Building a Case for Single Family New Home Construction Education

Single family housing construction growth is creating a sustainable new business opportunity for appraisers. July housing data continues to bring improving and good news for the newly built home markets. July’s newly built homes sales, as reported by the Census Bureau and HUD, rose 5.4 percent from June and 25.8 percent from July 2014. New home inventories increased in July to 218,000, the highest level in more than five years. The continued increase of new homes available for sale is another confirming sign that builders anticipate the sales market to continue its improvement. Led by a strong jump in single-family production, housing starts jumped nearly 13 percent and continue to grow to a seasonally adjusted annual rate of 1.206 million units in July, which is the highest level since 2007. Builder confidence increased again in August to nearly a 10 year high and as a result builders are increasing production.

While global economic developments are in the news and continue to rattle financial markets, most indicators point to strength at home within the United States. Gross Domestic Product (GDP) is receiving a significant boost in the most current reading. The upward revisions were broad-based with accelerated growth for consumption, investment, government spending, and trade components of the economy. Construction spending continues to add to economic growth with the pace of spending on single-family construction expanding 15.8 percent on a year-over-year basis.

This is welcome news as we all know construction of new single family residences have been in the doldrums, and in some cases, non-existent since the housing bubble and the great recession. Now there is even more positive long term news to evaluate. The Mortgage Bankers Association released a new research paper that projects between 13.9 and 15.9 million additional households will form by the year 2024, potentially making the next decade one of the strongest in housing in U.S. history.

Finally, sustained positive news for homebuilders. So how do appraisers position themselves to capitalize on this growth opportunity? In recent years, new home construction has been depressed due to a long and jobless recovery. Understanding that new home construction would eventually need to accelerate to accommodate household formations, Allterra Online worked with the National Association of Home Builders to develop a 7 hour CE approved course: Appraisal of Single Family Residential New Construction. The online course, taught by instructor David Phillips, SRA, CDEI, covers the importance of the valuation professional in the lending process; reviews basic principles of valuation that are essential to the appraisal of new construction; and discusses the techniques and special challenges of the appraisal of new construction.

As you remember back in 2010, the Interagency Appraisal and Evaluation Guidelines made it abundantly clear that appraiser selection requires that the person selected possesses the requisite education, expertise, and experience to competently complete the assignment. By completing education specific to the valuation of new construction, you will differentiate yourself from your peers while construction of new homes continue to accelerate, and refinances fade away as interest rates eventually begin to rise.

You can provide yourself with a marketing advantage by signing up for this resourceful course, Appraisal of Single Family Residential New Construction, now at a discounted rate. Use “BUZZ15” for 15 percent off any course today through September 14, 2015.