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Net zero building nationwide | Waccabuc Real Estate

California’s progressive approach may be difficult to implement nationwide – here are the hurdles to consider.

According to the Net Zero Energy Coalition, growth of ZE (Zero Energy) home construction was 75% higher in 2017 than in 2016. While California represents approximately half of all net zero energy homes built in the US, growth is occurring across the country, including Massachusetts, which has a similar top-down approach to the construction process, putting this state in second place in the inventory of zero ready (ZR), near zero (NZ), and ZE inventory.

A ZE home (also referred to as a Zero Energy Building, ZEB) is a home that consumes no more energy than it produces in a year. To achieve this, ZE homes are extremely efficient, leveraging cutting-edge building materials and construction methods, smart thermostats, and energy-efficient appliances to keep the home’s energy consumption as low as possible without seriously inconveniencing the homeowner. ZE homes produce on-site energy from renewable sources. In the residential segment, the most common renewable installed is solar photo voltaic (PV) panels. ZR homes have all of the energy-efficient elements with the exception of on-site energy generation.

For many communities, ZE is an important building block for their climate and sustainability action plans, driving several states and cities to introduce ZE legislation:

  • Oregon has set a 2023 target for all new home construction to meet ZE.
  • Austin, TX, has required all new homes to be ZE-ready since 2015.
  • Cambridge, MA, has a multiyear plan to move towards a zero net energy community, requiring all new residential home construction to be ZE by 2022.
  • Cambridge, MA, has a multiyear plan to move towards a zero net energy community, requiring all new residential home construction to be ZE by 2022.
  • The city of Fort Collins, CO, created FortZED nearly a decade ago to partner public, private, and academic resources to experiment with new technology that saves money and energy and helps create jobs locally.

The drive to implement ZE policies on a citywide or statewide level could help make these benefits a standard amenity, but these efforts require buy-in among builders. Most builders are now aware of ZE and have a basic understanding of the various elements. The National Association of Home Builders (NAHB) surveys its members regularly, and its 2017 Green Practices Study and Green Multifamily and Single Family Homes Report confirms that the housing industry is gradually changing. NAHB reports that three out of ten builders have constructed at least one near zero, zero energy ready, or ZE home.

However, the decision to construct a ZE home often relies with the consumer/home buyer, and many barriers can inhibit that decision. California is unique in that it has goals and codes driving changes, higher energy costs, favorable solar energy policies, and engaged utility providers. In other parts of the country, low energy costs are a barrier. Getting consumers excited about spending more upfront to see lower energy bills is a difficult proposition. Parks Associates survey data reveals that one-third of home owners in U.S. broadband households have a monthly electricity bill of less than $100.

As a result, ZE builders focus on the attributes of a higher quality home, which provides the homeowner with a healthier, quieter, more comfortable, and more energy-efficient home. A key message is the ZE home provides peace of mind, as well as a hedge against future utility bills, as the home is built with better components and with higher construction quality. Overall, customers indicate a willingness to pay more for high-performing homes. A Parks Associates survey of US broadband households in 4Q 2017 found 80% of homeowners believe that having an energy-efficient home is important or very important, and at the end of 2018, 89% reported energy-saving actions. Parks Associates interviews with builders confirm that most customers will pay approximately 5% more for higher quality, high-efficiency ZE homes.

However, a home is an infrequent purchase, and once it comes down to spending actual dollars, consumer actions often diverge from original intentions. Budget drives the decisions regarding efficiency upgrades or adding renewables, which can often push home buyers to decide between ZE options and other amenities. In interviews with Parks Associates, entry to mid-level builders report about one-third of buyers respond positively to energy-efficiency attributes and the associated benefits, while the remaining two-thirds are either more interested in other aesthetic enhancements or skeptic of the benefits overall.

Loss of incentives can drive decisions away from high-efficiency equipment. For example, the current residential federal tax credits for solar, wind, fuel cells, and geothermal heat pumps are 30% of the total installed costs. The amount is being stepped down yearly and will be phased out after 2021. As federal incentives go away, local municipalities and utilities will need to step up to replace them, or installation of these systems may decline.

Scarcity of resources can also be a barrier, and in general, local policies, codes, and incentives drive where support resources are located. Simply put, it can be difficult to find the materials and trained subcontractors necessary for a ZE project in an area that does not promote or incentivize this type of construction.

