The “Not-So-Obvious” Benefits of Buying New

Bob Barreto

By Bob Barreto, President
Home Builders Association of Greenville

Home buyers have the choice of two types of houses on the market: resale or new.  Home buyers planning to buy a brand-new house or town home often cite, as factors driving their choice, energy-efficiency, open layout, a warranty, and being able to select appliances, flooring, and paint colors.

But builders say that buyers can be drawn to a new house for reasons that are not as obvious.

Building a Community Together
A new home often comes with a new community. When families move into a new community at the same time, lasting bonds of friendship and neighborliness are formed right away. Nobody is the “new kid on the block.”

Community Amenities
New communities generally offer popular amenities like pools, walking trails and athletic courts. Some new communities are geared toward residents in the same stage of life. Whether you have a young family, or consider yourself to be an “active retirees,” you can find a community that meets your family’s needs.

Entertaining
Throwing a party in an older home can be a challenge because smaller, distinct rooms make it difficult to entertain guests. Most new homes offer larger, open floor plans ideal for entertaining. We have all heard that parties usually end up in the kitchen. What better way to solve that problem than to have your kitchen in the great room?

A Clean Slate
Parking your car in a sparkling-clean garage, or being the first to cook a dinner in a brand-new kitchen, is part of the appeal of new construction. In addition, you will not have to spend time stripping wallpaper and repainting to suit your style.

Outlets, Outlets Everywhere!
If you have ever lived in an older home, you know the challenges of having enough extension cords, and the concerns of connecting too many appliances to the same cord. Home builders had no way of anticipating the invention of the modern technology that we enjoy today. New homes can accommodate advanced technologies like structured wiring, security systems, and sophisticated lighting plans, and can be tailored to meet your individual needs.

Consult a New Home Sales and Marketing Professional
Buying a new home comes with its own set of challenges. For starters, your new home may not even be built yet. However, the important advantage of buying a new home is that you can tailor nearly every aspect of your new home to suit your family’s needs and lifestyle. For that advantage, you may sacrifice immediate availability.

There is a group of professionals in the Greater Greenville area who specialize in connecting home buyers with Approved Professional Builders to make that dream of a new home a reality.

Members of the Sales and Marketing Council of the Upstate work directly with Approved Professional Builders. They are uniquely qualified to help you with your new home quest. For more information about the SMC of the Upstate, visit HBAofGreenville.com/sales-and-marketing-council.html.

Hire an Approved Professional
When buying a new home, in addition to consulting with a member of the Sales and Marketing Council of the Upstate, ask your Home Builder if he or she is an Approved Professional Builder. For more information about Approved Professional Builders, visit HBAofGreenville.com/approvedprofessionalbuilder.html.

FHFA: Mortgage rates increased in June

Nationally, interest rates on conventional purchase-money mortgages increased from May to June, according to several indices of new mortgage contracts.

The National Average Contract Mortgage Rate for the Purchase of Previously Occupied Homes by Combined Lenders Index was 4.00 percent for loans closed in late June, up 13 basis points from 3.87 percent in May.

The average interest rate on all mortgage loans was 4.00 percent, up 10 basis points from 3.90 in May.

The average interest rate on conventional, 30-year, fixed-rate mortgages of $424,100 or less was 4.15 percent, up 18 basis points from 3.97 in May.

The effective interest rate on all mortgage loans was 4.11 percent in June, up 9 basis points from 4.02 in May. The effective interest rate accounts for the addition of initial fees and charges over the life of the mortgage.

The average loan amount for all loans was $318,900 in June, up $3,400 from $315,500 in May.

South State Bank annouces $100 million low-income mortgage initiative

HBA member South State Bank announced this week a $100 million initiative to offer mortgages to consumers in low- to moderate-income and minority areas.

The $100 commitment, which is planned over a five-year period, will target the bank's combined markets following its merger with Park Sterling Bank, another HBA member.  The combined bank will serve South Carolina, Georgia, North Carolina, and Virginia, with a strong presence in the Greater Greenville area.

The Headlines: July 27, 2017

Ten Home Building industry stories we have read recently:

• When builders and Postmasters disagree. NAHBNow.
• Treasury examines burdensome tax regulations with eye to repeal. NAHBNow.
• New home sales rise by 2.9 percent in May. Reuters.
• Existing home sales rebound in May despite record-low supply. MarketWatch.
• Five years ago, Trump made a prediction on Twitter about housing. He nailed it. The Washington Post.
• More than half of U.S. renters can't afford a mortgage. MarketWatch.
• Could the housing market meltdown happen again? Investors Business Daily.
• Community banks account for nearly half of residential construction loans. Eye On Housing.
• Want a $1 million paycheck? Skip college and go to work in a lumberyard. Bloomberg.
• Top 5 mobile apps for Home Builders. NAHBNow.

