U r b a n T r e k k e r

A Constant Reminder..

Read this story a few days ago, it is a few months old. However, it's still true to this day. The notion that you've got to pay attention to the builder's financial health. That's because builders of all stripes faced with the potential of cash flow gaps.. especially in this market. A few small builders in our area  have folded their tents. Drop in the Big Builder's Online occasionally just to check the lineup. It's very unfortunate.

Here is a message that 'really hits home': When builder folds it takes with it not only an 'unfinished home' but also your deposit.

From Washington Post.

Jane Hwang spent $120,000 and devoted five years waiting for her perfect custom home. Then in one brief phone call, she learned she might lose it all. The builder, Seville Homes, couldn't pay its bills, and its bank was seizing Hwang's nearly completed house.

Scared of losing her investment, Hwang pounced into action. She went to the auction on the Fairfax County courthouse steps and outbid a bank for the house.

"For five years I have been fixated on this place," said Hwang, a real estate agent. "I planned my retirement, I put all my life in there. I had to grab that house.

The poor woman not only had to buy her "own" house at an auction but also had to spend extra money (to fix property related problems) than she'd originally intended! I don't understand how the builder could get away using deposits to fund its business operations instead of using it to build homes. Don't get it. Is it because builder uses its own-customized-sales-contract?

This is a big problem in new home is when a builder goes under. How do you protect yourself - before and after the delivery (like dealing with warranty)?

So, protect yourself and have your ammo ready, just in case..

McMansion Homes No More in Alexandria

image: Cameron Station

Over in Arlington, Alexandria City, Fairfax City, Fairfax, PG County, MD - either has regulations already in the books or in the works - for infill development of McMansion or Super-sized homes. The amendments include: height, front setbacks, garages, floor area ration (FAR), tree coverage and teardowns on substandard lots.

Alexandria City recently passed three amendments to address the super-sized homes issues. Three amendments approved by the City Council, via Update (subscription-only):

1. For houses that are 'too big.'

- Alexandria imposes Floor area revisions (FAR) for both residential and commercial. Removes exclusion on areas under 7'6" ceiling heights. Attic under 5' excluded. Vaulted ceilings over 15' shall be counted twice, and those over 25' counted 3 times FAR.

2. For houses that are 'too tall.'

- Dwelling height calculation is set at the greater of 25 feet or average building ht on the blockface plus 20%. Special permit is needed if owners looking to build homes that exceed those requirements.

- Front threshold heights. It's a permanent approval given to interim regulations. It limits the front threshold and by extension the first floor height. The new limit is average of front threshold height on the blockface + 20%.

- Measuring building height. This is how Alex. City would measure it: Building height will be measured from the lower of the pre-construction grade or post-construction grade to prevent cheating (for lack of better word) when builders using dirt along the foundation that gives the impression of decreasing building height. Other def are added for mansard and gambrel roof types. (sample of restoration of a gambrel home in Virginia).

image: gambrel roof (via Wiki)

image: mansard roof (via Wiki)

 

3. Curbing the growth of out-of-character houses.

To preserve neighborhood characteristics, the City gives incentives for front porches, detached garages.

- Open porches up to 240 s.f. is excluded from FAR calculations.

- Rear yard garages will be excluded from FAR measurements. Garages can only be used for cars (no more junks store in the garages).

More details, after the jump....

Potomac Yard Transfer of Density (Update-1)

So I poked around the City of Alexandria proposed amendment for the redevelopment plan of Potomac Yard. This is the adjacent site next to Potomac Yard shopping mall where it housed some of the big box retailers like Target, Barnes and Noble, PetSmart, Old Navy, etc. (Previous posts here and here).

Via New Homes Trekker.

Two nation's big developers, Centex Homes and Pulte Homes, teamed up to redevelop the former railroad tracks off Route 1 a.k.a Jefferson Davis Highway within the City of Alexandria boundary. It will be a mixed-use development sits on approximately 167 acres, south of Potomac Yard shopping center. The famous Del Ray neighborhood is walking distance from this project. The proposed plan will offer a combination of retail, office, residential and a hotel with 300 rooms. This project will be one of the largest projects for the City with 1.8 million square of office, 135,000 sq. ft. of retail.. this is in addition to 600,000 sq. Potomac Yard shopping center, 1,973 residential units and a hotel with 300 rooms.

