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Real Estate Today 1-29-17

Jan 29, 2017|

Opening doors for buyers and sellers with critical and credible information on the real estate market. Fast paced and fact packed with experts, interviews, call-ins, field reports, and timely market conditions.

Transcript - Not for consumer use. Robot overlords only. Will not be accurate.

This it's real estate today. The number one real estate show on. In the radio. And welcome to real estate today. Backed by the professional experience of real tours from across America we are your most trusted source on the radio for up to date real estate information. Real estate today is the official radio program of the national association of real news and it's real for members in your neighborhood. Hi there I'm Steven best way to I'm glad you could join us today as we continue our special New Year's series of shows about how to do real estate the right way. And today and how to build a for many people building a home of their rope is a lifelong dream and talk about how to make them dream come true. We'll bring in the professionals to explain how to borrow a friend's house for how to build a customer comes from scratch. How to build a house. You straight ahead. But first let's go to the realistic today newsroom with. With Bill Thompson Carville Stephen. In an abrupt reversal the trump administration has suspended a reduction in the FHA mortgage insurance premium the would have saved the typical borrow more about 500 dollars a year. The quarter percentage point reduction was announced by outgoing Hud secretary Julian Castro in the final days of the Obama administration. It stopped just hours after Donald Trump took office. The Washington Post reports that congressional Republicans have expressed concern about the premium reduction worried that it could lead to another taxpayer bailout of FH LA. During his confirmation hearing new Hud secretary Ben Carson said that he was caught by surprise by Castro's announcement. And the the trump administration would examine the policy. Now it's possible they'll reinstate the cost savings later this year but no guarantees. And Stephen logged more on this story in just a few minutes. In other news about real estate and the new administration Donald Trump's nominee for Treasury Secretary has some explaining to do it his senate confirmation hearing. Even the Nugent. Was forced to back pedal on remarks he made him a television interview shortly after his nomination. In which he indicated the trump administration would take Fannie Mae and Freddie Mac quote out of government control. Pressed on that and is hearing minutes and clarified. We need housing reform so we shouldn't just leave Fannie and Freddie as is for the next four or eight years. Under government control without effects that I believe we can find a bipartisan. Fix for the is so on the one hand. We don't end up with a giant bail out on the other hand we don't run the risk of completely limiting housing finance. Shares of Fannie Mae and Freddie Mac tumbled more than 10% immediately after the Newton's remarks. Builder confidence across America remains solid in January the latest National Association of Home Builders Wells Fargo housing market index. Is down just two points from December's number. While industry remains concerned about rising mortgage interest rates as well as shortages of lots of labor there is a percolating optimism about the new year. The NHB expects 10% growth in single family construction this year. Meanwhile the government says housing starts surged in December. Up eleven point 3% to a seasonally adjusted annual rate of one point 23 million units. The nation's foreclosure inventory in November 20 sixteen fell to a level that was 79%. Below the peak in January 2011. According to core logic the national foreclosure inventory that is the number of loans so more in the foreclosure pipeline was down 30% year over year in November. And the number of mortgages in serious delinquencies fell 22% compared to November 2015. Contractors all across America are hiring a new survey released by the associated general contractors of America and aged construction and real estate. Finds that nearly three out of four construction firms expect to increase their payrolls this year. The plans of the result of optimism about the trump administration but finding qualified labor may present a challenge and a market that's already tight. Coming up in half an hour why mortgage bankers want a crackdown on patient loans Stephen thank you. Thanks bill. And now a big realistic story that happened within the very first few hours of the trumpet ministries. The new administration announced it would stop the scheduled reduction in mortgage insurance premiums on FHA backed home loans. Our reduction was originally scheduled to go into effect this past Friday. The plan was announced in the last days of the Obama administration. Which said it would have saved home buyers around 500 dollars a year in mortgage insurance cost. But that's all over now because the reduction is off the table. Let's talk about this big change now within expert joining us this frank Donnelly a 25 year veteran of the mortgage banking industry. Frank is the past chairman of the board of the mortgage bankers association of metropolitan Washington. Frank welcome to realistic today. Welcome to be here we're glad your here so frank. You and I just talked about this a couple of weeks ago that everyone who took out an FHA backed home loan as of January 27. And who needed mortgage insurance. Would see a reduction in the premium. So tell me what were your thoughts when you heard that the premium reduction plan had been stopped. Right well we heard eight certainly we shocking we'd heard that that might happen. Strategy Dell it's earthquake which it seems like the other day we talked about and here we are wrong it backs are. Wanting in our industry changing its her changes he wanted to order the only thing you can count on. Now obviously the Obama administration made the announcement. Just eleven days before they left office in as we said the change is expected to go into effect. A week after the trump administration had taken office. At the time frank did it ever occur to you that the trump administration would just say no I don't thinks. Right onslaught that Iran has certainly it was kind of hurt a parting gift. From a high commissioner I knew that. Terminate principled standpoint that the Republicans would not like it's for a couple of reasons are cherished one the actually change fund. The MMI. Years. Just a little bit over there required minimum the editing of course you administration doesn't want getting in Chiu. Another draw from the taxpayer trajectory jaded are just a few years eager to achieve in at one point seven billion. OK in any other thing it they don't like the government in Chiu other didn't you except if your mortgage insurance company you welcome that changed. Or frank let's walk our listeners through exactly. What this means to them first ball if you already have an FHA backed home loan. This doesn't mean anything to you because your mortgage insurance premiums would not have gone down anyway correct. Exactly wrench interchange work current FHA borrowers. But this change by the trump administration will affect due to the tune of around 500 dollars per year. If you were planning on getting an FHA backed mortgage for a purchase or refinance. Correct. That is correct and that's the bad news for potential homebuyers. Now if you missed the announcements are things aren't getting worse than they work they're just going back to what they've worked three weeks ago except he still FHA is a wonderful program. It helps our new and I'll moderate income borrowers. You know you can put 3.5 percent dance yet relaxed guidelines on credits. As well as your qualification ratios. Could still great program just could be a little bit better picture. So this is a change but it's not like it's slamming the door on hundreds and hundreds of thousands of people who wanted to buy a home it's just. They'll have to pay a little bit more throughout the year. Precisely correct and it is deductible. Depending on you know consult your jacket art or bad depending on your income he confronted with your deductibles or even at fifty dollars and maybe. Depending on your effective can actually maybe forty dollars. Short term. It's not kidneys for potential Bart verdict it's not the end of the world. Frank were also hearing that the trump administration is examining. The idea. Because in their words they've