Justin Winter’s Carolina Lake and Mountain Blog

US Existing Home Data March 2013

Although the initial reaction of the equity market has been to treat the March 2013 Existing Home Sales report as a “miss”, this overall is a decent set of data that suggests that the Spring selling season has started to show a true acceleration of demand.

Overall sales were estimated at 4.92m, which was less than the 5.00m consensus forecast, while February sales were notched lower to 4.95m from 4.98m. This is well within the error tolerance of the data and so even at the headline level this represents an “in line” report. However, it should be remembered that there is a big seasonal pick-up in sales between February and March, and flat headline sales mask an increase in the NSA single month data of 82K (26%) between February (304K) and March (386K), making this the best March since 2008. In other words, the positive winter data (when demand tends to be very depressed) has translated into a traditional pick up in actual spring time sales. Should this trend persist throughout the rest of the peak season (which runs from March to September) then this would represent genuine progress.

Perhaps more importantly there is clear evidence that sales would have been higher if it were not for a shortage of inventory (particularly on the low end) in a number of key markets (something the NAR specifically commented on). This can be seen in the national inventory data, which rose only slightly to 1.69mm and has shown much less of a spring-time surge in new listings than would have been expected. Indeed this is the lowest March reading since 2000, when the housing market was a backwater had ceded the limelight to the peaking equity market.

The substantial rise in average prices underlines the shortage of inventory, with March’s $223.60 being 9.92% higher than that of a year ago. This is a very fast pace of growth that compares with the rate of HPI seen in the 2001-2005 housing boom. However, as noted above the constriction of lower price inventory has probably helped nudge the average a little higher than would otherwise have been the case and therefore true HPI is probably mid to high single digits, which is still a very healthy rate of increase.

Options for Repairing or Replacing Drain Pipes

Drain stoppages cause such a mess and never seem to happen at a convenient time. If your main sewer line stops up and cannot be easily unclogged, then you may have several options to consider other than traditional excavation. Traditional excavation can often be a costly, messy option. Listed below are three other alternatives for drain repair that you should consider.

Drain Relining

Looking for a solution to your drain problems that won’t destroy your landscaping? Drain relining might be the perfect solution for your home. It repairs your pipes from the inside out. It can also be a very cost effective solution.

Over time, pipe corrosion can build up and lead to leaks, bad tasting or smelling water, and sewer backups. Pipe relining offers a permanent and fast solution to these problems. Most drains can be relined in a day or less.

Trenchless Repair

Occasionally, when drains do not work in a house, it may be more than just a clog. When pipes break, it can be a complicated problem, requiring lots of work, time and money to fix. At Corley, we’ve cut the work, time and money down by offering trenchless pipe repair services, the most advanced repair technique in the business.

With the use of cameras and our trenchless repair equipment, we are able to cut the workload in half by not digging continuous trenches looking for the break. We can then easily slip a new pipe into the ground without tearing up your yard.

Here is link to a video that explains how we do trenchless drain repair - Link to Youtube video https://www.youtube.com/watch?feature=player_embedded&v=LX1XbUSzbnw

Read a Case Study - Trenchless Process Brings Peace of Mind to Greenville homeowners.

Drain Jetting

When clogs become too hard to unclog with traditional methods, Jetting is one of the most advanced options for fixing the drain.

Jetting is a technique that uses special nozzles to force high pressured water through the pipes in your sewer system. When the water pressure is high enough, it can clear dirt, emulsify oil and soap, break clogs and even cut roots and other growths.

If your main sewer line stops up you don’t want to wait for drain cleaning service. Corley Plumbing, Air & Electric offers extended hours for all of our drain services. Contact us at 864-517-1251 or Schedule Service online.

Home Prices Increase at Fastest Annual Pace Since May 2006

Every city in the S&P Case-Shiller 20-City Composite Index has now posted annual increases for at least two consecutive months. In 16 of the 20 cities the annual growth rate rose in February compared to January and ten are now posting double digit positive changes. Newsroom America reported– Average home prices increased 8.6% and 9.3% for the 10- and 20-City Composites in the 12 months ending in February 2013, according to the latest S&P/Case-Shiller Home Price Indices.All 20 cities covered by the indices posted year-over-year increases for at least two consecutive months.In 16 of the 20 cities annual growth rates rose from the last month; Detroit, Miami, Minneapolis and Phoenix saw slight annual deceleration ranging from -0.1 to -0.4 percentage points.