The redevelopment plan is divided into 8 land bays with target of residential 1,927 units, commercial and office space 1.9M s.f. and retail 720k s.f.

The focal point for Potomac Yard will be a town center much like Reston Town Center, Shirlington Village, with variety of uses for people to meet, gather, and offices. The plan is for taller buildings along the street corridors. From proposed amendment plan also reallocate office use. There is a plan to transfer 765k s.f. of office density to land bay (LB) H (see plans above) from LB J and LB H. Along with it, it will designate LB H as a mixed-use and allow up to 110' height for four buildings and 82' for the remainder.

The most important part of all this, is the traffic analysis. Route 1 is going to be the major road for this development. Even now, some days traffic backs up from passing through traffic on Route 1. On the existing plan, the analysis shows that there would be an est. 1624 peak hours car trips AM and 1954 cars during peak hours PM. The proposed amendment calls for 1625 cars peak AM and 1955 cars peak PM. (That sounds like a lot of cars). The solutions looking to use traditional grid pattern with intersections. The plan shows there is a total of 16 intersections slated for this new neighborhood.

Everything looks nice and dandy, except there's nothing in the proposed plan mentioned about feeder buses to and from Metro stations, or other alternative plans for transportation. The last thing residents want is to spend extra 15 mins just to get out of the complex. They've got to make it easy for workers, residents and shoppers alike to go in and out of the neighborhood.

What they're counting on, really, is to get Metro to agree for a possibility of extending the line to Potomac Yard. Financing it is the stumbling block. (But, with everyone trying to save money on gas, think Alexandria has a case.) If that's the case, they're looking at a possibility of taking 15% of external traffic density.

With gas prices skyrocketing, the use of mass transit or other alternative method of transportation like car or bike sharing, the City should encourage the use of alternatives.

** UPDATE: A reader Route 1 Transit commented that Arlington county and Alexandria teamed up to provide bus services along Route 1. The Federal Transit Administration has approved the transit improvement in Crystal City and Potomac Yard. See map here.

images: City of Alexandria

 

Not Moving or Sign of Desperation?

How many times you get to tour a new development with the builder? I can't remember a day in the past years where we see builders show up at the sales office - just to say hi - to prospect buyers. Now, builder start showing up at events. They're trying to build relationships with buyers. Hoping this approach will help 'close the deal.'

Hm, is this a sign that a) sales really slow moving, or b) desperation? Take your pick. Your guess is as good as mine.

At any rate, if you're in the mood for a weekend gateway - this could be it. A vacation  'courtesy' of the builder.  You'll probably have to listen to the  'sales pitch.' That's about it.

New Homes Special Deals Line Up

Every week I receive builders email solicitation. You can sort of measure builders desperation by looking at the prices. The new home builders can afford to cut prices aggressively more than Joe home seller because to them, each home is just a commodity. Or, number on the balance sheet.

Arts District of Hyattsville

So we know from this email that Busboys and Poets is coming to the hood. And price reduced for this one home (usually a 'spec') from $470k to $399k or a 14.8% price reduction!

Centerpointe in Fairfax

420 Condominiums

Penderbrook Square

This is a serious ding to their condo prices. What a 2BR now under $250? Comstock used to sell the 1BR at high-$200's pushing $300's. They even do FHA now.

Tysons Chase

Even luxury homes cut their prices on their spec homes. Actually there are two spec homes with big discount. One is below and the other one is Carlton model, that comes with over 5900 s.f., 6 BR and 5 1/2 Ba, Chef kitchen with stainless steel appliances, open floor plan for entertaining and brick patio backing to conservation area. (around Tysons Corner, Vienna)

Cameron Station

Prices now off $70,000! It's off $70k probably for the remaining 'few?' units they have available. I love it when they say only a 'few.' My follow up question will be 'how many is few?' The answer determine how far down they're willing to negotiate.

Parker Flats

Capitol Gateway

In addition to the incentives above, they have a couple of spec homes priced from low-$300's to mid-$300's.

Midtown Alexandria Station

Logan Row

Ready for barbeque? The kicker - open house with barbeque for a change here.

I'll keep you posted when I see more deals coming on the pipeline. Here is my disclosure: Prices and incentives subject to change without notice. Got it?

