One provision in this year’s state budget (H97) was the elimination of the noncommercial underground storage tank fund. Here are the details of the provision:

• Appropriates a nonrecurring sum to the Noncommercial Fund;
• Uses the remaining balance of the Noncommercial Fund to pay the cleanup costs of releases reported to the Department of Environmental Quality (formerly the Department of Environment and Natural Resources) prior to October 1, 2015 and determined to pose unacceptable risk (the $2,000 deductible applies);
• Eliminates the Noncommercial Fund moving forward; and
• Provides temporary rules that alter the requirements for remediation when a leak from a noncommercial tank is discovered.

NCAR believes this fund was vital to the protection of North Carolina’s environment and its property owners. The fund was established to reimburse property owners for costs incurred during the cleanup of soil and groundwater contamination resulting from the release of petroleum from an underground storage tank. While no hard data exists on the precise number of noncommercial underground storage tanks in North Carolina, a reasonable estimate is approximately 200,000.

NCAR is concerned that the elimination of this fund could have a negative impact on the real estate market.

The Government Affairs staff continues to work with members of the NCGA and Department of Environmental Quality staff to find ways to lessen any negative impacts this change will have on the market. 

Please submit this form about transactions which have been negatively impacted by the elimination of this fund.

Congress is considering a proposal that would create a tax on all potential homeowners and consumers looking to purchase or refinance a mortgage.

By increasing Fannie Mae and Freddie Mac’s credit risk guarantee fees (g-fees) to fund transportation programs, Congress would disturb the housing recovery.  Now is not the time to raise the cost to purchase or refinance a home.

NAR strongly believes that taxing homeowners to pay for transportation programs places an unnecessary long-term burden on consumers and this action will disproportionately impact low and moderate income borrowers, as well as first-time homebuyers.

We need your help! Click here to Stop the Housing Tax for Transportation.

Land of the Sky Association of REALTORS

ANNUAL ELECTION LUNCHEON

	Bring a Coat Keep Someone Warm
Wednesday, October 21, 2015 will be the annual election luncheon. Ballots will be provided that day for your use in voting. Lunch starts at 11:30. Come and vote for your Officers and Directors for 2016! Complimentary meal including vegetarian options. Hot potato and chili and salad bar, plus fixins, etc. In addition, this year we are putting on a coat drive. Donate a coat to help keep someone warm this winter. As a board it is our goal to donate one hundred coats this year to help those in need in our communities. All sizes and styles accepted. Our Gold and Silver Allied Members this year will also be shown there. RSVP: [email protected]
	WHEN: October 21, 2015
	WHERE:  Crowne Plaza Tennis & Golf Resort 1 Resort Drive, Asheville, NC 28806
	CLICK HERE TO REGISTER NOW

• Matrix Overview– Matrix overview, for most 40 level users of InnoVia – Approx. class time is 2.5 hours
  • To watch a recorded version of this session, click here
• Matrix for Appraisers – This class is for appraisers only, and will focus on the 1004MC Report – Approx. class time is 1 hour
  • To watch a recorded version of this session, click here.
• Matrix for BIC/Office Staff – Will be the exact same content as the Matrix Overview Class, with an added 30 minutes of Office Level functionality – Approx. class time is 3 hours
  • To watch a recorded version of this session,click here.

After months of work by the members of the General Assembly, a budget deal was reached Monday to resolve the differences between both Chambers’ versions. The more than $21.7 billion budget is contained in over 500 pages, which legislators have been working to review throughout the week. The Senate held votes on Tuesday and Wednesday where support fell mostly along party lines. The House conducted their votes yesterday and early this morning.

Thanks to the efforts of NCAR leadership, Government Affairs staff and REALTORS® across North Carolina, this budget supports many REALTOR® priorities.  Below is a list of positive budget provisions.