Phoenix continued to stand out with an impressive year-over-year return of +23.0% while Atlanta and Dallas had the highest annual growth rates in the history of these indices since 1992 and 2001, respectively.

“Home prices continue to show solid increases across all 20 cities,” says David M. Blitzer, Chairman of the Index Committee at S&P Dow Jones Indices. “The 10- and 20-City Composites recorded their highest annual growth rates since May 2006; seasonally adjusted monthly data show all 20 cities saw higher prices for two months in a row – the last time that happened was in early 2005.

“Phoenix, San Francisco, Las Vegas and Atlanta were the four cities with the highest year-over-year price increases. Atlanta recovered from a wave of foreclosures in 2012 while the other three were among the hardest hit in the housing collapse. At the other end of the rankings, three older cities – New York, Boston and Chicago – saw the smallest year-over-year price improvements.”

As of February 2013, average home prices across the United States are back to their autumn 2003 levels for both the 10-City and 20-City Composites. Measured from their June/July 2006 peaks, the peak-to-current decline for both Composites is approximately 29-30%. The recovery from the early 2012 lows is 8.7% and 9.3%, respectively.

In February 2013, the number of cities that posted positive monthly changes increased; Boston, Dallas, New York, Portland and San Diego are now among the MSAs posting month-over-month gains.

Even though eight MSAs posted monthly declines, all twenty cities showed increases when compared to their February 2012 levels. Atlanta, Detroit, Las Vegas, Los Angeles, Miami, Minneapolis, Phoenix, San Diego, San Francisco and Tampa were the ten MSAs that continued to report double-digit year-over-year gains. San Diego and Tampa recorded their first months of double-digit annual increases of just over 10.0%.

Despite the mixed economic news in March, housing continues to be one of the brighter spots in the economy. From the start of the year until early March, expectations for stronger economic growth and concerns about an early end to the Fed’s bond buying program caused mortgage rates to increase. Since then, however, mortgage rates have fallen back to the lowest levels of 2013. The actions of central banks around the world have been a major reason for the recent decline in rates.

To View Complete Report:

S&P/Case-Shiller Home Price Indices

La Bastide - Redubbed Hotel Domestique

By April A. Morris –  Hincapie brothers’ destination to combine the old and new worlds.

Nearly a year after brothers George and Rich Hincapie purchased defunct inn and restaurant La Bastide in northern Greenville County, the 13-room inn will reopen this summer as Hotel Domestique, the pair announced this week. The 29-acre property and vineyards had been shuttered since January 2011 before the Hincapies took it over in July 2012. It was once owned by the Cliff Communities, but had been foreclosed on. Hotel Domestique’s name comes from the French word “helper,” a role that George Hincapie often took on, helping his teammates win cycling races. George Hincapie is known for competing in the prestigious Tour de France a record 17 times.

The multi-million dollar renovations started in August 2012, and much of the ground floor was ready in October for the Grand Fondo event that celebrated George Hincapie’s retirement from professional cycling, Rich Hincapie said this week.

“The hotel renovation should be completed by the end of next week and then we’ll start on the restaurant side,” said Rich Hincapie. The brothers preserved the “old-world” portions of the hotel’s structure like the original stone floors, ironwork and cut granite staircase, but have updated everything else, he said. “We’re mixing old-world with new-world. All the furniture, colors, lighting is all kind of chic-modern – really new, fresh and young, mixed with the actual architecture, the floors and some of the beams, which are old-world European,” he said.

Because both Hincapies have traveled and enjoy Mediterranean food, the restaurant’s menu will reflect some of their favorites, he said. The chef has not been hired, but should come on board soon, he added. The restaurant, expanded to seat 160, will be open to guests and the general public. In addition to Mediterranean fare, they hope to feature farm-to-table items from a nearby farm, said Hincapie.

“We want it to be simple, good Mediterranean-style food, really a comfortable place to go eat – we don’t want it to be stuffy or unapproachable,” he said.

Some of the added amenities include an outdoor pizza oven, additional bar, patio water feature, and a new 25-meter pool for floating or swimming laps, he said. And Hotel Domestique boasts something that most hotels don’t offer: a custom storage area for road or mountain bikes along with a bicycle mechanic to fine-tune the two-wheelers after a day out. “That’s a small component of what we’ll do,” Rich Hincapie said. “For the most part, it’s going to be a hotel open to the general public and a good getaway destination whether you’re a cyclist or not.” However, the mountain destination has already created some buzz. “We have some corporate bike rides booked for September and October,” he said. Hincapie said Hotel Domestique also has several weddings and other events already booked. The original structure was constructed in the 1990s to emulate a villa in Provence, France, and included a staircase constructed of granite from Winnsboro that was left unused since 1932 along with red roofing tiles from Tulane University’s original administration building.

