Grand Foundation helps Habitat break new ground

 
 

Habitat for Humanity of Grand County hopes to double its building capacity in 2022 to respond to the acute need for affordable local housing, and a recent Grand Foundation grant of $9,500 will move the nonprofit home-building organization closer to that ambitious goal.

“This grant will help us meet the moment,” Habitat Board President Martin J. Smith said, referring to the affordable housing crisis in the county in the aftermath of the COVID-19 economic meltdown and the 2020 East Troublesome Fire. “We’re grateful to the Grand Foundation for recognizing the need and helping Habitat address it.”

The grant from the Board of County Commissioners’ Fund will support Habitat’s effort to “jump start” its next two homes, which should begin to rise this spring on a seven-lot parcel along US Highway 40 in Hot Sulphur Springs. Habitat began developing that site several years ago, and two homes already have been built there. The second of those is due for completion in the coming weeks.

Those homes are the most recent of the 13 homes the local Habitat affiliate has built since its founding in Grand County in 1999. With its small crew volunteers and the help of generous local contractors, Habitat historically has been able to complete one home about every 18 months.

Habitat’s current board of directors hopes to increase its volunteer base, step up its fundraising, simplify its design and construction processes, and complete the next two homes by spring 2023.

The organization plans to break ground simultaneously on houses No. 14 and No. 15 as soon as the ground is thawed, probably in April. Specifically, the Grand Foundation grant is intended “to get two Hot Sulphur lots excavated and foundations built for a fast start in 2022.”

“If we can get both of those houses under roof and sealed in before the weather turns cold next fall, we can focus on the interiors during next winter’s harsh weather,” Smith said. “The grant will help keep us on track to finish those houses sooner rather than later. It’s a huge boost.”

Habitat’s mission is to make home ownership possible for members of the Grand County community who otherwise might never get the chance — and who are willing to invest their own time and effort for the opportunity. Selected homeowners typically help build their homes alongside Habitat volunteers and contractors in return for a mortgage that’s significantly more affordable than a conventional loan.

Keep reading on Ski-Hi News.

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2021 Price Surges Yield Record-Level Profits for Home Sellers, Report Says

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It’s no secret that 2021 was a banner year for real estate sales, but a new report from ATTOM Data Solutions indicates that homeowners that were willing to sell last year reeled in a profit that hasn’t been seen in more than a decade.

ATTOM released its Year-End 2021 U.S. Home Sales Report on Jan. 27, which shows that home sellers realized a profit of $94,092 on the typical sale in 2021—up 45% from 2020 and up 71% from two years ago.

Based on median purchase and resale prices, experts said the profit increase marked the highest level in the United States since at least 2008.

Major takeaways

  • National median home prices rose 16.9% in 2021 to $301,000, causing profits to surge.

  • Profits margins rose in nearly 90% of the nation—150 of the 173 metro areas with sufficient data to analyze.

  • Homeownership tenure dipped to a nearly 10-year low of 6.14 years.

  • One of every three single-family house and condo sales in 2021 was an all-cash purchase—a six-year high.

  • Institutional investing accounted for one of every 14 single-family home and condo sales in 2021 in the U.S.—an eight-year high.

  • Federal Housing Administration sales hit their lowest levels in 14 years.

What this means

Frenzied market behavior filled headlines last year as pandemic-induced stimulus and historically low mortgage rates helped fuel demand for a finite number of homes for sale.

According to the report, a surge of buyers financially unscathed by the pandemic flooded the market throughout 2021. The intense competition for a tight supply of homes contributed to a price surge that proved to be a boon for sellers who were able to reel in nearly $95,000 in profit for their homes.

“What a year 2021 was for home sellers and the housing market all around the U.S.,” said Todd Teta, chief product officer at ATTOM, in a statement. “Prices went through the roof, kicking profits and profit margins up at a pace not seen for at least a decade. All that happened as the virus pandemic raged on, which actually helped drive the increases instead of stifling them. Households that escaped job losses from the pandemic dove into the market, in large part as a response to the crisis. And the rising demand led the market boom onward.”

While 2021 was a record-setting year for price gains and profit margins, ATTOM noted that there are signs that prices could flatten out in this year as declining affordability, lower investor profits, and rising foreclosure activity contributes to a market cooldown that began in the fall.

The report stated that that was layered over with rising inflation and likely increases in mortgage rates this year.

A silver lining is that the current imbalance in demand and supply suggests there is room for at least some additional price gains.

“No doubt, there are warning signs that the surge could slow down this year,” Teta said. “But 2021 will go down as one of the greatest years for sellers and one of the toughest for buyers.”

Keep reading.

