Washington State building permits increase: A positive sign.

Now that our Seattle and Wenatchee home inspection company offers HVAC testing (duct blaster) for new construction homes we like to keep an eye on the new construction permits.  The 2009 Energy Code for HVAC Sealing requires a third-party verifier to make sure the HVAC system complies with the minimum performance requirement, therefore, we are hired to conduct the HVAC duct testing.

In the May/June issue of the BIAW’s Building Insight Newsletter the chart below displayed a positive sign of recovery in the building industry since 2010.  Spokane, Pierce, King, Franklin and Benton Counties helped to push the May 2011 building permits over the May 2010 totals.  The overall improvement for 2011 shows a 38% increase in building permits year-to-date in May.  Chelan, Mason, Kittatas, Cowlitz, Island and Jefferson Counties didn’t have much change from May 2010 to May 2011.  Let’s hope the trend keeps improving for Washington’s building and real estate industries.

Source: BIAW Building Insight, Residential Building Permits Issued May 2011

Wenatchee Real Estate Outlook 2011 (4 of 5)

Guest writer, Rebecca Darley

As the manager of a Wenatchee home inspection company I attend many local real estate events to stay informed of the latest industry news and developments.  On May 19, 2011, the Wenatchee Valley Chamber of Commerce hosted a discussion panel called “2011 Real Estate Outlook.” This blog entry along with the other 4 entries will summarize the panel discussions of each speaker including a loan officer, appraiser, commercial real estate broker, builder and residential real estate broker.

Previous Entries:

• Speaker from Touchstone Appraisals, Cheri Farivar
• Speaker from Peoples Bank, Darel Ansley
• Speaker from Windermere NCW, Fritz Nichols

Randy Gold is the owner of Gold Construction and has 26 years of experience in the building industry.  Gold Construction won two awards in 2002: the Building Industry Association of Washington (BIAW) Washington State Builder of the Year and Wenatchee Business Journal Reader’s Choice Award for Best Builder. He was the founding President of the local Home Builders Association (NCHBA) and the 2003 President of the BIAW, the largest trade association in Washington State.  He moved to Wenatchee from San Diego in the early 1980’s.

Randy started his discussion with a look back to the building industry cycles of the preceding decades.  In the 1970’s the interest rates averaged 10%.  In the early 1980’s the interest rates escalated to an astonishing 19%.  Randy commented that he was trying to build anything that he could “from fences to dog houses” to make ends meet.  In the 1990’s he started building spec homes and was doing really well.  As that decade ended the demand fell and he was stuck with 2 -3 spec homes on the market for two years.  In 2000 he decided to focus on high-end custom homes and was feeling like he had figured out the industry when the bottom fell out in 2008.  He says “this is longest downturn I’ve ever seen.”  Everyone on the panel agreed that they’ve experienced slow and hard times in our real estate market but the fallout of 2008 is taking a long time to sort out.

Randy believes that bargain hunting, longer processing periods, low offers and desperate sellers accepting lowball offers are all factors contributing to the decrease in home values.  He has already sold one spec home for less than it cost to build. 

He predicts a huge epidemic will surface once the new construction demand returns.  Many mills and plants closed and skilled workers found other jobs due to lack of demand in construction.  Randy believes that building material costs will skyrocket and construction lag time will increase while a shortage in building materials and skilled workers will have to be figured out.  He agreed with the other panelists that this is the best time to buy.  New regulations and requirements from building codes will increase the cost of building as well.  He believes that interest in remodeling will increase due to everyone’s equity being tied up in their home.

Homeowner Tax Guide: Get All Your Deductions!

Photo Credit: http://theiowarepublican.com

In a time where buyers are cautious and are really weighing out all the benefits of home ownership here are some considerations for tax season. Several tax deductions and credits are providing relief to homeowners and making them very proud of their investment decision. Deducting mortgage interest, home equity debt, capital gains on home sales and taking advantage of energy conservation credits are just a few of the tax season benefits that homeowners can cash in on. Do you have a home office? There’s another one. Most of our monthly home loan payment is interest and you can deduct every bit of it. Only those folks with a loan of $1,000,000+ receive a cap on this deduction.

Stephanie Singer, a Realtors.org contributor wrote about this topic in Tax Time Less Taxing for Home Owners. She said that, “ninety-one percent of homeowners who claim the mortgage interest deduction earn less than $200,000 a year, and the ability to deduct the interest paid on a mortgage can mean significant savings at tax time. For example, a family who bought a home in 2010 with a $200,000, 30-year, fixed-rate mortgage, assuming an interest rate of 4.5 percent, could save nearly $3,500 in federal taxes when they file this year.”

We found a great resource from Kiplinger.com. They have listed all the deductions for homeowners at “What’s Deductible? – A to Z.” Check it out to make sure that you’re getting the most deductions as a homeowner. We use a skilled accountant in Wenatchee to guide us through our own tax deductions. We suggest that you hire a recommended accounting professional to point out these important opportunities for you.