suspended. The drop in mortgage insurance premiums they haven't eliminated them. And they say they might revisit the issue later on so watch your guests will that happen or not. Right if defined it yet their mind find so what happens is each borrower paid the FHA an MIT security Jake puts her at a big bucket. And then from time to time when FHA borrowers. Aren't able to make the mortgage payment that reimburses lenders are currently that fund is just a bit above the required minimum of 2%. Of their outstanding warrants Gerald. As that number goes up in the economy seems to be improving there's a lot less foreclosures. The American advance maybe there'd be room for this without cutting endangering the public and speak without risking a potential draw. So it's possible bit it's sometime in the future we will seated scum back onto the table. Yes well frank thank you for joining us today and talking about. The suspension. Of that plan to reduce mortgage insurance premiums for anyone getting an FHA backed loans carry much. Glad to have you here frank frank Donnelly past chairman of the board. Of the mortgage bankers association. Of metropolitan Washington. Coming up on realistic today. All the ways the real work can help you save money. When you're buying a brand new house the exploding cost free air conditioning. A certain amount of dollar figure for upgrades there's all kinds of things at the local little twirl no more than. There's no adjustment but then that's fine that's coming up on our special show how to build a house. Real estate today. Connecting you with the real estate professionals. Every week. And we're back live our special show how to build a house it's all about how to buy a brand new home. We'll build a customer it's just the way you want it from scratch. So right now let's talk about buying a different house in a brand new development. Joining us is Kenny Parcells with the Kenny Parcells team that. Equity real estate in Spanish fork Utah. Kenny was the 2011 president of the Utah are real torched and Utah's 2013. Real chore of the year. And just last year Kenny served on the national level as any r.'s regional vice president for the rocky Mountain States Kenny welcome to real estate today. To be Richie yeah I'm glad your here so Kenny you work with clients all the time who buy brand new home so first question. What are they preferred votes over existing homes. Welcome to look low inventory. On existing homes their best option is to go build a new and and try to do the way they want. Do most of those people buy brand new homes that have been built in development or do they do. Custom homes from scratch. Yeah it's all over the map some people have the dream do Bill Thompson from scratch and some others would rather be in subdivisions and have kind of attract children go that way so it really depends on the buyer. Interest and no Kenny many people find development will have beautiful homes and at end its own sales day or so ago. Should the buyers still have a real tour. He always gonna be represented by a local realtor that knows the market so keep in mind and local builders as felt staff they represented the builder he always wants somebody representing year and that's why it's key don't have a real cardinals market. Well let me ask you about that Kenny at what point do you bring the real tree into the transaction from the very first time you look at the place. Or can you bring him in later or if you do that is it kind of unfair to the builder. Yeah I think you always on find your local real toward a nose market to get him involved right from the get go to home what you're looking for. And then they can helped direct choose which community the best speech union family. And that's a good point because the real turtle know. Not just what face the in and bad but they'll have a database that shows every single new home for sale in the entire geographic area. Skewed you're spot on general terms also know of different incentives at different builders are due and and what they may have given some incentive for a certain amount and number she brought so many people to this specific builder so. Definitely good realtor or will get you. Right in the right direction you need to be. What are some of the incentives you might be able to get from a builder. If you have your realtor with you. Got a good local realtor Romo is there are some kind of preferred lender that they pay some more cheers closing costs of free air conditioning. A certain amount of dollar figure for upgrades. There's all kinds of things at a local real twirl no more than than just trying to find a battle line. Interest in so Kenny when you walk into a brand new house with your client. How do you evaluate that place to figure out if it's a good fit and if it's the right price. Well I think a lot of milieu that so value of the real tour as a lot of people of the prices with the upgrades included and some of them have a lower price and then they charge more for the upgrades. Do you really need local real toward help you navigate what is the best bank for ebooks he really comparing apples to apples. Know when you're doing that walk through Kenny are you looking for any red flags things that would make you advise your client to just walk away from that particular development. Yeah you always wanna know is this water table to IA. It certain upgrades. Not really a great. It's all those things that he can help correct your buyer to really get the most bang for the buck in and help them down the road for resale. Well that's interesting because I don't think I would personally think. Where's the water table when I walk into a house but you would. Yeah do you you kinda get to know this subdivisions and you know what to and HO wage you know what what emitted did you get do you get Internet Egypt Wi-Fi. Cable all those trash pick up all those things that factored into really what does this is your bottom multiply. You know not the you have to crack so. So a tough question your candy when you walk in with your real tore into a brand new development. And you decide to buy a house there. Will the builder pay the realtors commission or as the buyer since you brought an end is that our new. Yeah most builders have buyer's agent conditions factored in and so. By sometimes going in there at the Lone Ranger not being represented you're not saving them money. Surely cost you many because one nobody is looking out for you they don't discount. Give that commission back to the buyer they just keep that is to build a profit. So all in all when your buying a house that brand new in a development. You would recommend your clients always work with a realtor. Q what Kenny has a lot more to talk about I'd like to ask you. About building a home from scratch. Can you join us again in our next hour and we'll discuss that. Okay thanks Kenny we'll talk to you send Kenny Parcells with the Kenny part Al team at equity real estate in Spanish fork Utah. The 2011 president of the Utah are real tours Utah's 2013. Real sure of the year in any r.s 2016. Regional vice president. For the rocky Mountain States. Coming up front realistic today. New homes are getting some. All learned what we think your happening is that still there are adjusting their product mix. They are still things work out how to expand our homes in preparation. For eight speakers we've seen coming from younger buyers can comfort them on tight. That is correct. That's coming up on our special show how to build a house. But first it's time for ask the millennial. The millennial was the biggest demographic group in America and potentially the biggest group of homeowners. Ever. So let's talk real estate now with a genuine member of the millennial generation. Joining us is Jayne dollar injure hi Jane. Kind Stephen great to be here so Jane what's on the menu today even. It made it pretty clear now that I don't like winter I don't like the cold I don't like the note and I really don't like later. If I worry once letter and that's enough I'm just not. So I decided that I'm going to mentally moved myself into summer and what comes what are. Spending time in the beautiful. Sunny warmer and outdoors. And according to research from Better Homes and Gardens win millennial are on the hunt for a home there in summer mindset as well and they are looking very closely at the backyard and. At the back yard and what are they looking for in a backyard. They're looking for something interactive. Like a backyard vegetable garden the national gardening survey showed that last year five million millennial started gardening. Eagle consciousness