The average size of a single family home shrank to 2,480 square feet in 2009, according to the National Association of Home Builders (NAHB).  The industry trade group’s survey of builders in January indicates that 95% of builders said they’d be working on lower-priced models in 2010, while 96% said they planned to build smaller homes.

The NAHB survey revealed the top 10 features builders said they would incorporate in the homes they built this year. These included: 

1. Walk-in closet in master bedroom
2. Laundry room
3. Insulated front door
4. Great room
5. Low-E windows
6. Linen closets
7. Programmable thermostat
8. Energy-efficient appliances and lighting
9. Separate shower and tub in master bedroom
10. Nine-foot or higher ceilings on the first floor 

The design features that were least popular with builders and not likely to be incorporated in any new construction this year included outdoor kitchens and fireplaces, sunrooms, butler’s pantries, 8-foot ceilings on the first floor, media rooms, smaller kitchen areas than in the past and a two-story foyer. 

A Growing Pragmatism among Home Buyers 

An earlier survey of potential new home buyers by Better Homes & Gardens magazine in November 2009 that was presented at the International Builders Show in January, confirms that new home buyers do indeed want smaller homes, but there were certain priorities that were even more important than size. 

Among the findings for priority items, the survey indicated prospective buyers wanted: 

• Energy efficient HVAC systems –   76%
• Energy Star rated appliances –       70%
• Efficient floor plan design -               66%
• Abundant natural light -                    65%
• Lots of storage space -                        62%
• A smaller home -                                   36% 

Other items that were relatively high on the prospective buyer’s wish list were: 

• Separate Laundry areas -                             85% (up from previous surveys)
• Low maintenance exteriors -                     81%
• Private back yards -                                       80%
• Larger kitchens with eat-in areas –          67%
• Extra bedrooms and baths -                       65%
• Comfortable family gathering space -    62%
• Space suitable for home office -                59%
• Improved home electronics -                    48% 

Source: National Association of Home Builders 

Greater Comfort and Less Maintenance Dominate Buyers’ Wish Lists 

Buyers were much less interested in proximity to downtown (29%), a master suite like a great hotel room (29%), deluxe bath finishes (24%) and deluxe kitchen finishes (20%). 

Information gathered by the Better Homes & Gardens survey also found there’s little doubt that the challenging economy is affecting buyers’ home size and home design preferences.  At the same time, there are demographic factors driving a shift in demand for different types of housing as well. 

According to a story in U.S. News & World Report (“The Future of Housing Demand: 4 Key Demographic Trends,” 2/1/10), aging baby boomers are choosing to relocate closer to their children and grandchildren rather than heading south. And because they’re generally healthier than their parents were, they’re also putting a move into retirement communities on hold as they settle into mixed age condominiums. 

Along with younger age groups, such baby boomers will increase demand for pedestrian-friendly, mixed-use urban communities as well as redeveloped, walkable town centers in the suburbs. Public policy is also encouraging more concentrated development than the suburban community plans of the past.

William Raveis explains the new raveis.com Housing Data Matrix -- the important benchmarks and indicators of market activity

The mortgage company, which has been operating since 1984, received this honor as a result of the company’s long-time ethical, responsible lending policies especially during a time when many other lenders were drawn into exotic mortgage loans that led to the recent housing recession. 

According to Mr. Ferraro, the top ranking status ultimately benefits the company’s home buying customers.  “Our ranking not only gives us the ability to offer great FHA rates to our customers but also allows us the ability to launch new products that are largely unavailable to other lenders,” he said. Products include mortgage loans with 97% conventional financing on single family purchases and 95% conventional financing on purchase and rate/term refinances on single family properties and condominiums with conventional financing, both with private mortgage insurance.  

An additional low financing benefit is also available to those looking for a second home. William Raveis Mortgage can provide up to 90% LTV conventional financing with private mortgage insurance.  The maximum loan amount is $417,000 for these programs with low down payments and private mortgage insurance. 

“If you are in the market to take advantage of great rates and good housing values,” stated Ferraro, “now is the time to maximize your purchasing power with William Raveis Mortgage, nationally recognized as a high quality low down payment lender.” 

