First-Time Buyers Aren’t Afraid of Renovation

~ I remember when I purchased my first home. It was a HUD home and needed everything updated and we did everything slow as we didn’t have the money, but we liked being able to work on something we knew was ours ~

First-Time Buyers Aren’t Afraid of Renovation

First-time home buyers are showing a strong desire for taking on remodeling projects. First-time buyer renovators in 2016 spent $33,800, on average, on their projects. That marks a 22 percent increase over 2015, according to the sixth annual Houzz & Home survey of more than 100,000 respondents in the U.S.

Average Investment in Living Spaces

Here is what remodelers spent in renovating their homes in 2016:

  • Kitchens: $19,100
  • Master bathrooms: $11,700
  • Living/family rooms: $5,400
  • Master bedroom: $3,400
  • Laundry room: $2,800
  • Dining rooms: $2,600
  • Guest bedrooms: $1,900

Source: “Houzz & Home Survey,” Houzz (May 4, 2017)

“Younger and cash-constrained first-time buyers are responding to the low inventory of affordable homes by purchasing properties that require more than just cosmetic upgrades,” says Nino Sitchinava, Houzz principal economist. “Not surprisingly, we are seeing their spending on home renovations increasing significantly in 2016 and expect this trend to continue through 2017.”

Both first-time and repeat buyers are taking on larger scope projects, such as remodeling up to four rooms at the same time, the Houzz survey shows. Kitchen and bathrooms continue to be the most popular rooms in the house to renovate.

And while “recent home buyers drive a significant share of home renovations today, repeat buyers are investing twice as much in their home as first-time home buyers,” Sitchinava notes.

Baby boomers and earlier generations, who are age 55-plus, continue to spend three time more than millennial homeowners aged 25 to 34.

Overall, homeowners spent $60,400 in 2016 on home renovation projects, up from a $59,800 average in 2015.

Source: “Houzz & Home Survey,” Houzz (May 4, 2017)

17 Ridiculously Stunning Showers That’ll Wash Away Your Troubles

~ Which one is your favorite? Mine is #4 and #9 ~

17 Ridiculously Stunning Showers That’ll Wash Away Your Troubles

1. This blue-and-white tiling situation that probably just made you say, “Ahhhhhh.”

2. This waterfall shower that’s even nicer than being in a real waterfall, if possible.

3. This ultra cool shower that makes the most of angled ceilings.

4. This dark shower with copper accents that still has plenty of light.

5. This little section of black-and-white tiled heaven.

6. This all-white one that’s most certainly waiting for you in a luxury villa somewhere.

7. This stone-lined stall that’s soothing just to look at.

8. This steel-framed gateway to cleanliness and godliness.

9. This shower-bath combo that literally has it all — an exposed brick wall, a claw-foot tub, and so much room for a refreshing shower.

10. This sublime marble on that’ll be hard not to take 20-minute showers in.

11. This one, which is so cool it definitely would’ve been featured on MTV Cribs.

12. This dreamy butterfly tile work that looks straight out of an art museum.

13. This one that proves fancy showers don’t have to have glass doors.

14. This one that’s like a mystical enchanted garden that came to life and turned into a shower.

15. This mesmerizing tiled shower.

16. This simple, yet striking shower stall.

17. And this unbelievable indoors-meets-outdoors glassed-in shower.

Here’s What Actually Happens When You Get Your Home Renovated On ‘Love It Or List It’

 

We do a fair amount of fangirling over celebrities, HGTV hosts included. With their salacious divorces, adorable children, and over-the-top proposals broadcast to the world, we feel a certain kinship with them — even if it’s not reciprocated. But for all we know about the hosts, the shows themselves remain fairly mysterious. There’s a lot of speculation over what actually happens behind the scenes, speculation that we’re too weary to accept. So, we knocked on the door — well, Gmail’s proverbial door — of a homeowner who’s been there.