has become a huge issue personal needles and growing our own food part of that reminds that. In fact that spoke on the show before about balcony garden so it makes sense that when we finally have an actual yard we want an actual garden. That's interesting gene if you had a backyard garden what would you grow how well anything really but in the vein of eco consciousness he got. Vegetables in terms basically anything had a ball. And what do we do without those herbs and vegetables that we grow in our backyard bird while we use them to make pizza. In our outdoor pizza ovens are European oven that's awesome. Right but only W my landlord wouldn't be so cool with me installing one on my balcony. According to REALTOR.com. Really aren't interested in pools are decks in fact we really intra city in any sort of landscaping your feature that requires a ton of maintenance. But we are interested in outdoor kitchens. As I've said before her entertaining is a huge reason when Nolan heels once owned a home and having pizza oven or a fire pit. A built in reason to throw a party. Well Jane that sounds great to me a pizza oven in the backyard that sounds. Wonderful. Even when I buy a house you're more than welcome to 97 fire at a party. Just please bring the key and fire that's sounds great. Jane dollar and your aides genuine member of the millennial generation thanks for joining us unrealistic today. Thank you Steve and ended any of you have questions that only a millennial cancer. Please send me an email and act. The millennium at the radio dot realtor. And if possible obviously not yeah. Real estate today. Because knowledge is power. And we are back with a special show how to build a house. Walking you through the steps you'll take it you're buying a brand new home for building one from scratch the coming up he's your brand new house need to be big in order to be. That's story and much more is straight ahead on how to build a house but right now let's check in with Bill Thompson in the realistic today newsroom cargo. I Stephen. The Mortgage Bankers Association is calling on the trump administration to clamp down on fast growing property assessed clean energy or pace loans. The NBA says pace loans are like sub prime mortgages believe borrowers vulnerable to predatory lending. Pete milled MBA senior vice president says homeowners get easily sucked into a very bad deal. All of the consumer protections that apply to them mortgage contract and are effectively. I worked around and so tila has not apply the ability to repair requirement is not required on pace lines there's a significant void consumer protection under the pace program. We'd like to see that entire program and be changed significantly. Two to mitigate those risks. Face loans are typically used to make home improvements but the loan becomes part of the homes tax assessment bill. A new national and Allison forecast that home prices and rents will continue to rise faster than incomes for the next two years. The latest arch MI risk index projects that the price increases would be in the three to 6% range nationally. But the report all says there's no bubble and the likelihood of home prices falling over the next two years is just 4%. Chicago's real estate market gained strength and 20s16. According to a Euro and analysis by re Max home sales in the second city were up four and A half percent from 2015 to the highest total sold since 2006. Most of our growth was in the first half of the year sales in the second half a toy sixteen were up just 2%. Coming up and half an hour wire rising mortgage rates may be good for the market. She's been back to you thanks bill. And we have brand new information we're. About new homes being built all across America. In 2016. The average size of those homes dropped compared to the year before. That hasn't happened in seven years in the recent. Well the national association of homebuilders reports that right now builders. Are getting ready. For millennial home buyers who were more interested in amenities and sheer size when it comes to new home construction. Let's talk about this big development now with rose quint the assistant vice president for survey research at the National Association of Home Builders. Rose tracks all the trends in home building from both the consumer and the builder perspectives. Rose welcome to realistic today. Thank you so much for having me even. We're delighted you're here now rows let's start with the latest numbers in 2015. The average new home. Was 2689. Square feet. The next year it dropped 22634. A dip of 55 square feet but that's not a huge drop but still. It's a drop so rose tell us about this development. That's right it's added giant dropped but what's important about the development aid ecstatic that first time since about ninety that we've seen this trend. Paint reversed course and actually go down. Back in 2009. The average price of new homes started in the country was 2362. Square feet. And what we fell year after year and a nine with that number right things. Consecutively. Until we reach that number that you that the patents 689. When fifteenth I think sixteen and we fell for the first time controversial. In that transfer that's important there reversal of the trend which we thought I'd check in the actual site of the home. But also in Africa characteristic of the home that also. Took a turn in their blunder or the other way in point sixteenth such didn't care homes where. Amenities like for a more backroom two or three pulled back from her more or crack tricky parts are more all of those amenities. In terms of the share in the homes with the community. Came down and sixteen after right thing for several years in Iraq. You know rose what I read about this I saw that the home builders belief. That the reason a smaller house is a good idea. Is this big wave of millennial home buyers who were about to enter the market is that right. What we think here it's happening is that builders are adjusting their product neck. They are building more townhouses sense smaller homes in preparations. War aid speaker do you mean coming from younger buyers and I'm part time on why that is correct. Well rose from reading through your survey it's clear that there's a preference. Among today's new homebuyers. They'd rather have a home filled with a amenities even if it's smaller. Been a great big home with fewer amenities. With that if you had. The game my money eat and you have to choose between a bigger house with your amenities. Or a smaller house with high quality product and amenities which I'm would you take. Terrible without batting an overwhelming majority of buyers across all income levels would rather take. The smaller house with a high quality product rather than the turn economic bigger house with the with Fuhrman. So what that helped me back buyers out there are willing to trade site format eighty which is a very critical point of information. That's a really big point you know as you said rose for many years to size of new homes was getting bigger and bigger every single year. But now it has dipped back down in the other direction do you think in your opinion. That will continue and every year new homes will be getting smaller and smaller. I expect in Twain seventeenth. The fact the average factory home to continue to go without. I'm and the reason for that is that bill there are prepping app they're getting ready for demand that they think is coming from. The younger generation from younger homebuyers and first time homebuyers and they've begun to change the product mix now and it will continue to do so and when he seventeen. Will rose it has been a pleasure thank you so much for coming by today and talking with us. About the size of today's new home. It would my lecture given any time thank you. Rose quint the assistant vice president for survey research at the national association of homebuilders. Coming up on real estate today. Could you get a home loan in the home doesn't exist yet. Speeds and decent. Still fairly restrictive lending environment you're definitely gonna wanna be a very strong candidate that's next on our special show. How to build a house. This is real estate today. 