Survey says: home size unchanged
The lack of affordable, buildable lots and the scarcity of labor affected home production in 2017. While starts increased by 9 percent over 2016, the characteristics of these new homes stayed largely the same, according to survey results from the National Association of Home Builders (NAHB) released today during a press conference at the NAHB International Builders' Show in Orlando, Fla.
The average home size, at 2,622 square feet in 2016, was essentially unchanged in 2017, averaging 2,627 square feet. Forty-six percent had four bedrooms or more compared to 45 percent in 2016; 37 percent had three full baths or more compared to 35 percent in 2016.
Housing availability and affordability remain a serious issue, and it's reflected in these findings, said Rose Quint, assistant vice president of survey research for NAHB.
Further, 65 percent of those surveyed don't believe it's going to get any easier in 2018. Seventy-nine percent of these prospective buyers can only afford half the homes in their markets, Quint said. "These potential buyers see a problem with housing availability. They know it's a tough nut to crack, but they are not deterred. They are still planning to buy a house in the next 12 months."
Homes built in 2018 will most likely include a walk-in closet in the master bedroom, separate laundry room, a great room, nine-foot ceilings on the main floor and granite kitchen counters. They are also very likely to contain energy-efficient features such as low-E windows and Energy Star-certified appliances and windows, the survey said.
Home owners are staying in their homes longer than they used to – about 12-13 years, on average – and they are anxious to make changes. Traditional Home executive editor Jill Waage and Better Homes and Gardens home design editor Amy Panos say their surveys show that 80 percent of respondents – female home owners – say they want to make some home improvements in 2018, from freshening up their paint colors (48 percent) and changing their flooring (43 percent) to making improvements in the kitchen, bathroom or outdoor spaces. Those are the top five renovation projects anticipated by survey respondents this year, whether that home is now owned by a "mainstream" (defined as an income of less than $125,000 per year) or a "luxury" buyer.
Mainstream buyers are much more likely to tackle do-it-yourself projects and make compromises, such as choosing cost over quality, to get results: brightly painted kitchen cabinets and big-box lighting solutions rather than custom installations. They place a premium on energy-efficiency improvements, likely because they live in older homes with outdated heating systems.
The "luxury" owner is looking at high-end outdoor fireplaces and furniture, a bathroom renovation that includes a spa shower or expansive, free-standing bathtub and a kitchen with all the bells and whistles, like built-in wine coolers and warming ovens.
One trend that Better Homes and Gardens is watching, Waage and Panos say, is the great room. A staple of new home design for more than 30 years, the combined kitchen, dining and family room may be losing some steam. Whether that pans out into more separate and defined living spaces is unclear, and it's too soon to tell, they said.
Meanwhile, there is a potential market for "tiny houses." The NAHB survey found that 53 percent of respondents might consider purchasing a home of 600 square feet or less in size – at some point in their lifetimes. More Gen Xers and millennials are open to the idea than baby boomers and seniors.
Readers Respond: Short on Bitcoin
Earlier this week, HBSDealer took note of the price of a Bitcoin — roughly $15,000. On Friday, the cryptocurrency value was running at about $13,860.
That sharp drop shows the financial acumen of readers of HBSDealer, the vast majority of whom described $15,000 price tag on a single Bitcoin as "ridiculously high," in this week's poll question.
Specifically, the poll asked: "The cryptocurrency known as Bitcoin was selling for just under $15,000 on Monday. What's your take?"
- 9% — At $15,000, Bitcoin is a bargain
- 3% — At $15,000, Bitcoin is priced about right
- 9% — At $15,000, Bitcoin is high
- 79% — Come on, $15,000 is ridiculously high
As a point of information, Bitcoin's price in early January 2017 was a little more than $1,000.
The poll remains open. Cast your vote here.
Walmart to raise starting wage, expand maternity and parental leave
Walmart is raising its starting wage for all hourly associates in the United States, handing out bonuses and expanding maternity and parental leave benefits — including providing financial assistance for adoption.
The nation’s largest private employer will increase the starting wage rate for its more than one million hourly associates in the United States to $11, and provide a one-time cash bonus for eligible associates ranging from $200 to up to $1,000. (Rival Target raised its minimum wage to $11 last fall.) The company said the changes partially motivated by anticipated savings from the new tax plan, which provides deep tax cuts to corporations.
The pay increase, which takes effect in the Feb. 17, 2018, pay cycle, is in addition to wage increases Walmart has already planned for many U.S. markets in the coming fiscal year.
The cash bonus will be provided to all eligible full and part-time hourly associates. The amount will be based on length of service. Associates with at least 20 years will qualify for $1,000.
This increase in wages will be approximately $300 million incremental to what was already included in next fiscal year’s plan. The one-time bonus represents an additional payment to associates of approximately $400 million in the current fiscal year, which ends Jan. 31, 2018. Walmart said a “discrete” one-time charge will be taken in the fourth quarter of the current year to account for the bonus.
Walmart is also expanding its parental and maternity leave policy, providing full-time hourly associates in the U.S. with 10 weeks of paid maternity leave and six weeks of paid parental leave. Salaried associates will also receive six weeks of paid parental leave.
The retailer will also provide financial assistance to associates adopting a child. The adoption benefit, available to both full-time hourly and salaried associates, will total $5,000 per child and may be used for expenses such as adoption agency fees, translation fees and legal or court costs.
“Today, we are building on investments we’ve been making in associates, in their wages and skills development,” said Doug McMillon, Walmart president and CEO. “We are early in the stages of assessing the opportunities tax reform creates for us to invest in our customers and associates and to further strengthen our business, all of which should benefit our shareholders. However, some guiding themes are clear and consistent with how we’ve been investing — lower prices for customers, better wages and training for associates and investments in the future of our company, including in technology. Tax reform gives us the opportunity to be more competitive globally and to accelerate plans for the U.S.”
Walmart said it is early in the process of assessing potential additional investments.
“That assessment will be done not only through the lens of associates, customers and shareholders, but also within Walmart’s financial framework of strong, efficient growth, consistent operating discipline and strategic capital allocation,” the company stated.