Marci Lew and her husband Matt had their tiny, Durham, NC, home renovated on Love It Or List It in 2015. Two years later, the couple’s in a new home. They listed, but won’t reveal whether it’s one of the houses they saw on the show. We caught up with Marci on the phone to chat about everything that happened when the cameras weren’t rolling.

The show found them.

This being Love It Or List It‘s first foray outside of Canada, show producers were seeking willing candidates in what Carolina locals call The Traingle, a three-city stretch of central North Carolina. Marci and Matt had just given up on renovating their home after receiving an expensive estimate for the work. “Shortly after, I saw an email on our neighborhood list-serv that a home renovation show was looking for households to feature,” Marci said. She and Matt weren’t told which show was searching before they sent in their application. “We finally found out it was Love It Or List It — which is actually a show we both knew of and enjoyed — when the casting department emailed back,” Marci revealed.

You’ll have more respect for the show’s video editors after submitting an application.

Along with answering a slew of practical questions about their home (when it was built, the square footage, and any need-to-know impediments, like the fact that Marci and Matt’s house was listed on the National Register of Historic Places), the couple was tasked with creating a five-minute video that led viewers through their home and introduced all the problems with it. “Trying to do the house tour and talk in under five minutes was pretty impossible and funny,” Marci laughed, since the show manages to squeeze an entire reno into a 30-minute segment. She and Matt had friends over for dinner in exchange for filming their video. “It was definitely not professionally produced!”

Homeowners are barely involved in the renovations.

Matt’s biggest concern was the kitchen. As is the case with most older homes, it was tight on space and low on function. “We mentioned a few things that we liked and didn’t like, but in the end, they’ve got great designers who make the final choices,” Marci said. They ended up with the island they asked for and some unexpected bells and whistles like under-cabinet lighting, but having little say meant they also wound up with things they would have done differently. “The white quartz counters were stunning, but Matt and I probably would have chosen a darker, more practical color,” Marci admitted. And she would have liked a different fridge and freezer set up: “The drawer freezers they installed didn’t have the space we needed.”

There are pros to having your home redesigned on television.

If you’ve heard someone complain about a home renovation, it’s probably been about one of two things: time or money. Contractors tend to exceed the budget for both. But when you’re filming everything for a TV show, there’s not as much wiggle room. “They cared more about the timing than we did!” Marci said. Her home was done in seven weeks, about two weeks longer than the show’s usual timeline since contractors had to adhere to certain restrictions caused by the home’s listing on the National Register of Historic Places.

The reveals are a complete surprise.

Any regular viewers know Love It Or List typically ends with homeowners “loving” their renovated home. There are rumors that producers film both endings and choose one later — Marci chose not to comment on that — but regardless of what they decide, homeowners see their renovated houses for the first time while filming the reveal. “Hilary let us check on the house twice, once just to see the outside and another time to see the start of built-in cabinetry upstairs,” Marci said. Other than that, she and Matt had no clue what they’d find. “We had to figure out what to do right then,” she added.

Hilary and David aren’t acting for the cameras.

She’s a designer, he’s a realtor — they’re bound to argue when pit against each other, but Marci insists it was all in good fun. “They actually do love to rib each other!” she laughed. “It was fun to witness that up close.”

Tesla begins taking orders for its solar roof

~ Make sure to do your research, though as the costs saved with electricity costs is shown over 30 years and most homeowners do not stay in their homes that duration of time ~

Tesla begins taking orders for its solar roof

Tesla Inc. will accept orders for its solar glass roofs starting Wednesday afternoon.

Chief Executive Elon Musk teased the announcement on Twitter early Wednesday, saying deployment in the U.S. would begin this year and overseas delivery and installations would start in 2018.

He added that his company’s solar roofs could be purchased for homes nearly anywhere in the world.

Homeowners will need to pay $1,000 to reserve a spot on the order list.

A typical homeowner looking to replace a 3,000-square-foot roof with the solar roof could expect to pay about $21.85 per square foot, Tesla said. That price doesn’t include tax credits and applies to a roof that is 35% covered with electricity-generating tiles.