• No change to the current Mortgage Interest and Property Tax deductions.
• Restoration of both the residential and income producing historic tax credits.  The program’s sunset is now 2020.
• The Workforce Housing Loan Program receives $12.5 million in funding in 2015-6 and $15 million in 2016-7.
• For this fiscal year (FY15-16), the budget provides $1M in recurring funding for the Economic Development Partnership NC tourism promotion over the current funding level.  In the next fiscal year (FY16-17), there is an additional $2M recurring funding for tourism promotion over the current funding level.
• Beginning in 2017, the Personal Income Tax rate will decrease to 5.499 percent.
• Multiple grants and fund programs also receive funding including:
  • $3 million for the OneNC Small Business Fund;
  • $2.5 million for Rural Economic Development Grants; and
  • $30 million for the Film grant program.
• Job Development and Infrastructure Grants (JDIG) received over $63 million in funding.
• The Housing Trust Fund retains its annual funding allocation of approximately $10 million.
• No change to the tax distribution equation for counties.

We are extremely appreciative of the work of the House and Senate leadership who have supported these provisions.

Next week we will be launching a call for action asking you to reach out to your Representative and Senator to thank them for supporting the budget.  Watch your inbox and please take action to show those who supported us that we are appreciative of their work.

While this budget was great for our industry, one issue did not receive as favorable an outcome. The Non-commercial underground storage tank fund was eliminated. The backlog of claims identified and in the system with DENR through October 1 of this year will be paid.  After that, the fund will no longer be available to help NC citizens. The standard under which tank removal and remediation will be changed.

NCAR believes this fund was vital to the protection of North Carolina’s environment and its property owners. The fund was established to reimburse property owners for costs incurred during the cleanup of soil and groundwater contamination resulting from the release of petroleum from an underground storage tank. While no hard data exists on the precise number of noncommercial underground storage tanks in North Carolina, a reasonable estimate is approximately 200,000.

NCAR is concerned that the elimination of this fund will have a disastrous impact real estate market, with profound negative effects on the marketability and insurability of properties where a release has occurred. We are also concerned about financing and title issues which could halt sales.

The Government Affairs staff is working with members of the NCGA to find ways to lessen any negative impacts this change will have on the market.  We are also setting up an online portal for you to share your clients’ stories.

ASHEVILLE – The City of Asheville and Land of the Sky Association of REALTORS® announce the 2015 Asheville Housing Fair to take place from 10 a.m. to 2 p.m. September 19 at the Stephens Lee Center, 30 George Washington Carver Ave. The event is free and open to the public and will guide consumers and homeowners through a myriad of questions surrounding credit, renting, vacation rentals and more. 

Representatives from more than 20 nonprofit organizations and associations will be on site to provide information and one-on-one assistance to persons seeking to learn more about affordable housing options. 

A series of workshops will be held throughout the event. The workshop schedule includes:

– Living in 120 Square Feet – Life in a Tiny Home

– Learn Your Rights as a Renter

– Credit: Get It. Keep It. Improve It

– The ABCs of Home Buying

– What is an Accessory Dwelling Unit?

– Homestays

– Landlords are Part of the Solution

– Everything You Wanted to Know About Affordable Housing

A tiny home exhibition will be on display in the Stephens Lee Center parking lot. Two Tiny Homes will be on display.

The Asheville Housing Fair will be family friendly with a playground and toddler bouncy house on site. There will be a free hot dog lunch provided by the Land of the Sky Association of REALTORS®. 

A complete list of participating organizations and a full workshop schedule can be found on the event website, www.ashevillehousingfair.com. Event information is also available by phone, at 828-259-5728, or by emailing [email protected].

About the City of Asheville:

The City of Asheville strives to provide the highest quality and most efficient municipal services possible. The City serves a population of 87,000 people with services ranging from public safety to economic development, parks & recreation, water resources and more. Find detailed information at www.ashevillenc.gov.

About the Land of the Sky Association of REALTORS®

The Land of the Sky Association of REALTORS® (LOTSAR) is the longest running REALTOR® association in North Carolina. LOTSAR’s mission is to enhance our members to exceed, to foster high ethical standards, to promote private property rights, and to be the voice of home ownership. The Land of the Sky Association of REALTORS® is located at 37 Montford Ave, Asheville, NC 28801. 