Since its establishment 26 years ago, William Raveis Mortgage LLC has closed more than $6 billion in mortgage loans. Its consistent performance is attributed to, experienced management team, the company’s diverse portfolio of lending partners, national pricing power, progressive technology for its loan officers, and sound underwriting approvals. The company is licensed in MA, CT, NH, RI, and NY.

After the January 2010 Las Vegas convention wrapped up, it was clear to attendees that the manufacturers of many home products have made significant strides in improving energy efficiency throughout the home. And products that contribute to enhanced comfort, convenience and elegance continue to share center stage with energy-efficient products.

Here are a few of the most intriguing new products that were introduced at the show.

Energy-efficient products

Lighting

• A new CFL light dimmer (Leviton Decora®) which automatically detects if the bulb is incandescent or a dimmable CFL, and adjusts the dimming rate accordingly.

• Another new dimmer (Maestro® Dimmer with Occupancy/Vacancy Sensor), made by Lutron Electronics to reduce unnecessary energy consumption.

Residential wind turbines

• A compact wind turbine (Honeywell) that resembles a large bicycle wheel with plastic blades. It can be mounted on a home rooftop and generates electricity at wind speeds as low as 2 miles per hour, the equivalent of a light breeze.

Thermal Hot Water

• A solar thermal collector made by EarthNet Energy that makes hot water for domestic use, radiant floor heat or spa and pool water heating.

Heating and Cooling Systems

• A home heating and cooling system powered by renewable energy. The system will be brought to market this summer by Lennox Industries.

Insulation

• Natural wool insulation (by Green Metal USA), a product that absorbs moisture in humid climates, absorbs airborne toxins and won’t burn. It’s also produced with low energy, is recyclable and easy to install.

Roofing

• Stone-coated steel tiles and shakes (DECRA Roofing Systems) that are lightweight, energy-efficient, long-lasting, low maintenance and contain over 25% post-consumer recycled steel.

• Synthetic slate and shake roofing tiles from EcoStar® which, with 80% post-industrial recycled materials, represent an eco-friendly alternative to traditional slate and cedar shake roofing products.

Attic ventilation

• An attic-ridge vent (Greenward Ridge Vent) that harvest escaping hot attic air and uses that thermal energy to preheat water in the home, by Energy Alternatives.

Outdoor water use

• A rainwater harvesting system (Original Rainwater Pillow) that’s designed to be stored in a horizontal wasted space like a crawl space or under a deck or porch.

Other innovative home enhancements introduced at the show included:

Shelving

• Floating glass shelves (Bluegate Inc.) that require no hardware.

Noise reduction

• A non-toxic, noise-proofing compound that reduces noise transfer from one room to the next by up to 90%. The product, made by The Green Glue Company, contains no volatile organic chemicals (VOCs) or hazardous odors.

Architectural stone

• Affordable architectural-cut stone for window and door surrounds, columns, balusters, caps and sills, fireplace surrounds, hearths and mantles, by Delta Stone Products.

Storage

• Automated, vertical carousels (by StorageMotion Inc.) for the pantry and master closet, including The Automated WardrobeLiftTM and the ShoeSelect,TM which holds hundreds of shoes.

Basement waterproofing

• A high-strength, elastomeric liquid rubber (Ames Research’s Blue Max) that can seal hard-to-stop leaks on below-grade foundations and basement walls, making them impervious to water.

Outdoor decking

• Decking and rails (Trex TranscendTM) that are guaranteed to outperform wood, composite materials and PVC and contain 95% recycled content.

Luxury Market Update Year End for Connecticut 2009

In the last posting we defined the luxury market for the purpose of this writing as $1-$3M, $3-$5M and $5M+. We also reviewed the development of the market over the first nine months of the year. 

Real estate has had an interesting ride since the fourth quarter of 2008 as a result of the challenges in the economy and the financial system in particular. Also, substantial expectations have been put on the new administration to take steps to stimulate the economy and establish some balance in the financial system / lending sector. 