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The Housing Market Needs More Condos. Why Are So Few Being Built?

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Despite robust multifamily construction activity overall, the share of these units built for sale last year was less than 5.4 percent—almost the lowest level in half a century.

The rest were rental units. This trend has persisted even though demographic patterns are boosting the need for condos, and the shortage is adding to concerns about the lack of affordability in the homebuying market.

Condos can present a key path to first-time homeownership, but a combination of federal financing issues and local defect laws have contributed to a lack of multifamily units for sale. Although the issues are complex, it is critical to break down these barriers to developing more affordable housing supply and expand homeownership opportunities to more families. 

Multifamily for-sale construction is near historic lows

Multifamily construction for sale is historically low, whether measured as a share of all new multifamily units (constructed for sale and for rent) or as a share of all new housing units for sale (single-family plus multifamily units). Multifamily construction built for sale accounted for only 5.4 percent of all multifamily starts and only 2.7 percent of all single-family and multifamily home construction for the first three quarters of 2021.

This is not a pandemic-related phenomenon; multifamily construction for sale has been declining since the Great Recession, and the approval time for new construction means it is unlikely the pandemic significantly affected volume.

Condos are more affordable than single-family homes

In every major city except New York and Philadelphia, condo and co-op prices are significantly lower than single-family home prices. During the pandemic, the gap between single-family and multifamily home prices has increased as families have traded location for space, leaving condos as the far more affordable choice.

Because condos and co-ops are generally more affordable, they tend to help first-time homebuyers step onto the first rung of the homeownership ladder. These buyers often use the equity on their condo to then purchase a larger single-family home. When we look at government-sponsored enterprise purchases with a mortgage, about 60 percent of condos and co-ops are purchased by first-time homebuyers; for single-family homes, the share is around 40 percent (link corrected February 1, 2022).

Demographic trends favor more robust condo development

Condos and co-ops also tend to better match long-term demographic changes. The share of one-person households has increased from 12 percent of all households in 1960 to 28 percent today. The share of two-person households has increased from 28 percent to 35 percent.

Owner-occupied multifamily units tend to have a disproportionate share of one-person households. Approximately 20 percent of all owner-occupied single-family housing is occupied by a one-person household; that share is 45 percent in owner-occupied multifamily housing. Approximately 35 percent of both owner-occupied single-family and multifamily housing consists of two-person households, while larger households disproportionately live in single-family housing.

The growth in one-person households over the past several decades should have provided the basis for more robust growth in multifamily housing than in single-family housing, but that has not been the case.

Why the disconnect?

Condo production has been low for two main reasons. First, financing constraints are an issue for both the sponsor and the builder.

Successful condo development requires that the sponsor be able to sell the units quickly, which requires that potential unit buyers either have cash on hand or can obtain financing. Few owner-occupants, especially in more affordable buildings, will be able to purchase with cash, and with credit tight for first-time homebuyers, this uncertainty is a concern for sponsors. 

But sponsors cannot solve that problem by selling to investors, who are more likely to be able to buy with cash. For example, a potential condo buyer cannot get a Federal Housing Administration (FHA) loan or a Fannie Mae or Freddie Mac loan unless (1) at least 50 percent of the condo units are owner-occupied and (2) no more than 15 percent of the units in the complex have association dues that are more than 30 days behind.

In addition, the FHA requires no more than 10 percent of the units in the complex secure existing FHA loans, further limiting access by the low-income borrowers the FHA typically serves. And Fannie Mae and Freddie Mac require that no single entity can own more than 2 units in projects consisting of 5 to 20 units and 20 percent of units in projects consisting of 21 or more units, and that the homeowners’ association is not named in any lawsuits.

In addition, defect litigation can substantially increase the cost of insurance and the riskiness of a condo project.

There is a statute of limitations on construction defect claims, which varies by state and by type of defect. For example, in New York State, construction defects are covered for one year after the warranty date. Plumbing, electrical, heating, cooling, and ventilation systems are covered for two years, and material defects are covered for six years. As a result, the condominium association has an interest in raising defect claims promptly. These claims are common on new buildings, and they have a chilling effect on a sponsor’s willingness to build for owner-occupants. And while this litigation is under way, it is virtually impossible to sell or finance new units in the building.

Because of the higher risk associated with condo development, the builder pays a higher rate to finance the condo construction than would be the case on a rental unit, and the lender demands a higher return for the higher risk.

These federal financing constraints and local defect laws make it far riskier for multifamily developers to build rental housing than for-sale construction and have limited the construction of condos and co-ops. But amid growth in single-person households and affordability concerns in the market, the need to address these challenges and build more of this type of housing has never been greater.

