Friday, September 28, 2012

BuilderBytes' MetroIntelligence Economic Update for 9/28/12


Please click here to see the edition of BuilderBytes for 9/28/12 on the Web.

In this issue of the MetroIntelligence Economic Update, I covered the following indicators:
  • New home sales in August dip by 0.3% from July but still 27.2% above August 2011
  • Pending home sales in August fall by 2.6% from July but still 10.7% above August 2011
  • GDP in 2Q2012 declines to 1.3% in third (and final) estimate
  • Durable goods orders in August fall by 13.2%, the fourth consecutive monthly decline
  • Initial unemployment claims fall by 26,000 in latest report
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Wednesday, September 26, 2012

BuilderBytes' MetroIntelligence Economic Update for 9/24/12

Please click here to see the edition of BuilderBytes for 9/26/12 on the Web.

In this issue of the MetroIntelligence Economic Update, I covered the following indicators:

  • S&P/Case-Shiller Indices rise for third consecutive month
  • FHFA House Price Index up by 3.7% for 12 months ending in July 2012
  • Consumer Confidence Index bounces back in September after August dip
Want to advertise in the newsletter and reach over 130,000 readers? Contact National Sales Manager Nick Cosan at nkosan@penpubinc.com.
Want to make sure your company or event is included in the events calendar? Contact editor Dani Smith at dsmith@penpubinc.com.

Monday, September 24, 2012

BuilderBytes' MetroIntelligence Economic Update for 9/24/12

Please click here to see the edition of BuilderBytes for 9/24/12 on the Web.

In this issue of the MetroIntelligence Economic Update, I covered the following indicators:
  • Leading Economic Index falls by 0.1% in August but remains in slow growth mode
  • Philadelphia Fed's Outlook Survey reports flat September activity
  • Mortgage applications fall by 0.2% in latest report even as rates fall to historic lows
Want to advertise in the newsletter and reach over 130,000 readers? Contact National Sales Manager Nick Cosan at nkosan@penpubinc.com.
Want to make sure your company or event is included in the events calendar? Contact editor Dani Smith at dsmith@penpubinc.com.

Saturday, September 22, 2012

L.A. Times story covers super-efficient new homes

A couple of weeks ago, I got a call from Alex Lazo at the L.A. Times, who was going to be writing a story on home builders' ongoing efforts to make their homes increasingly energy efficient.  I gave him an overview of what was going on in the industry, and pointed him in the direction of builders such as KBHome, Pardee, Lennar and others as well as the ABC Green Home in Orange County.

That story was published today:

With the market healing, and with builders trying to distinguish their products from homes they built as recently as six years ago, companies such as KB Home, Lennar Corp. and others are rolling out more options for consumers and increasingly making energy efficiency part of the basic package.

"For new homes, it is becoming more of a standard feature, and the reason is that builders need a compelling reason that somebody should buy a new home rather than a resale," said Patrick Duffy, principal for research firm MetroIntelligence Real Estate Advisors.

In coming years, California guidelines will call for ever more energy-efficient homes, with the goal of having all homes built in 2020 being net zero. For now, net zero remains more of an aspiration for the industry, though experts say builders are increasingly making standard some of the fundamental elements of green design, including more efficient appliances, lighting and solar panel systems...

Click here for entire story.

Friday, September 21, 2012

September column for Builder & Developer magazine now online

My column for the September issue of Builder & Developer magazine is now posted online.

For this issue, entitled "The Rise of the Single-Person Household," I had read an interesting article in Fortune magazine about the demographic changes in the U.S. and the generational rise of single-person households.  What does that mean for our industry? An excerpt:

According to the most recent Census Bureau statistics, just 51% of adults today are married, putting singles within shouting distance of becoming a majority cohort.  Moreover, 28% of the country’s households now include just one person, which has doubled since 1960 and is the highest in U.S. history.  And this trend isn’t just confined to the U.S. – single-person households account for 50% of the total in cities like London and Paris and even higher (60%) in Stockholm...

Of course singles also buy homes, and that is attracting the attention of both brokers and builders.  Today, single households buy one-third of homes and, according to the NAR, unmarried men and women account for 10% and 21% of all buyers.  Interestingly, despite their higher incomes, men in their thirties and early forties show little interest in buying a home, while women increasingly look to homeownership as a way to graduate to the next life stage of total independence. Then, and only then, will many of them even consider partnering up with a significant other...