So, you might wonder how did the high-end market end for 2009? 

In comparing the year end sales in the $1-$3M range from 2007 to 2009 it was interesting to see that although the number of unit sales dropped significantly year-to-year, the average sales price didn’t.   In 2007 there were 2009 units sold, compared to 1279 in 2008 and 954 in 2009.  The average sales price went down from $1.6 to $1.5 million      (-6%) over the same time. Interestingly the average list prices for sold properties were constant at about $1.7 million for the whole period reflecting a net change between 2007 and 2009 of a 1.4% decrease.  There was a significant change in new listing inventory over the past three years in this price range with 4838 listings in 2007 and only 3692 in 2009. This corresponds to a drop in listings of 24% over the two-year period. 

The charts below represent the change in new listing inventory as well as the change year-to-year (orange) and the cumulative change (green).

As we go up in price point to $3-$5M we see the same trend.  Unit sales dropped significantly year-to-year, but average sales price and average list price for sold listings show little change.   

In this price range there were 285 units sold in 2007, 161 in 2008 and 112 in 2009.The average sales price dropped from $3.6 million to $3.4 million (-6%) during the two-year period. Average list price of units sold varied between $3.8 and $3.9 million (net change of 1%) and consistent with what we saw in the lower price range. 

New listing inventory at this price range follows the trend for the $1-$3M range with 679 listings in 2007 and 507 in 2009, a drop of 25% over the two year period.

Let’s take a look at the $5M+ range.   We can see some differences here compared with the lower price points, even though the drop in units sold shows the same trend – from 161 in 2007 to 80 and 68 during the following years.  Interestingly in this sector the average sales price was higher in 2008 and 2009 than it was in 2007.  The average sales price in 2007 was $7.2 million while it was $8 million in 2008 and $7.3 million in 2009.  This corresponds to a price increase of 11% between 2007 and 2008 and an increase of 2% over the two-year period.    The average list price for sold listings shows a positive trend – $7.8, $8.9 (+14%) and $8.8 (-1%) million respectively, with an increase of 13% over the 3 year period. 

In this price range we can see that there has not been the same drop in new listings as for the lower price points. There was a drop from 368 to 318 (14%) between 2007 and 2008. However, this was compensated slightly by a 2% increase in 2009, a 12% drop over the 3-year period and significantly lower than the prior price points.

If we take a closer look at the development during 2009 we can see a significant increase in activity during the second half of the year for all price points.  For the $1-3 million range, the units sold during the second half of the year were 626 which is an increase of 91% compared with 328 sold during the first half of the year. The relative increase is even higher for the other price points – $3-5 million shows an increase of 150% from 32 to 80 and $5 million+ a 124% increase from 21 to 47 between the first and second half of 2009.

As buyers become more confident, and the numbers seem to reflect that, the unit sales should continue to rise for 2010.   We should remember, though, that the average supply of inventory is up considerably compared with two years ago for all price points. In the $1-3 million range the supply of inventory has increased from 13 to 27 months, in the $3-5 million the corresponding increase is from 15 to 43 months and finally for $5 million from 23 to 54 months.  Consequently, there is a lot for a buyer to choose from and sellers need to take note of this when pricing their home for sale. 

Luxury Market Update Year End for Massachusetts 2009

For the purpose of this writing we will define the luxury market as properties with a price point of $1-$3M, $3-$5M and $5M+. We also reviewed the development of the market over the first nine months of the year. 

The Industry has experienced an interesting ride since the last quarter of 2008 with the challenges in the economy and the financial system in particular. Substantial expectations have been put on the new administration to take steps to stimulate the economy and establish some balance in the financial and lending sectors. 

 So you might wonder how did the high end market end for 2009? 

In comparing the year end sales in the $1-$3M range from 2007 to 2009 it is interesting to see that although the number of unit sales dropped significantly year-to- year, the average sales price didn’t.   In 2007 there were 1872 units sold, compared to 1429 in 2008 and 1210 in 2009.  The average sales price went down from $1.5 to $1.45 million (-3%) over the 3-year period.  Average list prices for sold properties were constant at about $1.5 million for the whole period.   