Overcoming these obstacles would require government and government-sponsored agencies at the federal level to ease financing restrictions and would require states and localities to reevaluate defect laws. Although these defect laws provide valuable protection to condo owners, it may be possible to provide this protection in a form that does not discourage new condo production. This challenge reflects another instance where a concerted partnership among all levels of government is needed to overcome barriers to affordable homeownership.

Learn more on Urban.org.

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5 Mortgage and Homebuying Tips for Newlyweds

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For many newlyweds, buying a home makes their union feel even more official. After all, finding the perfect space to grow old together may seem like the most romantic thing a new couple can do.

Yet much like wedding planning, the homebuying process can sometimes test even the most solid couples. Indeed, when you combine the pressure of a new lifetime commitment with first-time homebuying jitters in a hot real estate market, you have a recipe for a potential housezilla meltdown.

But we’re here to tell you saying “I do” to a home can be as smooth as your first dance, if you know the right moves to make.

We tapped a team of experts for intelligence on what newlyweds need to know about making a financially sound mortgage commitment and choosing the right home for their happily ever after.

Tip No. 1: Check out your credit

Some first-time homebuyers don’t have much of a credit track record. Lack of a solid credit history can make lenders question whether you’ll be able to make your monthly mortgage payments. (Lenders consider a credit score of 740 ideal, while a score of 620 is the baseline for securing a decent loan with a reasonable interest rate.)

“Before you even apply for a loan, you need to check your credit report and score—and see where you stand,” says Michael Simons, a real estate broker and the owner of Tres Amigos Realty Group. “You also need to look at your debt-to-income ratio. Finally, sit down with your spouse and discuss your finances to see if one of you has bad credit or a lot of debt, as these factors could cause your loan to be turned down.”

Tip No. 2: You don’t have to put both names on the mortgage

If your credit is good, but your partner’s score is in the red, you have options.

“It’s possible to name the mortgage loan after just one spouse,” says Collen Clark, a lawyer and the founder of Schmidt & Clark, LLP in Dallas. “And that’s highly recommended if one partner’s credit score is low, because it excludes one party’s debilitating credit ratings from being considered during the mortgage calculations, ensuring a more affordable and friendly payment scheme.”

However, keep in mind that ownership is determined by whose name is on the title deed. So make sure both spouses’ names appear on the title, if only one name appears on the mortgage.

“At the end of the day, married couples must learn to disassociate the property’s ownership from the mortgage,” adds Clark. “Being the sole borrower of a mortgage loan does not equate to ownership.”

Tip No. 3: Determine how much house you need

While it might seem impossible to map out the next 30 years of your married life before buying a house, it’s a good idea to talk about the future in broad strokes.

“When buying a new home, there are a few basic things to consider,” says Rachel DiSalvo, broker associate at Keller Williams Park Views in Rutherford, NJ. “Most importantly, determine if this will be your primary residence. Then, determine if it will be a starter home or a forever home.”

Couples should also think about whether they picture children in their future or whether they foresee moving an elderly relative into their home at some point.

Once you determine the size of the home you’ll need, and drill down on a price range, you can work on your financing choices.

“A great mortgage product for a newly married couple that has never purchased a home in the past is an FHA mortgage, which is federally backed and requires just 3.5% down,” adds DiSalvo. “That could come in handy after paying for a wedding!”

Newlyweds should also keep a realistic budget in mind, beyond the home price. Remember that a home purchase comes with property taxes, homeowner insurance, and the home’s upkeep.

Tip No. 4: Beware of too low-interest rates

Did you get a fantastic offer from a lender? It could be a red flag.

“Newlyweds should be on the lookout for unbelievably low interest rates,” says Scott Rubzin, founder of Tiffany Property Investments LLC in Charlotte, NC.

Low interest rates might make an offer seem like a great deal, but there are sketchy loans out there. For instance, if you miss a payment, the late fees can be severe, and the deadlines for payments can tighten. These loans aren’t upfront about how tough the penalties are, so couples can end up losing their homes after a few missed payments.

Tip No. 5: Consider a house hack

Do you have the money to offer a sizable down payment?

“House hacking has become popular among first-time house buyers on a budget,” says Kris Lippi, a licensed real estate broker in Hartford, CT. “Instead of getting a single-family home right off the bat, why not get a duplex first, so you can rent out the other half and lessen the load of the mortgage payment? You can also portion off a section of a family home and rent out extra space there, too.”

For more tips, visit Realtor.com

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7 Things Professional Movers Want You to Know About Moving in 2022

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Whether you’re moving across town or across the globe, the process may not look like it did when you’ve moved in years past.

