Hood Canal Real Estate, Mortgage, and the Economy – US Homebuilder Sentiment Slips

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US homebuilder sentiment slips, but overall outlook positive

By ALEX VEIGA
Apr. 17, 2017
U.S. homebuilders are feeling slightly less optimistic about their sales prospects, even as their overall outlook remains favorable.
The National Association of Home Builders/Wells Fargo builder sentiment index released Monday slipped to 68 this month. That’s down three points from 71 in March, when it jumped to the highest level since June 2005.
Readings above 50 indicate more builders view sales conditions as good rather than poor. The index has been above 60 since September.
The April reading fell short of analyst predictions. They expected the index to dip to 70, according to FactSet.
Readings gauging builders’ view of sales now and over the next six months also edged lower, as did a measure of traffic by prospective buyers.
Despite the decline in the latest builder sentiment survey, sales of new U.S. homes have been robust this year and are expected to continue climbing.
Low mortgage rates and a solid job market have helped drive home sales steadily higher. Sales of new U.S. homes increased in February at the fastest pace since July, reaching a seasonally-adjusted annual rate of 592,000. That sales pace was nearly 13 percent higher than in the same month last year.
A pickup in mortgage rates last fall helped spur sales early this year. In recent weeks, mortgage rates have been edging lower, making the cost of home loans less expensive.
The average 30-year fixed mortgage rate has fallen the past four weeks, declining to 4.08 percent last week. That’s up from an average of 3.65 percent all last year, but still low by historical standards.
This month’s builder index was based on 307 respondents.
A measure of current sales conditions for single-family homes fell three points to 74, while a gauge of traffic by prospective buyers declined one point to 52. Builders’ view of sales over the next six months slid three points to 75.

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Hood Canal Real Estate, Mortgage, and the Economy – Boomers Remodeling To Stay

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If you build it, they'll stay; boomers remodel their homes
By JOYCE M. ROSENBERG
Apr. 05, 2017
NEW YORK (AP) — If you build it, they will stay.
The small businesses that dominate the home remodeling industry are expecting robust growth in the next few years, thanks partly to baby boomers who want to remain in their homes.
Home remodelers say they've had a pickup in projects from boomers who are in or approaching retirement and are seeking to modify their houses. It's a trend known as "aging in place," an alternative to moving to smaller quarters or a warmer climate.
Many of these homeowners are hoping to make their surroundings easier to manage and safer in case they have health problems.
They're replacing bathtubs with walk-in showers, installing safety rails, widening doorways and building ramps — features known as "universal design" since they can be used by anyone, regardless of physical ability. Boomers are also redoing their kitchens and sprucing up other areas — since they're staying put, they want to enjoy their surroundings.
Zach Tyson estimates that 30 to 40 percent of his revenue is now coming from boomer renovations, up from 15 to 20 percent five years ago. Most of the projects come from homeowners who are healthy and mobile now, but want to be prepared if illness or injury hits.
Besides making bathrooms safer, they're enlarging rooms so wheelchairs or walkers can be used more easily, and also to give the rooms a more open feel.
"It's trending up, for sure," says Tyson, co-owner of Tyson Construction in Destrehan, Louisiana.
The oldest of the 76.4 million boomers, the U.S. generation born after World War II, are turning 71 this year. As more of them retire and make decisions about where they want to live, there will be a great need for accessible housing, according to a report released in February by Harvard University's Joint Center for Housing Studies.
"A large share of these households live in older homes in the Northeast and Midwest, where the housing stocks have few if any universal design features," the study said.
The report predicts home improvement spending by homeowners 65 and older will account for nearly a third of the total amount of remodeling dollars by 2025, more than twice the portion that group spent in 1995-2005. Owners age 55 and over already account for just over half of all home improvement spending.
"The boomer activity seems to be driving the market," says Abbe Will, a research analyst at the Harvard center.
That's a change from the past, when older homeowners generally handled maintenance, repairs and landscaping but tended not to renovate. And some of the boomer-driven remodeling is coming from younger homeowners who expect their parents might later come to live with them and want to be ready, Tyson says.
The requests Tiffany and Bryan Peters get from boomer customers include replacing traditional turning doorknobs with lever handles that can be pushed down. Homeowners want motion-sensor light switches and faucets, and non-slip flooring. In bathrooms, they're replacing fixtures with models that are designed for people with disabilities — showers than can accommodate wheelchairs, and toilets at the same height as wheelchairs, Tiffany Peters says.
"We've definitely experienced an increase in requests for aging-in-place work," says Peters, who with her husband owns a Handyman Connection franchise business in Winchester, Virginia. "We get several requests a month."
Home remodeling companies began seeing an increase in boomer spending about 18 months ago and expect it to contribute to their growth in the next few years, says Fred Ulreich, CEO of the National Association of the Remodeling Industry, a trade group.
"We see this as something that is dramatically affecting the marketplace," Ulreich says.
Boomers typically live in homes that are several decades old, prime targets for remodeling, Ulreich says. Unless they move to a brand-new home that's designed for aging in place, their decision is likely to mean remodeling.
Sal Ferro says boomers are his biggest group of customers, but he's not getting many requests for aging-in-place projects. It's more renovations to make their homes more enjoyable.
"They're finally getting the projects done that they always wanted. They're getting that kitchen or bathroom," says Ferro, owner of Alure Home Improvements, based in East Meadow, New York.
Some remodeling companies are specifically marketing to boomers, sending salespeople to trade expos and events those customers are likely to attend.
Miracle Method, a franchise business that refinishes kitchens and bathrooms, has increased its outreach to boomers, says Erin Gilliam, the company's marketing manager. Franchise owners say much of the 11 percent growth in the franchise's overall business in the past year was driven by boomers, she says.
Gilliam's husband, Gabriel, sees the trend in the franchise he owns in Salt Lake City. He estimates that revenue from boomers has risen between 10 and 20 percent, and the growth is prompting him to hire more workers. He has five staffers now, having added one per month the past three months, and expects to reach 10 in the next year.
"I'm hiring as quickly as I can," he says.

