attention of our judges, though, was that its environmental ethos also yields a thoroughly pleasing aesthetic experience.
Sustainable Steel Home, San Diego, designed by Macy Architecture/ Jensen & Macy Architects The home’s footprint allows for plenty of natural ventilation, and it also connects the interiors with the outside in true mid-century spirit. The house maximizes its infill location by providing city and water views to the main rooms, which all occupy the second floor. Photovoltaics produce on-site power, and rainwater harvesting meets the site’s irrigation needs. Lots of glass, both transparent and translucent, helps with daylighting and passive solar.
GREENville House, Greenville, N.C., designed by Tonic Design The owners of this new LEED Silver-rated residence did their sustainability homework in advance. “They knew about solar and geothermal from the beginning,” says project designer Katherine Hogan. That head start allowed Hogan and principal designer Vincent Petrarca to weave green features into the fabric of the building, rather than tack them on as options after the fact.
Green Lantern, San Antonio, Texas, designed by John Grable Architects In one of San Antonio’s, oldest neighborhoods, architect and developer John Grable, FAIA, salvaged 45 percent of a 1948 house because of his client’s commitment to conservation and green building. At the same time, a contemporary home was the aim.
Americans’ overall confidence in the U.S. housing market has declined from a year ago, according to the January 2016 Zillow Housing Confidence Index, driven lower by diminished expectations of the market’s future.
The overall U.S. Housing Confidence Index fell to 66.9 in January from 67.4 a year ago according to the Zillow Housing Confidence Index, sponsored by Zillow and calculated by Pulsenomics LLC.
However, expectations for the year ahead fell even more, from 69.9 in 2015 to 67.5 this year, a decline of 3.4%. Homeowners near term expectations fell 3.5 percent, from 74.1 to 71.8 but renters lost even more confidence. Among renters, expectations for 2016 compared to 2015 fell from 63.9 to 60.8, or 4.8 percent.
The results come at a time when rising rents and stagnant incomes are making it tough for many Americans to buy homes. Millennials are renting longer than past generations as they put off major life decisions. Those aged 18-34 said they expected home values to grow by 5 percent per year, on average, over the next ten years, compared to just 3.7 percent for all Americans.
The survey found that overall aspirations for homeownership are at their highest level in two years, driven in large part by faith among younger Americans and Americans-of-color in the general value of homeownership. Among people 18-34 years old, 65 percent said homeownership and the American Dream go hand-in-hand, more than any other generation. Of Hispanic respondents surveyed, 70 percent agreed that owning their own home is necessary to live the American Dream, followed by 64 percent of Asian respondents and 63 percent of black respondents. Less than 60 percent of white respondents agreed.
The semi-annual Zillow Housing Confidence Index, sponsored by Zillow and calculated by Pulsenomics LLC, is calculated for the U.S. as a whole and 20 large metro markets nationwide. It is based on a national survey of 10,000 American renters and homeowners. The ZHCI is composed of three sub-indexes: one that summarizes homeowner and renter assessments of current market conditions (HMCI); another that measures their expectations regarding future home values and affordability (HEI); and a third that gauges their aspirations and attitudes regarding homeownership (HAI).
Recently, S&P Dow Jones Indices and the Federal Housing Finance Agency (FHFA) released their home price indexes for November. The Case-Shiller (CS) National Home Price Index, reported by S&P Dow Jones Indices, rose at a 10.9% seasonally adjusted annual pace in November. The Home Price Index from the Federal Housing Finance Agency (FHFA) rose at a seasonally adjusted annual rate of 6.7% in November.
Despite monthly volatility the FHFA and S&P/Case-Shiller home price indexes have very similar trends.
For 43-year-old Giuia Abano Grady, who lives in Gorham, Maine, and raises pigs and chickens and will soon raise cows, the work needed to prepare her 250-year-old farmhouse for the winter isn’t as easy as just disconnecting a garden hose.
Besides turning off all the exterior water lines and draining her garden’s irrigation system, she seals the doors and windows in her basement with plastic sheeting. Outside doors in the 1730’s-era home get wrapped with insulation and plastic, and her basement gets several space heaters set on low to prevent pipes from freezing. Exterior water lines must be wrapped in heat tape and even her barn’s water supply needs a heating line to keep it from icing up, she says.
The preparations were needed, as in January of 2015 nearly 8 feet of snow fell in a little over a month. Thanks to her and her husband’s efforts, her only crisis last winter was a frozen pipe. “An hour with a hair dryer and it was all fixed,” she says.
