3D Printing Home Building

3D printing home building
Healthy Home (infographic from hud.gov)

When you think of modern home construction, you typically think about (wood) sticks and bricks.  And it’s been that way for decades.  But since its introduction in 1983, tech visionaries thought about using the 3D printing to build houses.  What was once a futuristic dream of 3D printing home building is now a reality.

In his 2017 commentary, Sean Mashian lays out how 3D printing will change the landscape of home building and real estate (The impact of 3D printing on real estate; Cornell Real Estate Review; 2017. 15, p64-65.).   He discussed how the technology was used and the potential for the housing industry.  His assessment was that large scale commercial 3D printing technology was rudimentary and expensive.  Instead, the industry mostly used the tech for smaller projects, such as scale models for new home developments.  However, like any new technology, he expected large scale commercial 3D printers to become more commonplace as the tech emerges.  He predicted the potential of 3D printing growth, just as internet tech and e-commerce grew in the early 2000’s.

In order to grow the technology of 3D printing home building , pioneers like Apis Cor (apis-cor.com) are needed.  Apis Cor claimed to be the first company to develop and deploy a mobile construction 3D printer capable of printing a complete house on site.  About five years ago, Apis Cor made headlines when they “printed” a house in 24 hours.  Although. the one level 400sf home was rudimentary, it demonstrated the flexibility of the 3D printing technology.  The home was 3D printed completely on site and in mid-winter. 

The 3D tech is already being used in some manner in the housing industry. A 2013 article in Kitchen & Bath Design News (Design and the 3D Printing Revolution) reported on design companies that were using 3D printing to manufacture personalized home fixtures.  And in 2019, the National Association of Homebuilders reported that 3D printing tech is already being used by a small number of builders to produce architectural details for homes.

A January 11th National Association of Home Builders release discusses how 3D printing can change the industry (How 3D-Printed Structures Could Disrupt Housing; nahb.org).  Although the NAHB states the tech is still developing, there is a belief that it will address several concerns about housing:

First, it will make homes more affordable.  Currently, 3D printed homes are relatively small, which reduces materials and time to build the home.  Automation significantly reduces labor costs.  Additionally, some 3D printed homes can be built without a foundation, which also reduces time, materials, and costs. 

Second, home building will be more sustainable.  The technology inherently has little waste.  Each house is “printed” with the necessary material.  Besides incorporating green technologies, the structure is printed in such a way that it improves energy efficiency. 

Third, 3D printing home building designs are easily changed in an automated system.  The design flexibility can make numerous shapes that can address fast paced changes to the housing market.

And last, building delays are almost eliminated.  Whether the houses are printed on site, (such as Apis Cor’s technology) or built in a facility, the rapid building time reduces weather impact.  Depending on the home size and printer capability, a home can be built in as little as 24 hours or up to several weeks.  This type of productivity greatly reduces time and delay costs due to labor and materials.

By Dan Krell
Copyright © 2021

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Short Sale Home Selling

short sale home selling
Housing Market Expectations 2021

As you probably know, it’s been a sellers’ market with many listings getting multiple offers.  With such a strong housing market, it would seem unthinkable that some home owners would be underwater on their mortgages when selling their homes.  But the fact remains that there are many home owners who have to go through the short sale home selling process to sell their homes.

On the face of it, the January 14th press release from ATTOM Data Solutions (attomdata.com) seems to add credence to the housing market’s strength, touting that foreclosure activity is the lowest in sixteen years.  The report stated that default notices, auctions, and repossessions decreased 57 percent from the previous year, and decreased 93 percent from 2010’s peak would seem to be terrific news.  But the low foreclosure activity stats are actually a manifestation of a government moratoria on foreclosure activities that was imposed due to the pandemic emergency. 