100%. Real estate 100% of the time. And we are back with a our special show how to build a house and right now. A very important chapter in that examination. Which might be called. How to pay for a house you build. That's right let's look now at financing a brand new home. One you buy from a developer for when you built from scratch with your own custom builder. Joining us now is Keith coming here national mortgage expert and vice president at HSH. Dot com. The nation's leading source of information for consumer mortgage and financial information. Keith welcome to real estate today. Here we're larger here so Keith let's start talking about our new home that's in a development. Just finished never lived in before we'll getting a mortgage on their brand new home be any different from an existing home. While the mortgage process that self interest final mortgage shouldn't be any different you're gonna be giving your paperwork in order or you're gonna be waiting for your certificate of occupancy to come through on everything to be cleared by the lenders final inspections but other than that your mortgage should be pretty much the same process. RC you know Keith many times the builder will have a relationship with a specific. Lender. And also are closing company now should I go that route or does it still pay to shop around for a home loan. You should absolutely do a little shopping around it would do nothing else just making a few phone calls talking to a few lenders in the area. Just to get a sense of what reach into calmer heads fees would be available to you. Individual basis for comparison. List or whatever allfirst may be coming from the builder preferred. Contractors or once they have relationships went so. This way it and deal comes your way you'll be able to know if it actually deal or not. Okay are getting a mortgage for a brand new house and development is really not that different. From getting a mortgage for an existing home but what about a custom built house you find a piece of land and you wanna put up my house right there. What the mortgage process in that an area. For the most part you go I did get your soul slow land loan oral lot longer. Do you actually. Acquired a piece of property I admit it you're not quite ready to build you'll be making payments on that for a short period of time between you get your ducks in a row at which time Google ought to generally get yourself a construction loan that's going to be kind of a short term interest only loan so. And it's a home is being constructed you may have payments on both of those internet's. And then ultimately the homes completed negotiation to African occupancy take possession of a all those other financing. Opportunities. To close at a one permanent mortgage. So Uga Uga at all consolidated under one loan deal that you have to make him a shot. Interest in key to let me ask you this is there any such thing is a single home loan. That would allow you to pay for the land and allow you to build our house using just one mortgage. It's possible put your gonna find that most lenders keep those separate distinct because frankly if you could get a lot loans that you're going to build upon your war and win a single letter that maybe. Great to that one single letter but if you are talking about buying a piece of land and then hoping to develop it later you're going to general climate there's going to be separates text. So Keith one last question for you. To get financing for a custom built house in which there's no house there at all. But the banks lending me hundreds of thousands of dollars to build it. Do I have to be V most qualified borrower in America to get alone like that. Well it doesn't hurt to be the best quality borrower you have to teach. No you don't have to be perfectly. Putting today he's still early restrictive lending department you're definitely gonna wanna be a very strong candidate you're going to need. Substantial wanted to put a catalog along you're going to need to have all your finances in good shape in your credit in good shape to biggest lenders are still very wary about. I'm making loans to folks that are dole not really ups not to jump to better quality or the daughter Charity Navigator Russell put together. Nights he won't keep they sure do appreciate you coming by and talking to about new home mortgages both custom and development home thank ski. My keep coming your national mortgage expert and vice president. At HSH. Dot com the nation's leading source of information for consumer mortgage and financial information. Coming up unrealistic today if it's not only a brand new house it's also a brand New York. Where do you start we'll have that story next on our special show how to build. If you love listening to us talk about real estate during the conversation. Buying real estate today radio on FaceBook we can't wait to hear from you. That's real estate today radio. On FaceBook. This is a real estate today. Location. Location. And information. Welcome back to real estate today and a special show how to build a house. All about the exciting idea. Of buying a brand new house or even designing one yourself. We're going to wrap up this hour of the show by taking it outside. Into the yard. Because in many cases when you move into a brand new custom home or a brand new house in a brand new development. There's not a whole lot in the yard so they are you war with this beautiful. Gorgeous brand new house. Sitting on a level field. A brand new side not exactly the best picture frame for this masterpiece. You've just built. Of course most of new homes do you have something in the art the bushes are often young and level. The law and as I said his brand new turf and the trees well some developers just clear the whole lot. That makes the building process go a lot faster so the trees and planting later on it will be little sharply. Now other developers of course try to save trees as they build so it's possible you could have some mature trees on the lot. And that's good but if it's a development chances are the developer. Who have taken down lots of trees or your house in the entire neighborhood will have that brand new look with a big view of the sky. Since the trees won't develop that lush green canopy four years to come. And that brings us to an important point one factor that helps make neighborhoods in the homes in them truly beautiful. His time. When time passes and the growing seasons come in ago. Everything grows the bushes get bigger the loans are more established and the trees are taller and Fuller. Now obviously if you're starting from scratch you can't create the look and feel of a thirty or fifty year old landscaping design. But you can still make the guarding your new home beautiful. And if you plan it out the right way over time. It will grow into one of those lush gorgeous outdoors in parks. So let's look at how you can make that happen. The first step will be planning out your budget. You'll probably need a few thousand dollars beyond the price of the house to get that dream landscaping job up and running. How much you can afford and also whether you want to do it all at one. Or phasing in New Orleans keeping elements over time that can make it easier to pay for. No once you know the dollars and cents available consider bringing in a professional landscape designer to help plan the look and the feel of the yard. And here's where the real fun begins because you will have far more choice when landscaping a brand new home compared to an existing home. Just like the textures but colors in the pictures in side every decision will be yours. So here a few ideas for first whether you hire a pro or you're doing yourself give the landscaping plenty of room to grow. Many homeowners put in tiny azalea has only to learn later. They become a huge resilience did everything lots of room so that when they grow big and beautiful. You won't need to pull them out and put them somewhere else. Also one very hot trend in today's market is outdoor kitchens and outdoor living here like an entire room just outside. If you go that route you'll have a good starting point for your landscaping because. You wanna frame those areas would attractive and even fragrant plant to enhance your enjoyment of your new outdoor living area. Another idea for those of you who work late every day consider a moonlight garden. In which nearly every flower in every blooming bush. As white or pale yellow blooms. The idea is you get home after dark and with a few candles are soft lights or even just the light of the moon. Your garden comes alive at night. And also when you plan archer landscaping and don't just do it from the outside. Also go through your new home and look out the windows big and small. And try to create views are those windows. So that when you're at the kitchen sink looking out the window UC your flower garden for when you and your guess during the great. The big sliding glass doors. They look out of the dogwood tree in full bloom or rambling roses along the white picket fence. That's the great thing about a brand new place you can create the views just the way you want them. And in a bigger and that's one of the best parts of owning any home old or new. Every decision issue or you're working on something that belongs to you. And owning that parcel of land is probably the only thing that can make your work fun. If you'd like to hear more realistic today's special show how to build a house. Either stay tuned for joining us online at radio guard real cool. And from all of us here realistic today thank you for listening. If you're realtor. You can cookie to tie your real estate today's show on your web site the best real speech only radio. 