Fortunately for the rest of us, winter preparations may be as simple as installing an insulating cover to protect your outside faucets and prevent a burst pipe and flooding. But that doesn’t mean you should ignore Old Man Winter’s freezing breath.
Indeed, the National Weather Service is predicting one of the worst snowstorms in years could be hitting the Northeast later this week, with up to two feet of snow expected between Washington, D.C., New York and Boston from mid-Friday into Sunday, along with coastal flooding. Already a blizzard watch is in effect with heavy snow and wind gusts of 40 mph and temperatures in West Virginia, and the Washington, D.C. region, dropping into the 20s Fahrenheit.
Life vests carried aboard airliners have never saved a life. WSJ’s Scott McCartney joins Lunch Break with Tanya Rivero and explains why regulators still require they be carried on planes.
Last year’s winter season saw the second-coldest winter on record for the Northeast region, and for eight individual states — New York, Pennsylvania and all six New England states.
Here are some helpful tips on preparing your home for winter from real-estate broker Re/Max of New Jersey and utilities the Washington Suburban Sanitary Commission (WSSC) in Washington, D.C., the U.S. Fire Administration and the National Weather Service.
Repair all broken windows, exterior doors and walls and tightly close doors and windows to the outside. Make sure the outside doors and walls are well insulated. Seal all air leaks in crawl spaces and basements. If your vents won’t close, cover them from the inside with insulation, cardboard, plastic or newspaper, WSSC says.
Your attic should be properly insulated and ventilated to circulate the heat throughout the attic. This prevents ice from building up in certain areas and preventing major damage to your roof, Re/Max of New Jersey says.
Check your roof. Small leaks can turn into bigger leaks if snow sits on your roof…and then melts. Getting your roof coated before the winter can help to prevent leaks from trickling into your home and hoping the leak doesn’t spring up where you house valuable electronics. In addition, clean your home’s gutters as they are its first line of defense against water damage.
Homes with flat roofs are more vulnerable to having snow collect on the roof. Have a good roofer on call that is able to come out and remove large amounts of snow before it turns to ice or your roof buckles under its weight. Be careful on ladders when removing snow and have a second person hold the ladder if it’s more than two stories. It’s worth paying the $100 to $300 costs to remove snow, rather than pay the costs of a collapsed roof, which could cost thousands of dollars.
To help prevent the possibility of a burst pipe inside your home, install a pipe insulation sleeve to protect exposed pipes inside your home. Cover all parts of the pipes — even the joints — and seal them with duct tape. This will help keep your home energy efficient and helps reduce your chances of a pipe bursting and flooding your home. If a pipe does freeze, open the cold and/or hot water faucet nearest the frozen pipe, WSSC says. This will relieve the pressure and reduce the chance of breakage. Take a tip from Giuia Abano Grady and use a hand-held dryer if you attempt to thaw out the pipe yourself. Otherwise call a licensed plumber.
If you have a fireplace, check inside for cracks, build up and remove old ashes. Also, look outside and to ensure there is no space between the chimney and the exterior wall and that there are no loose bricks. Also the damper, which regulates the flow of air through the chimney, should be able to open and closes easily, Re/Max says.
According to the U.S. Fire Administration, one out of every six fires in the home is a result of malfunctioning or incorrectly used heating equipment and half of those fires occur during the winter months of December, January and February. As such, keep anything that could burn at least 3 feet away from a heating source like a space heater or a fireplace. Only one space heater should be plugged into a single electrical outlet at a time, the USFA says. Never use a propane-powered heater indoors unless it’s specifically designed for that purpose with an oxygen monitor that shuts off if high carbon monoxide levels are detected.
Arm yourself with plenty of rock salt, de-icer, and shovels to remove snow and ice from the outside of your home. Some cities and towns assess fines to homeowners who don’t remove snow from around their property within a certain amount of time after a heavy snowfall, Re/Max says. Also, remove snow in front of homes where the elderly or disabled reside. You might just get a basket of cookies this winter in return or even satisfaction by doing the right thing.
Freddie Mac (OTCQB: FMCC) today released the results of its Primary Mortgage Market Survey® (PMMS®), showing mortgage rates moving lower for the sixth consecutive week amid ongoing market volatility. The average 30-year fixed is hovering just above its 2015 low of 3.59 percent.
