New Construction

One Way to Help the Housing Problems in Napa Valley with Manufactured Homes

I wanted to share this article with you that was in the Napa Valley Register on January 26th. It discusses one possible solution to the lack of affordable housing and construction costs/backlog (due to fires).

“A massive factory that churned out submarines to help win World War II has been retooled to tackle a new crisis: the shortage of low-cost housing.

Based on Mare Island’s Building 680, Factory OS manufactures housing units that can be hoisted by cranes and stacked like Lego blocks, similar to the units manufactured by a different company for Turley Flats on Pope Street.

Last September, Factory OS pre-assembled 110 units for a West Oakland project. A stick-built project of that size would take about a year to build. Factory OS installed the entire five-story complex in 10 days.

“We can build something as good as if not better than anything you can do on site,” Factory OS co-founder Peter Palmisano told a group of St. Helena city officials and housing advocates who toured the 250,000-square-foot factory on Jan. 10.

The start-up requires a minimum order of 50 units, but Palmisano said he’s willing to make an exception for St. Helena, the town where he’s lived since 1979.

The nonprofit Our Town St. Helena has been in talks with a local family about building affordable units on a St. Helena property. The site might be suitable for 25-35 units.

Factory OS is offering to team up with Our Town on the project. Palmisano said he hopes the city offers relief from various permitting fees, cuts some red tape during the entitlement process, and demonstrates the political will to get some units on the ground.

“There’s a can-do spirit in this community,” he said. “There’s money, there’s intelligence. We just need the will.”

Palmisano is even offering to install a Factory OS unit on his own west-side residential property as a test case so people can see it for themselves.

The units have a maximum size of 16 feet wide by 72 feet long. Palmisano said he can build them for about $155 per square foot. That includes washers, dryers, lights, water fixtures and kitchen appliances. Even with the additional cost of land preparation and installation, Factory OS’s process is still vastly cheaper than typical Upvalley residential projects.

Since they are built off site, Factory OS units can be installed in a matter of days, minimizing financing costs and the impact on the surrounding neighborhood, Palmisano said.

Mary Stephenson of Our Town St. Helena said units built off-site could provide infill housing all over St. Helena.

“If the community could see this, they would say ‘Oh, this isn’t bad. We could do this,’” Stephenson said.

In addition to managing the development of Meadowood Resort and other major projects, Palmisano served on the board of Bridge Housing Corporation, which developed Hunt’s Grove Apartments, and was a founding board member Our Town St. Helena, which is developing Brenkle Court and recently acquired a property on Pope Street.

Palmisano said he’s worried about a lack of housing for workers and professionals.

“These are the people who are vital to our community,” Palmisano said. “If we’re going to sustain the feeling of our small town … then affordable housing is key.”

Mayor Geoff Ellsworth, City Manager Mark Prestwich, Planning Commissioner Daniel Hale, Senior Planner Aaron Hecock, and Chief Building Official Philip Henry attended the tour, along with representatives of Our Town and Napa Valley Community Housing.

Ellsworth said that with the current council and staff, “this is the perfect opportunity” to try an innovative approach to affordable housing.

Ellsworth said he likes the idea of showing the community a tangible test case to demonstrate that units like Factory OS’s “fit the character of our town.”

“Let’s have the discussion and see what we can do,” he said.

To join an upcoming tour of Factory OS, email mary@ourtownsthelena.org.”

JESSE DUARTE jduarte@sthelenastar.com Jan 26, 2020 Updated Jan 26, 2020

The #1 Reason It is Difficult to Find Your Dream Home

The headlines in real estate today all revolve around one major point: there is a shortage of homes available for sale. Price appreciation is accelerating again because there is a shortage of homes available for sale. First-time buyers are taking longer to purchase a home because there is a shortage of homes available for sale in the lower price points. Boomers are staying in their current homes longer because there is a shortage of homes available for sale to which they would move. In certain markets, affordability is becoming more challenging because there is a shortage of homes available for sale.

What’s the major reason for this lack of housing inventory?

