Archive for February, 2010

The 20 Healthiest Housing Markets for 2010

Friday, February 26th, 2010

Housing economists have long held that the housing rebound, when it comes, will be uneven. The markets that benefit first will be the ones with the strongest core dynamics; places where house prices never got out of hand, cities where a diverse and progressive employment base drives job creation, towns that continue to draw population despite the economic recession.

Now that the housing recovery is nearly upon us–most economists expect a full-fledged recovery to begin this year–it’s time to figure out which markets will be the front-runners. Based on last year’s performance, especially the level of building permits pulled in the fourth quarter, it’s already clear that some markets are poised to grow at a faster pace this year than others in 2010.

Green shoots may be sprouting in markets throughout the country, but which markets will flower first? That’s the question we attempt to answer with the Builder Market Health Index, compiled by Hanley Wood Market Intelligence, our market research arm. Market Intelligence (MI) first input 2009 data and 2010 projections for household formations, resale values, and job and income growth. Then, after sprinkling in some secret sauce to weight these drivers, it ranked by health the top 100 housing markets (determined by permits pulled in 2009).

Not surprisingly, many of the markets that topped our 2009 list are on the 2010 leader board, including most of the major markets in Texas, where low development costs kept a lid on house prices during the boom, and strong local economies provided a cushion from the blow of a national recession.

But Lone Star markets were eclipsed this time around by some relatively hot markets in the Carolinas, which accounted for seven of the top 20 spots. Many of the major cities along the Mid-Atlantic seaboard continue to benefit from a strong influx of people drawn by a comfortable way of life, affordable housing, and growing employment prospects.

As with last year, markets that hit the trifecta–having within their borders a state capital and a big university along with a diversified economy–dominate our list of hottest markets. A strong base of government employment, whether it be from the state or the military, has helped stabilize some markets through the housing recession. In many cases, the government is the biggest employer among the 20 markets on our list.

We present this data with one big caveat. These markets may be healthier than others, but they aren’t healthy in the way they were during the housing boom, when it was common to find rising population, employment, and income. Virtually every housing market still has at least one blemish. And for that reason only two received a rating of 50 or more, indicating they are truly healthy. That’s an improvement, though; only one scored 50 or higher last year.

Hanley Wood Market Intelligence, which took into consideration forecasts from Moody’s Economy.com and other sources, is looking for several of these healthiest markets to break out this year. A few of them witnessed dramatic increases in building permits pulled in the fourth quarter of last year, momentum that is expected to carry over into 2010. Several of the markets on this list are poised for double-digit growth. Read on.

3. Charlotte-Gastonia-Concord, NC-SC

Market Health Indicator: 48.0

2009 Total Building Permits: 7,607

2010 Building Permit Forecast: 7,442

Home to 1.77 million people, Charlotte has been one of the strongest housing markets in the country during the last three years. Housing prices in this banking center (Wachovia and Bank of America have big presences here) were pretty stable last year, barely inching down. Income levels actually rose in 2009. And households continued to form at a relatively high rate, compared to the rest of the country. The job picture should brighten in 2010; the area is projected to add 2% more jobs. Single-family permit activity began rising in the fourth quarter–it was up 20% over the year-ago period–despite a glut of downtown condos that have been converted to rentals.

By:Boyce Thompson

http://www.builderonline.com/local-markets/the-20-healthiest-housing-markets-for-2010.aspx?cid=BLDR100225002&page=1

www.dvwise.com

A Home for the New Economy

Thursday, February 25th, 2010

Builders tend to define themselves by their buyers. Who’s your target market? Move-up families with kids? Downsizing empty-nesters? Millennials? The creative class? People who love smooth jazz and wire-haired fox terriers? During the boom, psychographic preferences were parlayed into what builders hoped would prove to be market-differentiating features, from pet-washing stations to wine caves to poker dens.

But as we enter a new age of pragmatism, the goodies that were once deal-closers are backfiring. Fully loaded homes are unsellable now that buyers can’t afford houses built around their hobbies du jour. They’re no longer treating home as an ephemeral commodity to be swapped out with each life change or whim.

Instead, many homeowners are finding that what they really want are flexible dwellings that can expand and contract with them as their physical, relational, and financial circumstances ebb and flow. It’s no longer feasible to uproot when that second baby is born, when grandma moves in, when the kids leave for college, when one spouse launches a home business, or when the other gets laid off.

