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How Does Interest Rates Affect New Home Sales and Wheres The Best Place To Build?
These real questions on new home starts and interest rates on real estate are answered by a US Master Builder and myself after receiving them from readers of my e-book, "Residential Development Made Easy." Question 1. What is the your forecast for home starts in the US for the next 12 months? 24 months? Master Builder & Developer's Reply: This depends upon where you are. New home starts are excellent for Florida, Texas, and Arizona. What most people don't appreciate is that there is always growth in new homes. Cities grow in spurts, but there is also controlled growth. As one part of an area dies from old age it is revitalized and redeveloped. So remember national growth statistics on new home starts are not much use to you unless you have a national business. The best advice we can give you is to "read" market data - census data etc. Personally I have kept average residential dollar sales figures on homes for my City since 1974. At first it might appear to be a lot of work, but after you have your base, say 20 years worth of data, you only have to add one figure a year. My City's growth dollar sales value shows a 150% increase every 8 years. It is valuable to know where you are in the cycle - so it is worth doing the figures. By that I mean, if you sold a property in the seventh year of the cycle, you'd make about 90% profit on your 'buy-price' but by waiting one more year it becomes 150%. Stats are important, so do the homework. After all, all you got to do is get some figuresfrom an office for FREE and put them on an spreadsheet. Question 2. How do changes in interest rates affect sales of first time new home, middle class, and estate housing? Aside from the obvious, any interesting statistics or trends? Master Builder & Developer's Reply: I'll tell you a secret. The answer is that it doesn't affect the new home part of the housing industry. If you watch the news when you hear about the housing industry in a slump or slowing down -- Greenspan in on the news within a few days adjusting the interest rates to ensure continued growth. The building industry is the engine of our economy. If a country has had an economic slump and the Government wants to kick it off again, they start by 'flicking on' on the new home building industry switch. It is the quickest to react; quickest to increase employment figures which pays for groceries, mortgages, school fees - you name it. Two economists arguing will give you three opinions, but they all agree on the 'economic multiplier effect.' That means that a $100 million project has an economic effect in the community of about $230 million. That is the steel in the building pays the company who made it, who then pays the wages of the workers, who then pays the grocer who then pays his staff, who then pay their rent, car payments and so on - it goes round and round. What does affect the new home industry is lower wages and our jobs going to foreign countries. If people can't afford a home, then they don't buy and that directly effects the housing industry. Question 3. What progressive processes are being implemented for more environmentally friendly and better insulated new homes? All concrete framing? (no wood) Other unique materials and approaches? Master Builder & Developer's Reply: As a Master Builder, we use the current technology in building material. Concrete is outdated and has many environment problems. Our new homes are the most environmentally friendly homes that you'll ever have built. No wood is used except for molding and cabinets. But the problem is convincing the buyer. We have access to material that replaces wood products, that are made up of recycled material that is vastly superior and looks more real than wood. We have access to luxurious carpet that is made from recycled plastic soda bottles. We have access to recycled paint that has no out gassing. Recycled roofs that have a 20 year warranty. Our homes have an R-70+ rating. Meaning less energy required for heating and cooling. There are the 'traditionalists' and there are the 'innovative clients' - all we can do is educate and then the clients will benefit and so will the environment. Question 4. What changes are being implemented to improve customer service to new home buyers? (My daughter is buying a Hovnanian home for a fraction of my last home purchase, yet she is getting a weekly status call from her new home sales representative!) Master Builder & Developer's Reply: This depends upon your builder. In our case we provide our buyers, investors and developers with daily video updates. They log into their account on our site and the site supervisor walks them through what was completed for that day and what is scheduled for the next day. Our clients have video documentation on their property. We also provide service after the sale. If three years after the purchase, the neighbor throws a ball through the window or the cat destroys the carpet -- all the buyer has to do is log on to their account. They tell us what needs to be replaced or repaired and in what room and we can do it almost immediately, because everything is in our database about the home. Author & $1.2 Billion Developer, Colm Dillon, Has Written The Best Selling 'How-To' E-book, "Residential Development Made Easy," With Readers In All States Of The USA, Canada, Australia, New Zealand, UK, Ireland and 79 Other Countries Of His Independent Web Site, http://www.realestatedevelopmentcoach.com/ez