100%. Greens and they are members. Just go to our new web address. Radio dot realtor and clicked. Don't really. This it's real estate today. The number one real estate show on the radio the. Welcome back to real estate today. Back for the professional experience of real tours from across America we are your most trusted source on the radio for up to date real estate information. Real estate today is the official radio program of the national association of real tour. And it's real for members in your neighborhood. Hi again I'm Stephen guests weigh in I'm glad you're here as we walk you through the basics of real estate. In a special New Year's series of shirts and today. How to build a house for many people it's a dream come true by any news or building from scratch. So we'll talk to experts about how to do it and how to do it the right way. How to build a house is straight ahead. But first let's go to the realistic today newsroom with Phil Thompson. I know I Stephen rising mortgage interest rates may help propel the housing market further upwards as one expert. Yale university's Robert Shiller co creator of the Case Shiller Index. Is rising interest rates may discourage some homebuyers and others he says will be motivated by now and lock in a good rate. That he says can propel the market upward it's happened before. Mortgage rates bottomed out and funny twelve. And then they started rising should that have clipped the housing. Market nor did the opposite the housing market was rising with the interest rates after Tony well. Chiller made his remarks on CNBC. There is fresh evidence to suggest of builders are preparing for an upswing in the number of millennial first time buyers. Research and survey results from the national association of homebuilders. Find that the average size of a newly built home declines in 2016 the first such drop in seven years. And a HP assistant vice president rose square and says she expects the size of homes to continue to decline as demand increases from first time buyers. Would more condominiums. For sale inspire more renders to choose homeownership. Some industry insiders quoted by national real estate investors say the answer yet. They believe a surgeon entry level condos will bring more renders to the table. John Affleck or research strategist for the Costar Group tells the publication that homeownership will quote. Returned the favor likely in the form of entry level condos that offer the same amenities many urban apartment dwellers prefer. And the national association of homebuilders chief economist Robert beat us he expects growth in the Condo market. The remodeling market remained positive in the fourth quarter of 2016. Although it was lower than the previous quarter. According to the national association of homebuilders the index number indicates that more remodel Hirsch report activity is higher than the number who say activity is lower. The NAHB's forecast is the remodeling activity will grow at a moderate pace of one to 2% annually over the next two years. Coming up and half an hour some home design trends that will disappear into 170. Stephen thank you thanks bill. Comes to 2016. The song might be it was a very good year. Because more existing homes sold last year than in any other year in the past decade. That's according to the latest existing home sales report. From the national association of real torched the report they're nearly five and a half million existing homes sold in 2016. And that's the most home sales in one year since 2006. Let's talk about the latest numbers and what they mean with Lawrence June chief economist at the national association of real torched Lawrence welcome to realistic today. It and are bred in me on the show we're glad you're here. So Lawrence it turns out 2016. Was the best year for home sales in a decade. So our first question why. Let's talk our memory backwards so bad. We he did it in calendar Holmes fills 2627. Million and actor and 2000 an entity to the 2006. These lawyer upload is known as the housing bubble leaders because WE GU lax underwriting standards. But which was not sustainable and subsequently crashed would do you rising mortgage default rate. And home still have been stuck at 425 million and strum 2007. To 24 can period. Only last year complete cross defendant to Levy a ball 5000000. And 26 came five and a half million. Well Gerri good number because you did say recovery. But not doesn't try and do you can use of the bubble years which is implying that how would you market. Looks beyond much solid foundation around and help figures. I remember you saying many times at 2015. Was the one to beat and yes we beat it last year. Manning is coming from to be consistent job creation and that's occurring in the country. I am are sold to mortgage rate being exceptionally low. For most up 26 came mortgage rates averaged under 4%. So he was a great buying opportunity and as many other people took advantage of that. Now going into the final months of the year we saw the mortgage rates begin to creep. Hi you're dead hit alt border village you're forced some byters. But one concerning trend that has been continuing throughout 26 changes do you inventory shortage. Ford nineteen consecutive months we are seeing falling inventory. People compare prompt saying months compared to one year prior year. So yeah inventories shrink game. And this will get some of these consumer confidence and excitement as should be you lack of choice says just do not excite consumers. What works and other interest in factory here is we're finding out that in the last month of 2016. Existing home sales dipped. Over it was a great year despite the fact that December wasn't that good. The home still struggled somewhat in December up because speech. Interest rate rose following the election night you know back in November that was partly due to would be excitement that people were anticipating may be. There will be a stronger economic growth in 2710. Which generally means steady interest rates should not be super low but should normalize back up to bed while other bond investors may have view that the impending deal lightly. Tax cut that's what I increasing government spending in the military and infrastructure. Could lead to permanently higher budget deficit and network are still push up interest rates so from the election night the interest rates have moved higher. And as a result is probably dead cat some people's affordability it's totally thought that it could afford homes at certain price point. But at higher potential trade. Now they are on the border a lot of instructing that has some impact. And are too blown out wanna miss out on the fact that even blow again had a torn souls were rising home prices more all right thanks. When he fixed came we encountered low lit homeownership rate in fifty years. So for a whole mortars and they are getting that equity gains. But given that we have lower homeownership rate or fewer people are participating in this equity increased. RC what Lawrence let's look at the big picture for the year were in right now. The latest numbers that you developed in the research department at any art does that give viewed any hints about how we're going to do in 2017. As a whole. Utley 27 Cano will face some closures and minus as. On the plus side do each job creation momentum appears scholar at so we should easily generate America should easily generate. On that two million jobs if some of the business spending wrote really kicks sand under Tom presidency knowing that he is troll this semester. And they did a job creation could even stronger and I will lead to higher wage growth. But on the naked the interest rates are larger. So on down I expect when he seventeen that there should be a game squeaker about one or 2% gain in unit sales stock prices could apply its more strongly I just because we have this housing shortage. And nipped up builders began to ramp up