Tuesday, September 29, 2015

BuilderBytes' MetroIntelligence Economic Update for 9/29/15

Please click here to see the edition of BuilderBytes for 9/29/15 on the Web.

In this issue of the MetroIntelligence Economic Update, I covered the following indicators:
  • Pending home sales dip 1.4 percent in August but up 6.1 percent year-over-year
  • Second quarter 2015 GDP increase rose to 3.9 percent in third and final estimate
  • Both personal income and spending rose in August
  • Consumer sentiment decline narrows in September
Want to advertise in the newsletter and reach over 130,000 readers? Contact National Sales Manager Nick Cosan at nkosan@penpubinc.com.

Friday, September 25, 2015

25 Years of Builder and Developer Magazine: A Look Back

www.bdmag.com

This year marks the 25th anniversary of Builder & Developer magazine, marking a time of more than one real estate cycle, and a time of great change in the building industry.

I still remember the nascent publisher Nick Slevin making the rounds at PCBC in the early 1990s, and as both his influence and readership grew, I knew this was a magazine for which I wanted to write.  Having first entered the building industry in 1986, I’ve seen big changes in everything from product design and quality to how we market and finance new homes.

To be sure, this is a much different industry today than it was in 1990:  Back then the top 10 largest builders in the country reported a collective market share of under 10 percent of the housing market versus 17 percent in 2014 (down from 20 percent in 2008).  Back then new housing starts totaled 1.19 million for a population of 250 million (a ratio of .477 percent) versus 1.003 million in 2014 for a population of 319 million (a ratio of .314 percent).

Back then 75 percent of housing starts were for single-family homes, whereas in 2014 that share had fallen to 65 percent.  In fact, more multifamily units were started in 2014 than in any year since 1989. And yet, despite surpassing the one-million unit level in 2014, residential construction for the year still lagged below any level posted from 1959 through 2007.

Without a doubt, the housing recovery did lose some of its steam in 2014, with homeownership rates falling to a 48-year low by the second quarter of this year.  But that’s been somewhat balanced by strong growth in rental households, encouraging traditional for-sale builders such as Lennar and Toll Brothers to build rental communities in order to provide more predictable cash flow.

Another big change has been the shift from large builders focusing on specific niches -- such as entry-level, move-up or luxury homes -- to broadening their scope depending on local conditions. As a result, the importance of valid, verifiable quantitative market research -- coupled with qualitative local expertise -- has never been more crucial to avoid product, pricing and marketing blunders.

Having once worked for a builder which went bankrupt trying to grow too fast in new, unfamiliar markets while failing to appropriately address higher marketing and merchandising costs, I can attest that following gut instinct simply doesn’t work as well in a much more complicated world.

However, even given the bright spot for rental housing, with rents rising faster than incomes can keep up, affordable housing remains an elusive goal for both producer and consumer.  Over the 10-year period between 2005 and 2015, the share of renters aged 25 to 34 paying more than 30 percent of their incomes for housing rose from 40 to 46 percent. Now, more than ever, there is a rallying cry for more affordable housing, which also continues to evolve in order to fit in more seamlessly with existing neighborhoods.

If you have access to HBO, I highly recommend watching the six-part mini-series “Show Me a Hero,” which chronicles how civil rights violations in affordable housing impacted the city government of Yonkers, N.Y. at the beginning of the 1980s.

Based on a book by the same name, the series covers the very rocky political transition from the crime magnets of high-rise ghettos to low-income units scattered throughout a community in multiple flat and townhome unit configurations -- much like many affordable housing projects see being built today.

Finally, another big change over the last 25 years relates to the importance of technology in our homes.  Whereas many builders previously left money on the table to post-sale, outside vendors beyond their control (and balance sheets), today the connected home is a critical element in new homes, with over 90 percent equipped with a broadband Internet connection in order to better enable “the Internet of Things.”

Moreover, according to a recent CEA report, about one-third of builders report increased revenue from installing these technologies.  And it’s not just consumers leading the way:  Architects are also playing a key role in this area, incorporating multi-room audio, home theater and security systems into their designs.

Looking ahead, it’s hard to predict where we’ll be in another 25 years, but as the industry -- and its customers -- continue to become increasingly sophisticated, it’s safe to say that we can look forward to many exciting innovations in the way we work, live and play in our communities.

BuilderBytes' MetroIntelligence Economic Update for 9/25/15


Please click here to see the edition of BuilderBytes for 9/25/15 on the Web.

In this issue of the MetroIntelligence Economic Update, I covered the following indicators:
  • New home sales soared in August, surpassing expectations
  • Durable goods orders fell 2.0 percent in August after rising in July
  • Mortgage applications dip 13.9 percent in latest survey
  • Initial unemployment claims dip 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.

Thursday, September 24, 2015

BuilderBytes' MetroIntelligence Economic Update for 9/24/15

Please click here to see the edition of BuilderBytes for 9/24/15 on the Web.

In this issue of the MetroIntelligence Economic Update, I covered the following indicators:
  • FHFA House Price Index rose 0.6 percent in July and 5.85 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.

