If you were considering building, I surely don’t think there is a better time than right now to do it. Why? The Materials Cost Index continues to show declining prices in just about all major components of a building project. The main “ingredient” in building is lumber and no product has fallen faster. Whether it is drywall, insulation, steel, plywood or electrical and plumbing fixtures, they are all tumbling in price. The only products holding steady are oil-based materials such as asphalt shingles or vinyl siding and concrete and concrete blocks.

What about labor and subcontractor costs? Those have fallen just as quickly as lumber prices. It is all based on supply and demand. When everything was sailing along smoothly in the construction industry, there was enough work going around that no one was trying to be very competitive in their bids. That has completely changed and some companies are bidding jobs just to keep their employees busy.

You still need to be careful about always taking the lowest bidder. The old saying “you get what you pay for” usually rings true and this is no different. There are very few of my subcontractors that I will change based solely on price alone and I value the trust that I have in the ones that I have built relationships with. I would rather pay a little more for someone to run my electrical service and know it is done right rather than try to save a couple hundred bucks for a job where corners were cut in order to still make money because the bid was so low.

Are you considering the rates too? With 30 year fixed rate mortgages hovering around 4.8%, you could save yourself ten’s of thousands of dollars over the life of that loan. With inflation coming sooner rather that later, don’t expect this to be mortgage rate in a year from now.

One thing that builders and consumers can all appreciate in times like these is the quality of laborers is increasing everyday. Companies and subcontractors that were just getting by, doing work that is less than desirable and just plain dishonest, those are the ones having to find a new area of “expertise” outside of construction. It makes it easier on all of us and I heard a saying that I like to use, “When the building industry takes a downturn, it’s like taking a rusty pipe and beating against a wall and all the junk and flakes falls to the ground”. Meaning, your well trusted, honest and high quality people hang around and the ones that aren’t get knocked out of business and find something else to do.

Materials, labor and Rates are down and the quality of construction is up. Doesn’t get much better than that!

Here are a few questions that I think are important before any building process is started. You should be able to answer all of them and understand all of them before you are ready to build

* What is a good design for our needs?
* What is a building code? Does it effect us? How does it work? What doesn’t it do?
* Who is responsible, overall, for my building project?
* What are good sizes and proportions for rooms? What style do I want?
* What am I really getting from the builder?
* What problems do I have in my current house that I don’t want to repeat?
* Where can I find answers and help? How do I make my desires known?
* What does that line on the drawing mean?
* What is a dispute; a lien?
* What are specifications? Does the builder write and provide them?
* What if my builder does something in a way I don’t like? Is the house going to be complete; will something be left out?
* When will the house be finished?
* What is a contract? How do I play a part in it? What does it say?
* What is “an extra”?
* Is that a good material, I’ve never heard of it?
* Can I change things?
* Who picks the color of the paint, wall coverings, etc.?
* Is landscaping included? Sod? Seed? mud and rocks? Slopes? Are landscape features guaranteed?
* What if I disagree with the builder? Can I stop the work?
* Am I allowed on the job site? Can I inspect the work as it goes up? Can I bring someone with me?
* I really want this ________________in the house — how do I get exactly that?
* I can buy the light fixtures from my brother– but who will hang them? What do I do?
* Should I close on the mortgage and pay the builder in full? I have several items that I don’t like – must I still close?
* Why do we have to make all these trips to pick things out?

You should not have any questions unanswered between you and your builder before the contracts are signed and work begins.

Location is one of the most important considerations when shopping for a new home or looking for a place to build. Weigh the pros and cons of living in the city, the suburbs or the country. Compare locations as carefully as you compare houses and home sites.

Consider practical aspects such as time and distance to work, schools and shopping, and the availability of public transportation. Make personal observations, but also consult with your builder, local government, friends, and if possible, people in the neighborhood.  As you explore each home, use the following checklist to help determine whether the location suits your needs.

Shopping. Are adequate shopping facilities nearby?

Police and fire protection. Are police and fire protection adequate?

Medical facilities. Is there a hospital or medical center nearby?

Schools and day-care. Are schools in a convenient location?  Are convenient day-care facilities available?

Traffic. Are the streets quiet enough?   Does the speed limit on the streets suit you?  If you have children, will they be safe from traffic hazards?

Parking. Are parking and garage facilities adequate?

Transportation. Is public transportation frequent and convenient?

Trash and garbage collection. Are trash and garbage collection adequate?