Rick Sharga, Executive Vice President of RealtyTrac, an ATTOM Data Solutions company, stated “The government’s moratoria have effectively stopped foreclosure activity on everything but vacant and abandoned properties. There is a backlog of foreclosures building up – loans that were in foreclosure prior to the moratoria; loans that would have defaulted under normal circumstances; and loans whose borrowers are in financial distress due to the pandemic.”  Further commenting on the foreclosure backlog, Sharga believes that the foreclosure wave won’t be as bad as what occurred prior and during the Great Recession.  But he cautioned that we won’t know how large the foreclosure wave will be until the moratoria expires. 

So, in the face of a strong housing market, there are many home owners who need to sell (due to job loss, job relocation, divorce, etc.) but can’t because the proposed sale price is short of the amount needed to cover the costs of selling (which typically includes mortgage, closing costs, realtor & title fees, etc.).  This is where a short sale can be considered.

A short sale is basically when your sales net isn’t enough to pay the mortgage(s) on the property.  In many cases, short selling home owners don’t have the funds to make up the shortage needed at settlement.  Instead, they seek lender approval to allow a lower mortgage payoff in order for the transaction to close.  Because short sales have become a common form of transaction in the real estate landscape, the process has become more standardized since the Great Recession.  Although the typical time to complete a short sale can take three to six months, short sales can take as little as forty-five days.  However, it’s important to note short sale approval can also take more than six months. 

Although the core process is the same, lenders have different requirements when collecting information and conducting their due diligence.  Having a professional negotiator helps facilitate your short sale.  Seasoned short sale listing agents typically work with experienced attorneys to negotiate and handle the process. 

If you are thinking of short sale home selling, interview several experienced and local short sale agents.  Ask about their track record for successful short sales and how they work on your behalf to get the job done.  Also talk to their negotiator, and ask about their track record in successfully negotiating short sales.   

When considering a short sale, consider all your other options as well and get professional advice from an attorney and CPA to determine your best solution. 

By Dan Krell
Copyright © 2021

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Home Selling with Pets

home selling with pets
Home renovations (infographic from census.gov)

We love our pets, they’re part of the family!  If you’re home selling with pets, you’ll find home buyer pet owners will likely be drawn to your pet accommodations.  According to the 2020 Animal House: Pets in the Home Buying and Selling Process report (nar.realtor, April 2020) many home buyers make decisions with their pets in mind.  Some highlights include: 43 percent of pet owners would move to find a better home for their pet; paramount to 18 percent of pet owners is outdoor spaces and convenience to a vet; 68 percent of home buyers’ decision to buy or rent was based on the community’s animal policy.

But there are many other buyers who don’t have pets.  Non-pet home buyers are often turned off by a “pet home” for various reasons.  Some have pet allergies, and can be affected when they enter the home.  Others are turned off by pet odors.  And some are distracted by free-roaming pets while touring the home.  Is there a home selling with pets strategy that can make your home more appealing to all home buyers?

Professionally deep-clean your home. 

One of the most common obstacles home buyers encounter when viewing a home is that their allergies are triggered when they enter a home where a dog and/or a cat live.  A common cause for this is pet dander and odor.  These issues are typically addressed by hiring a professional to clean carpets and furniture.  Refusing to do this could devalue the home and stay on the market longer. 

Repair pet related damage.

Pets are wonderful, but they sometimes scratch walls, doors, and furniture. Carpets sometimes get ripped and stained.  Wood floors can also be scratched and stained.  Pets can also dig holes in the yard and garden beds. If your pet has done any of these things to your home, consider making repairs. Failing to repair pet related damage can turn off potential buyers, and devalue your home. 

Before a buyer visits a home.

Before buyers visit your home, vacuum rugs and furniture, and sweep up dander in any other areas.  Inspect your home to make sure there are no surprise droppings from your pet.  Put away your pet’s toys.  Professionals recommend placing non-toxic flowers and plants through the home to help provide a fresh environment.  Because not everyone is a dog lover, take your dog out for a walk while buyers tour your home.

Many professionals advise pet owning home sellers to hide traces of their pets as much as possible.  However, it many feel this is more work than they signed on for.  Is there a balance where you don’t have ot remove your pet while selling?

