The Housing Chronicles Blog: 9/1/18 - 10/1/18

Thursday, September 20, 2018

August new home mortgage applications fell 4.6 percent from July, down 2.0 percent year-on-year

Mortgage applications for new home purchases decreased 4.6 percent compared to August 2017. Compared to July 2018, applications decreased by two percent.


August Leading Economic Index rose to highest level in over 12 years

The Conference Board Leading Economic Index® (LEI) for the U.S. increased 0.4 percent in August to 111.2 (2016 = 100), following a 0.7 percent increase in July, and a 0.5 percent increase in June.
The leading economic index is now well above its previous peak (March 2006, 102.4).


August existing home sales steady after four months of decline

Existing-home sales remained steady in August at 5.34 million units per year after four straight months of decline.  Sales were still down 1.5 percent year-on-year.


Bloomberg: Consumer comfort index rises to fresh 17-year high in weekly survey

Bloomberg: Consumer comfort advanced last week to a fresh 17-year high of 60.2 on brighter views of the economy.  In addition, the gauge tracking views of economy also rose to a new a 17-year high, climbing to 64.3 from 62.0.  The measure of buying climate climbed to 52.5, highest since September 2000, and the monthly economic expectations index rose to 57.5 in September, the highest since March 2002.


Wednesday, September 19, 2018

Join us for the 2018 Inland Empire Economic Forecast on 10/11/18!

MetroIntelligence is pleased to be a sponsor for the 2018 Inland Empire Economic Forecast taking place on Thursday, October 11th in Riverside, CA.

Click here to register:

It's been a decade since the U.S. fell into the worst economic downturn of the modern age. The Great Recession was especially ‘great’ in the Inland Empire where the damage inflicted was among the worst in the nation and came at a time of unprecedented expansion locally. Today, propelled by one of the fastest growing populations in the state, the region has largely put this painful episode behind it as unemployment has fallen to record-low levels, incomes are rising, and the housing market is picking up ever greater steam.

Get answers to these questions and more:
  • Is the Inland Empire economy different today than when the Great Recession hit? Are we better prepared to face the next downturn?
  • Are the same conditions that led to the recession beginning to form again? What signals should we watch for?
  • What are the greatest threats to today’s prosperity?
  • What are the best opportunities and how can you take advantage of them?

Click here to register:

September builder confidence holds steady at 67

Builder confidence remained steady at 67 in September on the NAHB's Housing Market Index. Current sales conditions rose one point to 74, six-month expectations increased two points to 74, and buyer traffic remained unchanged at 49.


August building permits dip 5.7 percent from July, down 5.5 percent year-on-year

Privately-owned housing units authorized by building permits in August were at a seasonally adjusted annual rate of 1,229,000. This is 5.7 percent below the revised July rate of 1,303,000 and is 5.5 percent below the August 2017 rate of 1,300,000.


August housing starts rebound 9.2 percent from July and 9.4 percent year-on-year

Privately-owned housing starts in August were at a seasonally adjusted annual rate of 1,282,000. This is 9.2 percent above the revised July estimate of 1,174,000 and is 9.4 percent above the August 2017 rate of 1,172,000.


Friday, September 14, 2018

July business inventories up 0.6 percent from June and 4.3 percent year-on-year

July business inventories increased 0.6 percent after edging up 0.1 percent in June and boosted by a strong increase in the stock of motor vehicles.  Year-on-year inventories rose 4.3 percent.


August industrial production rose for third straight month, up 4.9 percent year-on-year

Industrial production rose 0.4 percent in August for its third consecutive monthly increase. Manufacturing output moved up 0.2 percent on the strength of a 4.0 percent rise for motor vehicles and parts. At 108.2 percent of its 2012 average, total industrial production was 4.9 percent higher in August than it was a year earlier. Capacity utilization for the industrial sector moved up in August to
78.1 percent, a rate that is 1.7 percentage points below its long-run (1972-2017) average.


Consumer sentiment rose strongly to near-record level in early September survey

Consumer sentiment rose strongly in an early September read to 100.8, the second-highest level since 2004, and only behind the March 2018 reading of 101.4. These gains were also widespread across all major socioeconomic subgroups.


August retail sales edged up 0.1 percent as shoppers took a break

Retail sales edged up 0.1 percent in August, the smallest rise since February.   Still, data for July was revised higher to show sales rising 0.7 percent instead of the previously reported 0.5 percent gain.


Wednesday, September 12, 2018

The Evolution of the Master-Planned Community

It wasn’t too long ago when the typical master-planned community was mostly a collection of separate subdivisions selling under a shared branded location, with some homes wrapped around a golf course or a water feature in order to offer views (and premiums).

If there was a retail component, it was generally located on the periphery, requiring residents on various cul-de-sacs to drive for even the shortest errand.  When people went out for walks, it was generally along paved sidewalks adjacent to neighborhood streets, and did little to encourage interaction among the residents.