Duke Energy’s effort to inform the public about possible routes for a high-voltage power line didn’t satisfy most residents who attended the public information session at Blue Ridge Community College last Thursday. It was the third of three sessions that Duke Energy sponsored on the proposed new transmission line running from upstate South Carolina through Polk and/or Henderson Counties to connect with transmission lines at the soon-to-be converted coal-fired power plant in south Buncombe County.

After returning to Raleigh, I met with Duke Energy representatives and asked them to help me answer a range of questions that I heard from my neighbors in south Henderson County and my constituents in north Henderson County. What follows is a Q&A that hopefully will provide answers to many of those questions.

Overall, what is Duke Energy planning in Western North Carolina and South Carolina?

Over the past four decades, electricity use has more than doubled in and around the Asheville area. And as demand increases, Duke Energy currently has limited capacity to generate and transport energy within the Western Carolinas region. Following a comprehensive evaluation of the energy system, Duke Energy determined that building a new transmission line and substation, as well as retiring the Asheville coal units and generating electricity with new natural gas and solar is the best solution to meet future customer demand with safe, reliable, affordable and cleaner energy.

What Duke Energy calls its multi-facet project, the Western Carolinas Modernization Project, includes:

·         Retiring the 376-megawatt Asheville coal units.

·         Building an approximately 650-megawatt natural gas-fired combined-cycle power plant on the Asheville coal plant site to take advantage of historically low gas prices, and installing solar generation at the site.

·         Working with the local gas distribution company to upgrade an existing intrastate gas pipeline that will serve the region beginning in 2019 and will provide a firm fuel supply to the new combined-cycle natural gas plant.

·         Building new transmission infrastructure and upgrading related area substation infrastructure.

·         Continuing to move ahead on coal ash excavation and ash basin closure at the Asheville power plant site.

These investments are supposed to provide economical and long-term reliability for the region while reducing the environmental footprint.

Why does Duke Energy need to build additional transmission lines?

Duke Energy has a responsibility to meet its customers’ growing energy demand and to propose solutions that maintain reliable service. According to Duke Energy, the transmission infrastructure is needed to maintain system reliability, meet regulatory requirements and fulfill the growing needs of their customers. Duke Energy believes that more than the existing lines will be needed to meet the projected future energy demands in the region and regulatory requirements.

How does Duke Energy decide when to build a new transmission infrastructure?

Engineers and planners use growth and usage projections, as well as continuous monitoring of the electric system, to identify the need for expansion of the system that serves Duke Energy’s 3.9 million customers in North Carolina and South Carolina. Their forecasts indicate that demand for electricity in the region will grow by more than 15% in the next decade and demand has more than doubled since 1975 in the region.

Who is going to pay for this project and when?

The transmission projects will serve and benefit Duke Energy customers in the region and the costs will be passed through to Duke Energy and recovered through base rates over a 30-year period.

According to Duke Energy, its customers will earn a fuel savings that will more than offset the cost. With the additional transmission infrastructure, Duke Energy says it will be able to use more economical generation sources, thereby lowering the costs to their customers. The enhancement program has no cost impact to customers, according to Duke Energy.

How does Duke Energy choose transmission corridors and routes?

Duke Energy identifies potential corridors including existing transmission corridors and seeks feedback from the community. A corridor is a study area that represents the potential path of a transmission line. The specific transmission routes will be much narrower and located within negotiated easements. These specific locations will be determined at a later date following public input and further study to determine feasibility.

Duke Energy says that the process of selecting the corridors and routes is a very inclusive and comprehensive process. Duke Energy gathers information from many sources to analyze the physical, cultural and ecological characteristics of the entire study area.