There was not a significant change in new listing inventory over the past three years in this price range with 3976 listings in 2007 and 3699 in 2009. This corresponds to a drop in listings of 7% over the 3-year period. 

The charts below represent the change in new listing inventory as well as the change year-to-year (orange) and the cumulative change (green).

 As we go up in price point to $3-$5M we see the same trend.  Unit sales dropped significantly year-to-year, but average sales price and average list price for sold listings show little change.   

In this price range there were 122 units sold in 2007, 91 in 2008 and 65 in 2009. The average sales price dropped from $3.5 million to $3.4 million (-4%) during the 3-year period. Average list price of units sold varied between $3.9 and $3.8 million.

 New listing inventory at this price range increased significantly from 2007-2009 with 284 listings in 2007 and 334 in 2009, an increase of 18% over the 3-year period.

Let’s take a look at the $5M+ range.  We can see some differences here compared with the lower price points, even though the drop in units sold shows the same trend – from 32 in 2007 to 24 and 16 during the following years.  Interestingly, in this sector the average sales price was higher in 2008.  The average sales price in 2007 was $6 million while it was $6.8 million in 2008 and $5.3 million in 2009.  This corresponds to a price increase of 10% between 2007 and 2008 and a decrease of 20% between 2008 and 2009 with a net change of 13% over 3-years.   The average list price for sold listings shows a change of- 7% over the 3 years. 

In this price range we can see new listings did not change significantly year-to-year. There were 101 new listings in 2007 compared to 95 for 2008 and 96 for 2009, resulting in a 5% drop over the three years. 

 If we take a closer look at the development during 2009 we can see an increase in activity during the second half of the year for all price points.  For the $1-3 million range the units sold during the second half of the year were 781 which is an increase of 76% compared with 443 sold during the first half of the year. $3-$5M shows a 64% increase in the sales from the second have over the first half of 2009 with 41 sales after July and 25 sales the first half.   The $5 million+ showed the least change of 13% between the first and second half of the year with 8 sales for the first half and 9 for the second.

As buyers become more confident and the numbers seem to reflect that, the unit sales should continue to rise for 2010.   We should remember, though, that the average supply of inventory is up considerably compared with two years ago for all price points. In the $1-3 million range the supply of inventory has increased from 12 to 22 months, in the $3-5 million the corresponding increase is from 21 to 39 months and finally for $5 million from 79 to 88 months.  Consequently, buyers have a wide choice of inventory: and sellers need to take note of this when pricing their home for sale.  

For more details on market data visit raveis.com 

Data provided by Realty Marketing Update 

Submitted by Angela Thelin, Managing Director, Exceptional Properties, William Raveis Real Estate, Mortgage and Insurance.

                    Click to enlarge visual 

Reintroducing Mortgage Insurance on Conventional (non-FHA) Loans

After an increase in listing inventory over the first half of 2009, I see some clear signs of movement and a hope for positive things to follow.  In general, there was an increase in activity level after May, however it was primarily the lower end of the luxury property market that was moving.  This follows the same pattern as previous years, keeping in mind that the total sales volume is higher in this price range. Interestingly, the listing inventory was lower than 2008 at the same time. The lower inventory translates into less properties on the market for buyers to choose from and better opportunities for sellers.   With all that said, pricing the home correctly is a big component in the sales activity.

 From January to October last year, 779 sales were reported in the range of $1-3 million compared to 1168 for the same time in 2008 and 1791 in 2007. Sales in 2009 was consequently 33% below 2008 and 57% below 2007. If we just look at the last five months for the same years we see that sales are 22% below 2008 and 45% below 2007, which is a sign that we are moving in a positive direction. On top of this, sales in October were higher than for the same period in 2008. You can expect properties at this price point to stay on the market for an average of 144 days compared to the average of 126 and 118 from same period in 2008 and 2007. 