The issue was examined in a recent article by the National Home Builders Association (NAHB). In the article, Robert Dietz, Chief Economist for NAHB, explained:

“Home building in the 2010s was a story of the Long Recovery. After the Great Recession, the number of home builders declined significantly, and housing production was unable to meet buyer demand…Years of population and household formation growth, combined with relatively reduced levels of home building, have left the market with a critical supply shortage.”

Here are the single-family home construction starts by decade for the last six decades:

Kate_Spad_Blog_Single_Family_Home_Construction_Starts_in_millions_by_decade.jpg

Obviously, there’s a current shortage of homes for sale because not enough houses were built over the last ten years. To add to the challenge, the U.S. population expanded by more than 20 million people during the 2010s.

Below is a graph showing the number of starts per every million in population. The last decade shows that starts per population were less than half the average of the previous five decades.

Kate_Spad_Blog_Single_Family_Home_Construction_Starts_per_million_population.jpg

There’s good news coming!

The NAHB article explains that there is light at the end of the tunnel.

How confident home builders are in the housing market is a great indicator of how much building is about to get started. The NAHB/Wells Fargo Housing Market Index (HMI) gauges builder perceptions of current single-family home sales and sales expectations for the next six months as “good,” “fair,” or “poor.” The survey also asks builders to rate traffic of prospective buyers as “high to very high,” “average,” or “low to very low.” Scores for each component are then used to calculate a seasonally adjusted index where any number over 50 indicates that more builders view conditions as “good” than “poor.”

Here are the HMI readings going back to 2008:

Kate_Spad_Blog_Housing_Market_Index.jpg

The 2019 confidence reading of 76 was the highest since 1999. The January 2020 index came in one point lower at 75. These readings indicate we should see an increase in new residential construction in 2020. Just last week, NAHB Chairman Greg Ugalde stated:

“Low interest rates and a healthy labor market combined with a need for additional inventory are setting the stage for further home building gains in 2020.”

The increase in housing starts has already begun. According to the January report from the U.S. Census Bureau and the U.S. Department of Housing and Urban Development, single‐family housing starts were up 11.2% and attained the highest level in thirteen years.

Bottom Line

Whether you’re a first-time buyer or a seller thinking of moving up or down, 2020 could be your year with more new construction homes coming to market.

The 2 Surprising Things Homebuyers Really Want

In a market where current inventory is low, it’s normal to think buyers might be willing to give up a few desirable features in their home search in order to make finding a house a little easier. Don’t be fooled, though – there’s still an interest in the market for some key upgrades. Here’s a look at the two surprising things buyers seem to be searching for in today’s market, and how they’re impacting new home builds.

Homebuyers Are Not Giving Up Their Garages

The National Association of Home Builders (NAHB) recently released an article showing the percentage of new single-family homes completed in 2018. The data reveals,

  • 64% of new homes offer a 2-car garage

  • 21% have a garage large enough to hold 3 or more cars

  • 7% have a 1-car garage

  • 7% do not include a garage or carport

  • 1% have a carport

The following map represents this breakdown by region:

Kate_Spad_Blog_Parking_Options_By_Region.jpg

Homebuyers Are Not Giving Up Their Patios

Patios are on the radar for buyers as well. Community areas are often common amenities in new neighborhoods, but as it turns out, private outdoor spaces are quite desirable too. NAHB also found that,

“Of the roughly 876,000 single-family homes started in 2018, 59.4% came with patios…This is the highest the number has been since NAHB began tracking the series in 2005.”

As shown in the graph below, the number of new homes built with patios has been increasing for the past 9 years. Clearly, they’re a desirable feature for new homeowners too.

Kate_Spad_Blog_Single_Family_Homes_Built_With_Patios.jpg

Bottom Line

Homebuyers are looking for garage space and outdoor patio living. If you’re a homeowner thinking of selling a house with these amenities, it appears buyers are willing to spring for those key features. To find out the current value and demand for your home, contact a local real estate professional today.