30-year fixed-rate mortgage (FRM) averaged 3.65 percent with an average 0.5 point for the week ending February 11, 2016, down from last week when it averaged 3.72 percent. A year ago at this time, the 30-year FRM averaged 3.69 percent.
15-year FRM this week averaged 2.95 percent with an average 0.5 point, down from 3.01 percent last week. A year ago at this time, the 15-year FRM averaged 2.99 percent.
Average commitment rates should be reported along with average fees and points to reflect the total upfront cost of obtaining the mortgage. Visit the following link for theDefinitions. Borrowers may still pay closing costs which are not included in the survey.
Quote Attributed to Sean Becketti, chief economist, Freddie Mac.
“The 30-year mortgage rate dropped another 7 basis points this week to 3.65 percent. This week’s drop leaves the mortgage rate just 6 basis points above last year’s low of 3.59 percent.”
“In a falling rate environment, mortgage rates often adjust more slowly than capital market rates, and the early-2016 flight-to-quality has run true to form. The 30-year mortgage rate has dropped 36 basis points since the start of the year, while the yield on the 10-year Treasury has dropped 59 basis points over the same period. If Treasury yields were to hold at current levels, mortgage rates might well sink a little further before stabilizing.”
The most recent release of Census’ Construction Spending report included significant revisions to the residential improvements spending category. Residential improvements spending is calculated as the amount of total private residential spending on owner-occupied units after accounting for single-family and multifamily expenditures. As discussed in an earlier post, with these changes, the total amount of spending on residential improvements more closely tracks NAHB’s remodelers’ sentiment.
According to Census, in the January 2016 release of the Construction Spending report, which provides construction spending data up to November 2015, monthly and annual estimates for private residential, total private, total residential and total construction spending for January 2005 through October 2015 were revised to correct a processing error in the tabulation of data on private residential improvement spending.
As illustrated in Figure 1, which shows residential improvements spending measured at a seasonally adjusted annual rate for each quarter, the revised series diverged noticeably from the first quarter of 2012 onward. Between 2012 and the third quarter of 2013, the revised series shows a muted increase while the previous series rose more significantly. In addition, the previous residential improvements series exhibited a steep decline over 2014 with a partial recovery in 2015. In contrast, the 2014 decline in the revised series is shallower, of a shorter duration, and is erased by the first quarter of 2015.
Figure 1 indicates that the revisions to residential improvements spending were sizable, especially in 2014 and the first three quarters of 2015. Between 2012 and the third quarter of 2013, the December 2015 release of residential improvements spending was revised down by an average of $12 billion in each quarter by the January 2016 release. On average, each quarter of spending over this period was revised down by 9%. The largest revision in this period took place in the first quarter of 2013 when the $131.3 billion in residential improvements spending was revised down by 12% to $115.6 billion.
Existing home sales, as reported by the National Association of Realtors, decreased 3.4% in October, and the annual share of first-time buyers in 2015 fell to its second-lowest level since the survey was launched in 1981. Total existing home sales in October decreased to a seasonally adjusted rate of 5.36 million units combined for single-family homes, townhomes, condominiums and co-ops, down from 5.55 million units in September. October existing sales were up 3.9% from the same period a year ago.
Existing sales were flat in the Northeast and fell 0.8% in the Midwest, 3.2% in the South 8.7% in the West. Year-over-year, all four regions increased, ranging from 8.6% in the Northeast and 8.3% in the Midwest to 2.7% in the West and 0.5% in the South.
Total housing inventory decreased by 2.3% in October, and is 4.5% below its level a year ago. At the current sales rate, the October unsold inventory represents 4.8-month supply, compared to a 4.7-month supply in September. One-third of homes sold in October were on the market for less than a month.
The distressed sales share fell to 6% in October, the lowest since the series began in October 2008. Distressed sales are defined as foreclosures and short sales sold at deep discounts. The October all-cash sales share remained unchanged at 24% in October, compared to 27% a year ago. Individual investors purchased a 13% share in October, unchanged from September but down from 15% during the same month a year ago.
The October median sales price of $219,600 declined to the lowest level since April, but was 5.8% above the same month a year ago, and represented the 44th consecutive month of year-over-year price increases. The median condominium/co-op price of $207,100 in October was up 1.6% from the same month a year ago.
This house in Boca Raton, Fla., is partially clad with Neolith’s Basalt Black supersized porcelain tiles. (TheSize Surfaces, S.L.)