MORE RESOURCES: Real estate experts share a message for home buyers as they predict rising home prices through 2025 Fox Business The Folly of China's Real-Estate Boom Was Easy to See, but No One Wanted to Stop It The Wall Street Journal Anywhere Real Estate Inc. (HOUS) Reports Q1 2024 Financial Results Amidst Market Challenges Yahoo Finance Australia Judge Approves $418 Million Settlement That Will Change Real Estate Commissions - The New York Times I'm A Real Estate Agent: Here's What Will Happen to the Housing Market If Rent Keeps Rising Yahoo Finance How real estate commission changes could affect buyers and sellers The Washington Post Agencies' headquarters in DC remained 'nearly empty' in 2023, real-estate board finds Federal News Network reAlpha Tech Corp. Launches Claire, Real Estate's First AI-powered, Zero-Commission Smart Buyer's Agent Business Wire Developer Sam Mizrahi files lawsuit against Edward Rogers and his real estate fund, alleges $30-million loss The Globe and Mail real estate market and insurance Sacramento Appraisal Blog Blackstone's Beleaguered Real-Estate Fund Stems Exodus The Wall Street Journal Public records: Muskingum County, Ohio, real estate transfers Zanesville Times Recorder @properties Christie's International Real Estate Taps Industry Leader to Expand in Fort Worth - CandysDirt.com CandysDirt.com Homes for Sale in New York and Connecticut The New York Times Home in Silver Hills North an oasis in Prattville | REAL ESTATE Montgomery Advertiser Real Estate Minute – 04-25-2024 KFDX - Texomashomepage.com Homes for Sale in Manhattan and Queens The New York Times Reversing the Real-Estate Doom Loop Is Possible. Just Look at Detroit. The Wall Street Journal Top residential real estate sales for April 8-12 in Sarasota, Siesta Key, Palmer Ranch, Osprey, Nokomis Your Observer Spokane-based Haven Real Estate Group acquired by Epique Realty Spokane Journal of Business Real Estate Transfers: April 25, 2024 - Riverhead News Review Riverhead News Review Philly's luxury penthouses; Linden Hill Estate in Gladwyne up for auction The Philadelphia Inquirer Inside Savannah Homes $3.1M Tybee home with panoramic ocean view Savannah Morning News Real Estate Property Transfers in Franklin for April 1, 2024 Williamson Source Rockford Is Now America's Top Housing Market After an Improbable Turnaround The Wall Street Journal ANYWHERE REAL ESTATE INC. REPORTS FIRST QUARTER 2024 FINANCIAL RESULTS Longview News-Journal Kevin Owens joins Scottsdale-based Lessen real estate company | Scottsdale Independent Daily Independent Pigford marks 50 years as licensed real estate agent Meridian Star Anywhere Real Estate Inc. 2024 Q1 - Results - Earnings Call Presentation (NYSE:HOUS) - Seeking Alpha Better Homes and Gardens Real Estate Metro Brokers extends affiliation agreement for 10 years Atlanta Agent magazine Pro boxer Caleb Truax retiring to become Twin Cities real estate agent - Minneapolis / St. Paul Business Journal The Business Journals Quebec Real Estate Investor Luc Poirier Looks to South Shore Brossard for Future Growth CoStar Group Tricon Residential Inc. Announces Receipt of Investment Canada Act Approval for Take Private by Blackstone Real ... Yahoo Finance Who's Who in Residential Real Estate 2024: Berkshire Hathaway agents - Pittsburgh Business Times The Business Journals Top Transfers: 65,000 sq. ft. Dublin property sells for $7.85 million The Columbus Dispatch The Highest Paid Execs in Real Estate Mike DelPrete CoStar Group acquires Matterport for digitalizing real estate GIM International Real estate transfers GoDanRiver.com Massachusetts housing crisis: Greater Boston Real Estate Board campaign slams transfer fees Boston Herald Positive week for Mivne Real Estate (K.D) Ltd (TLV:MVNE) institutional investors who lost 6.9% over the past year Simply Wall St Manhattan Real Estate Update: "Embrace the Boredom" westsiderag.com Bedford board votes to keep real estate tax rate level Lynchburg News and Advance As RREAF CEO Kip Sowden weighs future, son Graham waits his turn The Dallas Morning News Recent commercial real estate transactions - 4/24/24 BizTimes Milwaukee Anywhere Real Estate Inc. (HOUS) Reports Q1 2024 Financial Results Amidst Market Challenges Yahoo Finance UK What changes to real estate industry commissions could mean for you | Dollars & Sense ABC10.com KXTV Baltimore City: See how much real estate prices increased the week of Dec. 11 - The Baltimore Banner Baltimore City: See how much real estate prices increased the week of Dec. 11 The Baltimore Banner Invest DSM selects real estate firm to manage mixed-use building in Highland Park Local 5 - weareiowa.com Collierville shopping center sold to Atlanta-based real estate firm - Memphis Business Journal The Business Journals California, United States Luxury Real Estate Home California Listings How restaurants can tailor real estate strategies to an uncertain market Restaurant Business Online Big changes coming to commissions in July ABC10.com KXTV Real Estate Sales Include Two Falconer Commercial Properties Jamestown Post Journal Banks Believe They Are Well-Prepared for Commercial Real Estate Fallout The Wall Street Journal Is The Housing Market Going To Crash? Bankrate.com Choice Properties Real Estate Investment Trust Reports Results for the Three Months Ended March 31, 2024 Business Wire Fennemore renews Biltmore lease with smaller footprint amid firm's national expansion - Phoenix Business Journal Phoenix Business Journal Pod People on KWTX@4: Meet the podcast host of "Mosaic - The Stories of Real Estate." - 4.24.24 KWTX PEA Group buys ASTI Environmental Crain's Detroit Business Homebuyers and sellers might spend less following major real-estate settlement - Evanston RoundTable Homebuyers and sellers might spend less following major real-estate settlement Evanston RoundTable |
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