Thursday, March 5, 2015

BuilderBytes' MetroIntelligence Economic Update for 3/5/15

Please click here to see the edition of BuilderBytes for 3/5/15 on the Web.

In this issue of the MetroIntelligence Economic Update, I covered the following indicators:
  • Private sector jobs up by 212,000 from January to February
  • Manufacturing sector index fell slightly in February due partly to West Coast port strike
  • Service sector economy index rose slightly in January
  • Personal income rose in January as consumer spending dipped
Want to advertise in the newsletter and reach over 130,000 readers? Contact National Sales Manager Nick Cosan at nkosan@penpubinc.com.

Tuesday, March 3, 2015

BuilderBytes' MetroIntelligence Economic Update for 3/3/15

Please click here to see the edition of BuilderBytes for 3/3/15 on the Web.

In this issue of the MetroIntelligence Economic Update, I covered the following indicators:
  • January pending home sales rose to highest level in 18 months
  • Fourth quarter 2014 GDP grew at 2.2 percent in second estimate
  • Consumer sentiment fell in February due to severe weather
  • Chicago Business Barometer plunged in February likely due to harsh winter and West Coast port strike
  • Construction spending dipped slightly in January but still up 1.8 percent year over year
Want to advertise in the newsletter and reach over 130,000 readers? Contact National Sales Manager Nick Cosan at nkosan@penpubinc.com.

Monday, March 2, 2015

Relaxed credit standards and job growth bringing back the retail and first-time home buyer?

Last December, I wrote about a slow but steady housing rebound that seemed to suggest an even stronger 2015, and this is certainly still the case.  However, more updated economic information from the fourth quarter of 2014 and the first part of 2015 seem to point to a different type of animal:  Look for 2015 to be the year that we see the continued return of the retail buyer, and especially the first-time home buyer.

During the depths of the Great Recession, perhaps the single most important saving grace which led us out of the crisis were investors who realized that the crash in home prices meant that many owner-occupied homes were excellent rental property investments.  Their purchases of millions of otherwise vacant homes helped to establish a pricing floor for foreclosed properties.  However, by the end of 2013, rising prices and more competitive supply for these homes meant declining profits for these investors, so they gradually disappeared from the market through the middle of 2014.

At the time, traditional buyers who live in these homes – also known as retail buyers – were not yet ready to fill the gap due to a combination of tight credit, lack of down payments and a job market which was improving but still had yet to impact wage growth.  Since then, however, several important factors have changed, mostly due to a strengthening job market and the relaxing of credit standards.

For all of 2014, almost three million new jobs were added – the most since 1999, which was the peak of in the first phase of the Internet-related technology boom.  And, while many of these jobs were simply replacing the millions lost during the previous recession, these gains were across the board and included multiple industries.  During the last quarter of 2014, nearly 290,000 jobs were created per month, and in January 2015 another 257,000 jobs were added.

However, even with these impressive gains, during 2014 wage growth barely budged over two percent, which meant that employees simply didn’t have extra cash to use for down payments.  Until the prime-age employment-to-population ratio rises from the current 77.2 to closer to 80 percent, the U.S. economy likely won’t see consistent and meaningful wage growth.

It is mainly due to this weakness in wage growth – along with inflation that remains below its target of two percent and the decline in GDP growth during the fourth quarter of 2014 -- that Federal Reserve Chair Janet Yellen has continued to postpone any hike in short-term interest rates.

Despite the sluggishness in wage growth, consumer spending did rebound strongly in 2014, adding 1.7 percentage points to overall GDP growth and posting the best showing since 2006.  And while GDP growth was much faster in the middle of the year before slowing to 2.2 percent in the fourth quarter of 2014, much of that slowing was due to an increase in imports related to increased consumer spending and a decline in federal government spending.

For lenders, one way for them to encourage the return of the retail buyer is to relax lending standards – helped in large part by FHA, Fannie and Freddie.  Last December, FannieMae launched its own program for first-time homebuyers with FICO scores as low as 620, limited cash-out refinances, and down payments of just three percent.  FreddieMac punted the start of its own low-down payment program until March 23, requiring borrowers to first seek credit counseling and setting its own FICO floor at 660.  Meanwhile, FHA has lowered its MIP insurance for 30-year mortgages to just 0.85 percent that, when combined with low interest rates, provides the lowest-cost effective financing available in its 80-year history.

For home builders, these changes bode well for 2015, with NAHB’s Leading Markets Index moving up to .90 in the fourth quarter of 2014, which means that the national housing market is back to 90 percent of normal economic and housing activity.  Of the 360 metro areas tracked by this index, 80 percent saw increases during the quarter.  At the same time, NAHB’s Housing Opportunity Index also showed housing affordability rising to nearly 63 percent, due largely to lower interest rates and some lower-priced housing inventory.