production on there will be a super good playing out personally provide more consumer choice says. You will attain. And arsenal you will create jobs for the economy the building activity has a big impact on the job creation for the country. So let's hope that builders are given more room to bill that was perhaps some relaxation and then regulation on. But bill right now we have a housing shortage more building could lead to much better 27 can. Growth possibilities risks. Well we sure hope so Lawrence and I do appreciate you joining us today and talking about. This banner year that we just experienced in 2016. Or that there are great well thank you Lawrence for being here it's more June. The chief economist of the national association of real tours. Coming up unrealistic today. We'll talk about building your dream house from scratch. Light fixtures and plummeting in car that's boring you can't count for something about it that is not enough. And we had a great builders got it done it hundreds. And it's next on our special show. How do you build. Real estate today. Connecting you with the real estate professionals. Every week. And we are back with our special show how to build a house and in depth guide to buying new and building new. Now in our first hour we talked about how to buy a brand new house when a brave new developed. And goes up a right now. Which changed the focus let's talk about doing it from scratch. Finding the land finding the builder. And making it your very own custom house. How are nursed you do that well let's ask someone who knows because he recently did it himself. Joining us now once again is Kenny parcel with the Kenny partial team at equity real estate in Spanish fork Utah. Kenny was the 2011 president of the Utah are real torch and Utah's 2013. Real tour of the year. Last year Kennedy served on the national level as any errors regional vice president for the rocky Mountain States Kenny thanks for coming back. Buick. They're Kenny if I wanna build a house from scratch. How to waste start what my first step. All the talk kind of steps first step is to find out where you wanna live and find just a piece of land have been determined. Today at the utility stub is ready to build or do you have to do you know put those improvements and so probably the first thing would be. Find the land. Is that something real Turk can help me. Absolutely you wanna find a real tour. They can tell you all those things and you know what is the water table what is Sergio technical surveys that's been done. What are the property lines is it actually build global do you need to bring in so much feel to deal all those things you really need somebody who cornered O'Keefe figured out. And while we're talking about the realistic professional here Kenny. Would any real toward be able to help me with that or should I look for real true with a certification. In buying at and improved land. Yeah I would find a real tour that's educated in that says that really can hold you by the hand and hope. You know keep UEFA many of those pitfalls that you might come across. Can you raised appoint a few minutes ago I'd like to ask you about. If you find that gorgeous little piece of heaven up on a Hilltop. With a beautiful view on all four sides. There might not be any utilities up there so for instance with the electric company pull in a line at their expense or would you have to pay a lot of money. For that line to reach your property. Yeah so you you know typically you'd be real to make an offer subject to all those things and find out and an hour early help determine what your value is on the land. And so if you be paid too much of land which you are on those costs it is better to walk away so once again hire local rope or that knows what they're doing. In trusting but Kenny what happens most of the time. Will be electric company bring those lines and for free or do you have to hit the hip to get them to your new lot. I really depends every every. Real estate land piece of land is different so that's why you have a local rule toward helped you know hold you through this by the end and what you through the process. OK so you'll find the land and you make an offer on it and it accepted. Do you actually own that land before the first shuttle goes in the ground or can you still be waiting for closing while the building starts. So that's a great question there's a lot of different opportunities you can get a lot loans and by the law in itself. You can also ruled that a lot into a construction loan. Been so good local rule tour can help Q. Navigate those mortgage mortgage fees and interest what is the best way to figure most you know did most bang for your buck. OK but I imagine you just don't guests how much money you're going to need. I mean you probably have to sit down and crunched the numbers and know exactly. What your expenses are going to be. Before you even applied for that low. Yes correct so what do you do you'd have a cost breakdown Steven. What that house is gonna cost it would also have the builder sees all the subcontractors. Who would be O line item doubt. And depending on the lender they would require certain amount down on the law and then they would give either construction loan and the law alone. As a package. Okay but in that case how can the lender even come up with a an appraisal. If the house hasn't been built yet. Yes or go to procedural take take the plans see what the cost breakdown is what kind of amenities are inside the house and that they'll give alone accordingly. Of course you've got a great big team being put together here Kenny you've got the client you've got their real tour. You have the lender you have an architect and you have a builder. The realtor sort of acts like the hub of that hole we'll correct. Yeah absolutely and in you know you get somebody that knows on the financing Micanopy terminate re doing a construction alone. You do and onetime close where you roll all interest in all wants to you outside your title agent pictures that you're mainstream clear you know that you can actually no incumbents no wind discrepancies. So it really is the ropes were really as a senator the Pope making sure everything just take care all the postings. Help navigate so you can did most bang for your buck build your dream. Now let's wrap up Kenny and talking about your own experience you built a custom house from scratch. Just in the last couple of years. How did it go for you. We had a great experience had a great builder. We knew exactly who we had every line item what we're gonna spend on light fixtures imploding in carpet flooring cabinets and counter tops and other and other data about the fifth and we had a great builders got it done and had a great experience. Would you do it again absolutely. Excellent. We'll Kenny ushered to appreciated and thank you for telling us about how to buy. A brand new house has been built and development and also how to build a house from scratch we sure do appreciate it to be rigid excuse well thanks for being here. Kenny Parcells with the Kenny part Al team at equity real estate in Spanish fork Utah. The 2011 president of the Utah are real tours Utah's 2013. Real sure of the year in any r.s 2016. Regional vice president. For the Rocky Mountains states. Coming up unrealistic today. Is your dream house have to be the big to be cute. The writ large here. So that they can have the character that's why. What really matters that makes how to how best straight ahead our special show how to build a house. But first it's time for get real tour. Special segment on realistic thing in which we ask one real sore about one important topic. But can help you get the best possible result when you buy in though properties. And today our guest is sharing meadows broker owner at Keller Williams cornerstone realty in Central Florida. Past president of the Florida real tours and currently serves as any ours regional vice president for Florida and the surrounding states. Sherri thanks for joining us today on and get real sore. And it's a pleasure to have opportunity so Cheri the question today is about that important timeframe. Between getting a signed contract on your house spent the day we go to settlement Telus for both the buyer and seller. What kind of work goes on behind the scenes during that period. We're a lot that happened what jeopardy of the mining habit buying contracts. You can bet and all the clock in the contract. Due diligence Kate began he'd do your action. You've done you're there days you done your trade rules you wanna make sure you meet the terms of the contract. That continually