Why Marnella Homes?

August 8, 2016

When looking through the many listings for different builders and their homes, what makes their homes different from one another?  It is far more than just the architectural style and price range.  As I often say, “what is behind the sheetrock is as important, if not more so, than what is in front of it.” I encourage anyone looking at a new home to walk the builder’s homes prior to the installation of sheetrock to see how they are assembled. You will see a lot of surprising things, not all good.  A few things that are in built into every Marnella Home are; Advanced framing, extensive air sealing, blown-in insulation and HVAC systems that are in the conditioned space.  These are just some of the features that, with all we know about building science today, it still surprises me that more builders refuse to build with these systems.

More wood is not better.  However, that is the theme amongst most builders because it is how they were taught.  They are just following the lessons of their Grandfather, Dad or the mentor that got them started.  In the new way of building, less wood is better.  The Advanced Framing technique, utilizes less wood which means room for more insulation, which means a more comfortable and efficient home.  This style of framing really stands out from conventional framing.

Extensive air sealing isn’t just filling over-cut openings in the exterior shell of a home.  It is the air sealing of every seam and joint in the exterior shell of a home.  The benefit of this is not simply to improve efficiency and energy loss, though important, it is also to improve the health of the indoor environment by sealing out pollutants that can be drawn into the home.

Blown-in insulation is so important to effectively insulate a home.  Installing Batt styled insulation is such an inferior way of insulating, yet still most common.  The insulating performance of insulation is its thickness.  So, why does anyone expect that a compressed batt, forced over plumbing or wiring in a wall, is going to perform to it’s intended performance?  I know, right?  It can’t.  That is why blown-in insulation that completely fills a wall cavity, regardless of what is in its path, will perform to it’s intended performance.

HVAC systems in the conditioned space is one of the smartest moves that we have made in our homes…ever.  Not only are these systems exponentially more efficient than a standard forced air system, but they create a more comfortable home.  In 2007 we moved our HVAC systems inside the home, our service calls for uneven heating/cooling  and requests to have the systems balanced, stopped completely.

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So, as you are looking around at new homes, remember to look at the homes in their pre-sheetrock stage.  Food for thought, a home built to the building code minimum, is really a home that is barely legal.  Anything less, and the building inspector would not approve it for occupancy.  On average, a Marnella Home is built to 35% over the code minimum.  The benefits to our homeowners include, lower maintenance, lower heating & cooling costs, greater comfort and lasting value.

Meriwether

Gathering room with sitting area

The english translation is “Solar” however, to us it means clean affordable energy.  It also could mean, “what do I do with the extra money in my pocket each month?”  It could actually be quite confusing for your family. If your combined monthly gas and power bills are only about $40, what would you do with the extra money each month?  Would you take your family out to dinner, treat yourself to a massage, put the money into savings or pay down your mortgage?  That’s the dilemma that the homeowners of our Solare Collection at Meriwether in Oregon City have.

This collection was designed from the ground up to be highly efficient, luxurious, healthy and comfortable.  This integrated performance provides low energy cost and low maintenance living.  All which result in a lower cost of ownership than any other comparably sized home.  New or used.  Over the last 30 years, PGE has increased their power rates on an average of 6% a year.  With the solar program we have through SolarCity, our homeowners have control over their power costs for the next 20 years.

Stop by Meriwether and experience the difference of a Marnella Home.  You will not only see and feel the difference, but you will realize the difference year after year of comfort and energy savings that our homes deliver.  In addition, why the program lasts, our homeowners will receive a $6,000 tax credit from the State of Oregon for the Solar in this collection.

If your home has a furnace installed in the garage, it most likely is. At one of our Construction 101 classes at Volare our Town Home community in Happy Valley, this came up. We have been installing our entire HVAC systems inside the conditioned space of our homes (meaning the interior living area of the home). We realized the obvious benefits of: improved performance by reducing the length of duct work for the air to travel, by not installing ducting in the attic or crawlspace spaces as they are much hotter or colder than the air we are providing to the rooms that need it. Another benefit is, if the duct system leaks air it is only leaking into your home not the outdoors. However, it never occurred to us the air quality benefit of a furnace in the home versus the garage.