Fortunately, construction lenders have also taken notice, with the stock of AD&C loans made by FDIC-insured institutions rising by 17 percent between the fourth quarters of 2013 and 2014.   Even with such lending still strongly subdued from the peak of 2008, this gradual thawing could help provide much-needed inventory for the first-time buyers waiting in the wings.

Santa Monica-based start-up company offers home plans for sale

www.lotplans.com

Recently, a guy named Ramtin Ghaneeian reached out to me to tell me about a company he and his brother launched last November called LotPlans.  Based in Santa Monica -- the base of today's burgeoning "Silicon Coast" -- the Ghaneeian brothers launched their Web-based e-commerce service out of frustration when doing their own real estate deals and looking for custom home plans that were affordable and practical.

Although there are certainly other Web sites out there which offer ready-to-go plans for custom homes, LotPlans hopes to carve their own niche through a more detailed vetting process for submitted plans as well as the ability to customize and work with a network of experts they've assembled.  I asked Ramtin to tell me what makes his company different, and here's what he had to say:
"At LotPlans, we understand that there are other companies selling house plans. However, we are a boutique shop with a huge online presence. What that means is, at LotPlans, we cater to quality versus quantity. Because we can modify any plan that we have on our site, our vision is 'If you want to build it, we have it - or we can design it!'

That being said, we don't want to feature everyone's plans on our site. In fact, we've turned away some designers and architects that we thought weren't on par with our company.

My brother and I come from a development background. And, as we were very fresh in the business, we felt there was a need for a company like LotPlans that's more personable and caters to both architects and potential home-builders. In speaking with a lot of architects, they didn't necessarily have the best relationship with their plan publishers.

At LotPlans, we develop strong relationships with our partners because we we feel like we will showcase plans on our Web site that you won't find anywhere else, along with a heightened customer experience for our clients. After my brother and I paid the high cost in fess (and time) for house plans designed for development, we thought we would launch a more user-friendly, cost-effective, and efficient company to help developers, home builders, and home designers alike.

We are a newer company, and we have grown organically. We began by pounding the pavement, begging architects and designers to trust our vision (even though we didn't even have a functioning Web site at that time) to now, where we have designers coming to us to publish their plans.

We have strict quality control, meaning we don't just publish everything on our site. That's why I like to refer to us as the low-cost, high-end boutique of online plans - and a Web site that comes with great customer service. This has grown into our passion and our customers definitely feel that when they use our service."
So if you're looking to build your dream home, add a guest house to an existing property or even build your own homes for sale as a builder, LotPlans may have what you need.  I wish these guys the best of luck just as the housing rebound turns to the next phase in which more retail buyers (versus investors) come into the marketplace.


Friday, February 27, 2015

BuilderBytes' MetroIntelligence Economic Update for 2/27/15


Please click here to see the edition of BuilderBytes for 2/27/15 on the Web.

In this issue of the MetroIntelligence Economic Update, I covered the following indicators:
  • FHFA House Price Index up 1.4 percent in fourth quarter of 2014 and 4.9 percent year-over-year
  • CPI fell 0.7 percent in January; down by 0.1 percent over previous 12 months
  • Durable goods orders rose in January for first time in three months
  • Initial unemployment claims rise by 31,000 in latest report
  • Mortgage applications fall 3.5 percent in latest survey as rates rise slightly
Want to advertise in the newsletter and reach over 130,000 readers? Contact National Sales Manager Nick Cosan at nkosan@penpubinc.com.

Thursday, February 26, 2015

BuilderBytes' MetroIntelligence Economic Update for 2/26/15

Please click here to see the edition of BuilderBytes for 2/26/15 on the Web.

In this issue of the MetroIntelligence Economic Update, I covered the following indicators:
  • January new home supply rose to highest level since 2010; sales up 5.3 percent year over year
  • Case Shiller:  Home prices grew at twice the inflation rate in 2014
  • Consumer Confidence Index declines in February but still at pre-recession levels
Want to advertise in the newsletter and reach over 130,000 readers? Contact National Sales Manager Nick Cosan at nkosan@penpubinc.com.

Tuesday, February 24, 2015

BuilderBytes' MetroIntelligence Economic Update for 2/24/15

Please click here to see the edition of BuilderBytes for 2/24/15 on the Web.