The roofs are a mix of nongenerating tiles and solar tiles, which cost more, though both tiles look identical, Tesla said.

Musk said during a call with reporters Wednesday morning that the roofs could be made up of as much as 70% active solar tiles, though most houses would have about 40%.

Musk said the solar glass tiles will be lighter and stronger than normal roof tiles, and that the roofs will come with a warranty that extends either to the lifetime of the house or to “infinity” — whichever comes first.

“I’m confident this is a compelling financial decision,” Musk said on the call. “We want to look around at neighborhoods and see roofs that are beautiful and generate energy from the sun.”

Palo Alto-based Tesla has a calculator on its sales site where prospective customers can input their address and see the cost of the roof and the amount of money it is expected to generate in energy over 30 years. The calculator includes the amount of tax credits customers could receive as well as the cost of a Tesla Powerwall storage battery.

The electricity generated from the solar roof can be used to power a home when combined with the Powerwall battery.

Customers can use a slider to determine how those figures would change depending on what percentage of the roof would be covered in active solar tiles.

Tesla said it will take about five to seven days to install the roof, in line with typical roof installation times.

Musk unveiled the line of high-design, solar power-generating roof tiles last fall in an event at Universal Studios Hollywood.

The goal has been to branch out to untapped consumers who have shown an aversion to the boxy solar panels that attach to rooftops.

Although more solar power was brought online nationwide last year than any other source of electricity, the pace of rooftop solar installations — the focus of residential and business customers — dropped dramatically compared with the sizzling growth in 2015.

Rooftop solar growth dipped to 19%, down from a 63% average increase year-over-year from 2012 to 2015. The rooftop solar industry has been working to retool its operations by coupling solar panels with battery storage to offer consumers increased independence from their utility companies.

Initially, only grey smooth and textured black glass tiles will be available for purchase. Tuscan and French slate options will come in 2018, according to Tesla.

Electric carmaker Tesla Motors Inc. bought solar panel firm SolarCity last year, making the combined company, now known as Tesla Inc., a one-stop shop for clean energy.

Other companies have sought partners to create similar offerings.

A more diverse portfolio of products from the rooftop solar industry comes as incentives are set to decline.

The federal government is phasing out a 30% federal tax credit for solar installations. The credit will decrease to 26% in 2020 and 22% in 2021. After 2021, the residential credit drops to zero and the commercial and utility credit will become fixed at a permanent 10%.

also related –

Tesla is releasing a solar roof calculator to show if your home will make money from the sun

Reforming land use regulations

~ I hope you enjoy the below article. As it pertains to building affordable real estate in many parts of the country, I find it interesting. I hope you do as well. ~

 

Reforming land use regulations

Arguably, land use controls have a more widespread impact on the lives of ordinary Americans than any other regulation. These controls, typically imposed by localities, make housing more expensive and restrict the growth of America’s most successful metropolitan areas. These regulations have accreted over time with virtually no cost-benefit analysis. Restricting growth is often locally popular.  Promoting affordability is hardly a financially attractive aim for someone who owns a home.  Yet the maze of local land use controls imposes costs on outsiders, and on the American economy as a whole.

New York City enacted its pioneering zoning code in 1916. The Supreme Court only established the constitutionality of Euclidean zoning, which restricts neighborhoods to single uses, in 1926. Yet, these restrictions didn’t meaningfully prevent new building in much of America until the 1970s. Abundant new construction, not just in Texas but also in New York, Los Angeles and greater San Francisco, ensured that as late as 1970, prices remained close to the physical costs of construction in much of America.

Yet starting in the 1960s, a property rights revolution occurred in the U.S. Backed by environmentalist rhetoric in the suburbs and preservationist priorities in the cities, American localities increasingly restricted the rights of property owners to build. We changed from a country in which landowners had relatively unfettered freedom to add density to a country in which veto rights over new projects are shared by a dizzying array of abutters and stakeholders. Consequently, we now build far less in the most successful, best educated parts of the country, and housing prices in these areas are far higher than construction costs or prices elsewhere.

