Tag Archives: new construction

Builder Confidence Holds Firm in April

All three components posted losses in April

By Jeff Sorg, OnlineEd Blog

canstockphoto14235666 confidence 2(April 18, 2017) NATIONAL ASSOCIATION OF HOME BUILDERS – Builder confidence in the market for newly-built single-family homes remained solid in April, falling three points to a level of 68 on the National Association of Home Builders/Wells Fargo Housing Market Index (HMI) after an unusually high March reading.

“Even with this month’s modest drop, builder confidence is on very firm ground, and builders are reporting strong interest among potential home buyers,” said NAHB Chairman Granger MacDonald, a home builder and developer from Kerrville, Texas.

“The fact that the HMI measure of current sales conditions has been over 70 for five consecutive months shows that there is continued demand for new construction,” said NAHB Chief Economist Robert Dietz. “However, builders are facing several challenges, such as hefty regulatory costs and ongoing increases in building material prices.”

Derived from a monthly survey that NAHB has been conducting for 30 years, the NAHB/Wells Fargo Housing Market Index gauges builder perceptions of current single-family home sales and sales expectations for the next six months as “good,” “fair” or “poor.” The survey also asks builders to rate traffic of prospective buyers as “high to very high,” “average” or “low to very low.” Scores for each component are then used to calculate a seasonally adjusted index where any number over 50 indicates that more builders view conditions as good than poor.

All three HMI components posted losses in April but remain at healthy levels. The components gauging current sales conditions fell three points to 74 while the index charting sales expectations in the next six months dropped three points to 75. Meanwhile, the component measuring buyer traffic edged one point down to 52.

Looking at the three-month moving averages for regional HMI scores, the West and Midwest both rose one point to 77 and 68, respectively. The South held steady at 68, and the Northeast fell two points to 46.

[Source: NAHB]

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For more information about OnlineEd and their education for real estate brokers, principal brokers, property managers, and mortgage brokers, visit www.OnlineEd.com.

All information contained in this posting is deemed correct as of the date of publication, but is not guaranteed by the author and may have been obtained from third-party sources. Due to the fluid nature of the subject matter, regulations, requirements and laws, prices and all other information may or may not be correct in the future and should be verified if cited, shared or otherwise republished.

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Builders Scramble for Lots – Worst Building Lot Shortage On Record

Lot availability hit a record low according to new data from the National Association of Home Builders

By Jeff Sorg, OnlineEd Blog

canstockphoto2159854 new home construction(June 2, 2016) – Lot availability hit a record low according to new data from the National Association of Home Builders (NAHB). Sixty-four percent of builders responding to specific questions in the May NAHB/Wells Fargo Housing Market Index reported that the supply of lots in their markets was “low” or “very low”—up from 62 percent last year, and the highest that number has been since NAHB began collecting this data in 1997.

Notably, this record shortage comes at a time when new homes are being started at a rate of under 1.2 million a year. In 2005, when total housing starts were over 2 million, the share of builders reporting a shortage of lots was 53 percent.

“The lack of availability of buildable lots has quickly become one of the biggest issues facing our members,” said NAHB Chairman Ed Brady, a home builder and developer from Bloomington, Ill. “While labor shortages and regulatory burdens remain struggles as well, lot shortages are preventing our builders from responding to growing demand for housing.”

“We have monitored lot availability for the last two decades, and it is clear that the scarcity of building lots is growing,” said NAHB Chief Economist Robert Dietz. “Whether due to land use policy, geographic constraints or other regulatory constraints, the lack of lots for residential construction will have negative impacts on housing affordability in many markets.”

The survey results varied somewhat, based on the region of the country, the size of the builder, and type of lot. The dearth of developed lots is most apparent in the Western regions of the country, where 39 percent of builders said lot supply was “very low,” compared to 23 percent in the South and 18 percent in both the Midwest and Northeast. When referring to premium “Class A” category lots, builders in all regions reported similar opinions of widespread shortages.

[Source: National Association of Home Builders press release]

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For more information about OnlineEd and their education for real estate brokers, principal brokers, property managers, and mortgage brokers, visit www.OnlineEd.com.

All information contained in this posting is deemed correct as of the date of publication, but is not guaranteed by the author and may have been obtained from third-party sources. Due to the fluid nature of the subject matter, regulations, requirements and laws, prices and all other information may or may not be correct in the future and should be verified if cited, shared or otherwise republished.

OnlineEd® is a registered trademark.

Oregon Homebuyer Protection Act – Protection From Construction Liens

The Homebuyer Protection Act protects residential property buyers against construction liens

By Jeff Sorg, OnlineEd Blog

new construction house(October 29, 2015) – Oregon’s Homebuyer Protection Act, or HPA, applies to a new single family residence or a single family residence where the sales price is $50,000 or more for original construction or the contract price is $50,000 or more for improvements to the residence completed within three months before the date the property is sold; a new condominium unit or a condominium unit where the sales price is $50,000 or more for original construction or the contract price is $50,000 or more for improvements to the condominium unit completed within three months before the date the property is sold; and a new residential building or a residential building where the sales price is $50,000 or more for original construction or the contract price is $50,000 or more for improvements to the residential building completed within three months before the date the property is sold.

The purpose of the HPA is to protect buyers of these types of properties from from liens recorded after a sale closes. In order to protect buyers, the seller of these types of properties must deliver to the buyer a from that specifies the types of protection available to the seller to offer the buyer, along with which of these types of protection the seller is offering to the buyer. These types of protection a seller may offer to a buyer are the following:

  1. Purchase owner’s extended coverage title insurance for the buyer that does NOT except filed or unfiled claims of lien. A standard title insurance or lender’s title insurance policy may not be sufficient.  This policy is to protect the buyer against recorded and unrecorded construction liens existing as of the date of closing;
  2. Retain 25% of the home’s sale price in escrow, along with written instructions signed by the seller and buyer instructing escrow to pay any claims of lien not paid by the seller filed after the date of sale;
  3. Issue a bond or letter of credit equal to at least 25% of the home’s sale price. A Construction Contractors Board bond that is required to license the contractor is not sufficient;
  4. Obtain written lien waivers from every lien claimant who claims liens of $5,000 or more and provide copies of these waivers to the buyer. The Oregon CCB recommends consulting with your lawyer to find out if the waivers presented are in their proper form to offer protection;
  5. Wait to close the sale until at least 75 days after all construction is completed; or
  6. Get the buyer to sign a waiver of right to protection under the HPA.

Noncompliance with the HPA is a Class A Violation.  An Oregon licensed contractor who fails to comply the the Act could be subject to suspension or revocation of license, civil penalties, or a combination of both.

The Homebuyer Protection Act is codified in ORS 87.007. Compliance with the HPA is the sole responsibility of the seller and real estate licensees are not liable for failure of a seller to comply with the act, while acting in their professional capacity as an agent for a buyer or seller. Real estate licensees should not engage in the practice of law by offering advice as to which option of protection is best for the seller to provide or buyer to receive.

Disclaimer: This posting is for informational purposes only and is not intended as or does not constitute legal advice. You should not act upon any information contained in this posting without consulting an attorney for advice regarding your particular situation.

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For more information about OnlineEd and their education for real estate brokers, principal brokers, property managers, and mortgage brokers, visit www.OnlineEd.com.

 All information contained in this posting is deemed correct as of the date of publication, but is not guaranteed by the author and may have been obtained by third-party sources. Due to the fluid nature of the subject matter, regulations, requirements and laws, prices and all other information may or may not be correct in the future and should be verified if cited, shared or otherwise republished.