On average, home buyers are willing to pay an additional $8,728 upfront on a home in order to save $1,000 a year in utility bills, according to NAHB’s recently released study, What Home Buyers Really Want (2019 Edition) (Figure 1). The study is based on a survey asking recent and prospective home buyers (people who bought homes in the previous three years or are planning to do so in the next three years) about what they want in a home and community.
It is important to note that while the average amount a home buyer is willing to pay is $8,728, the median is $5,000. The difference can be explained by the presence of some very green-motivated home buyers who are willing to pay more than $50,000 upfront to save $1,000 a year. It may also be the case that these particular home buyers have the means to make a bigger upfront payment. In fact, the study shows that home buyers who expect to pay more than $500,000 for their homes will pay an average of $10,560 more to achieve those savings, about 60 percent more than the $6,653 those buying the most modest homes (less than $150,000) are willing to pay.
An equivalent way to present this information is in terms of the rate of return a buyer requires on the up-front investment. If a buyer is willing to pay $5,000 up front to save $1,000 a year, this means the buyer requires an annual return of 20 percent.
For more valuable data on green features and what home buyers are willing to trade off, please visit BuilderBooks.com and download the latest edition of What Home Buyers Really Want.
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Appraising manufactured homes has its challenges. This new training course helps address them.
A new generation of high-quality, factory-built homes is providing a popular alternative in affordable housing to millions of Americans. And Freddie Mac is making financing certain manufactured homes possible through its CHOICEHomeSM program. The program will also make it easier for appraisers to value manufactured homes by allowing valuation professionals the use of site-built homes as comparable sales where there is no CHOICEHome sales available to compare.
Residential Realities Home price growth is slowing, housing inventories are tight, and a market correction is possible. And while appraisers working in the residential real estate sector say these trends can apply throughout the U.S., they note the reality is more nuanced: Each market essentially is local and has its own dynamics.
Better Together? The backbone of the valuation profession historically has been small, local shops run by hardworking entrepreneurs. Recently, the profession has moved in a different direction as a wave of consolidation has created larger industry players. Strong Vital Signs Health care is one of the hottest real estate sectors right now, but in terms of valuation, it’s also one of the most complex. Aging baby boomers and an increase in the number of insured individuals are among the drivers pushing demand for new health care facilities.
Also read our newest columns: On Point: Appraisal Institute President Stephen S. Wagner, MAI, SRA, AI-GRS, on how AI supports its nearly 80 chapters through events, education and administrative backing. Legal Matters: Mistakes happen, but which ones will get an appraiser sued? An analysis of past claims reveals the top risks. Front Lines: Warren B. Boizot III, SRA, on how the popularity of short-term vacation rentals is bringing new challenges for appraisers.Read all that and more in the
Wayne Miller, Chair of the Appraisal Standards Board, and John Brenan, Vice President Appraisal Issues at The Appraisal Foundation, will discuss how the adopted changes for the 2020-21 edition of USPAP balance appraiser flexibility while still protecting the public trust.Wayne and John will also answer your questions and comments.Send your questions to email@example.com.
WEBINARUSPAP Updates Explained May 22, 2019 1:00 PM ET Register
Comment Now!AQB Discussion Draft on PAREAThe AQB wants to hear from you! The comment deadline for the Discussion Draft on the Practical Applications of Real Estate Appraisal is June 2, 2019.To review the Draft, click here. Send your comments to: AQBcomments@appraisalfoundation.org.
Historically, purchase mortgages have performed better than refinance mortgages, or “refis,” defaulting less often. But changes made in response to widespread appraisal bias during the crisis have improved the industry’s risk assessment and management abilities overall and, accordingly, have decreased the expected default rate on all mortgages.
We looked at the data and concluded that these improvements have reduced the difference in how purchase and refi mortgages perform. And while the models used in FHA, Fannie and Freddie underwriting systems are not public, our results suggest an update may be in order.
Reducing appraisal bias
The pervasive belief that appraisal bias, especially towards no-transaction refinances, was a significant contributor to the great financial crisis lead to a significant re-evaluation of the appraisal process after the crisis. Appraisals undergo much greater scrutiny today, and the GSEs commonly check these numbers against values generated from automated valuation models (AVMs). AVMs use mathematical modeling, drawing on a huge database of recent transactions, complete with property characteristics, to generate an estimated sales prices.
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JPMorgan Chase CEO Jamie Dimon told shareholders this week that the U.S. housing finance system is “desperately” in need of reform, and claimed that the housing market’s status quo of the last several years left at least $1 trillion in mortgages on the table.
Dimon made those claims in his yearly letter to shareholders, where he comments on both the bank and the country’s overall financial picture.
Dimon is no stranger to using these letters to call for sweeping reforms. Two years ago, Dimon said that if certain mortgage lending and servicing reforms were put in place, there could be an increase of $300 billion in originations per year. The year before that, Dimon claimed that originating mortgages was basically a losing proposition for the bank, but said that Chase continued to lend for the good of its customers.
One year ago this week, I was in Montgomery County, Tennessee to break ground for a new data center in Clarksville. It was clear from the excitement at the event that the jobs and economic investment meant a great deal to the community. I’ve seen that same optimism in communities around the country that are helping to power our digital economy. And I’m proud to say that our U.S. footprint is growing rapidly: In the last year, we’ve hired more than 10,000 people in the U.S. and made over $9 billion in investments. Our expansion across the U.S. has been crucial to finding great new talent, improving the services that people use every day, and investing in our business.
Today we’re announcing over $13 billion in investments throughout 2019 in data centers and offices across the U.S., with major expansions in 14 states. These new investments will give us the capacity to hire tens of thousands of employees, and enable the creation of more than 10,000 new construction jobs in Nebraska, Nevada, Ohio, Texas, Oklahoma, South Carolina and Virginia. With this new investment, Google will now have a home in 24 total states, including data centers in 13 communities. 2019 marks the second year in a row we’ll be growing faster outside of the Bay Area than in it.
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