NoMa's Constitution Square

Constitution Square is located next to New York Ave metro station between First and M streets slated for NoMa. NoMa corridor is the new 16 million s.f. (potential) redevelopment area on North Massachusetts Ave. and the Capitol. This is a walkable (close to Metro stations and shops) mixed-use, and livable community. It's interesting how NOMA BID (biz improvement district) refers to this hood as "Capitol Hill North?"

CityFeet.com reported that the first phase construction of Constitution Square, a mixed-use project slated for NoMa corridor, has just begun. The project is designated as Gold LEED standards. First phase of the project will include 204-room Hilton Garden Inn, One Constitution Square (speculative office space), Two Constitution Square 589,000 s.f. of Class A office space of which part has already pre-released to the Justice Department, Harris Teeter snatched some 50,000 s.f. there, another 330,000 s.f. for retail, and 440 apartment units. Harris Teeter shop is schedule to open 2010-2011.

Project completion is estimated around 2010.

image: Flickr

Dunn Loring New Homes

A while back, when I just get started tracking new homes for New Homes Trekker blog, the first post was this.

It looks like new homes will be built on this site sometime soon. I don't know exactly how many acres of lot. There are a couple of houses next to this one that's been bought out in addition to this house.

The site is about a block away from Merrifield Metro. Wonder what type of homes will be constructed on this site. Condos? Townhomes? Single Family Homes? There's no information available yet as of now.

Merrifield is part of Fairfax County Revitalization project and one of the fastest growing condo communities in Fairfax. Easy access to Metro, the Beltway, I-66 and Tyson's Corner helps fuel the going condo trends over here.

Fast forward a few years, there are two communities across the street from each other, Dunn Loring Chase and Dunn Loring Glen. Both of these communities are within walking distance from Dunn Loring metro station. That's why they name it Dunn Loring - and - something. Two different developers, Brookfield Homes and Dittmar Company, working the area across from each other's site. The constructions for single homes is an unusual move by Dittmar, because their core of business is rentals. The last condo they built in Arlington was converted to rentals.

Brookfield had done clearing the bigger land and ready to build 18 new single homes on the site. Not sure how many homes sit on the land before it was bulldozed to build the community. Across the street from here, Dittmar has already subdivided their (smaller) land for 7 homes.

DUNN LORING CHASE (by Brookfield Homes)

image: Brookfield Homes

Over here, Brookfield plans to build 18 Craftsman-inspired homes that offers 3,400-7,900 s.f. of living space and up to 7 bedrooms and 7.5 baths. The standard is 4 bedrooms, 3.5 bathrooms, and 2 car garage. Nothing has been built there yet. According to the sales rep, it'll take anywhere from start to finish 6-8 months after contract data. There are five different models (with different elevations): Chadwick, Dudley, Edgemont, Halley, and Meridia. It seems that the Dudley model offers the largest living area among these five models.

Each home comes with fully equipped kitchen, luxurious baths and energy-saving features. Few of the things you'll find in the kitchen: GE Profile Energy Star appliances, granite or silestone countertops, 42-inch oak cabinet, butler's pantry, kitchen island, morning room and hardwood flooring. Some of the features in the bathroom: ceramic tile floors and bathtub surround in bathroom, garden soaking tub (not sure I have seen this before) and separate shower in the master bathroom, private water closet.

There's only a few communities in our area that have build 'truly green homes.' At the most, you'll find Energy-Savings features. Here is some of the 'good energy savings' features.

• Energy Star appliances
• Clean and green recycling center
• Dual-zone gas heating for maximum efficiency
• 75-gallon, high-efficiency gas hot water heater
• Maintenance-free low-e, double glazed, insulated, double-hung windows with tilt-in sashes
• Insulated entry door
• Insulation in roof ceiling, overhangs, vaulted ceilings, exterior walls and basement walls
• Air infiltration prevention system
• Attic ridge vent system
• OSB with house wrap

The insulation in roof, overhangs, ceilings, exterior walls and basement walls plus the low-e double glazed windows and vent system - would help you maintain a lower energy bills, keep the house warm in the winter and cool (comfortable) in the summer.

Homes are priced from the low-$1 million.