Affordability and Construction Costs

 In ordinary conversation, people usually just discuss nominal housing prices.   Housing advocates often discuss affordability, which is defined by linking the cost of living to incomes. But the regulatory approach on housing should compare housing prices to the Minimum Profitable Construction Cost, or MPPC. An unfettered construction market won’t magically reduce the price of purchasing lumber or plumbing. The best price outcome possible, without subsidies, is that prices hew more closely to the physical cost of building.

In a recent paper with Joseph Gyourko, we characterize the distribution of  prices relative to Minimum Profitable Construction Costs across the U.S.   These costs are based on R.S. Means, which estimates building costs and sells these estimates to the construction industry. We base our estimates on an “economy” quality home, and assume that builders in an unregulated market should expect to earn 17 percent over this purely physical cost of construction, which would have to cover other soft costs of construction including land assembly.

We then compare these construction costs with the distribution of self-assessed housing values in the American Housing Survey. The distribution of price to MPPC ratios shows a nation of extremes.  Fully, 40 percent of the American Housing Survey homes are valued at 75 percent or less of their Minimum Profitable Production Cost. This finding is not that surprising. Most homes are old and we are comparing them to the cost of building new housing. Most used cars also sell for much less than the price of building a new car. Another 33 percent of homes are valued at between 75 percent and 125 percent of construction costs.

Other data seems to support that most American homes do not seem to have been valued for much more than replacement costs in 2013 view. In 2014, seventy percent of the metropolitan areas covered by the National Association of Realtors had median sales prices below $200,000, and these typically reflect somewhat newer, nicer homes. We also found that 85 percent of the metropolitan areas in our sample had median price to MPPC ratios that were below 125 percent. Price growth has been steady since 2013, which is unfortunately, the last year for which we have both R.S. Means and American Housing Survey data, but the basic point that much of America remains quite affordable is still true today.

But most productive parts of America are unaffordable. The National Association of Realtors data shows median sales prices over $1,000,000 in the San Jose metropolitan area and over $500,000 in Los Angeles. One tenth of American homes in 2013 were valued at more than double Minimum Profitable Production Costs, and assuredly the share is much higher today. In 2005, at the height of the boom, almost 30 percent of American homes were valued at more than twice production costs.  Our painful housing bust eliminated some of the affordability problem in our most expensive areas, but that problem has returned.

America’s affordability problem is local, not national, but that doesn’t mean that land use regulations don’t have national implications. Historically, when parts of America experienced outsized economic success, they built enormous amounts of housing. New housing allowed thousands of Americans to participate in the productivity of that locality. Between 1880 and 1910, bustling Chicago’s population grew by an average of 56,000 each year. Today, San Francisco is one of the great capitals of the information age, yet from 1980 to 2010, that city’s population grew by only 4200 people per year.

Land use controls that limit the growth of such successful cities mean that Americans increasingly live in places that make it easy to build, not in places with higher levels of productivity.

Land use controls that limit the growth of such successful cities mean that Americans increasingly live in places that make it easy to build, not in places with higher levels of productivity. Hsieh and Moretti (2015) have estimated that “lowering regulatory constraints” in areas like New York and Silicon Valley would “increase U.S. GDP by 9.5%.” Whether these exact figures are correct, they provide a basis for the claim that America’s most important, and potentially costly, regulations are land use controls.

Supply, Geography and Regulation

 How do we know that high housing costs have anything to do with artificial restrictions on supply? Perhaps the most compelling argument uses the tools of Economics 101. If demand alone drove prices, then we should expect to see places that have high costs also have high levels of construction.

The reverse is true.  Places that are expensive don’t build a lot and places that build a lot aren’t expensive. San Francisco and urban Honolulu have the highest ratios of prices to construction costs in our data, and these areas permitted little housing between 2000 and 2013. In our sample, Las Vegas was the biggest builder and it emerged from the crisis with home values far below construction costs.