not. Due out trying to rob the contract ink I and it agreed upon you the close date bout. A large part of the realtors job and the benefit you figure out a professional and a transaction. But I don't company at that ball. The inspectors there and barked the survey are involved and that buyer and teller kept up to date on the that are being backed up as I'm gonna buy during that time period between college act in the credit. And boy that calendar. Is crucial because miss a deadline by one day. Your own. So many of our agents in the end that tree you'd certain software. He sat out. But I prayed at that inspection. What a contract and then. It entered added there online transaction management that they edit get that correct lag it let that the deadline. On every single deal that they're working on. That I pray and inspection need to. He'd done it surveyed need to be done when we need that I need to get screwed out of markets and all of those dates are at the calendar. I have a really good agent who's gonna stay on top. Big short of that deadline pass to protect valor act to protect the buyer and a transactions. Great to note Sherri thanks for joining us today on get real tour. All I appreciate you are needed beauty ski Sherry meadows broker owner as. Keller Williams cornerstone realty in Central Florida. The past president of the Florida real torch and currently NAR's regional vice president for Florida in the neighboring states. This is real estate today. All real estate all the time. And we are back with our special show them how to build a house. And in depth guide to building your next home from scratch. Why in different homes that no one has ever lived in before. It's exciting coming up that house maybe you. But how do you build a yard from stress. How to build a house is straight ahead right after we check in with Bill Thompson in the realistic today newsrooms are built. Hi Stephen. Plenty of people are buying homes in Minneapolis Saint Paul. But the number of Twin Cities listings. Fell more than 1% to a fourteen year low according to new figures from the Minneapolis area association of realtors. Association president Connie Lowrie tells WCC Joseph TV that many would be sellers are nervous or extra. This is. They're just afraid do. Put their own American because it inventory is solo that they're not going to be able to find anything to move to so they sell our house too quickly and make yourself quickly. Then there you know then they don't have a place to go and so there's a lot of uncertainty. Average sale price last year in the Twin Cities rose more than 5% to 232000. Dollars. Have we intend to be white on white kitchen trend or REALTOR.com recently named some. Home design trends that they predict will fade away faster and 20s17 the monotone kitchen is one of them. So the colored great for awhile one of the hottest decorator Hughes now real crew dot com says it's been so overused it. Just looks gloomy. And the quick start severe minimalism of the glam look is also on its way out. And so what is ship lap which the web site calls to only sixteen version of tacky wood paneling. Cheap night. Thanks bill. Continuing now our special show how to build a house. And right now let's examine something really. And that is making sure your new home fix your life and your lifestyle. Perfectly. Let's talk about that now with a national expert on building homes that did you just right. Joining us is Sara is Erica architect and author of the best selling not so big series of books. A series that began with a not so big house and grew to include the not so big house home by design. And even the not obeyed life in which her inspirational messages serve life as well as architecture. Her books have sold well over a million copies Sarah it's great to have you back on the show. Thank you should be here route manager here so Sarah let's start at the very beginning. What the whole idea of the not so big house. Well I eat used to work as a residential architect and people would show up in my office saying I want so many square feet and I want. It could cost this much money and it showed me pictures of what they wanted it to look like. And I news that if they want at that many square feet that would no way that it would look like back at what the budget to keep at. So I did realizing that we almost all of us have our dreams more expensive and what we can afford. It's just human nature week over week each. And current started to think about how they help people. To design and build houses that are a little bit smaller than they thought they wanted. But the little larger so that they can have its harrick and that's what really matters that makes outs and how. And so. I talked about this for years to Torre came up with the words that not a big helped but really not a debate is about. Focusing more on quality not quantity. Paradoxically. It's not in specific sides it's really watts. Just right for use and typically what we can't formally thinking about a new dream house. It's figured that we actually need if we tailor it to our real needs are real functions are real desires. Had a not so big crowds in without making something good. Really writes I just for you for your life for your household goods and debt and about your dollars to go much further towards the pig you really can. Will Sarah here's a quote I believe it's from your first book. I'm not so big house feels more spacious than many of its oversized neighbors. Because it is base with substance. All of it in use every day. Can you expand on that. That's right probably a lot of people that are listening. Half runners and their houses that rarely if ever get used. Oftentimes formal living rams formal dining and meanwhile we are living in the kitchen and the family that most of the time. What I try to help people seem that if you actually. Make one major of the primary living space. And either do away with the formal spaces or. Make a much smaller and make them do double duty here this serving another function well you end up with how it's back square footage. You're living in more square footage everyday. And accurately that he could not to take. It's a lot about doing double duty you don't want spaced that often gets. Given a double duty function in a not a big house is what we might call I'd. End or guest bedroom. You can have that be an income at the same time so that you don't need three basis you can actually have one of those scary thing. So if one of our listeners is interested in this concept in his thinking about actually building a not so big house. Where should they began. Well I would start with the first that can make serious statement read the not to think how it's an easy read and it will give you a much better sense of what it is that I'm talking about. Then if you re a reader and he loved to read about arrogance. The second that creating an opt for the council gives you more information and more of an idea of how to make Alice. Not a big. And then held by design is like a visual dictionary of all of the design principles that I'm talking about Tibet had great addition to adapt. To book series. And if your combat consistently wanna go you can go to my web sites and not a big house dot com. And there is a professional directory there scrub hum professional directory. Where you could find local architects that can help you all salute some builders that listed there. But that's a good next steps that go and interviewed some of the people locally that are interested and can help you. But in general architects are familiar with my books so if you find an architect whose words you really like. By all means go and talked about the American institute of architect is also a great place to find evidence architect so. Although it avenues are good starts. If you're not thinking about working directly with an architect. You can still find a house suspect will fit you very well the process that I've been working on actually with the developers in. The Chicago area street skate development. Are developing. Small beautiful communities. Don't have a lot of these features in the houses that they designed so we have we are working together to start to get more of this in to meet the mainstream marketplace is not a lot of them yet but. But they're comics. Could that Connecticut avenue particularly for a Chicago land that made it possibility. Sarah again thank you for talking with a today about the not so big house. Attitude Durbin thanks so much you're welcome Sarah is Erica architect and author. Of the best selling knocks no big series of books. Coming up unrealistic today. We'll