The furnace unit that is installed inside the conditioned space is a “Sealed unit” this means that the cabinet of the furnace is entirely sealed up. Unlike, most furnace units that are installed in a garage. Most people can recall being near a furnace in a garage when it started up and seeing the flame burning through the venting of the front of the furnace cabinet. What probably didn’t come to mind was that when the fan motor started up it was pulling air from within the garage. This could be including the exhaust from the car, gas fumes from the gas can, bag of yard fertilizer, etc. Anything off gassing in your garage could have its fumes spread throughout your home.

The great benefit of a Marnella Homes system being entirely with the home is that it is only pulling fresh air from the exterior of the home with the assistance of the HRV (Heat Recovery Ventilator). The HRV periodically exchanges stale interior air with fresh outside air. This provides interior air quality that is superior to any traditionally installed HVAC system. This should be especially important to anyone with children that have asthma or any other respiratory health issues.

So, should you be stuck with a traditionally installed system in your home, consider this when you are letting your car warm up in the morning and you might want to find a better place to store the gas can, fertilizer bag or anything that you smell when in the garage. However, if you are looking at buying a new home, you owe it to you and your family’s health to consider how your next HVAC system is installed.

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Marnella Homes has had many firsts for a home building company here in the northwest.  As we strive to improve our homes and the buying experience, we continue to look outside the box and create new programs to assist and benefit our home buyers and owners.  Some of the things that we have done to differentiate ourselves are:

 Our “Home Sellers Assistance Program”.  This program offers our home buyers the opportunity to list their current homes at a 3% total brokerage fee.  We bring in an interior designer to assist in getting their home ready to sell. We coordinate any necessary repairs and we credit back to our buyer the cost of these repairs towards their home purchase up to $5000. 

  • We are the first production builder to build 100% of our homes over the Earth Advantage/Energy Star Gold level.  Which combined with our marketing efforts earned us the Energy Star award for large builder in Oregon.
  • We also offer a buyer’s guide to our home buyers to use when shopping for a home. It helps to educate and inform them of what features they should look for that will provide them lasting value and comfort in their next home.
  • Now, we offer the “Rest Assured Plan”. 

 Marnella Homes’ Rest Assured Plan provides security and reassurance in these uncertain times. At no cost to our buyers, our plan guarantees that in the event of a job loss within 24 months after closing, their mortgage will be paid for up to 6 months. We want to make sure that the fear of something that may not ever happen doesn’t keep someone from purchasing their next home.  We understand that there are economic challenges right now however, we hope that these concerns won’t prevent families from making a sound investment in their future. Now is a great time to buy a home. Prices and interest rates are at record lows and the U.S. government has created incentive programs and tax advantages for home buyers.  We have faith in the American Dream and we’re here to help families achieve it without losing sleep.

Our list won’t end here as complacency will never be acceptable.  With our home buyer’s needs ever changing in a market that is ever changing, it will be necessary to continually strive to improve our programs and our buying experience.

The Oregonian published and article by Dave Hogan a couple of weeks ago that stated what many of us have been thinking.  Mr. Hogan wrote, “The downturn in Oregon’s economy is not expected to grow worse but will continue into 2009, then begin a slow recovery in the second half of next year, state economists said Thursday.”  This statement says a couple of things that are important.  First, you will continue to hear from the naysayers that we are still free falling and there is no end in site so, it is still better to rent.  The State Economists are stating that it is not expected to get worse.  As the story I wrote about last month referenced, our local market is only down 1.1% year to date.  So, if we are only down 1.1% as of August continuing to rent will be one of the biggest investment mistakes of your life.  What little our market may slide, if any, will be eclipsed by a rise in interest rates after the first of the year as the market tightens up.  The next 6 months will be the best time to buy a home that we will probably see in the next 10 years.  Second, the end is believed to be in site.  With every report that shows that building starts are down, as mentioned in this story, it should be acknowledged as good news.  This means that due to the fact the building permits have been down since last November, if they remain down until next spring, we will be able to reduce the current inventories in time for Spring & Summer of ’09.

 

For a review of the completed story see this link: http://www.oregonlive.com/news/index.ssf/2008/08/economists_say_downturn_to_con.html

 

I feel that over the next few months we are going to be hearing more and more good news.  That is not to say that all will be good.   There will be plenty to satisfy the naysayers appetite, but there will be more and more signs of improvement and more importantly signs of opportunities that buyers should be seizing in real estate.  Remember, Real Estate has doubled about every 10 years locally and nationally.  I believe that this is the beginning of the next 10 years.  Will you sit this one out again or take advantage of it?