Melissa Dittmann Tracey, in her NAR article Can You Stage the Household Dog? (March 26, 2012; nar.realtor) relates her experience about selling her home by getting her dogs in on the sale.  The staging is basically making the pet area more homely.  Tracey dressed her dogs for a photo to be placed in their area. The photo said “Welcome to our home.”  She related that when she removed her pets, she didn’t get an offer.  However, when the pets where in the home, she received two offers.  Of course, Tracey’s experience is purely anecdotal, but it’s something to think about as an alternative staging idea.

By Dan Krell
Copyright © 2021

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Disclaimer. This article is not intended to provide nor should it be relied upon for legal and financial advice. Readers should not rely solely on the information contained herein, as it does not purport to be comprehensive or render specific advice. Readers should consult with an attorney regarding local real estate laws and customs as they vary by state and jurisdiction. Using this article without permission is a violation of copyright laws.

Clean your home

clean your home
Top renovations when selling your home (infographic from keepingcurrentmatters.com)

“Clean your home” is one of the most underrated activities when preparing to sell your home.  Although it’s seemingly the easiest thing to do to get a higher price and faster sale, it’s often misunderstood or shrugged off. because there’s so much going on when selling a home.  Besides getting the home ready to list, you’re likely planning a move.  With so much on your mind, it’s easy to put it off. 

A New York Times piece by Tim McKeough (Market Ready; nytimes.com; July 25, 2012) gave advice from a real estate broker and a cleaning professional on properly cleaning before listing a home.  The real estate broker commented on cleaning windows and floors; as well as polishing furniture.  Paramount is the condition of home entry, kitchen and bathrooms.  The entryway is important because it’s the area where the home buyer gets their first impression of the home.  The kitchen and bathrooms get much of the home buyers’ attention, and should also be a focus of a deep cleaning.  It’s advised that the entryway be decluttered, and the kitchen and bathrooms should be “spotless.” 

Attention to detail is important, such as cleaning the oven/range, clean tile grout and a new shower curtain.  Because dirty grout can leave a bad impression with home buyers, consider regrouting.  “Horizontal surfaces” (such as windowsills, picture frames, baseboards, and shelves) should also be a focus of cleaning.  Also, a deep cleaning should focus on areas where cleaning finger prints are found, such as light switches and door knobs.  When showing the home, the sink should be clean and dishes put away, as well as putting away toiletries and making the beds.

When your agent recommends to clean your home, they mean to get a deep cleaning. However, home sellers often misconstrue “deep cleaning” as a routine cleaning.  Don’t get me wrong, cleaning your home anytime is positive.  However, a deep cleaning goes after dirt and grime that has accumulated while you lived in the home.  A deep cleaning includes and goes beyond the basic cleaning.  A deep cleaning typically includes (but isn’t limited to) shampooing rugs and carpets, cleaning grime from oven and range burners, cleaning bathroom grout, cleaning windows, cleaning baseboards and corners, and ceiling fans.  If you have a pet, your deep cleaning should also focus on removing pet hair, dander and lingering odors. 

Most home sellers hire a cleaning service for the “deep clean.”  The Better Business Bureau (bbb.org) offers these tips when hiring a cleaning service: 1) Research the company. Ask friends, family members, and neighbors for recommendations.  Interview at least three companies.  Check if the company has complaints.  2) When interviewing the service, ask to also meet with someone who will be doing the cleaning to understand their process.  Also ask what cleaning products are used, especially if anyone in the home has sensitivities and allergies.  3) Most important – check credentials. Check if their operating license is in good standing.  Ask for proof of their bond and insurance.  Request or conduct your own background check.  4) Ask for and contact past client references.  5) When talking about the cost, consider the time that will needed for the cleaning.  Make sure that the service includes everything that you need to be cleaned.  A home walkthrough is recommended to provide a service estimate.  Although it’s typical to be attracted to the least expensive service, it may not be the best value.  6) When you decide on the service, get it in writing and make sure it’s specific as to what the service will do and the time they will be in your home. 