Outside the inn, there are vineyards situated in the best climate for growing grapes in South Carolina; however, the vines never produced wine. Rich Hincapie said they want to preserve the vineyards and at this point they have been cleaned up, but new grapes won’t be planted until next spring. “Nobody had touched them for years,” he said. Hotel Domestique is scheduled to open in late July or early August in anticipation of the busy season beginning in September, said Hincapie.

Back on Top - The Cliffs Communities Continue Their Climb Back from Bankruptcy

By Dick Hughes – Upstate Business Journal 

The new owners of the Cliffs Communities are building clubhouses for the two exclusive Cliffs Communities, Mountain Park and Keowee Springs, that don’t yet have them. Unlike the ostentatiously large buildings characteristic of clubhouses at the five other communities, these clubhouses are smaller, more typically Southern and more harmonious with the environment. The clubhouses at Mountain Park and Keowee Springs reflect the restrained approach of the partnership formed after the club entity of seven of eight Cliffs communities in South and North Carolina came out of bankruptcy in August. The new owners are aware of the devastating toll a collapsing real estate market visited on exclusive golf communities like The Cliffs, coinciding as it did with the overbuilding of golf-linked luxury homes while golf was in decline. “What we have to get away from is the huge grandiose plans that people had in the past,” said Brett Johnston, CEO of Cliffs Land Partners. “They are not sustainable. Our plan is to build sustainable buildings useable today.”

Cabin in the Woods In addition to completing the Gary Player Golf Course for play by September, the new owners are building a 4,000-square-foot clubhouse at Mountain Park in contrast to the more formal 20,000-square-foot clubhouses in other communities. “The idea is to have it be like a cabin that has been in the woods forever,” said Johnson. “It is going to be rustic, but nice. The food will be casual. It is going to be indigenous to the area, Southern mountain.” At lakeside Keowee Springs, which has a Tom Fazio course but had no clubhouse, the former home of the International Institute of Golf is being refitted as a clubhouse with its Southern porch, rocking chairs and casual food. The pro shop for the Tom Jackson-designed course at The Cliffs at Glassy Mountain, the first Cliffs golf community to be built, was rebuilt, and 350 people showed up for its opening, said Davis Sezna, CEO of Cliffs Club Partners. In all, $8 million in amenity improvements are currently underway.

More than Tees and Greens “You are going to see a lot more amenities like bike trails, outdoor fire pits, a lot more of the social infrastructure rather than big clubhouses. Those are things of the past,” said Johnston. “We’re really raising the bar throughout all the communities with culinary,” he added. Still, golf remains a major attraction, and the owners expect the Player course to create considerable buzz in the golf world and be a draw for Mountain Park. “When a golf course opens to great acclaim, we all want to go,” said Sezna. “We don’t care how far or where it is, we find a way of getting there. I believe this course will attract this kind of attention.” The acquisition by cyclist George Hincapie and his brother, Rich, of La Bastide, which had been owned by Cliffs founder Jim Anthony, has been a “wonderful addition to the neighborhood,” said Sezna. This week, the Hincapies announced that the property will reopen soon as Hotel Domestique. “When you tell people they can go out for a ride with George Hincapie, they are just amazed,” said Sezna. “It is more than cycling. It is a legend.”

Greenville Office Pays Off Johnston said that the storefront sales office on Main Street in Greenville also has helped raise awareness. “We get people walking by, stopping in. We can track a couple of sales that came through this office.” A master plan is in the works for on-going capital investment over the next decade. The plan takes into account the lifestyle interests of existing property owners and potential buyers, Johnston said. “The Cliffs has always been known for golf, but, as we go forward, we’ll find fewer people mention golf because there are so many other reasons to be at The Cliffs. So many things are happening with food and beverage and what we are doing with wellness.” Sales activity picked up last year with more than $80 million in property transactions. Johnston expects even more sales this year.