DUNN LORING GLEN (by Dittmar Company)

model home

There are only 7 homes planned to be built in this community. One of them is already been completed, that's the house they use as a model home. Size of lots approximately 0.25 acre per home with finished homes from 3,600 to 6,500 s.f.

Each home features designer kitchen, luxurious bath finishes, and energy efficiency. Designer kitche features granite countertops, stainless steel GE appliances package, walk-in pantry, butler pantry with sink and wet bar. The energy-efficiency shares some similar features as Dunn Loring Chase even though not as comprehensive as what they have to offer here:

• Andersen thermal pane windows and sliding doors
• Efficient forced air gas heating
• Dual zone central heating and cooling
• 75-gallon 'quick recovery' gas hot water heater
• Tyvek insulated house wrap
• R-15 exterior insulation, R-38 attic insulation

There are two models available: Albermarle and Brentwood.

Homes are priced from low-$1.3 million.

Schools: Stenwood ES, Thoreau MS, George Marshall HS. Community info, here.

Crossposted at New Homes Trekker

Northern Virginia's First Energy-Star Certified Homes

A few weeks ago, I drove by Stockwell Manor, a new homes community in the border of McLean and Falls Church and saw the big sign that reads, "100% Energy-Star Certified Homes."  The 100% Energy Star homes, peaked my interest to go back and revisit. Because sometime in 2006, I visited the community when they just opened up the office. Don't remember if at the time, they'd started marketing the Energy Star certified homes yet. Maybe they did, or didn't.

With no end sight on how high oil prices can climb, Camberley Homes, the developer really took the plunge and committed to build Energy Star certified homes. Even in today's standard, it's not 'main stream' yet. Wait a few years from now, this type of homes will be trendy by that time, especially as more and more home owners feeling the pinch.

This is probably the first Energy-Star certified community of new homes on the market in Northern Virginia that I know of. There is a few eco-friendly and LEED condos on the market. But, eco-friendly and energy efficient does not necessarily offers the same features. [We'll talk more about some other time about the differences between the two in another post]

What is an Energy-Star Certified New Homes?

According to U.S. Environmental Protection Agency information, Energy-Star certified new homes must meet guidelines for energy efficiency set by the Agency. These homes must have 15% more energy efficient than homes built to the 2004 International Residential Code [IRC], and include energy-efficient features that typically make them 20-30% more efficient than standard homes. The energy-efficiency that separates them from the regular (standard) homes.

Energy-Star Certified homes uses energy-efficient features that contribute to improved home quality, comfort, lower energy demand and reduced air pollution.

image: front-loading washer & dryer

There are six 'Must-Have' components to qualify (or certified) for 'Energy-Star' homes:

1. Effective insulation 
2. High-performance windows 
3. Tight construction and ducts 
4. Efficient heating and cooling 
5. Efficient products 
6. Third-party verification

Yes, they do have to be certified by an independent third-party rater.

The components are what separated a home from being energy-efficient versus today's not-so-energy efficient homes. Think about this, a well-sealed and properly insulated home is not only quiet, but it offers other features that aren't so much can be found in today's (or yesterday) standard homes. Things like better indoor air quality, lower utility bills and because it's designed to use less energy, it helps reduce the greenhouse gas emission. Less energy consumption equal to less strain on the grid. 

From the outside, you probably can't see the differences between a standard homes versus energy-efficient homes. But, when you get to the inside, that's when you find most of the differences.

Here are some of the specs of Energy Efficiencies that you can find in their new homes:

• Third party energy inspections to meet ENERGY STAR certification 
• Dual-zone gas heating and central AC 
• Carrier Performance Series 93% high-efficiency gas furnaces 
• 13 SEER Puron refrigerant AC 
• Carrier 5 day programmable thermostat 
• Carrier humidifier 
• 75 gallon high-efficiency water heater 
• Tankless hot water system 
• Attic spaces insulated to R38

image: Camberley Homes

There are two types of homes available at Stockwell Manor: Townhouses and single family houses. Twenty-nine single homes and seventy-one townhouses are planned. A number of homes already been built and occupied. Single homes offered approximately 3600 s.f. to 4200 s.f. of finished square feet, comes with top-of-the-line kitchen appliances, i.e. Viking Professional and Designer series appliances. Homes are priced from low $1.5 million to high $1.7 million.

