Real Estate Report 10/17/2012

 More first-time home shoppers say they want a house they can “grow into” not a home they can quickly grow out of. With big housing bargains and low rates, some first-time buyers have decided to go big with their home purchase and sidestep the traditional smaller “starter house.” A growing number of real estate professionals are reporting that childless, twenty-somethings who have strong incomes are taking advantage of housing deals and looking for their dream house now, rather than wait until later. A Minneapolis couple purchased a 3,000-square-foot-home as their first home. "The more starter homes we saw, the less impressed we became. .Since we knew we could easily afford to buy more than we were initially looking to spend, the choice was quite simple," Joseph Simons told the Minneapolis Star-Tribune. "Why not buy a forever home with everything we want?" Indeed, more buyers are purchasing a home with intentions to live in it longer than they once did. On average, buyers now expect to stay in their house 15 years compared with 10 years in 2010, says Walter Maloney, spokesman for the National Association of Realtors®. Steve Howe, a sales agent for RE/MAX Results in the Minneapolis area, says one big driver for first-time home buyers to go big on their first home is low rates. Howe says first-time buyers worry that rates — the cost of borrowing for a home purchase — will never be this low again so they want to take advantage while they can. "If they can lock in a $300,000 or $350,000 loan at 3.5 percent, that's as good as gold," Howe says. Source: Star Tribune

Remodeling and construction of single-family homes to make them more green continues to grow as more attention is placed on the benefits of going green for energy efficiency savings and better indoor quality, a new study shows. In the construction market, the green home market share has grown to 17 percent in 2011. That percentage is expected to rise to 29 percent to 38 percent by 2016, according to a new report by McGraw-Hill Construction, “SmartMarket Report: New and Remodeled Green Homes: Transforming the Residential Market.” According to the report, the two key forces driving the green growth: Green homes are often viewed as higher quality and can potentially save consumers money on utility costs. "In the current residential market, there is an enormous need to differentiate your homes for consumers," says Harvey Bernstein, vice president of Industry Insights and Alliances at McGraw-Hill Construction. "When builders are able to offer homes that not only are green but also offer the combination of higher quality and better value, they have a major competitive edge over those building traditional homes." In the past, builders have cited higher upfront costs as a roadblock to building green. However, the survey found that a much lower percentage of builders view that as an obstacle now than in 2008. Source: National Association of Home Builders
Home remodeling is expected to have its best year since 2006, according to Harvard University's Joint Center for Housing Studies. The biggest focus areas of home owners in remodeling: Mid-size kitchen and bath projects, maintenance improvements, and energy efficiency upgrades. But when it comes to remodeling, home owners are much more concerned with the price, and therefore, are making their renovation projects smaller and more focused nowadays as they search for ways to curtail costs, USA Today reports. "Before it was curb appeal, showiness and keeping up with the Joneses," Duo Dickinson, author of Staying Put: Remodel Your House to Get the Home You Want (Taunton Press), told USA Today. But now more home owners want their homes to reflect who they are. "The house is the most direct mirror of your personal values. When people renovate to change their lives, they waste money." When they renovate to improve how they live, they have the opportunity to benefit more, he says. So what do home owners have their eye on remodeling? According to remodeling experts, more home owners are concentrating on some of the following:

• Outdoor spaces, such as adding decks or porches or larger windows to more enjoy the outside of their homes.
• “Livable kitchens,” in which kitchens are becoming more multi-purpose and can serve as not a place just for cooking but also recharging laptops and a living room with comfortable seating.
• Open floor plans, as home owners seek ways to connect living rooms, kitchens, dining rooms, and even the outdoors to bring about more light and openness in their homes.
• Smaller master baths, such as spa tubs being replaced with larger showers.
• Energy efficiency, such as upgrades with windows, insulation, and doors to help curb utility costs. Source: USA Today

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