At the same time, builders looking to mitigate risk are realizing that in order to stay afloat, they must build smaller, less prescriptive homes that can appeal to a broader swath of the population—all the while value-engineering their plans to provide more bang for the buck.

But there’s a fine line between universal appeal and vanilla design, and the need to differentiate remains. How do you build something practical and compact that still feels special? Do you shrink the entire floor plan equally, or do you abide by different rules of proportion? How do you parcel out a limited construction budget to create the most value? And how can you make one structure work equally well for buyers at different stages in their lives and in different tax brackets?
For answers to these questions, Builder turned to designer Marianne Cusato, who is perhaps best known as the creator of the original Katrina Cottage. Who better to ask? Disaster relief is what this beleaguered industry needs right now, and that includes a pro forma or two that skittish lenders will be willing to bankroll. Cusato joined forces with building scientist Mark LaLiberte, and came back with a no-nonsense plan that wastes little, appeals to many, and can be built just about anywhere.

Including on the Web. Unlike previous Builder show homes, this one isn’t a brick-and-mortar structure. It’s virtual. Why? Because the beauty of this versatile little house is that it can be configured in, oh, so many ways—more ways than we could possibly have space for in print. We showcase a few variations here, but for a full tour you can visit www.builderconcepthome2010.com.
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Dollars and Sense

How much does our Home for the New Economy cost to build? Construction costs vary by region and the level of finish will greatly impact price, but Cusato estimates that the basic house can be built for about $110 per square foot, excluding land costs.
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Simple Architecture

Let there be no doubt this is a smart little plan that faces the recession head on. At 1,700 square feet, the Home for the New Economy is essentially a saltbox with another box tacked onto the back. In other words, it’s uncomplicated massing that’s easier, faster, and cheaper to build—particularly from a framing and foundation standpoint—than a house with lots of bump-outs and undulating roof forms.

 “Somewhere along the line, homeowners were told they needed 10 gables or they didn’t measure up,” says Cusato, whose book, Get Your House Right, lists this phenomenon among a litany of superfluous extras that end up devouring construction budgets.

“When you don’t have tons of gables, you aren’t putting money into extra flashing in the peaks and valleys of your roof, or in a patchwork quilt of different materials on the front elevation.”

Take away those expenses and you can spend more on features that serve multiple purposes—such as a deeper porch that doubles as outdoor living space. Or double-hung windows on all sides that channel natural light and allow cross-ventilation, thus reducing the burden on the HVAC system. Aesthetics alone aren’t sufficient justification for any one line item, Cusato cautions. There’s more value for the buyer in features that do double, or triple duty.

Apply the same value test to every other design decision and four-sided architecture suddenly becomes doable, she points out. Better to perfect one clean element—say a 6-foot window and trim detail—and repeat it consistently than to muddle up the face of the house with 10 competing pieces of eye candy that give the front elevation the fake appearance of a façade in the backlot of an old movie studio.

by Jenny Sullivan

http://www.builderonline.com/design/a-home-for.aspx

www.dvwise.com

Even Smart Builders Continue to Neglect the Attic

Thursday, February 25th, 2010

Chances are that you design and build your houses with a vented attic. This is the most preferred (and affordable) method of construction for most builders, and if you’re in the right climate, it’s perfectly fine. But a growing number of researchers say many builders aren’t doing a good enough job to make the space energy-efficient.

I recently discovered how important the attic space is to the overall energy efficiency of a house when I had an assessment done on my small, c. 1975 three-story townhouse in Hyattsville, Md.

My house has a three-year-old SEER 14 HVAC system, insulated replacement vinyl windows, and fairly decent (preexisting) fiberglass insulation. With three months to go in 2009, my electric bill is already $1,655.90. If history is any guide, by the end of the year I will have paid $1,865. And this is with a relatively mild Washington summer.

It’s been a mystery that my electricity bill continued to rise even though I have taken measures to help reduce it. A price hike by my utility provider, Potomac Electric Power Co., is one part of the explanation. But recently I found another: My unsealed and uninsulated attic was literally sucking conditioned air out of the house and money right out of my wallet.

