To many architects and builders, prefab and modular construction remains an enigmatic technology.

Advocates say it helps reduce costs, produces less waste, results in more-consistent quality, offers precise construction, results in a stronger house, and reduces construction time. And yet the technology accounts for only a miniscule percentage of the new homes built every year.

The cause of this disconnect is unclear, though some builders say prefab does not always deliver on the promise of cost savings. Plus, the perception of some consumers and lenders is that a prefab or modular house is like a double-wide trailer.

Author Sheri Koones is on a mission to separate truth from myth and show what ideas about prefab housing are misguided. Koones, who has written about prefab in such books as Modular Mansions, Prefabulous, and Prefabulous + Sustainable, has a new book coming out in October called Prefabulous + Almost Off the Grid (Abrams Books).

The book profiles more than 30 of the most energy-efficient homes in the U.S., but what’s noteworthy about the homes is that all were built with some type of prefab construction. On top of that, the homes are stylish and architecturally appealing—ranging in style from modern to traditional, to somewhere in between.

Builder magazine recently spoke with the author about what prefab really is and how its reputation is changing.
 
Builder:Why did you write this book?

Sheri Koones: As I’ve been writing books on prefab construction, I’ve seen the remarkable houses that have recently been built using a variety of methods. These houses are more energy efficient, healthy, and environmentally friendly than those built in previous years. Building prefab is automatically more efficient, but coupled with the methods used by these architects, builders, homeowners, and manufacturers, these houses are particularly noteworthy.

B:Were the decisions to use prefab in each project driven by the designers and builders, or by the owners?

SK: Most of the homeowners in this book—Prefabulous + Almost Off the Grid—did their research on home construction before going to a builder. In many cases, they chose the builder because of their experience with prefab. I’m also seeing more and more architects and builders getting educated about prefab and beginning to recommend the various methods to their clients.

B:What surprised you about these homes that may also surprise builders?

SK: Many of the homeowners said they were on tight budgets and wanted to make sure the methods they used were cost-effective. The energy-saving and environmental aspects used to build these houses did not add substantially to the cost of the houses.

B:What do you think builders and consumers need to know about prefab?

SK: An important point is that prefab houses are indistinguishable from site built ones. They are generally better built, are completed faster, generally cost less (when comparing apples to apples and pears to pears), and create far less waste.

B:Are you surprised more homes aren’t built with the prefab model?

SK: I’m always surprised if homeowners decide to build on site. Prefab methods are faster, more economical, less wasteful, and stronger.

B: What do you think is the biggest obstacle to prefab being more universally accepted?

SK: Empathically education. Almost always when people learn about prefab methods, they decide to go that route. I get notes from readers every week asking how they can find builders to build the kinds of houses I have in my books. Once people learn about prefab, they rarely decide to build on site.

B:What roles do public perceptions, lenders, and appraisers have in the mainstream acceptance of prefab?

SK: I’ve written four books about prefab and have spoken at numerous professional conferences, so I’m still shocked to hear prefabs referred to as double-wides. People that perceive prefab as inferior have probably never seen one or watched one being built. If they did, they would most likely be impressed with prefab, as I am. There may be some lenders and appraisers out there that may be uneducated about prefab, but there are also lenders today that specialize in prefab loans. Most appraises today understand the advantages of prefab.

The housing market is clearly in better shape than when Obama took office in 2009, but the president can’t take much of the credit.

Republicans and Democrats are taking sides about whether Americans are better off than they were four years ago – and who gets the blame or the credit.

To help voters cut through the election spin, we checked the facts on the housing market, comparing today with January 2009, when Obama took office.

On most counts, the housing market is in much better shape than four years ago:

• Prices have stabilized. The huge decline in home prices started long before Obama took office. When Obama took office, prices were in free fall, and now they have stabilized. From April 2006 to January 2009, sales prices fell 29% nationally (Case-Shiller, Composite 20, seasonally adjusted). After Obama took office, prices continued to fall another 7.5% to January 2012. Then, prices turned around, rising 3.6% from January 2012 to June 2012 (the latest Case-Shiller figure). Looking forward, theTrulia Price Monitor shows that sales prices should rise another 2.1% from June to October because asking prices rose by that amount from April to August and tend to lead sales prices by two months. All told, home sales prices on Election Day should be just 2.2% below where they were in January 2009. And, of course, the trend has totally turned around: the year-over-year change in prices was -19% in January 2009 (Case-Shiller) and was +2.3% in August 2012 (Trulia Price Monitor).
• Homeownership affordability has improved. Although prices are nearly back to their January 2009 level, affordability has improved becausemortgage rates have fallen. The typical mortgage rate on a 30-year fixed-rate loan dropped from 5.05% in January 2009 to 3.60% in August 2012 (Freddie Mac). That drop in mortgage rates reduced the monthly mortgage payment on a $200,000 loan by 16%. For those who can afford the down payment and can qualify for a mortgage (which excludes a lot of people), homeownership is significantly more affordable today than when Obama took office.
• Vacancies and inventory are getting back to normal. When Obama took office, there were too many vacant homes and way too much inventory – thanks to the surplus of new homes that were built but not sold during the bubble and the lack of buyers during the recession. Since 2009, this glut of available, vacant homes has been absorbed, as fewer newly constructed homes have come onto the market in 2009-2012 and fewer foreclosed homes are waiting to be sold. The inventory of homes for sale has fallen by 36% from January 2009 to September 2012, according to HousingTracker, which is a return to normal levels. And the National Association of Realtors reports that the “months of supply” of existing homes fell from 9.5 in January 2009 to 6.4 in July 2012 – with 6 considered normal. Vacancies, too, are much closer to normal: homeowner vacancy was down to 2.1% in 2012 Q2 from 2.7% in 2009 Q1 (compared to around 1.7% pre-bubble), and rental vacancy was down by an even bigger amount, to 8.6% in 2012 Q2 from 10.1% in 2009 Q1 (compared to around 8% pre-bubble), according to the Census.
• Delinquencies have slowed, even though foreclosures remain high. As the job market picks up, fewer people are falling behind on theirmortgages. According to Lender Processing Services (LPS), 7.03% of mortgages were delinquent in July 2012, down from 8.61% in January 2009. Although delinquencies have fallen, foreclosures have increased: that’s because the foreclosure stage is the later part of a long process and therefore lags the improvement in home prices and the delinquency rate. The share of mortgages in the foreclosure process has risen to 4.08% in July 2012 from 2.43% in January 2009. Most of this increase is due to foreclosures backing up in “judicial” states such as Florida and New York, which have a much longer legal foreclosure process. The share of homes in foreclosure is now almost three times higher in “judicial” states than in “non-judicial” states.

Even if the housing market is, in important ways, in better shape than it was four years ago, Obama can’t take much credit for it. Although mortgage rates are lower, credit for that goes to the weak economy and the Federal Reserve. The declines in inventories and vacancies are mostly because new construction plunged after 2007 and has remained far below normal levels – so few new homes have been added to the supply. It is also because there are fewer foreclosed and other distressed homes for sale. And the biggest hangover from the housing crisis – homes stuck in the foreclosure process – is governed more by states than by the feds.

Obama’s main contributions to the housing recovery were the 2009 stimulus, which prevented a worse recession which ultimately boosted housing demand, and the ongoing push to make refinancing more widely available, which has given the economy further modest stimulus. But there’s little that the Administration did – or could have done – to influence the path of home prices and construction and their human costs.

To be sure, even though the housing market may be in better shape than it was four years ago, it’s still far from normal. Trulia’s Housing Barometer shows that “normal” is still years away – and huge housing policy questions, like the future of mortgage giants Fannie Mae and Freddie Mae, are unanswered. Other big challenges remain: mortgage credit is still tight, and four million foreclosures since the start of the housing crisis have left families with wrecked credit, lost homes and personal suffering. Thus, the housing market is nothing to cheer loudly about. But overall, is it better off than four years ago? Surprisingly, yes.

A report by Federal Reserve Bank of Boston researchers disputes a long-held belief that foreclosures don’t just affect people who lose their homes, but also significantly drag down the values of nearby properties.

According to the report, a home foreclosure only depresses neighborhood property prices by about 1 percent. It also argues that prolonging the seizure process can do more damage than good.

Senior Federal Reserve economist Paul S. Willen — who coauthored the study with Kristopher S. Gerardi, Eric Rosenblatt, and Vincent W. Yao. — said the findings show that if a foreclosure is necessary, it should be expedited. Delinquent borrowers frequently let their properties fall into disrepair, he said, which can have a larger impact on the prices of adjacent homes.