Adjusting to Reality “We get most of our people through our website,” Johnston said. “The buyer today is extremely educated. When they walk in, they already know what is out there and what things are selling for.” Sensitive to the realities of today’s market, the costs of entry into the lifestyle are lower, relatively speaking. Home sites start at $100,000, half what it was in the high-flying pre-recession days. Homes range from $500,000 to $4 million. The up-front initiation for golf membership was reduced to $50,000. It had been as high as $125,000. Monthly fees range from $865 for full access to any of the seven courses to $778 for home golf privileges and $692 for non-residents. There are lower monthly dues for wellness, non-golf sports and social activities. Johnston said memberships have increased more than 30 percent from 1,920 in prerecession days to 2,600.

Raw Land for Conservation? Seventy-seven homes are under construction, and the company is recruiting and vetting builders to have five or six preferred builders for each of three regions – lake communities and mountain communities near Greenville and Asheville. Silver Sun Partners, the umbrella group that owns the clubs and most of the land and which Johnston and Sezna work for, anticipate developing 2,000-3,000 more home sites over eight to 12 years, leaving “several thousand acres of raw land” that could be developed for another 1,000 or more home sites. “But,” Johnston said, “I don’t see us ever fully developing everything. We might put some of the land in a conservation easement.” When things were on hold, at best, followed by the uncertainty of bankruptcy, Sezna said, property owners “went through a traumatic time” but now “are excited and ready to roll again, chanting, ‘The Cliffs are back.’”

Real Estate Moves That Have Surprising Tax Implications

BY Tara-Nicholle Nelson

Remodeling. The conventional wisdom is that when you remodel your home, whatever you do, for the love of all that is sacred, save your receipts. And this is not a ‘save them until tax time’ recommendation; it’s a ‘save them until you sell the place’ mandate!  The money you invest into improving your home over time gets added to your purchase price, or cost basis, when you sell, bringing down the amount the IRS considers being profit or gain and reducing your chances of incurring capital gains tax. (Single home owners can realize $250,000 of “gains” above the cost basis of their home tax-free; marrieds, $500,000.)

This is no surprise to most homeowners. 

Here’s where many of us do get surprised - many remodeling projects popular with homeowners these days trigger local and state tax credits. This is especially the case for home improvements that increase your home’s efficiency, from low-flow toilets and shower heads, to dual-paned windows and insulation - even solar systems and tankless water heaters. If you are remodeling and improving your home’s efficiency at the same time, visit your state, county and city websites to see what tax credits or other financial incentives (for which you might qualify).

And whether or not your remodeling projects are eco-friendly, if you use a home equity line to finance them, chances are good that you can deduct the interest from that loan (up to $100,000) on top of your home mortgage interest deduction.  Again, don’t forget to mention this to your tax professional.

Waterfall of the Month

Ken Sloan of SCMountainLakes.com

Waterfall Pick of the Month: Pigpen & Lick Log Falls (Mountain Rest, SC) Two waterfalls a quarter of a mile apart. Pleasant 1 hour hike, ideal for a family outing.

Length of hike: 0.9 mile.

Time to falls: 30 minutes

Difficulty: Easy Ken has several videos of area hiking trails posted on UTube, some with his WOLF frolicking in the water! Visit SCMountainLakes.com  for morinformation.

What’s Your Home Really Worth?

By – Ilana Polyak

It all depends on why you need to know. If you’ve bought or sold a home recently, you probably noticed that your real estate agent, insurance representative and tax assessor had different notions about what your home is worth. Why?

There isn’t just one value for your home. Here are three home values you should keep in mind.

ASSESSED VALUE

First, there’s the matter of taxes. You pay property taxes based on what the local tax assessor says your home is worth. Depending on where you live, your assessed value may be higher than the market value. If that’s the case, consider contesting the assessed value. That’s what Dawn Harrison did after she bought her home in a small town near Fort Bragg, N.C., in 2008. She paid $221,900 for the home and a few months later it was assessed for $246,000.

Harrison appealed and used her bank’s appraisal as evidence. The county lowered its assessment to $232,000. “I figured I had a small victory, but over time a lot of military families have left the area, homes are sitting vacant and I know my home isn’t worth as much as what I paid for it,” the retired sergeant says.

TO DO: Appeal your assessment. One caveat: Local laws may limit how often you can appeal.

REPLACEMENT VALUE

Say you bought a 2,500-squarefoot home for $250,000. So why does your insurance provider want to insure you for $320,000? To account for how much it would cost to rebuild in the event of a total loss — an amount known as the replacement value. If you moved to an area with diminished home prices, then the cost to rebuild could be higher than the market value, explains Thomas Damrow, USAA property and property and casualty underwriting director. “People don’t always understand that the cost to rebuild or replace their home can sometimes be more than what they think their home is worth,” Damrow says.