Policies can attract resources and also drive greater consumer awareness for ZE solutions. Just take a look at California, with the highest number of residential solar PV installations, to confirm that policies, codes, and coordinated efforts across players can drive adoption. In other areas, the federal tax credit has helped grow consumer awareness and adoption of solar. Today, most consumers also have a basic awareness of renewables and higher efficiency products, so market opportunities exist for high-efficiency appliances, equipment, and smart home energy products and service providers as part of the ZE equation. Smart-home products, renewable generation, battery storage, and electric vehicles are all transformative technologies individually, but all are currently in the early stages of adoption in US households.

Parks Associates

Near zero and zero ready homes create more choice for consumers and are becoming affordable as ZE homes become cost competitive to standard dwellings. Rocky Mountain Institute’s recent 2018 study on construction costs of ZE and ZR single-family homes report that on average, a ZE home now costs 6.7%-8.1% more than a standard home and a ZR home is only 0.9%-2.5% higher. Prices are continuing to decline for renewables and battery storage, making these energy efficient homes truly affordable.

Production builders can see a clear competitive advantage as they reduce their construction costs and expand their ZE and ZR home offerings across the US. As more builders embrace this trend, expect to see more creative offers such as Lennar’s SunStreet program that offers solar PV at no upfront costs to the home buyer.

Historically, the push for ZE home requires alignment, awareness, and education across all parties in the housing industry. Stakeholders include architects, construction trades, local code compliance organizations, utility partners, real estate professionals, and the financial industry, in addition to the product manufacturers, trade associations, and local suppliers who work with builders to implement these solutions.

It is a complex undertaking, but as more communities look for ways to preserve resources, and promote energy independence, ZE solutions will continue to emerge as viable options in US households. The single-family home building industry at a point where declining costs, competitive solutions, and consumer awareness of benefits could potentially drive adoption of ZE and ZR homes without incentives and policies.

This story appears as it was originally published on our sister site, www.hiveforhousing.com

Median rent reaches all-time high | Waccabuc Real Estate

Apartment for rent

Median asking rent has reached an all-time high, rising to a record $1,006 in the first quarter of 2019, according to recent data from the U.S. Census Bureau.

Rental properties that were lying vacant remained low at 7% in Q1, a factor that is driving up rental prices.

rent

Meanwhile, homeownership levels across the country were relatively flatfrom last year, the data revealed, reversing a trend of eight consecutive quarters of growth.

Rents rise as increased demand takes a bite out of homeownership

It appears a surge in renters is the cause. The number of renters has changed course, rising in Q1 after falling in six out of seven previous quarters.

Skylar Olsen, Zillow’s director of Economic Research, said the data suggests the younger generation is having trouble overcoming the hurdles they face in the path toward homeownership, including securing a down payment, finding an affordable home and qualifying for a loan.  

“These hurdles – combined with potential shifts in preferences and/or a simple delay in the many ‘adulting’ events like marriage and children that precipitate buying a home – can have the effect of keeping younger, would-be buyers in rental housing for a longer time,” Olsen said.

He added that the sheer size of the 20-and-30-something population is exacerbating the situation by creating competition that drives up rental prices.

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https://www.housingwire.com/articles/48891-median-rent-reaches-all-time-high?id=48891-median-rent-reaches-all-time-high&utm_campaign=Newsletter%20-%20HousingWire%20Daily&utm_source=hs_email&utm_medium=email&utm_content=72133183&_hsenc=p2ANqtz–UJ10g-blERYQowrIuE0apEhOELqrKPiq6ZfTaoudQUKAjt_2RBRCx8g27bpDIlIGC1c3fYmt44l4iOLOVC7kDeZ8d3g&_hsmi=72133183

Monthly Employment Growth Improved in March | Waccabuc Real Estate

Total payroll employment increased by 196,000 in March, while the unemployment rate was unchanged at 3.8%. Residential construction employment increased by 12,200 in March, after the decline of 8,100 jobs in February. The total construction industry (both residential and nonresidential) gained 16,000 jobs in March.

According to the Employment Situation Summary for March, released by the Bureau of Labor Statistics (BLS), total nonfarm payroll employment rose by 196,000. It was a big jump from the gain of 33,000 jobs in February, which was revised up from its original estimate of a 20,000 increase. Monthly employment growth has averaged 180,000 per month for the first three months of 2019, compared with the average monthly growth of 223,000 over all of 2018. Over the past twelve months, total nonfarm payroll employment rose by 2.5 million, with the average monthly growth of 211,000.

The unemployment rate was unchanged at 3.8% in March. Meanwhile, the labor force participation rate, the proportion of the population either looking for a job or already with a job, declined by 0.2 percentage point in March, to 63.0%. The decrease in the number of total labor force reflected both a 201,000 decrease in the number of persons employed and a 24,000 decline in the number of persons unemployed over the month.