Duke Energy used a team of scientists, planners, engineers and real estate specialists to develop the list of criteria used to identify potential corridors. Community input, ecological, physical, real estate and land use information will be collected and used to evaluate the corridors and determine viable routes (the actual easement areas for the new transmission lines).

Duke Energy says that it will look for corridors and routes that minimize the impact on homes, the community and the environment, while meeting the legal and engineering requirements of the project and minimizing the costs to customers.

Where will the transmission line be located?

The proposed transmission line will potentially run through Buncombe, Henderson and/or Polk counties in North Carolina, and Greenville and/or Spartanburg counties in South Carolina. Duke Energy’s goal is to minimize impacts on environmental and cultural resources, as well as homes and businesses.

What would the line look like?  

Current construction plans call for the lines to be suspended on open-framed darkened lattice steel towers. The average height of the above-ground structures will be about 140 feet, but will vary on the foothills and mountainous terrain. The conductor will be a non-reflective aluminum in order to make it less visible from a distance. Plans estimate an average of 1,000 feet between each structure.

What is the difference between the 1,000 foot corridor area and the final route?

The 1,000 foot corridor, or study area, is the area being studied for final placement of the route/easement. The final easement will be approximately 150 feet for the construction and maintenance of the Foothills transmission line.  Property owners within the 1,000 feet study area should have been contacted about the project to obtain input into the siting process.

Can Duke Energy put the lines underground?

After Duke Energy establishes the preferred transmission routes, it expects to evaluate the option of an underground transmission alternative. However, based on past evaluations, Duke Energy says that underground transmission lines have not proven to be better than overhead transmission lines because of extremely high cost and environmental concerns.

Duke Energy is required to construct in the most cost-effective manner due to the impact on customers rates. In addition, a fault in a buried line, caused by a manufacturing defect, substandard construction, or an accidental dig-in, would take much longer to repair than a fault in an overhead line. In addition, there can be significant impacts to the environment (e.g., wetlands, trees) and traffic and commerce from underground construction and maintenance. Because a transmission outage can affect a significant number of customers, some customers could experience power interruptions for 1-2 weeks while a fault is repaired. Duke Energy says it will take advantage of opportunities to co-locate the planned transmission lines with existing lines where possible.

When will the line be built?

Duke Energy is in the preliminary stages of selecting the preferred corridors for the lines. Specific routes will be defined in late 2015. Rights of way will be acquired beginning in 2016. Construction will begin in 2017, with the project expected to be in service in 2019.

Does your opinion count?

Yes, Duke Energy needs to hear your opinions and concerns. The energy challenges we face and the solutions developed to meet those challenges affect all of us. Duke Energy has pledged that it will use input from the communities through open houses and other meetings as well as a dedicated email (WCTransmissionEnhancements@duke-energy.com) and toll-free phone line (1-888-238-0303). Unless I learn otherwise, my belief is that Duke Energy is dedicated to this stakeholder-involvement process, and it needs and looks forward to hearing the recommendations.

If the transmission lines cross my property, what can I have underneath them?

Typical agricultural crops that do not reach a mature height above 12 feet (corn, tobacco, cotton, etc.) may be planted and harvested on the right of way. A property owner can build a fence across or along the easement, if it includes a gate at least 16 feet wide to allow Duke Energy trucks access to the easement. Before installing any structure within an easement, the owner must receive permission through Duke Energy’s Transmission Right of Way Use program. Existing fences may remain in place, but Duke Energy may install a gate or temporarily remove the fence during construction or maintenance of the transmission line.

How much maintenance should I expect on a transmission line easement?

Except for emergency situations, a property owner can generally expect the transmission line to be patrolled by helicopter several times a year and patrolled by foot about every five years to identify any needed repairs. Repairs that are identified during these patrols will be scheduled and completed.

Trees encroaching in the right of way will be pruned at least every four years, and danger trees outside the right of way that could fall and endanger the safe and reliable operation of the transmission line will be cut, trimmed or removed as needed. Trees planted in landscaped areas within the easement that could grow to a mature height of 12 feet will be removed.