go beyond the green house all the way to the pass of how stiff the absolute. Ultimate speed and energy efficiency. Something went wrong with their heating system it never passed out in and all of us are really nasty winter storm Britain froze up. And they didn't know that he was off three days. That's next on our special show us how to build a house. This is real estate today because your home might beat your biggest investment. And we're track put our special show how to build a house. And right now we're going to look at a very special kind of cuts. When that so efficient. Barely uses. Energy. It's called a cast of when that's built from the ground up. With energy efficiency in mind and a house that uses less than 110. Of the energy. A standard home. Let's talk about building a passive house now within expert joining us is Justin frank. The editor of fine home building and green building advisor. Justin leads every weekly episode of the fine home building podcast and he's the Hoechst many of fine home buildings video series. And Justin was himself a professional remodeling contractor. Justin welcome to realistic today. Thank you very much to be here we're glad you're here so just in what exactly is a passive house. OK so if you put all the different housing certification programs. On a spectrum you know people probably be most familiar with Energy Star or lead a technicality is a ball all boats. It's pretty much is the highest level of performance the could build out to you. And it's not just a description it's an actual certification. They represent the very highest energy efficiency possible. Yes that's correct. Yet you get up a plaque that goes on your wall. 01 way to we like to think about it is speaking took an average house. And you added up all the air leakage and that how's it basically is equivalent to leaving a window open year round now do you contrast that to a packed house Iannetta air leakage in that building is up out the sides of a postage card. So they are massively. Tights and energy efficient building. That is amazing. We cat stories from builders and architects and homeowners one in particular could pick up that stood out to me is that something went wrong with their heating system in their past without. In a middle a really nasty winter storm works froze up. And they didn't note that the heat was off for three days really this was during the like polar vortex that it was negative temperatures outside of leaders in Maine. And it took him three days to realize that there eat it got. That about that there are tight or talk. So let's talk about building a passive house is stopping all that air leakage. One of your top priorities. He moved on Ayers so that either number one. Kind of thing to wrapper around and to address. But her is also when you get to that super tight level look at how key do you have to think about the tunnel orientation. Its ability to capture sunlight. At certain times a year at certain times of the day at repeat it it's a bit of a myth people like to think that passed the house has no heating and cooling system. That's rarely the case they usually pat a very small. Could there's not much that heating or cooling load wants you salt lot of problems. This is a fascinating. Area of new home construction is there a market for this big enough to sustain. They're actually the market big effort to sustain yet it's like it had the highest level that you could achieve so it takes a very special kind of a client. To want to go to that level. But it is growing ever number is climbing. Very steadily we say that hundred and the one that it will met her before. Every one. But it's a very proven model for people that want to achieve that high level. We'll Justin is a fascinating topic and I appreciate you joining us today. Thank you sir Justin thank editor of fine home building and green building advisor. Who leads each weekly episode of the fine home building podcast and as the host of many of fine home building video series. Coming up on realistic today the power. Of teamwork. That's next on our special show how to build a house. If you're hungry for real estate information follow real estate today on Twitter. Shares segments listened to them again and be the first to know what's on your next week show. Just search real estate today. On Twitter. Real estate today. Because you love real estate. Welcome back to realistic today in our special show. How to build a house in which we look at the world the building and buying brand new homes. You know quite often when you go brand new. You'll find the developer has an office where the L staff. And you can work with them depart a place but remember they're working for the builder not you. Chances are they're completely honest and above board but even so. Who's on your side. So the savvy new homebuyers know. It pays to use a real tour where the year buying a brand new place and development or building a brand new place from scratch. So let's wrap up today's show by looking at that six reasons to use a real sore when you go brand new. Number one finding that brand new home. In today's world finding homes on line is pretty easy in most new home communities what have a good online presence but. What if you miss one in what are your search comes back with too many results. That can be overwhelming. A real tour can help you narrowed down the potential properties according to your specific needs. And their experts in knowing everything that's out there so right from the start you'll have an expert partner in your new home search. Number two putting your best interest first. When you do finds a new home you might wanna buy. You'll need to make sure the price the amenities and the features. All represented the best deal for you. Where the real war you have someone who represents your interest all the way from the first visit to the closing table. Which brings us to number three pricing it right if you. One package can get to certain features finishes and fixtures while another might be considered an upgrade that sort of thing. So how do you know go to the prices are correct. When a real torque and pulled a couple of balls and present you with hard data about what similar homes are selling for and whether the one you want is priced right. Or not. Number four negotiating in your interest. Real torture expert negotiators who can help get you every possible upgrade at the lowest possible cost. Without that real tore Euro and Euro. And that brings us to number five the pressure Perry when you by the place we'll have a big impact on your prophet. When you eventually sell the place. A real torque and tell you which features will help that recent don't get maximum return on your investment and which ones won't. According to real tort Kenny personnel adding a third garage for instance could cost you about 8000 dollars up front but at resale. That could bring in 181000. Dollars it's really good information that you need to ago. Number six shopping for a lender most builders were heaven in house lender who can get to a mortgage on the place and that's fine. But it always pays to shop around. A real Turk and direct you do trusted lenders who could also provide that new home mortgage and that way. You can compare. And he which alone is best for you. Now here's one more important point you can't bring a reordering and halfway through the deal. That's only fair you can't walk in all alone decide to buy that new home get the whole process rolling and then. Reveal you have an agent instead be up front. Either walking in with fewer real tour or tell the builder you are represented by an agent. After all in most cases the builder will end up paying the agent's commission now argue. So they'll need to know you're working with someone from the very start and at someone. Is your real tour because it just makes sense don't go solo instead work with a pro when you're decide. To build a house. Coming up next week go to realistic today at home ownership. The final part of our New Year's series of shows about the fundamentals are realistic. We'll look at what homeownership means to you and your family. From building wealth through building credit to building relationships in your neighbor. Homeownership can transform lives and that's next week right here on realistic today. And remember you can always listen online at radio guard reopened after all of us here. If you're realtor you can see you tie your real C today show on your web site. And that's really speak show on the Radio One 100% free to any our members just go to our new web address. Radio dot realtor and click.