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Hood Canal Real Estate, Mortgage, and the Economy – Condos Hard To Find

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Why It's Hard to Find a Condo in Seattle


New condos are hard to come by and that’s not likely to change anytime soon
  

Seattle is awash in new luxury apartments, with tons more set to open in the next 18 months or so, but just try finding a condo to buy, especially a new one. With the exception of Luma—a luxury condo building on First Hill that sold out a few months after completion in 2016—virtually no condos have been built in recent years due to what local real estate experts call a perfect storm of factors. And that means an extremely tight to nonexistent supply of both new and existing condos, a blow for some first-time buyers who were relying on condominiums as an affordable entry point for homeownership.

“Why is there a condo shortage? Well, it could have to do with the number of quality Seattle condo projects currently involved in lawsuits or arbitration,” says Fionnuala O’Sullivan, managing broker and owner at Gerrard, Beattie & Knapp, a Seattle real estate company. “The core of the issue is the Washington Condominium Act. It is very difficult to summarize, but in a nutshell, there are provisions of the act that require certain warranties that a developer must comply with within four years. This makes condo development very expensive, and for many, it is simply not worth it.”
Basically, it comes down to the fact that anyone who builds a condo in the city will face some form of legal action, says Matthew Gardner, chief economist for Windermere Real Estate.

“So, in order to offset that fact, another layer of costs goes onto building condos,” Gardner says. Developers feel compelled to buy insurance against a lawsuit. “So it’s remarkably expensive and you are going to get sued. That’s why for the last several years, I’ve been told by contractors, ‘Why build condos when you can build apartments?’ If you know you’re going to get sued…it gives you pause for thought.”
And don’t expect developers to convert local apartments into condos anytime soon, either, he says, because the economics seldom pencil out when adding up the costs of purchasing the property, making improvements, taxes and other expenses.
“You can’t start repairs until the last tenant leaves,” Gardner says. “So, you have no revenue coming in terms of rent, but [the mortgage] stays the same. The proof is this: Look at the cranes in the city and look at what they’re building. Show me a condo. I will believe it when I see it.”

One rare new downtown condo development coming on the market is Nexus, a 41-story, 382-unit complex in the Denny Triangle neighborhood. Dean Jones, principal and owner of Realogics Sotheby’s International Realty, which represents Nexus, says such is the pent-up demand for new downtown condos that hundreds of potential buyers lined up last year on June 4, including some who spent the night in line, to slap down a $5,000 refundable deposit for first right of opportunity to purchase when the homes are officially released for sale.

Ben Kakimoto, a condo specialist with Keller Williams Realty, says he knows of only two other condo complexes underway at present: Gridiron in Pioneer Square, with 107 units, and Hendon Condominiums, a boutique-style development of 32 units on Phinney Ridge. “We are shocked how few condos there are” under construction, Kakimoto says. “There is such a need.”