The Oregonian ran an article last Sunday titled the “Real estate’s vocabulary expands: Defining Market Realities”.  For a complete review of this article go to:

http://www.oregonlive.com/realestate/oregonian/index.ssf?/base/homes_real_estate/1218227111271700.xml&coll=7#continue. Though the “vocabulary” today’s Buyers need to comprehend that the article refers too is valid.  What got my attention was in the middle of the story it refers to the fact that the terms of our industry are “intimidating” and “unfamiliar”.  Of course these terms can be.  If truth be known, these terms are “intimidating” and “unfamiliar” for some of our peers in the industry.  It states that,” Many of these professionals say they’re spending more and more time decoding unfamiliar terms and concepts for their clients.”  Is this a bad thing?  Isn’t that their job?

 

I think we can all agree that if the time these professionals are now spending with Buyers was spent over the past few years the mortgage crisis would not have ended up like it did.  Too many Real Estate professionals let Buyers get into mortgages and they did not understand the realities of the terms that they were accepting.  Buyers were so excited to be able to buy a home that if they were told they were approved for a loan they jumped on it.  With everyone so busy few took the time to explain to those Buyers what they were committing to.

 

I have been licensed as a Realtor here in the Portland metro area for over 22years, as well as building, developing and rehabbing over the years.  I thought that was our job as Real Estate professionals to “inform” and “educate” our clients to insure that they are making informed and educated decisions when buying and selling.  I expected it from the escrow officers and lenders that I worked with as well.  It appears to me that if this is what is now happing in the market place then this should only be taken as a good thing for the consumer. If things have slowed down enough that Brokers, Lenders and Escrow officers are actually servicing their clients like we used to, then once again the consumer benefits from market change.

 

With so many opportunities arising in our current market for the consumer like incredibly low rates, great selection of inventory and motivated Sellers this is just one more reason for taking advantage of this Real Estate market.

Was it worth the wait?

August 5, 2008

What I mentioned in the closing of last months entry was that, “Really the only thing that people should fear now is that if the market continues to improve, prices will strengthen and rates will go up.”  Well as of this week the long term 30year mortgage rate has increased to 6.77%.  This is a 1.52% increase from January.  I used an example in my April entry about an increase in rate, which at that time the increase in rate had cost a potential buyer $171 a month.  Today that would increase the monthly cost to a buyer an additional $264 for the same priced home.

 

This was illustrated brilliantly in a Time magazine article back in February of this year.  (for a full review of this article see the link,  http://www.time.com/time/magazine/article/0,9171,1713483,00.html . What is frustrating is that all the negative news has feared potential buyers into inaction and what was illustrated has come to pass.  The author showed that an increase in interest rate had a greater negative impact than a loss in value.  So, unlike the author’s illustration here in Portland where prices are still above where they were in January of this year, the interest rate increase has a much greater negative impact.  In fact, the Fed has recently stated that there will be no more rate drops this year and with inflation pressures they are certain to increase rates next year. 

 

While our market continues to improve the interest rate increase can have a significant impact on a buyers monthly affordability.  However, we must still recognize that even interest rates in the 6% or 7% range are still extremely good.  Considering historically where they have been.  When I first got into Real Estate back in 1986 as a sales agent we used to say that any rate in the “single digits” was a good rate.  I still believe this, but we have been spoiled by the rates in the high 4% and 5% range.

 

Bottom line here is that inventories are dropping for new and resale homes, rates are slowly increasing and we are seeing the signs that we are slowly crawling out of the bottom of this market.  Noted in the latest S&P/ Case-Schiller report which lists Portland as one of 7 metro areas in their 20 metro area composite that are improving as of their May report.  There are those that say there is another year of this, but the majority of those that I talk to at all levels of this industry feel that this buying opportunity is coming to a close and by February of next year we will be back to a normalized Portland market.  Nothing like we saw in 2005 & 2006.  Those days are gone for a while.  Maybe 10 years or so, but if we are able to shed 2 – 3 more months of inventory we will be back to what we are accustomed to with single digit appreciation and manageable inventory levels.