The primary alternative to the view that regulation is responsible for limiting supply and boosting prices is that some areas have a natural shortage of land.

Albert Saiz’s (2011) work on geography and housing supply shows that where geography, like water and hills, constrains building, prices are higher.   He also finds that measures of housing regulation predict less building and higher prices.

But lack of land can’t be the whole story. Many expensive parts of America, like Middlesex County Massachusetts, have modest density levels and low levels of construction. Other areas, like Harris County, Texas, have higher density levels, higher construction rates and lower prices. Across Massachusetts towns, Glaeser and Ward (2009) found that there was more construction in places, like Chelsea and Revere, with higher initial density levels and modest prices.

If land scarcity was the whole story, then we should expect houses on large lots to be extremely expensive in America’s high priced metropolitan areas. Yet typically, the willingness to pay for an extra acre of land is low, even in high cost areas. We should also expect apartments to cost roughly the cost of adding an extra story to a high-rise building, since growing up doesn’t require more land. Typically, Manhattan apartments are sold for far more than the engineering cost of growing up, which implies the power of regulatory constraints (Glaeser, Gyourko and Saks, 2005).

Naturally, there are also a host of papers, including Glaeser and Ward (2009), showing the correlation between different types of rules and either reductions in new construction or increases in prices or both. The problem with empirical work any particular land use control is that there are so many ways to say no to new construction. Since the rules usually go together, it is almost impossible to identify the impact of any particular land use control. Moreover, eliminating one rule is unlikely to make much difference, since anti-growth communities would easily find ways to block construction in other ways.

Public Policy and Land Use Regulations

Land use controls may be benign even if they restrict growth and increase prices. Their proponents argue that they prevent environmental damage and reduce the downsides of local growth to the community. Theoretically, it is at least conceivable that America’s web of locally-constructed zoning codes have worked out to be a finely tuned system that functions like a perfect Pigouvian tax internalizing all the offsetting externalities of all new construction.

Yet such a view seems untenable. Getting the right national policy requires comparing the social costs of building in one location versus the costs of building elsewhere. Few localities seriously consider the negative impact that restricting buying will have on non-residents of their town. No locality considers the impact that their local rules may induce more building elsewhere.

California builders have faced an onerous Environment Impact Review process since the 1972 Friends of Mammoth Case. When environmental rules prevent building in highly productive, highly restricted coastal California, homes get built elsewhere, like Las Vegas and Houston. Carbon emissions per household are lower in coastal California than elsewhere in the country, primarily because of a benign Mediterranean climate (Glaeser and Kahn, 2010). California’s land use restrictions don’t eliminate new construction, they merely move it elsewhere, so it isn’t enough to have a purely local perspective. In California’s case, preventing local construction for environmental reasons only ends up increasing carbon emissions by pushing building to less salubrious climes.

Empirically, there is also little evidence that these land use controls correct for real externalities. For example, if people really value the lower density levels that land use controls create, then we should expect to see much higher prices in communities with lower density levels, holding distance to the city center fixed. We do not (Glaeser and War, 2010). Our attempt to assess the total externalities generated by building in Manhattan found that they were tiny relative to the implicit tax on building created by land use controls (Glaeser, Gyourko and Saks, 2005).

Reforming Land Use Controls

Reforming land use controls is so difficult, because they are generated at such a low level of government. Washington didn’t make these rules, and constitutionally, H.U.D. doesn’t have the authority to rewrite them. Most localities like the rules that they have, so there is little chance of regulatory reform from either the top down or the bottom up.

The right strategy is to start in the middle. States do have the ability to rewrite local land use powers, and state leaders are more likely to perceive the downsides of over regulating new construction. Some state policies, like Masschusetts Chapter 40B, 40R and 40S, explicitly attempt to check local land use controls. In New Jersey, the state Supreme Court fought against restrictive local zoning rules in the Mount Laurel decision.

