With residential housing sales amid a “genuine recovery” according to National Association of Realtors’ economist Lawrence Yun last month, readers might have a taste for more stories about what’s working and what’s not in their local single-family home market.
Monday’s existing home sales report from the National Association of Realtors showed sales of “used” homes were up 10 percent in October over the year-ago period, and up more than 2 percent over September. Yun noted that despite a still-significant number of foreclosed properties among the sales, the inventory of existing homes continues to tighten. That’s sending prices up, and, in a phenomenon you may have noticed more of lately, emboldening buyers and contractors to make the most of what properties are available.
Remodeling creates a ripple effect through local laborers, skilled trades, waste removal, equipment suppliers and retail stores. What’s really interesting, though, is the spate of complete teardowns and rebuilds, where outdated houses in desirable neighborhoods are swept away and larger, more amenity-filled homes erected in their place.
Here’s an interesting May 2012 article from a Massachusetts real estate blog that says teardowns in 2012 were the most prevalent in years. The article makes the case that teardowns are a sign of an improving economy and a pent-up demand for spa bathrooms, great rooms and other features not found in older but sought-after suburbs — and not just in the higher-end markets but in middle-income neighborhoods as well. Foreclosures are ripe for teardown, the article says, and notes that the cost of new construction is less than that of renovation and remodeling. (Good topic for a sidebar or infobox: Materials cost? Electrical and other codes? Finicky work on older structures vs. semi-pre-fab components that newer houses are made of?)
Here’s an October article from the Houston Chronicle noting that residential demolition permits are up 22 percent year to date in that region, and the Minneapolis-St. Paul Business Journal reports that teardowns in the city of Edina are on track to set a record this year. Why not check in with your local cities and counties for the number of residential demolition permits year-to-date, and chronicle the dollars and cents decisions behind this move to raze and replace?
Not everyone is happy with the notion of teardowns, especially when the new homes change the character of existing neighborhoods, as this letter to the editor in the Vancouver Sun, protesting some 755 demolitions year to date, attests. You’ll want to acknowledge that angle and perhaps compare and contrast municipal ordinances and policies across your region to see which cities keep the tightest control on teardowns.
This U.S. Census Bureau report on characteristics of new homes, albeit reflective of 2011 data, will give you an idea of trends in amenities and features from square footage to number of bathrooms to lot size and price per square foot of new construction — as a basis for comparison with existing homes in your market.