 

I also feel that the window is closing and too many people that have stared great opportunities in the face are merely watching them go by because of a fear of the “what if”.  “What if prices drop after we buy?”  Well, as I have stated many times before you shouldn’t be buying as a short term investment right now.  Real Estate is and has been historically a solid long term investment.  “What if rates drop after we buy?”  IF they drop it will be so insignificant that it isn’t worth worrying about.  It is a greater concern of how much higher they are going to go.  

 

So, by the time these people feel it is safe to get back in the water, the market will have improved, tightened up and it will be to late to take advantage of what is before them right now.  I still see the buying and investing opportunity that exists right now as possibly a generational opportunity that we may never see again.

After reading some of the many negative articles that have been written since my last entry, it occurred to me that we quote from some of the same statistics.  However, the naysayers quote only what is negative, builders and home owners having a tough time and how the market compares to previous markets.  Yet, if any of us in the industry, and now more outside of the industry, spot light improvements and opportunities in the market we are labeled as propagandists.

 

This isn’t to say that we shouldn’t keep in perspective past markets, but to inform based only on how the current market compares to the past without including current performance is, I feel, disingenuous.

 

Would you even listen to the news if it only mentioned how the stories statistics related to the year before?  If the weather broadcast for the week only stated that the temperature would be 5 degrees warmer than last year, but didn’t tell you what the temperature would be for the week.  How about the news caster stating that “Crime is up 6% over last year”.  With no mention that actually all crime was down, except auto thefts.  Would this be acceptable as a complete story?  Would you even listen after awhile when you began to realize the missing information in the stories?  So, why listen to those who say that the Portland market is declining.  When in fact, out of the 12 regions of the Portland Metro area only 2 are showing signs of depreciation.  Compared to last year yes, the median sales price for May is down 3.2% however, it is up from April ’08 4.5%.

 

Acknowledgement of the opportunities within the market isn’t a denial of the current market slump.  Of course, the market is down from last year.  No one argues that.  Sales are off by over 30%.  It is also up month over month since December.  May’s sales in the Portland Metro area where up 17.8% over April.  I am criticized because this is a seasonal trend and so, this fact is irrelevant.  However, if you listen to those who are telling only the negative about the market.  How would you even know this is happening?  Seasonal or not?  With all this negative press, unless you are in the industry you would never realize this. The facts are that rates are at historic lows again and prices have corrected back to an affordable level.  To say that the market is good and it is a good time to buy again does not ignore what the current conditions are.  It clearly informs those in or considering getting in the market that conditions to buy are great.  You hear that it is difficult to get financing.  Yes, it is compared to the last couple of years, but recent improvements from Fannie Mae and FHA allow home buyers to still get 97% financing and there are even still products for 100% and stated income financing.  However, all you tend to hear is how difficult is to get financing.  How does that statement and the like inform or help anyone?  Builders are selling homes at or below cost to move them.  Isn’t that an opportunity that is worth looking into if a buyer is considering a home?

 

You decide who is churning out propaganda and who isn’t.  There will always be those who view the glass half empty and those who view it half full.  Obviously, I see it half full.  The reality is, we all have to adjust to this market and some of us are having a tough time.  No doubt, there will be more bad news which will be exploited by those that enjoy doing so.  However, to just resign to the fact that things are bad and ignore all that is positive, is foolish.  Moreover, to try and convince people that they shouldn’t invest without full disclosure of all the market offers is disingenuous to say the least.  I would rather inform people of the opportunities they can take advantage of than fear people into inaction and miss out on opportunities.   Really the only thing that people should fear now is that if the market continues to improve prices will strengthen and rates will go up. 

 

Those that do ignore the advice of the naysayers will reap the rewards of this market in the yeas to come.  I do feel that the market has made it’s correction and since real estate historically doubles about every 10 years, I feel this is the beginning of the next 10 years.

Another great article that vindicates a lot of what many of us have been saying was written recently.  The Wall Street Journal published an article written by Cyril Moulle-Berteaux on the 6th of May.  This article nails it!

 

It states that April will show that it was the bottom of the housing decline.  We feel that in our sales offices and what we hear amongst our peers.  Buyers are starting to feel a bit more confident and are starting to revisit the housing market.  More positive news like this Wall Street Journal article and our local new channel 6 had a great story about the Portland housing market last week all help rebuild the confidence that has been lacking in our market place.  We still hear plenty of negative press, but we will always hear that.  When the market turns around then it will be bad press about how unaffordable it is.  Most of the naysayers won’t find anything positive no matter what direction the market goes.  However, for the rest of us it is improving.  Ever it be so slowly, it is improving.