Does Duke Energy condemn homes when they build a transmission line?

Duke Energy says that it will make every effort to negotiate an easement with property and home owners. Again the company says that it will attempt to purchase right-of-way easement in locations that cause the least impact to the property, the environment and the community.

Will this line cause health problems?

Obviously extremely low-frequency electric and magnetic fields (EMF) are all around us – not just in power lines, but also in electrical wiring in buildings, electric motors and appliances, TVs, and computers. After decades of research, scientists still have not clearly identified any effects EMF exposure might have on human health. Having looked at the issues again because of this project, I can’t definitively assess the question.

Why does Duke Energy need to upgrade the transmission system?

This is Duke Energy’s verbatim response to that question: “North Carolina and South Carolina boast a large, diverse economy with a combined population of nearly 15 million people, 318,000 businesses and a combined gross domestic product (GDP) of more than $540 billion. Also, North Carolina is 10th in the United States in electricity generated. In addition to the large population and economy of the Carolinas, both states are large geographically, with North Carolina encompassing more than 48,000 square miles, and South Carolina with more than 30,000 square miles.

The results of a thorough planning process indicate that both Duke Energy Carolinas (DEC) and Duke Energy Progress (DEP) will experience solid growth in the years ahead. Electricity sales for DEC and DEP combined are expected to increase a total of 15 percent in the next 10 years, with an expected increase of 47,000 new homes and businesses added each year.

Duke Energy is able to meet today’s energy needs in the region because of careful planning years ago. Just as we need to plan to build new roads and schools to stay ahead of growth, we must also plan to ensure the continued reliability of the electric system. Duke Energy has a responsibility to meet its customers’ growing energy demand – including the cooperatives and city-owned utilities that receive power from the company – and to propose solutions that maintain reliable service. The company plans years into the future to allow sufficient time to identify, plan, obtain required state and local approvals, and implement new transmission solutions.

Duke Energy has developed a balanced approach to meet the challenge of growth, which includes:

·         Expanding the use of alternative energy sources and renewable energy to reduce our dependence on fossil fuels

·         Expanding our energy efficiency programs and initiatives to assist our customers in making the most of their energy dollars

·          Building new infrastructure with improved technology to meet growing energy needs

As the demand for electricity continues to grow, we will have limited capacity to generate and transport energy within the western portions of our North Carolina and South Carolina service areas. Following a comprehensive evaluation of the region, Duke Energy plans to meet the increased demand through a balanced program, which includes building new transmission lines, substations and other equipment, as well as upgrading existing facilities.

This project is critical to ensuring continued reliability of the electric system and maintaining the integrity of the transmission facilities that deliver power to homes, businesses and schools in the area. The project will also enhance reliability and their ability to prevent future outages due to the increased capacity and options for routing power that will result from the addition of the new lines.

Duke Energy looks at a number of possible routes for new transmission infrastructure, considering:

·         Public input

·         Distance from homes, businesses, historic sites and public facilities

·         Visibility and length of the proposed line

·         Environmental impacts, including wetlands, soil, vegetation and wildlife

·         Economics

·         Engineering and design standards

·         Reliability

·         Construction accessibility

·         Federal and state safety standards

·         Long-range planning and effectiveness

Duke Energy will continue to work with local communities to analyze these and other factors to determine the best options for the region. We are in the very early stages of this project to help efficiently move power throughout the region”.

It is clear that we will be dealing with the issue of transmission lines for the better part of the next year.   At this point, people interested in where the transmission lines might be sited or even whether the transmission lines are needed should send all of that information or their questions to Duke Energy.   Any questions or concerns or any needs for more information about the transmission projects should be communicated directly at:

Email:  WCTransmissionEnhancements@duke-emergy.com

Call:  888-238-0373

Website: duke-energy.com/WCTransmissionEnhancements

In another 5 or 6 months, Duke Energy will announce its decision on where the transmission lines will be located.   At that point, there will be public hearings and ultimately the decision as to the transmission lines rests with the North Carolina Utilities Commission.   Some people are communicating with local officials (city council members, mayors and county commissioners) about the transmission lines.   While those public officials can certainly communicate with Duke Energy on their constituents’ behalf, local governments don’t really play a role in this process.