To read the entire column, click here.

To read the entire September 2012 issue in digital format, click here.

BuilderBytes' MetroIntelligence Economic Update for 9/21/12


Please click here to see the edition of BuilderBytes for 9/21/12 on the Web.

In this issue of the MetroIntelligence Economic Update, I covered the following indicators:
  • Housing starts in August rise 2.3% above July and 29.1% above August 2011
  • Building permits in August dip by 1.0% from July but still rise 24.5% above August 2011
  • Existing home sales in August up by 7.8% from July and 9.3% above August 2011
  • Initial unemployment claims fall by 3,000 in latest report
Want to advertise in the newsletter and reach over 130,000 readers? Contact National Sales Manager Nick Cosan at nkosan@penpubinc.com.
Want to make sure your company or event is included in the events calendar? Contact editor Dani Smith at dsmith@penpubinc.com.

Thursday, September 20, 2012

Marketing to Millennials: Buying a home or a car not yet a priority

For several years now, we’ve been hearing about how to market to the Gen Y cohort, also known as Millennials or Echo Boomers.  Sure, they’re attracted to technology and sustainability, but what if their attitudes about owning things like cars and houses are completely different from the generations which preceded them?  According to a recent story in The Atlantic magazine, it’s possible that a perfect storm of economic and demographic forces have altered the very way that this generation participates in our consumer culture, potentially changing how we develop and build housing in the years ahead.

For those of us who remember driver training classes in high school, getting that license meant gaining independence, demonstrating responsibility and embarking on adventures outside of the local neighborhood.  But that was then, and this is now. Back in 1985, adults in the 21-34 age range bought 38 percent of all new cars sold, but by 2010 that capture rate had fallen to 27 percent.  While more people could be simply buying used cars, the proportion of teens with a driver’s license fell by 28 percent between 1998 and 2008.

Enter the sharing economy, in which companies like ZipCar, Airbnb.com and thredUP allow members to share, rent or sell goods which would otherwise simply sit idle.   Yet according to a ZipCar survey, it’s been the evolution of the smart phone – yes, the smart phone – which has somewhat replaced the car both as a status symbol and as a way to stay connected to the outside world.  At the same time, the connectivity of those same smart phones has symbiotically energized a sharing culture which relies on technology.

When it comes to housing, however, the sharing economy has had a lot more to do with The Great Recession and steep student loan bills than technology.  According to Harvard’s Joint Center for Housing Studies, between 2006 and 2011 the homeownership rate among adults under 35 fell by 12 percent, and another two million had boomeranged to live back with their parents.  A report from the New York Federal Reserve showed that just 9 percent of those aged 29 to 34 were approved for a first-time mortgage from 2009 through 2011.  Nonetheless, a recent FannieMae survey reported that 90 percent of Millennials still aspire to owning a home someday even as they contend now with low savings, low pay and tighter lending standards.

So, over the next decade, as a group of people of over 35 million begin to form households, where will they live?  According to a 2007 survey, 43 percent of Milliennials would prefer a close-in suburb where both the need for cars and the size of homes can be smaller as a trade-off for proximity to reliable public transit, shopping and entertainment options.  One great example of this would be the redeveloped Culver City, CA, which, besides being the home of Sony Pictures, has become a trendy spot for restaurants and bars, and will now be more accessible with the recent opening of Phase I of the light rail Expo Line (which promises to whisk riders to downtown Los Angeles in less than 30 minutes).

Places like Culver City offer up what’s called “urban light,” which blends the best of suburban attributes like good schools and safe streets with the efficiency of smaller residences connected to a town center with a transit stop.  Although there will still be great opportunities for builders and developers, they will have to continue evolving along with their customers.  This will likely mean fewer suburban tract houses in favor of well-designed flats, semi-private townhomes and small homes which preserve the functionality of single-family living in a denser environment.  It will mean more households opting to rent than buy – at least in the short to medium run.