Additionally, monthly employment data released by the BLS Establishment Survey indicates that employment in the overall construction sector increased by 16,000 in March. The number of residential construction jobs rose by 12,200 in March, following an 8,100 decline in February.

Residential construction employment now stands at 2.9 million in March, broken down as 838,000 builders and 2.1 million residential specialty trade contractors. The 6-month moving average of job gains for residential construction is 8,000 a month. Over the last 12 months, home builders and remodelers added 103,700 jobs on a net basis. Since the low point following the Great Recession, residential construction has gained 918,000 positions.

In March, the unemployment rate for construction workers decreased to 3.9% on a seasonally adjusted basis, from the 4.5% in February. The unemployment rate for construction workers dropped to the lowest rate since 2001, as shown in the figure above.

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Westchester Democrats taxing and spending | Waccabuc Real Estate

Despite already being one of the more heavily taxed counties in the country, Westchester homeowners and shoppers may soon see a hike in sales tax.

Westchester officials are reportedly hopeful that the state will approve an increase in local sales tax which could help steady the county’s finances. However, according to a lohud report , no formal request has been made, and it is unclear how much taxes may be increased.

The report states that Westchester County Executive George Latimer plans to first reach out to area business owners before he makes his formal cause to New York State officials.

The average Westchester homeowner paid nearly $20,000 in property taxes last year, with a sales tax rate of 3.375 percent, which is a lower rate than surrounding counties and lower than the county’s four largest cities.

In recent years, Westchester has found itself facing millions of dollars in deficits and the county has seen its reserves dwindle, leading to a downgrade of their credit rating. Westchester’s financial report card saw its credit rating cut one level by two prominent agencies.

Westchester County was notified by S&P Global Ratings and Fitch Ratings that the county’s financial outlook has been downgraded to AA+. Moody’s also assigned Aa1 to Westchester. The county has lost its AAA rating – the highest ranking available – in each of the Big 3 rating agencies.

Late last year, lawmakers approved the $1.9 billion budget, with the measure quickly signed off by Latimer. The budget was approved by a 13-4 vote, with the support of county Democrats. The budget contains a 2 percent property tax hike.

Officials said that the tax rate increase is to help offset tens of millions of dollars in deficits that the county is currently operating against. There are no planned cuts to staff or service in the approved budget, which is contingent on the county selling several parking lots that surround the County Center in White Plains. The sale of the lots is expected to net more than $20 million.

The tax levy increase is the first since Latimer took over as county exec last year. The county could have raised taxes by as much as 4.5 percent, but was able to curtail that number with certain allowances. The county was operating at a $32 million deficit to end 2017 year, which only ballooned in 2018.

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https://dailyvoice.com/new-york/chappaqua/news/will-westchester-residents-soon-be-paying-higher-sales-tax/747370/

Homeowner Optimism Still Among Record Highs | Waccabuc Real Estate

As the year is coming to an end, homeowners are more optimistic than ever that their home is worth more than they owe on it, and they expect that value to keep rising through 2019.

A new Rasmussen Reports national telephone and online survey finds that 69% of American Homeowners now say the value of their home is worth more than the amount they owe on their mortgage, up from May’s previous nine-year high of 66%. Just 21% now say their home’s value is not worth more than what they owe on it, but 10% are not sure. (To see survey question wording, click here.)

(Want a free daily e-mail update? If it’s in the news, it’s in our polls). Rasmussen Reports updates are also available on Twitter or Facebook.

The survey of 720 American Homeowners was conducted on November 20, 2018 by Rasmussen Reports. The margin of sampling error is +/- 3.5 percentage points with a 95% level of confidence. Field work for all Rasmussen Reports surveys is conducted by Pulse Opinion Research, LLC. See methodology.

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http://www.rasmussenreports.com/public_content/business/housing/november_2018/homeowner_optimism_still_among_record_highs

U.S homebuilding rose in October | Waccabuc Real Estate

U.S. homebuilding rose in October amid a rebound in multi-family housing projects, but construction of single-family homes fell for a second straight month, suggesting the housing market remained mired in weakness as mortgage rates march higher.

Other details of the report published by the Commerce Department on Tuesday were also soft. Building permits declined last month and homebuilding completions were the fewest in a year. Housing starts increased 1.5 percent to a seasonally adjusted annual rate of 1.228 million units last month.

Data for September was revised to show starts dropping to a rate of 1.210 million units instead of the previously reported pace of 1.201 million units.

