Hello Readers, in print and online.
Our mid-year look at housing economics reveals some interesting trends, as the country emerges from the pandemic and approaches a new normal. The demand for new homes is far outpacing supply, as home builders put the brakes on construction and the arrival of new homes in the market has slowed. Mortgage interest rates are still attractive, the economy is strengthening and employment levels are increasing nationwide. Inflation seems to be playing a larger than expected role as the cost of materials has soared, led by a huge spike in lumber prices, the essential raw ingredient of every new home. Fuel costs, food costs, shipping costs are all taking a toll as the resurgent economy faces headwinds. Household formations continue to drive demand, both for rental units and new homes for sale. Employers face challenges finding workers to return to work. Another industry particularly affected by materials shortages is the auto business, where a world wide shortage of microchips has severely curtailed production, driving up the values of used vehicles considerably in the process.
Changes in the way we use our homes as a direct result of being stuck inside them for so long will be permanently impacting the designs of new homes for a long time to come. We are already seeing design teams reacting with health and wellness becoming a top priority for home buyers. Indoor air quality is a major component of a healthier home, led by ventilation and HVAC. Manufacturers like Aprilaire are at the forefront of healthier products, working closely with organizations like Wellness Within Your Walls, who advocate for whole home health and better systems to ensure home owner comfort and well-being through design, construction, product selections, sustainability and energy efficiency. A big part of this process is third party certification. I am pleased that our own high performance demonstration home, The ABC Green Home 4.0 Project, participated as a pilot home in the WWYW Certification program and passed with flying colors. Our Net-Zero ABC 4.0 was also certified by 9 other agencies as well. The first California Home to pass the 2020 Title 24 building code, we smashed it by 37%. Built exclusively using our own advertisers building materials, nothing made from unobtanium, faberge eggs, or Golden eagle’s beaks was included. Everything our construction team deployed during construction is readily available in the supply chain.
I mention this as I continue to hear builders argue they disagree with green and sustainable home building on a cost basis, or because buyers don’t care. Two things to keep in mind: buyers definitely do care and continue to prioritize greener homes. Should you happen to be a California home builder, then congratulations, like it or not, you are automatically a green builder, thanks to the very rigorous building code. From a cost perspective, the components cost the same, the manner of assembly may change, is all.
Have a great summer and thank you for the privilege of your readership.