Recreation. Are there suitable parks and recreational facilities nearby?

Places of worship. Are places of worship available and convenient?

Privacy. Do the lot and house offer adequate privacy?

Water. Does the community have a reliable source of drinking water with adequate capacity to meet present and future needs?

Sanitation facilities. Is the sewer system or septic tank adequate and reliable?  Does it meet present and anticipated future needs?

Landscaping. Is the land well-drained?   Has proper landscaping been done to prevent erosion?  Is the landscaping attractive and likely to enhance the value of the home?

Taxes. Are the property tax rates reasonable?   Is either the tax rate or the value of the house likely to change enough to cause a substantial increase in your tax payment?

Assessments. Are there special assessments   that will force you to pay added monthly charges for a specified number of years?

Nuisances. Are there nearby sources of noise, smoke, soot, dust, odors or other hazards that will affect the housing environment?
Are any development plans under consideration that could substantially change the nature of the community?

Flooding. Is flooding a potential problem?

From now until the end of 2009, the government is offering a 30%, or up to $1,500, tax credit for all energy efficient home upgrades. Upgrades that are eligible include items like replacement windows, exterior door replacement, installing or upgrading your homes insulation, and replacing old Heating and Air Conditioning units. There are other possible items that can be replaced. Please contact Callaway Construction for more information on qualifying items and estimates on installation

Key Issues for Home Builders

Home Occupancy Bill – Passes House: Rep. Ted Pitts’ (R-Lexington) “Home Occupancy” bill (H. 3018) passed the SC House on Thursday. The bill would allow builders with completed, but unoccupied, new homes to delay paying property tax for a limited time on the real estate improvement (house) until the house is sold/occupied, or remains on the market for under three years. During the time the house is unoccupied, services provided by the local government are minimal. The builder would have to annually certify to the tax assessor that the house remains uninhabited.

Representative Jim Merrill of the House Ways & Means Subcommittee led the charge on the House floor. Representatives Ted Pitts, Kenny Bingham, Harry Ott and Anton Gunn were key players in working the bill on the House floor. The bill should be in the SC Senate when it returns after Easter.

Point of Sale Bill – Passes in the House: A bill (H.3272) to address the inequities caused by the point-of-sale assessment method for existing commercial and residential property received a favorable vote this week in the SC House. In order to insure House passage, the bill was amended on the floor to restrict the original bill.

Under the amended bill, if a parcel of real property, which has had no further improvement since the most recent countywide reassessment program was implemented, is sold (ATI – assessable transfer of interest), the new point of sale value is postponed until the next countywide re-assessment. The point of sale value is the value to which the limit on increases (15%) in fair market value is imposed going forward.

The good news is that the SC House kept the “Point of Sale” issue in play by getting it over to the SC Senate in a timely manner. The bad news is that the SC House bill just postpones the “point of sale” problem, it doesn’t solve it. The SC Senate, when it returns later this month, is expected to continue its hearings on a companion bill (S. 432). The bigger problem is that there is no easy solution to the “point of sale” problem. Any attempt to tweak the “point of sale” law creates financial winners and losers.

Building Codes Reform Bill Introduced: Recently, two bills were introduced in the Senate and the House (S. 618 and H.3769) to modernize the South Carolina building codes process. The bill contains several key provisions:

Splits SC Building Code Council into two boards: Residential and Commercial.

The current composition of the SC Building Codes Council does not reflect the increased sophistication of the construction industry and the different requirements of residential and commercial construction. Modern building codes are increasingly complex requiring practical experience in the use of the codes to make value judgments on the interpretation of building codes. The current 16 member council would be split into smaller councils.

Building codes and their modifications must be submitted to the General Assembly for approval prior to implementation. It requires that all building codes and their modification be first approved by the respective Building Code Council (Commercial or Residential) and then the General Assembly. This process has been used in the past.

It requires that the 2006 and 2009 SC Building Code be modified to use the seismic and wind maps prepared by The Citadel and Clemson University in its report to the SC Building Codes in February 2009. These state-of-the-art studies showed that South Carolina is over-engineering its houses.

Establishes a new state appeal process. An appeals procedure would be created that would allow a builder who differed with a building codes decision by his local building official to appeal the decision to the state level.

The bill was taken up in the Senate LCI Committee this week, but had to be carried over until we get the official wind study from Clemson University. The additional time will allow us an opportunity to fine tune the bill and resolve some of the concerns over the bill.