Tuesday, September 22, 2015

BuilderBytes' MetroIntelligence Economic Update for 9/22/15

Please click here to see the edition of BuilderBytes for 9/22/15 on the Web.

In this issue of the MetroIntelligence Economic Update, I covered the following indicators:
  • Existing home sales dipped in August after three months of gains
  • Leading Economic Index rose slightly in August, suggesting moderate growth in the near term
  • Federal Reserve opts to keep key interest rate at currently low level
Want to advertise in the newsletter and reach over 130,000 readers? Contact National Sales Manager Nick Cosan at nkosan@penpubinc.com.

Sunday, September 20, 2015

September column for Builder & Developer magazine now online

My column for the September 2015 issue of Builder and Developer magazine is now posted online.

For this issue, entitled "More Builders are Becoming Landlords" I wanted to review and discuss the nascent trend of builders such as Lennar and Toll Brothers building rental housing (including single-family homes) in order to broaden their business scope and provide steadier cash flow.

An excerpt:

According to recent U.S. Census data, in 2014 just under 65 percent of new home starts were for the traditional single-family home, with the balance mostly comprised of multi-family projects with five or more units.   And yet as recently as 2009, single-family starts stood at 80 percent versus just under 18 percent for larger multi-family developments, which means that the share of multi-family housing starts nearly doubled in just five years.

So if the share of new, single-family home starts is not returning to normal as originally planned, how are builders coping in this strange, new world?  For some, such as Lennar and Toll Brothers, by joining it.
To read the entire column, click here.

To read the entire September 2015 issue in digital format, click here.

Friday, September 18, 2015

BuilderBytes' MetroIntelligence Economic Update for 9/18/15


Please click here to see the edition of BuilderBytes for 9/18/15 on the Web.

In this issue of the MetroIntelligence Economic Update, I covered the following indicators:
  • August housing starts dip 3.0 percent from July but still up nearly 17 percent year-over-year
  • August building permits up by 3.5 percent from July and 12.5 percent year-over-year
  • Empire State Manufacturing Survey dipped for second month
  • Philadelphia Fed's Business Outlook Survey mixed in September
  • Mortgage applications fell by 7.0 percent in latest survey as rates dipped slightly
  • Initial unemployment claims fall by 11,000 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.

Thursday, September 17, 2015

BuilderBytes' MetroIntelligence Economic Update for 9/17/15

Please click here to see the edition of BuilderBytes for 9/17/15 on the Web.

In this issue of the MetroIntelligence Economic Update, I covered the following indicators:
  • Builder confidence rises to highest level since October 2005 in September
  • CPI dipped 0.1 percent in August but up 0.2 percent over previous 12 months
  • Retail sales rose 0.2 percent in August, up 2.2 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.

Tuesday, September 15, 2015

BuilderBytes' MetroIntelligence Economic Update for 9/15/15

Please click here to see the edition of BuilderBytes for 9/15/15 on the Web.

In this issue of the MetroIntelligence Economic Update, I covered the following indicators:
  • Producer Price Index fell flat in July, down 0.8 percent for previous 12 months
  • Consumer sentiment dips in September from August but still up 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.

Friday, September 4, 2015

BuilderBytes' MetroIntelligence Economic Update for 9/4/5


Please click here to see the edition of BuilderBytes for 9/4/15 on the Web.

In this issue of the MetroIntelligence Economic Update, I covered the following indicators:
  • Planned job cuts plunged by 60 percent in August but still 2.9 percent higher year-over-year
  • Initial unemployment claims rise by 12,000 in latest report
  • Factory orders posted modest 0.4 percent gain in July
  • Mortgage applications rise by 11.3 percent in latest survey
Want to advertise in the newsletter and reach over 130,000 readers? Contact National Sales Manager Nick Cosan at nkosan@penpubinc.com.

Thursday, September 3, 2015

BuilderBytes' MetroIntelligence Economic Update for 9/3/15

Please click here to see the edition of BuilderBytes for 9/3/15 on the Web.

In this issue of the MetroIntelligence Economic Update, I covered the following indicators:
  • Private sector jobs grow by 190,000 in most recent ADP report
  • Labor productivity growth rose sharply to 3.3 percent during second quarter of 2015
  • Chicago PMI dipped in July but comments still reflect modest to strong growth
  • Construction spending rose in July to over $1 trillion (annualized) for the first time since May 2008
Want to advertise in the newsletter and reach over 130,000 readers? Contact National Sales Manager Nick Cosan at nkosan@penpubinc.com.

Tuesday, September 1, 2015

BuilderBytes' MetroIntelligence Economic Update for 9/1/15

Please click here to see the edition of BuilderBytes for 9/1/15 on the Web.

In this issue of the MetroIntelligence Economic Update, I covered the following indicators:
  • Personal income and spending both continued to rise in July
  • Chicago PMI dipped slightly in August but still indicates rebound in purchasing activity
  • Consumer confidence takes a minor hit in late August due to stock market volatility
Want to advertise in the newsletter and reach over 130,000 readers? Contact National Sales Manager Nick Cosan at nkosan@penpubinc.com.