The pandemic has significantly affected almost every area of life, and moving is no exception. I talked to some professional movers to find out what you need to know and do to have a successful and trouble-free move this year.

Expect Delays — and Consider a Plan B

According to a recent survey by moving site moveBuddha, moving companies are struggling to keep up with the high demand for their services. “In 2021, 71 percent of moving companies reported experiencing delays,” says Ryan Carrigan, one of moveBuddha’s cofounders. He believes that 2022 won’t be any better. “People moving long distances should expect delivery delays and plan accordingly,” he adds.

Carrigan says moving companies are experiencing staffing shortages and schedules are filling up quickly. “The truck driver shortage has been a significant issue for the trucking industry, especially moving companies — and in 2021, the lack of drivers, paired with a spike in demand for long-distance moving services, led to a 250 percent increase in last-minute cancellations by moving companies and a 71 percent increase in delivery delays.”

He recommends booking a mover as soon as possible, and also having backup options in case of a cancellation. “I’d also recommend having a plan for if your delivery gets delayed so you aren’t stuck in an empty house for longer than you want to be.”

Hybrid Moving Is Going Mainstream

As a result of the pandemic-related labor challenges and disruptions to the supply chain, Mike Glanz, president of HireAHelper, believes that 2022 will be the year that hybrid moving finally goes mainstream. Hybrid moving is part DIY and part full-service. “Instead of being entirely ‘hands-off’ and fully surrendering their belongings to a full-service moving company, more and more people are hiring hourly movers to simply load and unload a rental truck or a moving container for them,” Glanz says.

By self-managing the transport and letting hired laborers do the heavy lifting, Glanz says you can save a significant amount. “A full-service move normally costing $2,600 could be done for $800 using the hybrid approach — and it gives people greater control and access to their belongings, providing invaluable peace of mind.”

Time Is Money and Money Is Time

If you’re paying movers by the hour, Cameron Brown, owner of Austin, Texas-based Einstein Moving Company, says you should move as much small stuff yourself as you can. “If you have time in between when you can move into your new place and when you have to vacate your old place, bringing over some of the random stuff that goes into your garage, [taking] stuff that is packed into your cabinets and drawers, and hanging pictures on your own before can reduce the stress of the move and save you a ton of time/money on move day,” Brown says. Believe it or not, he explains it’s not the big stuff that takes all of the time. “It is the small miscellaneous stuff that adds a bunch of trips back and forth to the truck that causes moves to go long,” Brown adds.

Make Sure You’re Prepared for Movers

Collin Flynn, owner of UniMovers, says that one of the biggest complaints he hears from movers is that the customer wasn’t prepared when they arrived. “We do provide packing services, however people often opt to save money by packing their boxes themselves.” 

Still, if everything is not boxed up when the movers arrive, it can disrupt the process. “What many people don’t know is that movers have a system when packing and loading a moving truck — certain items should go on the truck at certain times, and if everything isn’t ready, it can throw that whole system out of whack,” Flynn says. In addition to adding time to the move, he says the movers won’t be able to pack the truck as efficiently and safely. 

Transparency Is Key

Since moving companies are being stretched thin, Flynn also recommends being completely transparent with them. “Since we’re often on a strict schedule, it is imperative we know everything that will be moved, so we can give a proper estimate and we can stay for the full duration of the move.” Sometimes, people think if they don’t include everything in their request, they’ll end up paying less. But this strategy could have a negative ripple effect. 

“It puts us in a really tough spot, and we have to decide whether we’ll push back the next customer, and the movers might lose the break they were going to have between moves, plus, your price might be significantly more than you were expecting,” Flynn explains.

Give Friends and Family Plenty of Advance Notice

It’s not just moving companies that you need to contact far in advance. “If friends or family are helping, you want to get a commitment ASAP,” advises George Rohlfing, owner of Brookline Transportation, Inc. in Hanover, Massachusetts. The amount of support you get from them may determine how much you’ll need the movers to do — or even if you need movers at all. But if you wait until the last minute to ask friends and family and it turns out that they can’t help, it may be too late to book a moving company or extend your scheduled moving time. 

We’re Still in a Pandemic

Lastly, don’t forget to follow pandemic protocols — and make sure your movers do, too. “With variants of COVID-19 continuing to develop, we are still following health and safety precautions such as wearing a mask, avoiding handshakes and using fresh, clean moving supplies,” says Steven McKenna, vice president and general manager of Allied Van Lines. “Many professional movers like Allied are also providing virtual in-home estimates as a safer option to in-person walkthroughs.”

Find more moving tips on Apartment Therapy.

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