“First thing is to try to prevent the foreclosure. That can happen quickly,” Willen said. “If you go to foreclosure, then you want to get that done quickly, too.”

The report comes as foreclosures in Massachusetts continue to mount. More than 4,450 homeowners lost their properties during the first six months of the year, 18 percent more than during the same period last year, according to Warren Group, a Boston company that tracks local real estate.

At the same time, government officials have been working to help homeowners stave off foreclosure through loan modifications and other assistance. In 2010, Governor Deval Patrick passed a law extending the time troubled borrowers have to save their homes from 90 to 150 days.

But the report says that policies intended to slow the “transition from delinquency to foreclosure likely exacerbate the negative effect of mortgage distress on house prices,” while doing little to help homeowners who can’t pay their mortgages.

Based on their study of 158,000 home sales across the United States in 2009, the researchers concluded that properties lost 1.2 percent of their value if they were within 0.1 mile of a home whose mortgage was seriously delinquent. That dropped to 0.9 percent of the value if the nearby home was seized by a bank and 0.6 percent if the foreclosed home was sold.

The study results were questioned by some housing advocates who are fighting against foreclosures around the country.

Lewis Finfer, director of the Massachusetts Communities Action Network, based in Boston, said it fails to take into account the human elements of the nation’s foreclosure crisis. The problem has been exacerbated by mismanaged government programs and lenders’ procedures that delayed or denied help for borrowers, he said.

If mortgage-assistance programs were better run, Finfer said, borrowers would receive quicker decisions on requests for help.

“You have to balance economic efficiency with the fact this is someone’s home,” he added, “someone’s American dream that should not be kicked aside.”

You’ve probably looked at the ways in which you can cut the cost of your car insurance, but there are very worthwhile savings to be had on home insurance as well.

Car insurance cost-cutting tactics can be straightforward, such as limiting the number of miles you cover each year to simply shopping around to find the best quote.

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   Save-when-you-buy-home-insurance

Thankfully, there are similar easy wins when it comes to ways in which you can reduce the price of your home insurance premium.

If you started by following a few key guidelines and comparing quotes with MoneySupermarket, you could chop up to £200 off your home insurance costs.

So let’s take a look at how you can save money without compromising on the quality of cover…

1. Shop around for the best quote

Arguably, the simplest way to cut the cost of your home insurance is to shop around to find the level of cover that best suits your needs at the cheapest price, and by using MoneySupermarket’s comparison tool you can instantly compare quotes from over 80 companies.

And MoneySupermarket has now teamed up with a number of leading home insurance companies to bring you a range of exclusive deals you won’t find on any other price comparison site, including a £30 cashback offer when you buy buildings and contents cover combined and the chance to secure £25 of M&S shopping vouchers when you buy.

Simply carry out a home insurance quote and see which policy is best suited your circumstances.

And remember, it rarely pays to stay loyal to one insurer and you should certainly not accept the auto renewal price as this won’t be the best value cover on the market. Companies often keep the best rates or special offers for new customers.

2. Improve your home security

As with car insurance, there’s a good chance insurers will reduce the price of your home insurance policy if you make sure you have adequate security systems fitted.

However, not all security measures will automatically reduce the cost of cover so you must check with your insurer before you install anything. If you were considering making some DIY Home Alone-style amendments to your current security devices, it’s probably worth having a rethink.

If you are installing a burglar alarm, for example, make sure it is fitted by a firm approved by the National Approval Council for Security Systems and make sure that it is regularly maintained as per the manufacturer’s guidelines.

You should also make sure it is set in accordance with the terms of your insurance, which could include alarming certain rooms and external doors and windows at night time and fully activating it when the house is empty. Failure to do this could result in your policy being invalidated and a burglary claim not being paid.

When fitting door locks, make sure you consult with your insurer first, as they will probably specify that locks meet the British Safety Standard and are either a cylinder rim deadlock or a five-lever mortise lock that conforms to BS3621.

You should make sure that key-operated locks are fitted to all external windows and install smoke alarms – even if these don’t bring down the cost of cover they are an essential safety measure for every house.

If you fit any other type of lock there is a good chance that you will not see a reduction in the price of your policy.