It may also surprise folks that your state legislators don’t play any real role in the process.   In theory, the legislature could take away Duke Energy’s power to condemn property, but that isn’t going to happen over one transmission project.   Since decisions surrounding the regulation of the energy monopoly that Duke Energy has been given are very complicated, requiring expertise not generally available to individual legislators, North Carolina law puts essentially all responsibility for making electricity-related decisions, including rate decisions, with the North Carolina Utilities Commission.

Part of the idea is to insulate these decisions from the political process, since everyone recognizes that making decisions as to where transmission lines might go, for example, shouldn’t depend on the political strength of one’s legislators.    Thus, Sen. Apodaca, Rep. Chris Whitmire and I can certainly communicate directly with Duke Energy on our constituents’ behalf, but as a practical matter we likely can’t change decisions made by NC Public Utilities Commission.

Like many of my neighbors, my family and I may be personally affected by the decision made on the siting of the transmission lines.   My family and I got letters from Duke Energy telling us of the public information sessions and more than one route goes across property owned by me or by family members.   So I guess that means that I “feel your pain” if you’re among those whose land potentially lies along one of the potential routes.

Representative Chuck McGrady

North Carolina House of Representatives

District 117

July 30, 2015

I invite you to follow me on my Facebook  and Twitter accounts for current legislative updates. Please remember that you can listen to each day’s session, committee meetings, and press conferences on the General Assembly’s website atwww.ncleg.net.   Once on the site, select “Audio,” and then make your selection: House Chamber, Senate Chamber, Appropriations Committee Room, or Press Conference Room. You can also keep track of legislative developments on my website, at nc117.com.

Tell your U.S. Representative to support H.R. 9, the Innovation Act to stop patent trolls and protect the real estate industry from frivolous lawsuits.  

REALTORS® across the country receive threatening demand letters and lawsuits alleging patent infringement based on the use of common business tools such as drop down menus or search alert functions on websites and the scanner function on a copier. These patent trolls buy vague patents and use them to turn everyday business practices into potential lawsuits.

H.R. 9 is scheduled for House floor consideration next week.   Congress must pass this common-sense comprehensive patent litigation reform to protect Main Street businesses and REALTORS® from patent troll abuse.

NAHB frequently uses American Housing Survey (AHS) data to better understand who’s buying homes, and what it is they’re buying. The AHS (financed by the Department of Housing and Urban Development and conducted in odd-numbered years by the U.S. Census Bureau) is a representative survey of homes in the U.S., including those that have turned over recently. This article uses data from the latest, 2013 AHS to study the roughly 13.7 million households that bought a home in the two years prior to the date the survey was conducted.

Key findings about the 13.7 million home buyers:

       They represent double the number of home buyers in the previous, 2011 AHS.

       11 percent of them purchased a new home (up from a low of 8 percent in 2011).

       43 percent were purchasing their first home (down from a peak of 46 percent in 2011).

       Overall, the median buyer was 40 years old with an income of $69,974.

       The median first-time buyer was 32 years old with an income of $62,987.

       The median new home buyer was 40 years old, with an income of $84,987.

Key findings about the 13.7 million homes they purchased:

       The median value of the homes purchased was $168,000.

       Although the median value of homes purchased has been decreasing since its peak in 2007, the rate of decline is slowing down. The median value dropped $35,000 between 2007 and 2009, $10,000 between 2009 and 2011, and only $2,000 between 2011 and 2013.

       The median value of new homes purchased was $231,000 in 2013—essentially unchanged from $230,000 in both 2009 and 2011.

       The median value of a home purchased by a first-time buyer was $146,000—essentially unchanged from $147,000 in 2011.