Building permits slipped 0.6 percent to a rate of 1.263 million units in October. Economists polled by Reuters had forecast housing starts rising to a pace of 1.225 million units last month.

The housing market is being hobbled by rising borrowing costs as well as land and labor shortages, which have led to tight inventories and higher house prices. This is making home buying unaffordable for many workers as wage growth has lagged.

The 30-year fixed mortgage rate is hovering at a seven-year high of 4.94 percent, according to data from mortgage finance agency Freddie Mac. Wages rose 3.1 percent in October from a year ago, trailing house price inflation of about 5.5 percent.

Residential investment contracted in the first nine months of the year and housing is likely to remain a drag on economic growth in the fourth quarter. Economists expect housing activity to remain weak through the first half of 2019.

U.S. financial markets were little moved by Tuesday’s housing starts data.

SINGLE-FAMILY HOME BUILDING FALLS

Single-family homebuilding, which accounts for the largest share of the housing market, dropped 1.8 percent to a rate of 865,000 units in October after declining in September.

Single-family homebuilding has lost momentum since hitting a pace of 948,000 units last November, which was the strongest in more than 10 years.

A survey on Monday showed confidence among single-family homebuilders dropped to a more than two-year low in November, with builders reporting that “customers are taking a pause due to concerns over rising interest rates and home prices.”

Single-family starts in the South, which accounts for the bulk of homebuilding, fell 4.0 percent last month. Single-family homebuilding jumped 14.8 percent in the Northeast and fell 2.0 percent in the West. Groundbreaking activity on single-family homes dropped 1.6 percent in the Midwest.

Permits to build single-family homes fell 0.6 percent in October to a pace of 849,000 units. These permits remain below the level of single-family starts, suggesting limited scope for a strong pickup in homebuilding.

Starts for the volatile multi-family housing segment surged 10.3 percent to a rate of 363,000 units in October. Permits for the construction of multi-family homes fell 0.5 percent to a pace of 414,000 units.

Tuesday’s data also suggested that housing supply is likely to remain tight in the near term. Homebuilding completions in October fell 3.3 percent to a rate of 1.111 million units, the lowest level since September 2017.

Apple gives stocks the holiday blues

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

Read more…

U.S. Housing Starts Rise as Apartment Groundbreaking Gains | Newsmax.com

Home Sales Slow as Mortgage Rates Rise | Waccabuc Real Estate

Rising rates coupled with increasing home prices have discouraged homebuying activity during the third quarter of 2018, according to Freddie Mac’s (OTCQB: FMCC) October Forecast, which now includes estimates for 2020.

Sam Khater, Freddie Mac’s chief economist, says, “The housing market continued to cool off in the Fall with slowdowns in home sales, new construction and price growth. While we expect the weakness in housing activity to extend the next few months as the market absorbs the recent uptick in mortgage rates, the combination of strong economic growth and millennials moving toward homeownership should help home sales regain momentum and rise modestly in 2019.” 

Forecast Highlights 

  • After growing at its fastest pace in nearly four years (4.2 percent), the U.S. economy is expected to slow to around 3 percent in the third quarter of 2018. GDP is expected to grow at a rate of 3.0 percent for 2018, slowing to 2.4 percent in 2019, and dropping to 1.8 percent in 2020 as the effects of expansionary fiscal policy fade.  
  • Mortgage rates remained steady at 4.6 percent for the third quarter until the weekly average rate reached a seven-year high at 4.9 percent in the beginning of October. The 30-year fixed-rate is expected to average 4.5 percent in 2018, rising to 5.1 percent in 2019 and 5.6 percent in 2020.
  • Home prices are expected to increase to 5.4 percent in 2018, with the growth rate slowing slightly to 4.6 percent in 2019 and even further to 2.9 percent in 2020.
  • High home prices and borrowing costs continue to affect housing activity. Total home sales (new and existing) are now forecasted to decline modestly this year to 6.07 million, and then regain momentum, increasing 1.8 percent to 6.18 million in 2019 and rising 1.1 percent to 6.25 million in 2020.

Freddie Mac makes home possible for millions of families and individuals by providing mortgage capital to lenders. Since our creation by Congress in 1970, we’ve made housing more accessible and affordable for homebuyers and renters in communities nationwide. We are building a better housing finance system for homebuyers, renters, lenders, investors and taxpayers.

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freddiemac.com

U.S. wages rise the most in a decade | Waccabuc Real Estate

  • Wages and salaries rose 3.1 percent in the third quarter, the biggest increase in a decade, according to the Labor Department.
  • Overall compensation costs were up 2.8 percent, ahead of Wall Street expectations.
  • Wages have been the missing piece in the economic recovery, though the Fed has been raising rates to guard against future inflationary pressures.