And you should never say you have extra security fitted if you don’t as this could invalidate your policy and mean that your insurer does not have to pay out in the event of a claim being made.

3. Combine your buildings and contents insurance

There are two types of home insurance – buildings cover and contents cover – and you can often save money by combining the two.

Buildings cover insures the structure of your home, from the roof to the foundations via the walls and windows, and also covers permanent fixtures such as a bathroom suite or fitted kitchen (including any built-in appliances that could not be readily taken with you if you moved).

This should cover your home in the event of damage caused by burst pipes, fire, flood, falling trees, storm and subsidence.

You will have to provide a rebuild valuation for your property in case it is destroyed, and this figure will probably differ from the purchase price of the house. In areas where property prices are high, the rebuild value will be lower than the market value. The same applies in reverse: in some places it could cost more to rebuild a property than the property would fetch at sale.

It is important to get the correct rebuild value of your property. If property prices are high in your neck of the woods and your use the potential sale price as your sum insured for buildings cover, you could end up paying too much. But if you underestimate the likely rebuild cost, you could end up with a shortfall should the worst happen.

You might find the rebuild cost of your home on your mortgage valuation. The Association of British Insurers offers a calculator that will show your rebuild cost here

Contents insurance covers all of the possessions you keep in your home – think of it as everything that you would take with you if you were to move house, as well as carpets, curtains etc. – against damage or loss through fire, flooding and theft as well as explosions and earthquakes.

As with the rebuild estimate, you should make sure that you value your possessions as accurately as possible, bearing in mind that your contents might be more valuable than you think. For instance, the average family of four estimates its contents to cost around £25,000 when the true value is closer to £55,000.

And, while you may be able to bring down the price of your premium with a lower estimate, this will mean that any claim you make will not be enough to cover replacement costs.

On the other hand, you don’t want to overestimate the valuations as this could see you paying more than you have to for a level of cover that you don’t even need. So try to make your estimates as accurate as possible. You can find MoneySupermarket’s calculator here

A good way to bring the cost down without potentially leaving yourself short is to combine your buildings and contents insurance and take them both out with the same insurer. This is often cheaper as most insurers offer a discount for customers who take out both at the same time.

4. Increase your excess

Another tip – and one taken straight from the book of cheap car insurance tips – is to offer to pay a higher voluntary excess (the amount you pay towards a claim before the insurer pays out). The more you volunteer to pay, the bigger your reward in terms of a reduced premium.

This is on top of any compulsory excess, so if you make a claim for £1,000 and you have a compulsory excess of £100 and a voluntary excess of £300, then you will have to pay £400 towards your claim and your insurer will then pay the remaining £600.

So while it is a tried and trusted way to bring down the cost of cover, you need to make sure that, in the event of a claim, you will be able foot the bill for the excess else you could find yourself with a shortfall.

5. Pay for your policy up front

Another tip that will be familiar to you if you have ever looked at ways in which you can lower your car insurance costs is paying for your home insurance policy up front. Paying in one go can save you money as you will avoid the interest charges that are levied if you choose to pay in monthly instalments.

It’s a great time to buy a home. Selling a home? That’s a different matter.

The combination of the sharp decline in home prices since the housing bust and record-low mortgage rates have brought housing-affordability indexes to record highs. And with rents rising, home price-to-rent ratios—the housing equivalent of a price-to-earnings ratio for stocks—are at their lowest levels in more than a decade.

Small wonder, then, that when households polled for the Thomson Reuters/University of Michigan’s survey of consumers in August were asked whether it was a good time to buy a home, most said yes. That left an index based on their responses near its highest levels since 2004.

Households were also asked whether they thought it was a good time to sell a home, and there the response was very different, with most people saying no. While the Michigan index of home-selling conditions has made a little progress, it remains severely depressed.

Indeed, sellers’ lack of enthusiasm is a big part of why real-estate agents have been complaining about a lack of inventory lately. The obvious outcome is higher prices. And that looks likely in those areas where buyers are starting to line up but sellers remain on the sidelines.

Against that backdrop, it is hard to see why the Federal Reserve needs another round of quantitative easing to try to push mortgage rates even lower. Not least because having people lock into such low rates could cause problems if rates ever normalize down the line and people don’t want to give up their supercheap, fixed-rate mortgages. But the Fed is likely to see that as a problem for another day.