       The median size of a home purchased was 1,800 square feet—2,200 if it was a new home.

And key findings about the way the purchases were made:

       The median buyer looked at 10 different homes before deciding which one to buy.

       About 11 percent of the homes were purchased without a downpayment (either straight out for cash, or with a zero-downpayment loan).

       51 percent of the purchases were made using savings for a downpayment; 17 percent using sale of a previous home.

       The top two reasons for choosing a home were its size (cited by 76 percent of buyers) and room layout/design (74 percent).

       The top two reasons for choosing a neighborhood were “the house itself” (cited by 85 percent of buyers) and safety (71 percent).

Some of the statistics computed from the AHS data may differ from those reported from other sources. The advantage of using the AHS is that it that allows us to track home purchases along with a large number of characteristics of the homes and their buyers in a consistent way over time.

Home Buyers

The AHS shows that the number of households buying a home had been on the decline since 2005, but that trend was reversed and the number of recent buyers (those who bought in the two years prior to the survey) doubled between 2011 and 2013. While the 2011 AHS showed only 6.8 million recent buyers, the number jumped to 13.7 million in 2013. This works out to about 19 percent of all home owners, up from only 10 percent in 2011. The number of recent buyers and share of owners who bought their homes recently were both higher in 2013 than at any time since 2001 (Graph 1).

Among the 13.7 million recent home buyers in 2013, 43 percent were first-time buyers. Also, 11 percent of the 13.7 million were purchasing a new home. Although that’s higher than the 8 percent who bought a new home in 2011, it is still significantly below the 19-22 percent that was the norm between 2001 and 2007 (Graph 2). It’s also far below what buyers as a group say they’d prefer. According to the consumer preference survey data in NAHB’s “What Home Buyers Really Want,” over half (55 percent) of all buyers would prefer to purchase a new home if they could.

In the 2013 AHS, the median income for all recent home buyers was $69,974. New home buyers had a higher median income than existing home buyers—$84,987 compared to $67,974. About 29 percent of new home buyers, make less than $60,000, 30 percent make between $60,000 and $99,999, and the remaining 41 percent make $100,000 or more.

When compared to the median income for all home buyers, the median for new home buyers was 21 percent higher in 2013, down from 26 percent in 2011. The median income of first-time home buyers was 10 percent below that of all home buyers in 2013. The spread had narrowed to 8 percent in 2011 (Graph 3).

The average size of a home-buying household increased from 2.61 persons in 2011 to 2.71 in 2013, while the household size among non-moving owners decreased slightly from 2.58 persons to 2.54. More specifically, the average household size for new home buyers increased from 2.79 persons in 2011 to 2.93 in 2013, and for first-time buyers from 2.56 persons to 2.68 (Graph 4).

The 2013 AHS also shows that first-time home buyers tend to be younger and more diverse than trade-up buyers. The median age of first-time buyers was 32 years, compared to 48 for trade-up buyers. From a racial and ethnic standpoint, “only” 68 percent of first-time home buyers were white and non- Hispanic, compared to 81 percent of trade-up buyers.

More statistics for home buyers can be found in Table 1, in the “Additional Resources” box appearing at the top of the online version of this article.

The Homes Purchased

The AHS also contains considerable information on the homes buyers purchase. Not surprisingly, new homes tend to be higher priced and larger, while homes purchased by first-time buyers tend to be lower priced and smaller. In the 2013 AHS, the median value of all homes purchased was $168,000, compared to $231,000 for new homes and $146,000 for homes purchased by first-time buyers. The median value of the new homes was 38 percent above the median for all homes purchased—the highest the spread has been since 2001.

Meanwhile, the median value of a first-time home buyer’s home was 13 percent below that of all homes purchased in 2013—the smallest the spread has been since 2001 (Graph 5).

According to “What Home Buyers Really Want,” home buyers expect to pay a median of $203,900. This is lower than the median value of new homes purchased ($231,000), but higher than the median value of all homes purchased ($168,000).

