Monday, May 7, 2012

Safety and Energy Savings Will Boost New Home Prices

Small new home builders, those that build less than 15 homes a year, are facing even more competition from the used home market.  Every year state regulators and building code enforcement people meet to go changes needed for the year.

And it seems that every year they add more and more things to the list of required things that go into building new homes.  Some make sense and some are questionable. 


Proposed changes to a state’s building code that are meant to make houses safer and more energy-efficient have roused the ire of some modular and site builders, who say the guidelines could significantly jack up prices of new homes. 


At issue in some states are a handful of energy upgrades that would require builders to increase the amount of insulation to basement walls and add fire sprinklers to every new house.

Builders say the changes could add up to $20,000 to the price of a new house, a burden they don't think consumers are willing to shoulder, the banks are reluctant to finance and the appraisers can’t add into the appraisal in these tough economic times.

If these continuing regulations are imposed in every new home and not required as a retro-fit in older homes, the cost of a new home will continue to widen over a used home until it gets too much for lenders to justify.  

It is estimated that 1 in every 7 homes in the US is now either in the foreclosure process or abandoned and with the banks holding the paper on all of them and dumping them as fast as they can, it just doesn't make sense that regulators would continue to force these regs down the throats of  new home builders, forcing them out of the market place. 

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