Nonetheless, on a larger scale, this gradual shift to higher-density living could have profound impacts on the entire economy, chiefly productivity.  For example, research has reportedly shown that doubling a community’s population can increase economic output by 6 to 28 percent, and that half of the variation in per-worker output between states can be largely explained by density.  Moreover, by spending less on housing and cars, consumers will have more money left over to save or spend on education, thereby making them more nimble for a global and largely knowledge-based economy.  This industry could thus have an outsized impact on the future:  by deliberately encouraging Millennials to live closer together and share their ideas (as well as their cars and extra rooms), America could regain its economic strength for generations to come.

Wednesday, September 19, 2012

BuilderBytes' MetroIntelligence Economic Update for 9/19/12

Please click here to see the edition of BuilderBytes for 9/19/12 on the Web.

In this issue of the MetroIntelligence Economic Update, I covered the following indicators:
  • Builder confidence rises to highest level since June of 2006
  • Consumer confidence unexpectedly improves in September
  • August retail sales rise by 0.9% from July and by 4.7% from August 2011
  • CPI rose by 0.6% in August, mostly due to higher gas prices
  • Industrial production fell by 1.2% in August, partly due to Hurricane Isaac
  • Empire State Manufacturing Survey indicates weaker growth but greater optimism in the months ahead
Want to advertise in the newsletter and reach over 130,000 readers? Contact National Sales Manager Nick Cosan at nkosan@penpubinc.com.
Want to make sure your company or event is included in the events calendar? Contact editor Dani Smith at dsmith@penpubinc.com.

Monday, September 17, 2012

BuilderBytes' MetroIntelligence Economic Update for 9/17/12

Please click here to see the edition of BuilderBytes for 9/17/12 on the Web.

In this issue of the MetroIntelligence Economic Update, I covered the following indicators:
  • Initial unemployment claims rise by 15,000 in latest report
  • Producer Price Index rose by 1.7% in August, largest monthly rise since June 2009 due to higher energy costs
Want to advertise in the newsletter and reach over 130,000 readers? Contact National Sales Manager Nick Cosan at nkosan@penpubinc.com.
Want to make sure your company or event is included in the events calendar? Contact editor Dani Smith at dsmith@penpubinc.com.

Friday, September 14, 2012

BuilderBytes' MetroIntelligence Economic Update for 9/7/12


Please click here to see the edition of BuilderBytes for 9/14/12 on the Web.


In this issue of the MetroIntelligence Economic Update, I covered the following indicators:
  • Federal Reserve finally announces QE3
  • Mortgage applications surge by 11.1% in latest report, purchase loans rise 8%
  • Wholesale sales in July up by 2.7% from July 2011
Want to advertise in the newsletter and reach over 130,000 readers? Contact National Sales Manager Nick Cosan at nkosan@penpubinc.com.
Want to make sure your company or event is included in the events calendar? Contact editor Dani Smith at dsmith@penpubinc.com.

Thursday, September 13, 2012

Fannie and Freddie to allow principal reductions

In a reversal of a long-held stance against principal reductions, both Fannie Mae and Freddie Mac have agreed to allow principal reductions for underwater homeowners under certain conditions. From an L.A. Times story:

In a rare victory for proponents of principal reduction,Fannie Mae and Freddie Mac said they will immediately allow their borrowers to participate in Keep Your Home California and other states' Hardest Hit Fund programs that shrink the mortgages of troubled borrowers using taxpayer funds...

Federal Reserve announces QE3

Today the Federal Reserve Open Market Committee announced ongoing efforts to stimulate the economy, now known as "Quantitative Easing 3", or QE3.  From the press release:

Information received since the Federal Open Market Committee met in August suggests that economic activity has continued to expand at a moderate pace in recent months. Growth in employment has been slow, and the unemployment rate remains elevated. Household spending has continued to advance, but growth in business fixed investment appears to have slowed. The housing sector has shown some further signs of improvement, albeit from a depressed level. Inflation has been subdued, although the prices of some key commodities have increased recently. Longer-term inflation expectations have remained stable...

Wednesday, September 12, 2012

BuilderBytes' MetroIntelligence Economic Update for 9/12/12

Please click here to see the edition of BuilderBytes for 9/10/12 on the Web.

In this issue of the MetroIntelligence Economic Update, I covered the following indicators:
  • Improving market index rises to 99 markets, up from 80 last month
  • Consumer credit declined in July for first time in 11 months
  • Trade deficit in July mostly unchanged from June at $41.9 billion
Want to advertise in the newsletter and reach over 130,000 readers? Contact National Sales Manager Nick Cosan at nkosan@penpubinc.com.
Want to make sure your company or event is included in the events calendar? Contact editor Dani Smith at dsmith@penpubinc.com.