Higher wages are very good for real estate

Employment costs rose more than expected in the third quarter in a sign that more inflation could be brewing in the U.S. economy.

The Labor Department’s employment cost index rose 0.8 percent for the period, ahead of the estimate of 0.7 percent from economists surveyed by Refinitiv.

Wages and salaries rose 0.9 percent, well ahead of expectations for 0.5 percent. Benefit costs were up 0.4 percent.

On a yearly basis, wages and salaries jumped 3.1 percent, the biggest increase in 10 years.

Wage increases have been the missing link in the economy since the recovery began in mid-2008. Average hourly earnings have been rising steadily but have stayed below the 3 percent level as slack has remained in the labor market.

However the unemployment rate is now at 3.7 percent, the lowest since 1969, and wage pressures have begun to build. The Federal Reserve has been raising interest rates in an effort to stave off future inflationary pressures, though the central bank’s preferred gauge of inflation rose just 2.5 percent in the third quarter, including a 1.9 percent increase for health benefits.

The wage data came the same day that ADP and Moody’s reported private payroll growth of 227,000 in October, easily beating Wall Street expectations. The combination of news sent Treasury yields higher in morning trading.

Overall compensation costs for civilian workers rose 2.8 percent, tamped down in part by the small rise in benefit costs, which rose 1.9 percent for the 12-month period ending in September. Employers have been looking for non-salary measures to retain workers, but may have to start increasing wages to attract and retain talent.

In addition to the tighter job market, various states, communities and private companies have passed minimum wage increases, adding to inflation pressures.

At an occupational level, compensation costs increased 4.8 percent for information technology and 3.5 percent for sales and office and service occupations.

State and local government compensation costs rose just 2.5 percent, just one-tenth of a point more than the increase for the same period a year ago.

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https://www.cnbc.com/2018/10/31/wages-and-salaries-jump-by-3point1percent-highest-level-in-a-decade.html

Lumber, OSB, and Gypsum Prices Fall | Waccabuc Real Estate

Residential construction goods input prices reversed course in September, increasing 0.2% after declining each of the prior two months, according to the latest Producer Price Index (PPI) release by the Bureau of Labor Statistics. The index for inputs to residential construction has risen 5.2% in 2018 and is 10.2% higher than it was in January 2017.


Gypsum prices also reversed trend in September, falling 0.1% (seasonally adjusted) after a combined increase of 6.1% over the prior two months. Since the start of the year, the price index for gypsum products has increased 1.0% per month, on average.


From January to September of 2017, prices paid for gypsum products rose 7.2%. The index has increased 8.1% over the same period in 2018.

The September PPI release continued to capture decreases in prices paid for softwood lumber that began in mid-June. However, even after accounting for the most recent price movements, the average price paid for softwood lumber in 2018 remains the highest on record according to Random Lengths data—18.7% above the prior record set in 1997.


The index for prices paid for OSB (and waferboard) decreased for the second consecutive month (-5.2%, not seasonally adjusted). Prices are down 16.4% since July and have declined in five of the past 12 months.


The index for ready-mix concrete (RMC) prices increased 0.4% (seasonally adjusted), reversing a four-month trend of price declines. After an uncharacteristically large monthly increase in March—when the index rose 3.3%–the PPI for RMC has fallen back in line with its long-run trend.

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Mortgage rates average 4.09% | Waccabuc Real Estate

Freddie Mac (OTCQB: FMCC) today released the results of its Primary Mortgage Market Survey® (PMMS®), showing average mortgage rates moving lower for the third consecutive week.

News Facts

  • 30-year fixed-rate mortgage (FRM) averaged 4.09 percent with an average 0.5 point for the week ending Jan. 19, 2017, down from last week when it averaged 4.12 percent. A year ago at this time, the 30-year FRM averaged 3.81 percent.
  • 15-year FRM this week averaged 3.34 percent with an average 0.5 point, down from last week when it averaged 3.37 percent. A year ago at this time, the 15-year FRM averaged 3.10 percent.
  • 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 3.21 percent this week with an average 0.4 point, down from last week when it averaged 3.23 percent. A year ago, the 5-year ARM averaged 2.91 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 the Definitions. Borrowers may still pay closing costs which are not included in the survey.

Quote
Attributed to Sean Becketti, chief economist, Freddie Mac.

“After trending down for most of the week, the 10-year Treasury yield rose following the release of the CPI report. In contrast, the 30-year mortgage rate fell three basis points to 4.09 percent, the third straight week of declines.”