TO DO: With building costs at a five-year high, it’s time to review your homeowners policy to make sure you have adequate coverage.

MARKET VALUE

This one is easy: It’s what a buyer will pay for your home. While improving recently, home prices in many parts of the country still are not back to what they were a few years ago, so you may need to adjust your expectations. “Your perceived value of your home may not be the real value of the home,” says Scott Halliwell, a Certified Financial Planner™ with USAA.

TO DO: Seek recent comparable sales in your area to verify you’ve priced your home correctly. 

How Much Does A Custom Timberframe Home Cost?

While building a custom home is certainly one of life’s great dreams come true it’s also one of life’s biggest expenses. And since many of our customers are going through it for the first time, they have lots of very good questions surrounding costs. How much should I budget for a custom home? What drives the cost up? Or down? In this week’s post we’ll share with you a general cost range for a custom home based on our 30 years of experience plus the 7 factors that drive custom home building costs.

What is the cost range for a custom home?

Every home, every lot, every design is different but, in general, turnkey construction costs for a custom home range from $175-$300 per square foot. (Count on less per square foot, if you include a finished basement.) By ‘turnkey’ we mean the costs to construct your home in ‘ready to move into’ state including such costs as:

*the foundation *your Normerica Custom Home Timber Frame Package *carpentry, labour, electrical, plumbing, heating, cabinets, drywall, painting, floor and wall finishes, etc.

It does not include site and servicing costs or land costs for your custom home.

If you’ve been dreaming about building your own custom timber frame home, this range will help you get a rough idea so you can plan your budget and financing.

Now let’s look at the…

 7 Factors that drives the cost of a custom home up (or down)

The geographic locations, site conditions and remoteness of the location will affect taxes, labor rates and shipping costs.

1. Features of the home: such as sacrificing square footage to achieve a large soaring cathedral ceilings.
2. The size of home. Smaller is not always less expensive per square foot than a larger perhaps more efficient building.
3. Your choice in the quality and quantity of finishing materials such as windows, mouldings, doors, kitchen cabinets, fireplace, plumbing and electrical fixtures, floor and wall finishes. A hybrid custom home design, for instance, is one way of lowering your costs.
4. Is the construction of your home BUDGET driven or DESIGN driven? (We’ll let you and your spouse figure that one out ; ) but it’s a good idea to establish this early to avoid cost over-runs. While 70% of the homes we build are custom we have 1,000 of gorgeous existing cottage and home designs to pick from.
5. Complexity of the custom home design
6. Amenities outside the living area such as decks, covered porches and a garage will affect the cost per square foot of the living area.

All these factors added up will determine the cost of your new custom home. Bookmark this page for reference as you start your custom home building process. And check back in a few weeks for Part II of How Much Does a Custom Home Cost?

Normerica is a custom home builder creating authentic timber frame homes for local & export markets since 1979 from its home office in Ontario. If you want to explore over 50 award-winning cottage & custom home plans visit the design section on our website.

U.S. Pending Home Sales January 2013

BY Michael Shaoul, Ph.D, The Daily Speculator

After dipping sharply last month, the NAR’s estimation of US Pending Home Sales rose to 105.9 in January (2001 activity = 100), which effectively removes any concern regarding the December data. As can be seen on the attached chart, Pending Sales are in a steady trend of improving data, with the trailing 12
month ma now at 101.1 compared to 90.3 a year ago. The NSA data shows the index at 86.3 (January is typically a quiet month for sales), which is the strongest January reading since 2007 and compares to a reading of 78.2 in January 2012.

What makes matters interesting is that a normal level of Pending Sales is now operating in the face of extremely tight inventory. We have attached a chart which calculates the ration of total Existing (Single Family and Condo) and New Home inventory to the level of Pending Sales. As can be seen, this ration
crossed the 2 level for the first time in its 12 year history in December and January’s surge in Pending sales and sharp drop in inventory has caused the ratio to contract further to 1.78. In other words, the US housing market is now experiencing a historic degree of tightness going into the key spring selling
season. This can be expected to create something of a cap in overall sales activity, but to also lead to a significant degree of house price appreciation, which should in turn both free up inventory (primarily from existing homes currently “under water”) and also accelerate construction activity for New Homes.