July 27, 2017

Featured Bridge Award: Fairview Builders at Royal Oaks Court

This week's Featured Bridge Award, presented by GBS Building Supply, is in the Craftsmanship Category, New Home.  Fairview Builders' project on Royal Oaks Court won the Bridge Award in the $1 million to $2 million price range.

Fairview Builders at Royal Oaks Court

The 2016 Southern Home and Garden Bridge Award was presented by GBS Building Supply for Best Kitchen in a New Home, $1 million to $2 million. Congratulations Fairview Builders.  See all of the Bridge Awards by visiting HBAofGreenville.com.

House prices jump 6.9 percent year over year

U.S. house prices rose in May, up 0.4 percent from the previous month, according to the Federal Housing Finance Agency (FHFA) seasonally adjusted monthly House Price Index (HPI). The previously reported 0.7 percent increase in April was revised downward to reflect a 0.6 percent increase.

The FHFA monthly HPI is calculated using home sales price information from mortgages sold to, or guaranteed by, Fannie Mae and Freddie Mac. From May 2016 to May 2017, house prices were up 6.9 percent.

For the nine census divisions, seasonally adjusted monthly price changes from April 2017 to May 2017 ranged from -0.5 percent in the Middle Atlantic division to 1.0 percent in the West South Central division. The 12-month changes were all positive, ranging from 4.0 percent in the Middle Atlantic division to 8.7 percent in the Pacific division.

ReWa Approves New Account Fee Schedule

NAF changes apply to multifamily, mixed-use projects
Changes apply to fees paid on or after January 1, 2019

At its regular board meeting in July, ReWa approved changes and increases to New Account Fees (NAF) for mulifamily and mixed-used projects. According to ReWa staff, the new fee schedule better assesses the cost of serving these larger developments, particularly mixed-use developments that include commercial activities.

The new fee schedule does not impact single-family residential developments.

Your home builders association was consulted on the proposal before it was submitted to the ReWa board.

New Account Fees for Multifamily and Mixed-Use ProjectsAll new account fees are currently based on meter size; however, this creates an inequity among customer classes. To address this inequity, ReWa will assess multi-family and mixed use new account fees based on the estimated daily wastewater flows as provided by the South Carolina Department of Health and Environmental Control Regulation 61-67, Appendix A-Unit Contributory Loadings to All Domestic Wastewater Treatment Facilities (UCL). The estimated daily wastewater flow would be multiplied by the capacity cost per gallon of $8.33, which is based on the current new account fee of $2,500 for single-family homes with a 5/8” meter divided by the 300 gallons capacity per day per the UCL.

The table below shows the flow and the respective proposed new account fees for multi-family housing per unit.

Multi-Family Housing	Flow (gpd)	NAF
Three (3) Bedrooms (Per Unit)	300	$2,500
Two (2) Bedrooms (Per Unit)	225	$1,875
One (1) Bedrooms (Per Unit)	150	$1,250

The table below presents a sample multi-family housing new account fee calculation using the proposed methodology.

Sample Multi-Family Housing	Units	Flow (gpd)	Cost per Gal. per day	NAF
Three Bedroom Apartments	10	3,000	$ 8.33	$  25,000
Two Bedroom Apartments	50	11,250	8.33	93,750
One Bedroom Apartments	30	4,500	8.33	37,500
Total New Account Fee	90			$  156,250

When the multi-family housing project is submitted to ReWa’s engineering department for review, the number of residential units and associated number of bedrooms per unit will need to be clearly identified on the plans and shown in the design calculations. In cases where the bedrooms are unknown, ReWa will charge a $2,500 per unit fee and when the bedrooms are confirmed, the developer or engineer may request a refund, if applicable. The table below shows a sample mixed use property new account fee calculation using the proposed methodology. 

Sample Mixed Use Property	Units	Flow (gpd)	Cost per Gal. per day	NAF
Two Bedroom Condos	12	2,700	$ 8.33	$  22,500
Restaurant w/ 75 Seats	1	2,250	8.33	18,750
Office / Retail w/ 15 Employees	1	285	8.33	2,375
Total New Account Fee	14			$  43,625

When a mixed use project is submitted, in addition to identifying the residential units, commercial sites along with their projected use should also be identified on the plans. In cases where specific tenant information is not known at the time the project is submitted, the developer is to submit his best guess for the tenant and the applicable UCL. Prior to occupancy, the developer or engineer is to coordinate with ReWa’s engineering department to ensure that the original plans and fees submitted still match what is actually in place. At this time, if applicable, ReWa would refund fees or the developer would pay additional fees.

The effective date for these changes is January 1, 2019. Fees on developments previously approved but not yet paid at January 1, 2019 will be calculated based on the above methodology.