The AHS data show the median square footage of homes purchased has been 1,800 square feet consistently since 2005. However, the median square footage of new homes has been more variable, peaking at to 2,350 square feet in 2007, declining to 2,100 in 2011 before rising again to 2,200 square feet in 2013[1] (Graph 6).

According to “What Home Buyers Really Want,” buyers would like a median of 2,226 square feet in their home, and the 2013 AHS shows that this is just about what they got—if they were purchasing a new home.

More facts about the homes purchased can be found in Table 2, available in the “Additional Resources” box.

The Home Buying Process

The AHS also contains data on how buyers shopped for a home, and how the purchase was financed. Overall, in the 2013 AHS, buyers looked at a median 10 homes before making the purchase, while both buyers of new homes and first-time buyers looked at a median of 8.

About 11 percent of homes were purchased without a downpayment. No-downpayment purchases include both cases where a home is purchased straight out for cash, and cases where it purchased using a zero-downpayment loan. The latter became increasingly important for first-time buyers during the first decade of the 2000s, as the share of first-time buyers making the purchase without a downpayment rose to a peak of 25 percent in 2007. It has since declined to under 15 percent after the financial crisis when credit standards tightened (Graph 7).

For those who make a downpayment, the two most common sources of funds are (by a wide margin) savings and sale of an existing home. Overall in the 2013 AHS, 51 percent of homes were purchased using savings for a downpayment, and 17 percent using sale of a previous home.

Among new home buyers, 46 percent used savings for a downpayment and 24 percent used the sale of their previous home. After increasing from 28 percent in 2007 to 49 percent in 2011, the share of new home buyers using their savings as the down payment dropped slightly to 46 percent in 2013. The share of first-time home buyers using their savings as the down payment followed a similar trend, increasing from 57 percent in 2007 to 69 percent in 2011, before dropping slightly to 65 percent in 2013 (Graph 8).

Another important aspect of the home buying process is what motivates buyers to choose a home. Overall, the size and room layout/design of the home were the top two reasons among recent buyers in the 2013 AHS—76 percent cited size as a reason they chose the home, and 74 percent cited room layout/design. Next, price and neighborhood were each cited by 72 percent of buyers. Other common reasons for choosing a home were exterior appearance (cited by 65 percent of recent buyers), construction quality (64 percent) and yard/trees/view (59 percent). In contrast, a mere 15 percent of recent buyers chose a home because it was the only one available at the time.

For buyers of new homes, room layout/design, neighborhood, exterior appearance and construction quality tended to be even more important than for other types of buyers. Among first-time buyers, on the other hand, price was more often a consideration (see Graph 9). Other than the characteristics illustrated in the graph, the other reasons for choosing a home did not vary much across different types of buyers.

The AHS also asked home buyers about the reasons they chose a particular neighborhood. In the 2013 AHS, “the house itself” was the most common reason, cited by 85 percent of recent buyers. The second most common reason was safety (an item added to the questionnaire by HUD and Census Bureau in 2013, which NAHB has been advocating for some time), cited by 71 percent of buyers. Next were looks/design of the neighborhood (65 percent) proximity to friends and family (52 percent), proximity to amenities (51 percent), familiarity with the neighborhood (51 percent), and proximity to work (48 percent). Only 16 percent chose a neighborhood because it was convenient to public transportation.

Safety, looks/design and to some extent good schools tended to be more important to new home buyers than to other types of buyers. Proximity to work and friends/family tended to be more important to first-time buyers (Graph 10). Other than the characteristics illustrated in the graph, the other reasons for choosing a neighborhood did not vary much across different types of buyers.

More statistics on the home buying process are available in Table 3 under the “Additional Resources” box.

The “Additional Resources” box also contains historical versions of Tables 1, 2 and 3 based on the 2001, 2003, 2005, 2007, 2009, and 2011 AHS.

Special Studies, July 1, 2015: By Heather Taylor

Economics and Housing Policy, National Association of Home Builders