Wenatchee Area Builder Association Talks About Code

 A couple of weeks ago we posted information about Washington State’s new HVAC requirement.   We are members of the local North Central Home Builders Association and along with the BIAW they are frustrated with the adoption of this new code and fear that it will cost contractors time and money to meet the new requirements.  Read the summary below written by NCHBA.

“On February 7th, Judge Robert Bryan of the Federal District Court in Tacoma denied BIAW’s Motion for Summary Judgment and Granted the State Building Code Council’s Motion for Summary Judgment. The Judge issued a lengthy opinion, finding that Chapter 9 of Washington’s Energy Code was not preempted by Federal Law, even though it concerns the use of components that exceed federal standards…The Federal law states that credits under state energy codes must be on a one-to-one ratio to energy savings. In other words, a one point credit for installing a high efficiency furnace under Chapter 9 must equal the same amount of energy savings as the one point credit for building a house under 1,500 square feet…BIAW is appealing the ruling.”

Seattle Home Show: Feb. 19-27th

credit: Seattle Home Show

Spring is just around the corner and it’s beginning to look a lot like Home Show Season!  Wenatchee’s Home Show was a huge success last weekend, now we look forward to the Seattle Home Show starting on Saturday and open for 9 days.  Your online ticket purchase includes a full year subscription to “Better Homes & Gardens” and free parking.  Check out this info from their website:

The Seattle Home Show opens its doors for its 67th annual home products extravaganza on February 19, 2011 for a nine-day run through February 27.   This much-anticipated show of nearly 500 exhibits includes everything for the home and landscape, highlighted by Idea Street™ – a community of furnished and landscaped model homes. Idea Street is a showcase for home design, interior style and the latest appliances and fixtures.  Show attendees enjoy the variety and scope of the exhibition which includes green living displays, kitchens and baths, home decorating, arts and crafts, garden displays, and Meet the Expert Seminars featuring home improvement topics presented by industry professionals. America’s Biggest Open House™ – the Seattle Home Show – takes place in downtown Seattle at the Qwest Field Event Center. Details at www.SeattleHomeShow.com.

Home Show in Wenatchee: Feb. 11-13th

Every year the NCHBA or North Central Home Builders Association produces a spectacular home show in Wenatchee, Washington.  There’s a little something for everyone whether you are interested in remodeling, decorating, building, buying or selling a home…they’ve got all the experts there for your questions!  Here’s some info from their website.  Download this COUPON for $1 off admission:

This year, we have a lot of new things going on and are very excited to “get the Show on the road”! The Kid’s Zone by Lowe’s is going to be fantastic this year. Not only will the kids be able to build their own project with a professional from Lowe’s, they can go on a scavenger hunt with their parents or enjoy FREE ice skating on Friday and Saturday. So, if you have kids that are 12 and under, make sure to take them to the Kids Zone by Lowe’s, located in the Crunch-Pak Hospitality Room on the the main floor of the Town Toyota Center!  Workshops and How-to’s that you WON’T want to miss! Come and see what the Master Gardeners have to demonstrate on Friday, Saturday and Sunday of the show!   Be one of the first 250 attendees on Saturday and Sunday and receive a special Home Show Entrance Bag! These bags will be filled with small gifts, specials and discount coupons from participating sponsors and vendors! These bags will also come in very handy when you need a place to stow away other information and items you gather!  There will be additional event parking available for attendees across the street at Walla Walla Point Park, both parking lots, as well as at Lowe’s Home Improvement Warehouse. Many thanks to Lowe’s for generously allowing our Home Show attendees to use half of their parking lot for our event!

Home Warranties: Piece of Mind or Worth Every Dollar?

I inspected a house last week for the purpose of a home warranty. It was a new construction with a 1-year warranty that would soon expire. The owner wanted us to make sure everything was still in good shape and operating in favorable condition. The owner’s home was in great condition and having AMS out to inspect the property gave him piece of mind that he had chosen a great contractor and property for his investment. Read my info below to see if you should consider home warranties during your next purchase.

Many new construction homes come with a 1-year builder warranty. Before signing the closing documents read the warranty in its entirety. Make sure you understand what is covered, for how long and by whom…the builder or a third-party? Read the exclusions, liability and limitations carefully and ask questions. Just before your 1-year expiration, give us a call to inspect your home for any imperfections that would be covered under your warranty. It’s very important to watch your deadline and schedule a home warranty inspection. The best outcome would be one in which we don’t find anything wrong, but if we do you can talk with the builder and have them fix the problem without rolling out your own dollars.

For those purchasing any other home, existing home warranties are also available to the buyer. For about $350-600 the buyer can purchase coverage for 1 year. For example, you purchase a home and hire home inspector before closing. The report shows a few maintenance issues, but no red flags. After 4 months your dishwasher and clothes dryer both quit working. In your initial inspection report the appliances worked fine, but your inspector noted the increasing age of them. Here is a situation where a home warranty could definitely save you some money and the hassles of new home ownership. You call up the warranty provider and deal with the problem immediately. And remember, choose your warranty carefully and make certain that everything you want covered is in the contract. For more info about choosing a warranty, start here.