For a home builder, the holy grail of materials is one that can do everything.
For a homeowner, the holy grail of materials is one that looks really good and requires no maintenance.
Such a material is now available but virtually unknown to most builders and homeowners in the United States.
It’s not a miracle of nanotechnology or even new. It’s that old workhorse, porcelain ceramic tile, updated with modern equipment and manufacturing processes to such a degree that it may change the look of suburbia as well as our notions of what constitutes a tile.
Manufacturers can now produce porcelain tiles that are huge (5-feet-by-11-feet), really thin ( 1/8 – to ¼-inch thick) and absorb almost no water. This latter detail means that these big tiles will not crack in freezing temperatures and can be used indoors, outdoors in temperate climates such as the Washington area’s, and for an astonishingly broad range of applications. The tiles are also made in smaller sizes, though much larger than the 4-by-4-inch ones that are standard in so many bathrooms, and they can be nearly ¾-inch thick, depending on the intended use.
The tiles are marketed in the United States by Tennessee-based Crossville, which calls its tiles Laminam, and four Spanish manufacturers. Cosentino calls its product Dekton, Grespania’s version is Coverlam, Inalco’s is Itopkerand TheSize Surfaces’s is Neolith.
It looks like a solid block of marble but each side of this kitchen peninsula was made from a single slab of Dekton’s Aura. The large tiles were also used for the floor. (Fernando Willadino/Cosentino, N.A.)
Because this type of porcelain tile is so new, the industry has not yet settled on a generic name. Two terms used by the National Tile Contractors Association are “thin porcelain panels” and “thin porcelain tile.”
In keeping with designers’ preference for a “soft” palette, the offerings of these firms favor grays, “greige” (a combination of beige and gray), light and dark brown, charcoal, cream and pure white. Some of the tiles are a solid color, but others mimic wood, concrete, textile patterns, metals and natural stone. The marble lookalikes resemble the real thing so closely that even experts can be fooled.
When you see these supersize tiles in someone’s house for the first time, “great looking tile” is not likely to be your initial reaction . In fact, you probably won’t even realize that you’re looking at tile until someone tips you off. Unlike small, traditional tiles with grout lines running everywhere, big tiles have hardly any grout lines, and the few that are there are nearly invisible.
The big tiles with solid colors present a tasteful, unusual finish; the natural stone lookalikes, especially the marble ones, are stunning. Though marble has a long history in American interiors, the individual tiles have been small. To see an entire counter made of what appears to be a single slab of high-quality Calacatta marble is eye-popping.
Coverlam’s Dock series can be used to cover an interior kitchen floor and an adjacent outdoor concrete patio, which makes both spaces feel bigger. (Grespania, S.A.)
Once you know what to look for, where might you use the supersize tiles?
They can be used to finish walls as well as for flooring, countertops in the kitchen and bathrooms, kitchen sinks and fireplace surrounds. If you want to go really crazy, the thinnest tiles can be used to finish doors, tables, desks and stairs. Capitalizing on the unusually high heat resistance of the supersize tiles, the Spanish firm Inalco is experimenting with installing burners directly into the counter, which would eliminate the need for a separate cooktop. The tiles are extremely scratch and stain resistant. Spills do not have to be cleaned up right away, an appealing feature if you’re one to leave the kitchen cleanup until the next morning after your last dinner guest leaves at midnight.
Another plus with the large tiles in the kitchen is crack resistance. Traditionally manufactured tiles can crack when heavy objects are dropped on them. These porcelain tiles, however, are manufactured with a different process that makes them extremely crack resistant. As Jacobo Pardo of Grespania explained, as long as the tile is installed properly, “you can drop a large cast iron frying pan on the counter, no problem. If you drop a big cast iron pan on the floor, it won’t crack.”
Neolith’s Iron Blue makes for a very unusual kitchen counter. (Dámaso Pérez Ontiveros/Neolith, TheSize Surfaces)
In addition to their size, another difference between these tiles and traditional ones is their surface finish, which can vary from a soft matte to a highly reflective glossy (Cosentino’s Lorenzo Marquez said his firm’s “X-Glossy” finish is so polished “you can almost see your face [reflected in] a black or white Dekton surface.”) The tiles range from a smooth surface to a “gentle relief” that feels slightly irregular, “bush hammered” with a uniform nubby surface, and “hand tooled” with deeper gauges that appear to be hand made.