Saturday, February 20, 2010

Builders Cautiously Increasing Prices and Building Spec Homes in New Jersey

The housing market is still far from recovered, but builders in Southern California, Texas and the Northeast report that prices are increasing, either by way of reduced incentives or outright increases to base pricing, according to John Burns Real Estate Consulting’s February survey of new home builders.

This month, 292 home building industry executives in 99 MSAs overseeing 2,200+ communities report that traffic and sales improved in January 2010, especially in the second half of the month. “Sales gains are very focused on the entry level and in the best locations. Traffic pick-up is in quality more than quantity,” said Jody Kahn, VP of John Burns.
Additionally, the survey found that new projects are outselling legacy projects, due to better locations and lower price points.  Also, the average unsold, finished inventory per community decreased to 3.0 units, but is up from 2.8 units in the Fall. Inventory is expected to rise through May.
Nearly all builders are starting some speculative inventory.  New FHA guidelines may hinder sales of new homes in New Jersey and throughout the country, because they reduce allowable seller-paid closing costs, and require more down payment of buyers with low FICO scores.
Your 1st time buyer credit is good on new construction in Mercer County, but the timeframe is getting tight.  Contact me for ideas of the best places for new homes in Hamilton and surrounding areas, and how to find a good builder.
Joe Giancarli, Sales Associate

Thursday, February 18, 2010

Vacant Lots in New Jersey are a Great Buy

If you want to take advantage of the low real estate prices in Hamilton, West Windor, Robbinsville and other prime locations in Mercer County - but don't want the obligation of a house or condo - think land.  If you've noticed the low prices for housing, land is an even greater value now.  Buy to invest and resell, buy your dream lot to build on someday in the future.

The cost of a finished, ready to build lot can cost a developer about 25% of the finished home price. There are a number of these ready-to-go lots on the market at about half what they actually cost to prepare, nationwide but also in central New Jersey. Investor groups are snapping them up, figuring that the time will come soon when they will be in demand.

"The country needs 1.2 million new units for the next 10 years just because of population growth," says Scott Clark, president of American Development Partners, which has bought thousands of vacant lots all over the West. "[U.S. builders] built about 500,000 units in 2009 and 600,000 units in 2008, so there eventually will be pent-up demand. We want to get as many of those finished lots as we can because as demand begins to rise, the need for housing will become painfully obvious. The delta (ratio of change to value of underlying asset) in this investment will be significant."

Contact me for the best locations n Mercer County to buy and hold or buy and build, and use this real estate opportunity for future gain.

Joe Giancarli, Sales Associate

Tuesday, February 16, 2010

Home Builder Confidence up in New Jersey for February

According to the National Association of Home Builders/Wells Fargo Housing Market Index (HMI) released today, builder confidence rose two points to 17 in February as favorable home buying conditions and signs of healing in the job market surfaced, the highest level since November, 2009.

"Builders are just beginning to see the anticipated effects of the home buyer tax credit on consumer demand," said NAHB Chief Economist David Crowe. "Meanwhile, another source of encouragement is the improving employment market, which is key to any sustainable economic or housing recovery. That said, several limiting factors are still weighing down builder expectations, including the large number of foreclosed homes on the market, the lack of available credit for new and existing projects, and inappropriately low appraisals tied to the use of distressed properties as comps."

Derived from a monthly survey that NAHB has been conducting for more than 20 years, the NAHB/Wells Fargo Housing Market Index gauges builder perceptions of current single-family home sales and sales expectations for the next six months as "good," "fair" or "poor." The survey also asks builders to rate traffic of prospective buyers as "high to very high," "average" or "low to very low." Scores for each component are then used to calculate a seasonally adjusted index where any number over 50 indicates that more builders view sales conditions as good than poor.

Our weather hasn't been very favorable to thinking of breaking ground for a new home, but remember - your 1st Time Buyer Tax Credit and Return Buyer Tax Credit are good on new construction in Mercer County.  You need to be under contract by April 30, so contact me soon to look at some ideas for new homes in Hamilton and West Windsor areas.

Here is a Hamilton new home development with 5 lots left:  Dogwood Meadows.  The developer is offering a free finished basement - a $25,800 value - to qualified buyers.  That's a great deal!