 At the $3-5 million listing price range, we had 89 sales through October 2009, again with the highest number of sales during the summer.  Sales for the same period in 2008 were 151 and 252 for 2007.  Just looking at the last three months we can see that the number of sales during the two last years are almost on par at 40 sales and just 35% lower than 2007. The average time for a property to be on the market at this price point is around 171 days.  From the chart below you can see the inventory in 2009 is higher than the same period over the past two years.

 Moving onto the higher tier of luxury homes, $5+ million, there were 55 sales in Connecticut from January to December 1, 2009 compared to 77 sales in 2008 and 141 in 2007.  The number of sales from September through November was slightly higher than this same time in 2008: 22 vs. 20. Even though it is considerably lower than the 41 in 2007, it’s still a positive development. At this price point you can expect your average days on the market to be around 196, which is in line with the situation for 2007 but about 50 days longer than in 2008.You can see the total inventory building over the past years and remaining at a higher level in 2009 compared to the prior two years.

Fairfield County is following the trends of the State as there is a higher concentration of the higher end homes in this County than the rest of Connecticut. 

For information on the latest statistics in your specific city or town, visit

http://www.raveis.com/localhousingdata.asp . 

To learn more about how to analyze the data visit http://blog.raveis.com/2009/11/16/analyzing-the-data-for-buying-and-selling-a-home/

More luxury market watch blogs to follow for MA, RI, and Westchester County, NY

In Connecticut, for example, 2009 building permits should settle in the 3,000 range by year’s end. While still far short of the more than 11,000 permits issued in 2005 or the 7,746 permits issued in 2007, the slowdown may have reached its end.    

High Levels of Affordability Drive Home Sales

The good news for buyers is that housing affordability is currently at one of the highest levels that we’ve seen in nearly 20 years, driven by attractive mortgage rates and adjusted home values.  New levels of affordability are motivating buyers to re-enter the housing market so they can take advantage of unusually low pricing levels throughout much of the Northeast.  

Sales data in some areas confirms that buyers are indeed becoming more active. The number of existing home sales in Massachusetts that were pending (or put under agreement), for example, was up 27% in October 2009 for the fifth month in a row, compared to October 2008. And both single family home sales and condominium sales were up 17% in October from a year ago, the Massachusetts Association of Realtors reported. Massachusetts realtors attribute the spike in sales, which has been more apparent at the lower price ranges, to the $8,000 federal tax credit available to first-time homebuyers. 

A similar trend is apparent in neighboring Connecticut, where sales of single-family homes and condominiums rose by 11.5% and 10%, respectively, in October.  

The $8,000 federal tax credit has been extended through June 2010 and the income limits for eligible homebuyers has been raised, enabling a greater number of buyers to quality for the credit. We believe that the extension of the first time homebuyers’ tax credit will continue to help drive buying activity, as will the new $6,500 tax credit for step-up buyers who wish to trade up.  (“Step-up” buyers are those who have owned and occupied a residence for at least five of the past eight years.) 

New Construction Pricing is Determined Differently

Unlike sales of existing homes, however, pricing in the new construction marketplace is not only determined by supply and demand, but also by the cost of land, materials and labor.  

While some economists remain pessimistic, predicting that a full market recovery could take another three to five years, others sense that the worst is behind the industry and that a recovery is indeed underway.  In either case, certain markets show greater resilience and tend to recover more quickly, simply because they are great places to live; many offer perennial value and will always be perceived as desirable due to waterfront locations, proximity to a major university or commutability to a leading jobs center. 

Buyer Priorities Have Shifted Dramatically

Still, today’s buyers are exhibiting strikingly different buying behaviors than their predecessors did just a few years ago.  Today’s consumers are opting for smaller square footage with the same quality features of larger homes  and are shrewdly assessing the huge cost savings that come from heating and cooling a smaller home, not to mention reduced maintenance and furnishings expenses as well as lower property taxes. 

In the past, one often universal mindset among buyers was “Bigger is usually better.” Today’s buyers, in contrast,  have developed a new sensibility, one characterized by a pragmatic, frugal assessment of the “cost to operate” over the long term as well as a newfound appreciation for the financial benefits and enhanced quality of life that energy-efficient homes offer.