Jones says he’s not sure if the condo market will loosen up for buyers. In addition to the threat of construction-defect litigation, booming rents and an influx of new, highly paid tech workers to the city mean that apartment builders can easily sell a new apartment complex to institutional investors at a price similar to selling condos to hundreds of individuals, he says. That makes the decision simple for builders: “These developers aren’t in public service,” Jones says.

What does it mean for buyers? Well, those fourplexes going up in places like Ballard are looking more attractive by the day.

Hood Canal Real Estate, Hood Canal Properties, Hood Canal Homes, Hood Canal Lots, http://www.hoodcanalliving.com, Tahuya Real Estate, Union Real Estate, Belfair Real Estate

Hood Canal Real Estate, Mortgage, and the Economy – Condos Hard To Find

Hood Canal Real Estate, Hood Canal Properties, Hood Canal Homes, Hood Canal Lots, http://www.hoodcanalliving.com, Tahuya Real Estate, Union Real Estate, Belfair Real Estate



Why It's Hard to Find a Condo in Seattle


New condos are hard to come by and that’s not likely to change anytime soon
  

Seattle is awash in new luxury apartments, with tons more set to open in the next 18 months or so, but just try finding a condo to buy, especially a new one. With the exception of Luma—a luxury condo building on First Hill that sold out a few months after completion in 2016—virtually no condos have been built in recent years due to what local real estate experts call a perfect storm of factors. And that means an extremely tight to nonexistent supply of both new and existing condos, a blow for some first-time buyers who were relying on condominiums as an affordable entry point for homeownership.

“Why is there a condo shortage? Well, it could have to do with the number of quality Seattle condo projects currently involved in lawsuits or arbitration,” says Fionnuala O’Sullivan, managing broker and owner at Gerrard, Beattie & Knapp, a Seattle real estate company. “The core of the issue is the Washington Condominium Act. It is very difficult to summarize, but in a nutshell, there are provisions of the act that require certain warranties that a developer must comply with within four years. This makes condo development very expensive, and for many, it is simply not worth it.”
Basically, it comes down to the fact that anyone who builds a condo in the city will face some form of legal action, says Matthew Gardner, chief economist for Windermere Real Estate.

“So, in order to offset that fact, another layer of costs goes onto building condos,” Gardner says. Developers feel compelled to buy insurance against a lawsuit. “So it’s remarkably expensive and you are going to get sued. That’s why for the last several years, I’ve been told by contractors, ‘Why build condos when you can build apartments?’ If you know you’re going to get sued…it gives you pause for thought.”
And don’t expect developers to convert local apartments into condos anytime soon, either, he says, because the economics seldom pencil out when adding up the costs of purchasing the property, making improvements, taxes and other expenses.
“You can’t start repairs until the last tenant leaves,” Gardner says. “So, you have no revenue coming in terms of rent, but [the mortgage] stays the same. The proof is this: Look at the cranes in the city and look at what they’re building. Show me a condo. I will believe it when I see it.”

One rare new downtown condo development coming on the market is Nexus, a 41-story, 382-unit complex in the Denny Triangle neighborhood. Dean Jones, principal and owner of Realogics Sotheby’s International Realty, which represents Nexus, says such is the pent-up demand for new downtown condos that hundreds of potential buyers lined up last year on June 4, including some who spent the night in line, to slap down a $5,000 refundable deposit for first right of opportunity to purchase when the homes are officially released for sale.

Ben Kakimoto, a condo specialist with Keller Williams Realty, says he knows of only two other condo complexes underway at present: Gridiron in Pioneer Square, with 107 units, and Hendon Condominiums, a boutique-style development of 32 units on Phinney Ridge. “We are shocked how few condos there are” under construction, Kakimoto says. “There is such a need.”

Jones says he’s not sure if the condo market will loosen up for buyers. In addition to the threat of construction-defect litigation, booming rents and an influx of new, highly paid tech workers to the city mean that apartment builders can easily sell a new apartment complex to institutional investors at a price similar to selling condos to hundreds of individuals, he says. That makes the decision simple for builders: “These developers aren’t in public service,” Jones says.

What does it mean for buyers? Well, those fourplexes going up in places like Ballard are looking more attractive by the day.

Hood Canal Real Estate, Hood Canal Properties, Hood Canal Homes, Hood Canal Lots, http://www.hoodcanalliving.com, Tahuya Real Estate, Union Real Estate, Belfair Real Estate