In this issue of the MetroIntelligence Economic Update, I covered the following indicators:
  • Pending home sales dropped in January but still up 3.2 percent year-over-year
  • Federal Reserve meeting minutes show plans to keep rates low for longer than previously indicated
Want to advertise in the newsletter and reach over 130,000 readers? Contact National Sales Manager Nick Cosan at nkosan@penpubinc.com.

Friday, February 20, 2015

BuilderBytes' MetroIntelligence Economic Update for 2/20/15


Please click here to see the edition of BuilderBytes for 2/20/15 on the Web.

In this issue of the MetroIntelligence Economic Update, I covered the following indicators:
  • Leading Economic Index rose slightly in January, but pace of growth moderating
  • Initial unemployment claims dip by 21,000 in latest survey
  • Philadelphia Fed's Business Outlook Survey dips in February but still in positive territory
  • Mortgage applications dip 13.2 percent in latest survey; rates rose slightly
Want to advertise in the newsletter and reach over 130,000 readers? Contact National Sales Manager Nick Cosan at nkosan@penpubinc.com.

Thursday, February 19, 2015

BuilderBytes' MetroIntelligence Economic Update for 2/19/15

Please click here to see the edition of BuilderBytes for 2/19/15 on the Web.

In this issue of the MetroIntelligence Economic Update, I covered the following indicators:
  • Housing starts dipped in January from a recent peak, but still up nearly 19 percent year-over-year
  • Building permits dipped slightly in January but still up eight percent year-over-year
  • Builder confidence dips slightly in February
  • Consumer sentiment takes unexpected dip in February but still at highest level since January 2007
  • Empire State Manufacturing Survey dips slightly in February but shows continued, modest expansion
  • Producer Price Index fell 0.8 percent in January; flat for previous 12 months
Want to advertise in the newsletter and reach over 130,000 readers? Contact National Sales Manager Nick Cosan at nkosan@penpubinc.com.

Tuesday, February 17, 2015

10 Real Estate Promotion Ideas You're Probably Not Doing

www.easyagentpro.com

The other day, I received an email from a LinkedIn contact at EasyAgentPro suggesting I link to a recent post of his entitled 10 Real Estate Promotion Ideas You're Probably Not Doing."

Some of these are ideas are pretty interesting, and not just for a real estate agent or broker, but certainly for builders and sales agents looking to reach out in different ways.  Here's an abbreviated list, but there's a lot more detail on the original post:

1. Write or Post Content Online such as:
  • Video tour of a local neighborhood and a 500 word description of what makes it great
  • 3 photographs of a neighborhood and your opinion on why to move there
  • Photographs and video tours comparing schools in the area
2. Call Past Clients. Hunt Down Referrals.
You have to ask most people 7 times for a referral before they will take you seriously. Do not be afraid to ask.

3. New Target Markets
Pick a location you haven’t been in over a year. This works particularly well if you’ve never been there before. Here’s a short list of ideas: a bar, a different church, a college campus, a coffeeshop, a yoga studio, a orchestra concert, a school football game, the mall.  Observe.  Chat.  Think of new ways to market to new target audiences.

4. Pop-Bys
Pop-bys are gifts you give to past clients or people you want to be a client. They are a great way to surprise individuals and make their day. They also provide awesome conversations starters.

5. Go Get Coffee. Leave The Office.
Pick a busy coffeeshop and sit down. People will be working and interacting.  This should give you the motivation and inspiration you need to start over on another day of marketing. 

6. Reach Out To Educators
Reach out to a local elementary school teacher this week and offer to do a talk on careers.  You never know what will happen! Maybe the teacher will give you a backlink from their blog. Or maybe you’ll meet a parent that is looking to buy/sell soon. Either way, you’ll build new connections. You’ll have more to talk about on your social media page too.
7. Contact Local Business Owners
If you’re in a rut, how do you think other local business owners feel?  They are in the same position as you. Restaurants face stiff competition from food chains. Local hardware stores face the Home Depots of the world. Reach out to these people and suggest co-marketing together.

8. Sit On A Board
Quick questions: Who is always featured on websites, newsletters, and other informational material?
Individuals who sit on boards. It isn’t the most immediate fix for your marketing, but this tactic will provide substantial value over the long haul.

9. Reach Out To An Agent Working Elsewhere
Reaching out to a top agent in another market for advice is a great way to get new ideas. You’ll see what’s working in their area and might be able to apply some of their tactics to your local market.
Be sure to keep the relationship a two way street. Provide feedback to the responses they send you.

10. Recharge Your Batteries And Forget About Real Estate Promotion Ideas

Take some time off.  Go for a swim, or a hike, or spend a day with a book at the beach.