 

One theory that I have heard before and was addressed very well in this article is the belief that prices must drop another 30% before we get back with where they’ve been historically.  However, the article reads; 

 

“This is usually based on an analysis of house prices adjusted for inflation: Real house prices are 30% above their 40-year, inflation-adjusted average, so they must fall 30%. This simplistic analysis is appealing on the surface, but is flawed for a variety of reasons.

 

“Most importantly, it neglects the fact that a great majority of Americans buy their houses with mortgages. And if one buys a house with a mortgage, the most important factor in deciding what to pay for the house is how much of one’s income is required to be able to make the mortgage payments on the house. Today the rate on a 30-year, fixed-rate mortgage is 5.7%. Back in 1981, the rate hit 18.5%. Comparing today’s house prices to the 1970s or 1980s, when mortgage rates were stratospheric, is misguided and misleading.”

 

The national trends that are mentioned in this article are being realized here in Portland as well. The article addresses the fact that home inventories have been falling over the past months.  Here in Portland, RMLS reported that we had 12.8 months of unsold inventory in January.  By March we were down to 9.1.  We have seen an increase back to 10.1 in April however; an increase in inventories is historically in line with this time of year.  We have seen a 6.8% increase in pending sales from March to April.  Of course, all that will be referenced by the naysayers in their blogs and stories is that sales are down from last year with no mention of the increase in sales month to month since December of last year.

 

The National Association of Realtors has also just reported that, “buying a house in the Portland metro area is once again affordable for a family earning the median income.”  All the more reason to get into this market now and stop listening to those who continue to say the sky is falling in spite of the facts that things are improving.

 

 

A link to the entire WSJ article is provided below:

http://online.wsj.com/article/SB121003604494869449.html

Real Estate values have traditionally doubled every 10 years or so.  This has been the case for many decades.  But with every change in the market, there are those who say the end is near. As I often tell people, get your eyes off your feet and look ahead down the road. Real Estate has and always will be a long-term investment.  If you were looking to buy and sell in 6 months, I would advise you to stay put.  However, that is not why you buy. Whatever happens in the next few months should not dictate a person’s decision regarding their next home. 

 

Three weeks ago The National Association of Realtors stated that they expect the national market will decline by an estimated 1.2% in 2008.  1.2%!  If this is not defining the bottom of the market or the near bottom I don’t what is.  Bear in mind, this is averaging the top metro areas like Charlotte, North Carolina and Portland, Oregon with the likes of Miami, Florida, Las Vegas, Nevada and Detroit, Michigan.   So, if the worst they are predicting is 1.2% percent, I think that’s a pretty good indicator of how these top markets are going to perform this year.

 

On a $300,000 sales price today, 1.2% is only a “possible” decline in value of $3600!  Is it really worth missing out on the buying opportunities today over $3600?  Not to mention that the interest rates have increased 1 full percent since the 3rd week of January, this year, to about 6.25%.  That alone should be getting the attention of prospective buyers.  That same house with a 90% LTV (Loan To Value) mortgage at today’s 6.25% interest rate would have a Principal & Interest (PI) payment of $1662.  If it were purchased back in January at 5.25% with the same purchase price and loan amount, the PI payment would be about $1491.  So, not buying that home over just the last 10 weeks would have cost you $171 a month or $2,052 a year.  I don’t need to do the exercise of what the same house would cost with a 1.2% drop in value and another .05% increase in rate.  I think you get the picture. The point is that if you wait to feel out this market, home prices could steady and sellers might become less willing to negotiate. 

 

Portland Monthly Magazine just published a great story about the local real estate market that vindicated a lot of what I’ve been saying.  They stated that, “Portland hasn’t seen a decline in real estate values since the mid-80’s and our average annual increase is typically under 10 percent.  As a result, even if our market does stumble, we won’t have nearly as far to fall as a place like California, where double-digit annual price increases have been replaced by similar decreases.”

 

Suffice it to say, our local market is fairly steady and any dips are far below those of the national average. Not to mention, it’s become a buyer’s market once again, which, if you looked at a graph, would be right in line with how the market works. If you’re looking at real estate as a long-term investment, don’t delay. There are excellent opportunities out there right now.