Joe Giancarli Realtor

Tuesday, February 2, 2010

New Jersey Home Builders Face Economic Reality

The average size of a home in the US went down last year, for the 1st time in 27 years.  New home buyers said they want smaller houses, and builders are listening.  Data recently released by the National Association of Home Builders (NAHB) found the average size of a new home that was completed in 2009 fell to 2,480 square feet from 2,520 square feet in 2008. The last time the average completed-home size fell by a statistically significant amount was 1982.

Homeowners surveyed by Better Homes and Gardens magazine said downsizing was becoming a bigger priority: 36% said in November 2009 that they expected their next home to be “somewhat smaller” or “much smaller” than their current home versus 32% who said that in 2008. “Not surprisingly, we see a ‘cents and sensibility’ approach when it comes to buying or improving a home, with practicality and price being the top priorities,” said Eliot Nusbaum, the magazine’s executive editor of home design.

Two other trends in home construction are contributing to the declining square footages: The prominence of first-time buyers in the housing market and the increasing number of households with members 55 and older who are buying homes. Only half of all new homes today are built with 2 stories or more, a percentage that is dropping, reflecting the aging of the baby boomer generation.

New Jersey home builders have responded.  Although actual square footage of homes didn’t fall until 2009, the percent of homes with four or more bedrooms in them has been falling since 2007, NAHB data show. And in 2009, the number of homes with three or more bathrooms fell for the first time since 1992.

Builders plan to focus on lower-priced models and smaller homes.  As reported by RISMedia, they were most likely to include these features as standard in their houses this year:

Walk-in closets in the master bedroom.
Laundry rooms.
Insulated front doors.
Great rooms.
Energy-efficient windows.
Linen closets.
Programmable thermostats.
Energy-efficient appliances and lighting.
Separate shower and tub in master bathrooms.
Nine-foot ceilings on the first floor.

Among the things that builders said they were least likely to add to houses in 2010:

Outdoor kitchens.
Outdoor fireplaces.
Butler’s pantries.
Media rooms.
Desks in kitchens.
Two-story foyers.
Eight foot ceilings on the first floor.
Multiple shower heads in the master bath.
Smaller kitchens.

Buyers want energy-efficiency, energy savings, and homes built green, from the ground up.  I can recommend builders who are committed to building with Energy-Star ratings and making their homes as energy-efficient as possible.  Check out one development in Dogwood Meadows of Hamilton, in Mercer County - there are still 5 lots left.

Contact me to find developments and builders that meet your 2010 needs.  I can help with every phase of getting you into a New Jersey New Home.  Remember, your 1st Time Buyer tax credit, or Repeat Buyer Tax Credit, is good on new home construction in New Jersey - but you need to be under contract by April 30 and built by July 31.  Start looking now, and call or email

Joe Giancarli

Look for these Trends in Today's New Jersey New Homes

The trend this year in new home construction is toward smaller more functional houses, using great rooms and forgetting luxury add-ons, like home theaters.  Buyers want plans that focus on flexible spaces, not rooms, and homes that are built green.  The dominant theme noted by builders and designers seems to be "harvest" - the feeling of family togetherness in casual living and entertaiing.

Look for these top Trends in your New Jersey New Home this year:
  • Large kitchens, with an island, and granite countertops for the custom homes
  • Energy-efficient appliances, insulation, and windows.  Some use of recycled materials.
  • Home office or study space is much more important than "formals" - of dining room or living room.
  • Main floor master suite, probably also a future trend, as baby boomers age and want a bedroom downstairs.  This partners with the decline of popularity of upstairs laundry rooms.
  • Master suite soaker tubs - more important than whirlpools.  Oversize showers with seating areas moving up in demand.
  • Outdoor living room/space - just an outdoor "room" is more popular than an outdoor cooking area.  People want to spend time outside.
  • Stone and brick exteriors instead of stucco and vinyl.
  • Community landscaping with paths and playgrounds.
  • 2-car garages.  Larger garages will still be part of custom homes.
  • Trends toward correction, away from boom.

I've been in the building trades here in central New Jersey most of my life, and can recommend builders and lenders, answer your questions, and help you along the many steps from plans to walking through the door of your new home.  Give me a call or email, and visit the New Construction page on my web site for more information.

Joe Giancarli, Sales Associate
RE/MAX Tri County
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