Today, however, the typical master-planned community developer has replaced the golf course with open space and trails, created nostalgic town centers within walking distance of each home, and started producing regular events in order to foster more interaction among those who live there.

Somewhat ironically, it was the Great Recession, the housing bust and recovery which allowed many developers the luxury of time to re-think what a modern master-planned community could be. This time period also coincided with the aging of the millennial generation into their household-forming years, with many of them opting for novel and creative experiences, versus simply demanding more living space and a higher bedroom count.

Consequently, today’s most successful master plans focus on promoting a unique sense of place, with the actual living space sometimes almost viewed as a secondary consideration.

Another major change was greater product segmentation, with a few traditional single-family subdivisions of various home and lot sizes giving way to higher-density, single-family and multi-family options, both for younger residents as well as downsizing seniors wanting to live close to family and friends.  In some cases, today’s build-to-rent homes will eventually be converted for sale at the appropriate time, thus encouraging new renters to start developing local roots now instead of later.

Yet when bumping up against unyielding costs for land and improvements, developing an experiential community with ample open space alongside a wide mix of products creates its own mix of challenges to the bottom line.

Explains Tom Martin, Senior VP, Community Development of Newport Pacific Land Company, “I would say that our focus is not only on good place making and planning, but also on innovative products such as homes on small lots, cluster detached homes and townhomes.  This allows us to increase attainability thru density while achieving an acceptable residual to the land.”

In some cases, good place making can incorporate a common theme to be used throughout the community.

At the 199-acre Sterling Meadows master plan near Sacramento, CA, developer The True Life Companies chose music as a connector, especially at its 13.7-acre main park.

In addition to interior pathways designed to resemble a treble cleft (essential to reading music), musical notes and symbols are inlaid into the pavement on pathways, in plazas and in water play areas.  Even the community’s street names are tied to music, with the exception of one key street, which is named for a fallen military veteran of the local community.

In other cases, ensuring that the community blends into the surrounding environment is critical.  At the 1,600-acre Tesoro Viejo master plan north of Fresno, CA, views of the nearby Sierra Nevada foothills are given center stage, with one-quarter of the land allocated for natural open space, parks, areas for recreation and miles of trails. For community interaction, a resort-style clubhouse, amphitheater and large event lawn will be able to host a variety of live events.

The tradition-oriented Town Center, modeled after a typical small town’s Main Street, will include new stations for fire and police protection as well as the Welcome Center. Dubbed “The Hub,” the center will include a neighborhood coffee bar, food options and multi-use offices for daily use long after the last home has sold.

For more built-out environments, the challenge is how to transform a large swath of land which will still appear relatively seamless when completed.  In between the downtown area and a 30-acre harbor in Honolulu, HI, Howard Hughes Corp. is re-envisioning a former center for heavy industry and commercial fishing into the environmentally friendly Ward Village.  Here, cars are given a lesser priority than pedestrians, bikes and buses, encouraging a slower pace of life.

When completed, a central plaza with a Farmer’s Market, a future light rail stop, 4,000 residential units and over one million square feet of retail and commercial space – including scores of existing businesses – will allow locals to visit some of their long-favorite haunts in a re-envisioned place.  Others will simply call it home.

September business inflation expectations remain unchanged at 2.2 percent over the next year

Firms' inflation expectations were virtually unchanged at 2.2 percent over the year ahead during the September survey.  Sales levels compared to "normal times" declined somewhat over the month. Profit margins declined as well, and year-over-year unit costs went unchanged at 2.0 percent, on average.


July consumer credit use rose 5.1 percent, mostly due to auto and student loans

Total consumer credit rose in July to a seasonally adjusted $3.91 trillion, for an annual growth rate of 5.1 percent. Revolving credit, such as credit cards, rose only 1.5 percent per annum. Nonrevolving credit, typically auto and student loans, jumped 6.4 percent per annum.


August Small Business Optimism Index soared to new 45-year record

The NFIB Small Business Optimism Index soared to 108.8 in August, a new record in the survey's 45-year history, topping the July 1983 highwater mark of 108. The record-breaking figure is driven by small business owners executing on the plans they've put in place due to "dramatic changes in the nation's economic policy."


July open positions and job quitters both rose to record levels, layoffs declined slightly

More workers quit their jobs in July since January 2001, rising to 3.6 million, or 2.4 percent of the nonfarm workforce. The number of positions waiting to be filled rose to 6.94 million, or 4.4 percent of the workforce, both of which are the highest figures since this series launched in December 2000. Layoffs declined slightly to 1.65 million, or 1.1 percent of the workforce.


August Producer Price Index dipped for first time in 18 months, up 2.8 percent year-on-year

The Producer Price Index for final demand, seasonally adjusted, declined 0.1 percent in August after no change in July.  On an unadjusted basis, the final demand index rose 2.8 percent for the 12 months ended in August.