Monday, September 10, 2012

BuilderBytes' MetroIntelligence Economic Update for 9/10/12

Please click here to see the edition of BuilderBytes for 9/10/12 on the Web.

In this issue of the MetroIntelligence Economic Update, I covered the following indicators:
  • MultiFamily Production Index rises to highest level since 2Q2005
  • Nonfarm payroll employment rose by 96,000 in August
  • Service sector economy continued growth in August despite economic uncertainty
  • Mortgage applications fall by 2.5% in latest survey as refinancings fall
Want to advertise in the newsletter and reach over 130,000 readers? Contact National Sales Manager Nick Cosan at nkosan@penpubinc.com.
Want to make sure your company or event is included in the events calendar? Contact editor Dani Smith at dsmith@penpubinc.com.

Friday, September 7, 2012

A new problem: too few homebuilding workers?

Now that the housing market rebound finally seems to be gaining strength, it seems that there's a shortage of field workers needed to build those homes.  From a CNBC article:

Many former construction workers moved on to facilities maintenance work or remodeling, or whatever jobs they could find. Replacing them is difficult because today's market demands highly skilled workers, and there is simply no available base. In the past, builders would hire workers and train them on the job. 

"They don't have the luxury of that now," says John Courson, CEO of the Home Builders Institute, an industry training group. "They want workers that are available to them, that come out trained with a skill, and ready to hit the ground working. They don't want the expense of on the job training."

Home construction technology has changed dramatically just in the past decade, as builders must adhere to green building standards...

The shortage is across the spectrum, but especially in need are framers, concrete workers, plumbers, roofers and painters. The shortage is also felt most in areas where housing is coming back strongest, and permitting is easiest, like Texas and much of the West.

Click here for entire story.

BuilderBytes' MetroIntelligence Economic Update for 9/7/12


Please click here to see the edition of BuilderBytes for 9/7/12 on the Web.

In this issue of the MetroIntelligence Economic Update, I covered the following indicators:
  • Private sector jobs rise by 201,000 from July to August
  • Planned layoffs decline for third consecutive month
  • Initial unemployment claims fall by 12,000 in latest report
  • Productivity rose by 2.2% during the second quarter of 2012
Want to advertise in the newsletter and reach over 130,000 readers? Contact National Sales Manager Nick Cosan at nkosan@penpubinc.com.
Want to make sure your company or event is included in the events calendar? Contact editor Dani Smith at dsmith@penpubinc.com.

Wednesday, September 5, 2012

BuilderBytes' MetroIntelligence Economic Update for 9/5/12

Please click here to see the edition of BuilderBytes for 9/5/12 on the Web.

In this issue of the MetroIntelligence Economic Update, I covered the following indicators:
  • Home prices in July rise by fastest rate since 2006
  • Construction spending falls by 0.9% from June but still 9.3% above same month of 2011
  • Manufacturing sector dips for third time since July 2009 but overall economy continues to grow
  • Factory orders rose by 2.8% in July, inventories up by 0.5%
  • Consumer sentiment improves slightly in August as they pay down debt
  • Personal income and consumption rise in July as savings rate dips
  • Fed's Beige Book shows continued economic growth but manufacturing activity slowing
Want to advertise in the newsletter and reach over 130,000 readers? Contact National Sales Manager Nick Cosan at nkosan@penpubinc.com.
Want to make sure your company or event is included in the events calendar? Contact editor Dani Smith at dsmith@penpubinc.com.

Tuesday, September 4, 2012

CoreLogic says home prices rose at fastest rate since 2006

More good news for the slowly reviving housing market!  According to a story in the L.A. Times:

Nationwide home prices shot up 3.8% in July, making their largest year-over-year leap since 2006, according to real estate data provider CoreLogic.
The gain marks the fifth straight rise in the gauge, part of a positive swing following a year and a half of slumps. The last time prices rose so much was in August 2006, when they jumped 4.1%.
Prices in California bounded up 4.4%. Without distressed sales – including foreclosures and short sales – national prices were up 4.3% compared with last July.
Click here to read the entire story.
Click here for the CoreLogic report.