If states do want to reform local land use controls, they might start with a serious cost benefit analysis and then require localities to refrain from any new regulations without first performing cost-benefit analyses of their own. Once the state has decided that current rules are too restrictive, there are two plausible models.

The first, more powerful model is to override local land use controls entirely if a community has prices that are too high and permits too little. Massachusetts Chapter 40B provides a model, where builders can bypass local rules if a community doesn’t have enough affordable housing. This bypass is effective, but it is also unpopular.

A somewhat softer approach is to provide stronger incentives for permitting building, which is the model provided by Massachusetts Chapter 40R and 40S and the Mount Laurel decision. In this model, high price communities that permit too little new construction would pay a transfer to the state that would be transferred to communities that build more. This process is more politically palatable, but also less sure to yield immediate impact.

Reforming local land use controls is one of those rare areas in which the libertarian and the progressive agree. The current system restricts the freedom of the property owner, and also makes life harder for poorer Americans. The politics of zoning reform may be hard, but our land use regulations are badly in need of rethinking.

Selling? How to Make Your House Look Great in Photos

 

House of hemp: Growers call for a processing plant in WA to supply building industry

~ Love the innovative materials, which if we could get approved might lower the cost of building, which would allow for the production of smaller more eco- friendly homes to be built ~

House of hemp: Growers call for a processing plant in WA to supply building industry

Posted 5 Mar 2017, 7:54pmSun 5 Mar 2017, 7:54pm

Construction of the first hemp house in WA has just been completed, sparking calls to build a local processing plant so local farmers can supply the building industry.

The hemp plant’s woody stem is shredded, mixed with a lime render and tampered into place inside a timber frame.

Builder Gary Rogers said hemp is a high thermal insulator.

“The hemp is basically encased around your timber frame home so in a nutshell it’s your cladding, it’s your insulation, and it’s all your gyprock and basically all your painting, all done in one, in a monolithic wall,” Mr Rogers said.

The hemp walls are also termite resistant, fireproof, breathable, prevent mould, store carbon and reduce the need for heating and cooling.

And with the plant reaching maturity for hemp fibre requirements in just 14 weeks, it has been touted as an environmentally friendly answer to the building industry.

Mr Rogers used some locally grown and milled hemp to build the Margaret River home but he could not source enough product for a house.

At the moment, processed hemp needs to be imported from the east coast and Europe.

“We can import building materials to try and get it going and that’s what we’re doing at the moment, working with a couple of builders to import it so we can actually build interest in the industry,” Colin Steddy, director of the The Hemp Corporation, said.

Hemp growers face uphill battle

But local hemp growers said they could grow hemp plants but just needed a processing plant in WA because their product was going to waste.

Gail Stubber, a South West hemp grower, said regulations prevented her from selling the seed as a food product.

“I can grow this crop but I can’t do anything with it,” Ms Stubber said.

“The only thing I can do with the seed is either replant it next year if it doesn’t go high THC or I can have it pressed down into an oil, which is not really the way I want to go.”

There were strict regulations ensuring the amount of THC in the plant was low, but Ms Stubber said that was not the biggest hurdle.

“I’d like the seed to be used for food because that immediately makes my crop more valuable,” she said.

“I would like them to give us some sort of ruling on if the THC is slightly high, whether we can use the bi-products that are not involved in the high THC, so the herd, the inside part which is the housing thing.

“And I’d like the government to give us a hand, be it with a grant or something, to actually get a processing mill here in the South West.

“It’s closed a lot mills, a lot of paper and pulp mills, but maybe we can turn one of those mills, whether it be at Kirup or Nannup or something into a hemp mill and produce herd for housing.”

Colin Steddy said he planned to privately fund a processing plant in the South West which he said would open the door to huge farming and textile industry opportunities.

Mr Rogers said he already had several more clients lined up to build their homes from hemp