Townhouses have approximately 2600 s.f. to 3600 s.f. of living spaces comes with 10' ceilings on the main level with 9' ceilings on lower and third level. All homes come with 2-car garage. These townhouses are priced from the low $900's to high $1.1 million.

Crossposted with New Homes Trekker

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Climate Change and Real Estate

What climate change got to do with real estate? It all started out at homes. The electricity generated by buildings sector contributes one-third of the greenhouse gas emissions. According to Pew Center for Climate Change, buildings sector accounts for 43% of total carbon dioxide (CO2) emissions [chart below].

image: Pew Center on Global Climate Change

As you can see from the chart above and breaking it down further, the real estate industry that includes commercial and residential accounted for a total of 38% of total CO2 emissions in 2002. Residential sector produces 21% of CO2. To put it in context, in total electricity spew about 38 % of CO2 emissions to the atmosphere -- mostly come from electricity generated in homes, offices and industrial buildings -- that power everything from heating and cooling, fixtures, lighting, appliances, computers, and cell phones. Yes, your cell phones, too. That is one-third of the total U.S. CO2 emissions! Hello?

Okay, here is the thing Realtors don't build homes, they sell. Builders, are supposedly in the forefront of this carbon footprint because they build homes. How many energy-efficient homes being built in this area? Very, very few...if any. Knowing what we know about how greenhouse gas emissions causing the average global temperatures to rise, why haven't more low-energy (smart) homes being built? I found it intriguing to see why builders haven't done more beyond installing energy-efficient appliances? Costs? Yes, there's that. But the difference won't be much. Then, the marketing side of it. Whatever.

When you think about it, it is much easier to start from scratch in building low-energy homes (or even zero energy homes) than to retrofit later.

Now we know that there is virtually no limit on how high energy prices can climb. We saw crude oil price passing the 'psychological' mark of $100 yesterday. That got every one on the econ pundit lists talking about the possibility of recession. In real life, how is it going to impact you? It will have an impact on 1) your 'disposable income', and 2) because of that, you now have to 'seriously' take a hard look at how well you manage your finances.

image: Energy Information Administration

When it hits our pocketbook badly, we have no choice - but, to react. Control spending (now?)... er, reduce expenses. At home, that means, spending less money on energy bills. The dollars and cents approach to be energy-efficient.

It's only a matter of time before we see the interest into home energy conservation techniques - to spike up. Energy efficiency (inside the home) first before even thinking about going solar.

The good news. When we apply energy conservation at home, it reduces the strain on the grid. The move is not only help to cut our energy bills, but also reduce carbon dioxide emissions into the atmosphere. And, it helps save the environment we live in.

UPDATE: If you haven't read it yet. Dominion Power receives 'the blessing' from Virginia environmental regulators and U.S. Forest Service the tentative okay (whatever that means) to build a clean coal plant in Wise County. What clean coal? And guess what? Excuse for the plant: To meet the demand in Northern Virginia. [source: Bristol Herald]

Cross-posted with Talking Green

image: MSNBC
source: PEW Center on Global Climate Change

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Builders Profit

NV Homes, Cameron Station

Wondering how builders make their money? Via Market Watch.

Question: Can you provide any idea of what the average home-builder gross profit is on a square-foot basis right now here in the Northeast? I was getting ready to start negotiating the purchase of a townhouse here and I know the builder has a mortgage on the home for $286,000. I am trying to buy the home for around $340,000, which I think equates to a $12 per square foot profit. Just wondering if that seems reasonable.

Answer: I cannot give you a precise number, but I can extrapolate one from data provided by the National Association of Home Builders.

The average net profit before taxes of a typical home-building company was 9% in 2006, the latest year for which figures are available. The average price is now $300,000, give or take a few pesos, and the average size is roughly 2,500 square feet.

Now, 9% of $300K is $27,000. Divide that by 2,500, and you come up with a profit of $10.80 per square foot.

These days, builders are fighting for their own survival! Some of the big builders are in deep trouble financially. Their profit margin may be less than 9%, especially if they offer concessions either to buyers and/or agent bonuses. Incentives, price reductions, and overhead expenses could easily eat up their bottom line.

Somehow, a few of them would do it as 'a matter of survival.'