AUSTRALIAN housing prices could plunge by up to 20 per cent by the end of 2014, a leading international strategist says.

Investec Asset Management strategist Michael Power said while Australian property prices had fallen six per cent since 2010, he expected them to fall further in the next 18 months to two years.

“We’re not seeing anything like the US, Irish or Spanish property bust here,” the South African-based strategist told a business lunch in Sydney.

“But I think over the next 18 months it could go down by double digits, 12 or even 15 (per cent). A 15 to 20 per cent (fall) would be my outside downside over the entire period.”

Dr Power said according to the The Economist Property Index, Australian residential prices were among the highest in world and had long seemed particularly elevated, something which eventually “catches up with you”.

“When you see what Australia has done (in relation to property prices) you have to ask yourselves, you may be exceptional, but how exceptional are you,” he said.

Mr Power said recent falls in retail sales across the country were another indication property prices would fall.

However unlike the devastating property bubble bursts in the US, Ireland and Spain, Australia was buffered by low unemployment, and had “real” interest rates compared to the zero or even negative rates in some countries.

“There’s more protection on the downside here than the US or Spain or Ireland property burst,” he said.

Dr Power also did not think there would be any large increases in inflation in Australia in the near future.

But, he did warn that if property prices slid then Australian banks may be affected because they had borrowed money overseas to fund local mortgages.

Australian household debt was also very high which would only get worse if housing prices fell.

“Your level of debt is one of the highest in the world as a percentage of incomes which is fine if everything is going fine but will turn against you if there’s a real problem,” he said.

It’s no secret that foreign investors are changing the real estate landscape in the U.S. right now, especially with respect to the luxury market. According to the National Association of Realtors, more than $82 billion worth of homes were sold to international buyers in the 12-month period ending in March 2012. Buyers from China and Hong Kong alone accounted for $9 billion in U.S. home sales during that same time period, and that doesn’t even consider the large number of private sales transactions not officially reported.

My own experience supports what the numbers are showing. Over my career, I have sold many homes to buyers from all four corners of the world, but the pace at which I’m seeing transactions involving foreign buyers now is faster than ever; and it is only going to continue. So if you’re a broker, it’s imperative that you’re prepared for this ongoing shift, whereas The Agency’s CEO Mauricio Umansky says, “global is the new local.”

Here are five essentials to keep in mind when dealing with foreign buyers:

Establish trust

Foreign buyers are purchasing a home/investment in unknown territory and need to feel they can trust you, their agent, to guide them through the process. They want to know they are making a good investment and buying in a location that fits their needs and desires. They want to know that you are an expert in the area and that you understand how to work with international buyers.

Make sure the buyer understands the escrow process

Purchasing a home in other countries is not the same as it is in the U.S. Most foreign buyers are not accustomed to buyer’s agents, and think they must work with the listing agent of each property. The process of an offer in some countries can be as simple as handing the owner or listing agent a deposit check. If the buyer is not fluent in English, it is recommended that a translator be available. It is also essential that the buyer fully understands the escrow process. I have my title and escrow officer meet with the buyer to explain their part of the process.

Many foreign buyers prefer cash over loans

Many foreign buyers and investors pay cash, but financing is readily available. Most of my clients go through HSBC, as they can obtain a 40 percent down loan, with a $100,000 deposit with the bank and a one-year reserve. There is, typically, a $1.5 million loan limit. If the buyer is paying cash, be sure to consider the amount of time needed to transfer funds from other countries. At times it is seamless, but often there can be complications.

Be aware of different tax laws

Foreign buyers have different tax laws, and I highly recommend a U.S. tax adviser/CPA who is familiar with the laws in the country in which the buyers are residents. When foreign buyers get ready to sell, they can sometimes defer capital gains taxes with the 1031 Exchange program, but there are many rules that have to be strictly followed. It is best for the foreign buyer to consult a tax attorney, real estate attorney, CPA and/or a trust attorney to understand the long-term implications.

Respect cultural differences

Doing your homework is key, and that includes understanding the basics of the buyer’s culture. They will, in turn, appreciate your willingness to learn. As an example, I had one client whose culture would not allow him to shake hands with a woman who was not family. I have clients from other countries who only bow when an introduction is made. Being aware and respectful of their culture will aid in your long-term relationship with your new client.