By Dan Krell
Copyright © 2021

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Disclaimer. This article is not intended to provide nor should it be relied upon for legal and financial advice. Readers should not rely solely on the information contained herein, as it does not purport to be comprehensive or render specific advice. Readers should consult with an attorney regarding local real estate laws and customs as they vary by state and jurisdiction. Using this article without permission is a violation of copyright laws.

Negative Interest Rates Redux

negative interest rates
Average mortgage rates by decade

Negative interest rates used to be a controversial topic.  However, countries such as Japan and those in the European Union entered into the uncharted waters to stimulate their economies in the years following the Great Recession.  Back in 2015 there was speculation that the US was headed into negative interest rates too.  But those thoughts quickly vanished as the economy rapidly expanded after 2016.  But with the prospect of more economic distress down the road with on-and-off again lockdowns and business restrictions, are negative interest rates on the table again?

What are “negative interest rates?”  A very rudimentary explanation is it’s when interest rates go below zero.  Meaning that instead of borrowers paying interest on loans, the lender pays the borrower.  It may sound backward to what we are used to, but it is a “tool” that central bankers may employ in times of severe financial crisis. 

Although many economists contend that negative interest rates are a viable short-term option to respond to a severe financial crisis, it is uncertain the policy works as intended.  Negative interest rates expose a vulnerable economy to future financial downturns.  Additionally, some are concerned about long-term deflationary effects, while others fear it results in hyperinflation.  Some experts point to the potential of a paradoxical effect of freeze community lending.  This can occur if investors hold onto their cash, instead of depositing it with banks for zero interest (or even having to pay the bank to hold their money).  This lack of investment has the potential will reduce banks’ available capital to lend. 

The possibility of negative interest rates in the US is once again a hot topic.  A 2020 NAR report discusses this option (Expectations & Market Realities in Real Estate 2020-Forging Ahead; nar.realtor):

There is nothing stopping the U.S. from moving into negative interest rates, but several issues would arise should the U.S. decide to take that plunge. One of the biggest fears is that the FOMC [Fed Open Market Committee] would not have any tools left to employ when the next downturn occurs.  Global investors might lose faith in the safety of U.S. government bonds as negative interest rates and other forms of quantitative easing may be perceived as a sign of weaknesses in the economy. In addition, the portfolios of millions of U.S. investors would likely be hurt. According to the Office of Management and Budget, $16.8 trillion of the government’s $22.7 trillion debt is held by the public of the U.S.  A large portion of the holders of U.S. debt are retired or soon-to-be retirees who have their portfolios in risk-free U.S. Treasurys. Many federal programs, including Social Security, Medicare and Medicaid, are also heavily invested in Treasurys, meaning these public programs would most likely lose money on the aggregate due to negative interest rates.”

(Expectations & Market Realities in Real Estate 2020-Forging Ahead; nar.realtor)

Could we see negative interest rates in the US?

In their recent statement of the FOMC (federalreserve.gov), the Federal Reserve believes that although economic activity and employment are recovering, the health emergency has caused a tremendous human and economic hardship in the US (and globally as well).  If extraneous events are unchanged, “Overall financial conditions remain accommodative, in part reflecting policy measures to support the economy and the flow of credit to U.S. households and businesses.”  However…“The path of the economy will depend significantly on the course of the virus. The ongoing public health crisis will continue to weigh on economic activity, employment, and inflation in the near term, and poses considerable risks to the economic outlook over the medium term.”

Original published at https://dankrell.com/blog/2021/01/04/negative-interest-rates-redux

By Dan Krell
Copyright © 2021

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Disclaimer. This article is not intended to provide nor should it be relied upon for legal and financial advice. Readers should not rely solely on the information contained herein, as it does not purport to be comprehensive or render specific advice. Readers should consult with an attorney regarding local real estate laws and customs as they vary by state and jurisdiction. Using this article without permission is a violation of copyright laws.