This is partly the reason I’m uncomfortable in my house, why my house is dusty (despite my fastidious efforts), and why my electricity bill for one person was way out of control, says Dan Robinette, a comfort advisor at Minnick’s, a Laurel, Md.-based heating and air-conditioning firm that participates in Maryland’s Home Performance with Energy Star program.

“Most attics are under-insulated and poorly sealed,” says Robinette, who did the assessment of my house. “This is a big problem when it comes to the comfort of the home. These two things affect everything from the temperature in the upper levels, to the air quality, to the number of times your A/C is running in a day. So with a little time and materials and you can get that attic sealed up, insulated, and be on your way to a happy home.”

Robinette’s recommendation? Seal the attic and have 13 inches inches of cellulose blown into the space, which is what I did.

“Air sealing and insulation have a large impact [on a house],” says Amber Wood, program manager for energy efficiency at the NAHB Research Center in Upper Marlboro, Md. “Before anything, you have to seal all penetrations into the attic such as electric boxes, ceiling fans, knee walls, and attic openings, but you have to make sure the soffit vent can ventilate or it can lead to moisture problems.”

Sealing the attic and blowing in insulation—either cellulose or fiberglass—establish the house’s thermal envelope, help prevent air leakage, and help maintain the temperature of the conditioned space below.

“In cold weather, warm air is continually rising,” Denver-based insulation manufacturer Johns Manville says on its Website. “Leaks into the attic allow the expensive, heated air to escape into the attic, while at the same time drawing in cold air to displace it from the basement or other exterior leaks. This continuous air movement makes the home feel drafty and raises energy bills. By sealing attic air leaks, you plug the escape route of rising air and effectively stop the chimney effect.”

Other common sources of attic leaks that Johns Manville says should be checked include: areas between floor joists and behind kneewalls, the attic hatch, wiring holes, plumbing vents, recessed lights, and the furnace flue.

The sealing and insulation of my attic came in at a shade under $1,400. Robinette says—and other consultants agree—that this is typically what it costs. (During my assessment, he also discovered that my house has severely leaky ducts and proposed AeroSeal treatment to have them sealed from the inside out, which he estimated would cost another $1,900.)

André Desjarlais, who manages the building envelopes program at Oak Ridge National Laboratory in Oak Ridge, Tenn., says Robinette made the right call on my attic. In fact, Desjarlais says people don’t realize just how important the treatment of the attic space is in the overall energy efficiency of a home.

“There are lots of stats,” Desjarlais says. “But let’s take the average home with 2.3 people. Half of the energy bill for that home is used to heat and cool it. Half of the remaining [portion] is due to energy losses through the attic.”

It would be logical to assume that under-insulated attics is a problem largely for older homes, and in some ways this would be an accurate assumption. Older homes tend to be leaky and poorly insulated, and some construction techniques from yesterday may not be appropriate for how homes are built today. “Yes, the older [the homes] get, the worse the problem is,” Robinette says.

But Mike Barcik, senior research engineer and director of technical services at the Southface Energy Institute in Atlanta, says attic inadequacies aren’t only relegated to old homes; many new homes suffer from the same ailments. “I would say 90 percent of all existing homes need some improvement and are probably under-built, including those built two years ago,” Barcik says. “I might even up that to 98 percent.”

The problem with new homes, Barcik continues, is that building inspectors are largely focused on safety, and so a home’s energy usage gets overlooked. “The energy code is a fantastic code if it’s enforced, but it’s not enforced in many states,” he explains. “We have done blower tests to prove it.”

Neglecting the attic seems unthinkable given that it’s relatively cheap to address during construction of the house. Wood says, for example, that a builder may pay about $100 to $500 more in material to seal and insulate an attic. “It’s not that expensive,” she says. “They can do it either with foam and fiberglass, or they can use caulk. Caulking takes more time, but it’s inexpensive.” So the tradeoff is a $500 upfront cost compared to the $1,400 I paid to retrofit my house? That sure sounds like an investment that would be worth considering for new-home buyers and their builders.

by Nigel Maynard

Nigel Maynard is senior editor for products at BUILDER magazine.

http://www.builderonline.com/energy-efficientconstruction/even-smart-builders-continue-to-neglect-the-attic.aspx

www.dvwise.com