Back in March, I blogged about the importance of neighborhood distinctions in L.A., citing a recent attempt by a relatively small portion of Van Nuys to be absorbed into neighboring Sherman Oaks.
The reason this battle ignited my interest was that I have several friends who live in the affected area, plus I own some property there and had learned first-hand the differences between the two.
Given the constant ebb and flow of neighborhood boundaries being re-drawn and renamed (such as a portion of West Van Nuys to Lake Balboa, North Van Nuys to North Hills to Encino or a part of North Hollywood to Valley Village), I figured the change would pretty much meet little or no opposition by local neighborhood councils as well as by the L.A. City Council. I thought the reasoning laid out by the proponents on the group's Web site, PartofShermanOaks.org, was rational and was merely meant to correct a previous error of nomenclature by the city. Boy, was I wrong!
Much to my surprise, I recently learned that the leaders of both the Van Nuys and Sherman Oaks neighborhood councils were officially opposing the renaming effort. From an email I received:
Van Nuys Neighborhood Council President, Lydia Mather and Sherman Oaks Neighborhood Council President, Jill Barad site NEW reasons why it will be detrimental to Van Nuys if our community were to be allowed to be renamed Sherman Oaks.
The opponents to our name change application met with Councilmember Wendy Greuel according to her staff. In this meeting Lydia Mather stated that our community constituted 20% of all single family homes in all of Van Nuys.
This figure is important because it is an established fact that home ownership contributes greatly to the stability of any neighborhood. However, as we learned more about the evidence presented to the Councilmember - we began to wonder if all is what it seemed.
Apparently, Lydia Mather's 20% statistic was not presented in writing and Ms. Mather did not say which map these statistics are based on...
Regardless of our findings - we all concluded that our community may have a high level of home ownership compared to other parts of Van Nuys, but the people living in this community have a right to self- determination - AND WE ARE MORE THAN A STATISTIC.
I once served on the board for a similar neighborhood council in San Diego called 'Uptown Planners,' and I can tell you first-hand that decisions made by these groups are not always rational. On our board, we had a split between those who knew change was inevitable (including several architects) and those who said "No" to any change or new development because it made them uncomfortable (as well as a semi-coherent magpie who just liked to complain).
After one particularly contentious meeting, a reporter called me for comment because I was "one of the few rational voices on the board." But the City of San Diego took our meetings quite seriously, even sending out a representative from our City Councilman's office each time we met. I shudder to think how many bad decisions are made because a few people get drunk on power.
From my experience, I can only guess that Jill Barad, a 33-year resident of Sherman Oaks, simply doesn't like the idea of 'her' neighborhood boundary expanded -- even if it negates the rights of residents for self-determination. How I wish that all of my own personal opinions, with little respect to fairness or relevance, could also be made into law! That power Ms. Barad wields must be heady indeed.
As for Ms. Mather, I can sympathize with her more, because having a portion of her designated neighborhood join a better-managed one to the south on her watch has got to be embarrassing -- and an inconvenient failure should she some day want to seek higher office in local politics. But neither should her personal ambition thwart the rights of individuals to self-determination.
Fortunately, the President of the Sherman Oaks Chamber of Commerce disagrees with both Ms. Barad and Ms. Mather, and has voiced his support of the name change, including laying out specific, rational reasons for doing so. Perhaps they could learn something from him? From his open letter to Councilwoman Grueul:
Dear Wendy,
The Sherman Oaks Chamber of Commerce believes that citizens of Los Angeles should, within the framework of City governance, be allowed the right of self-determination to choose inclusion in the neighborhood that is most consistent and appropriate with the community in which they live and identify.
Such a choice should not be at the expense of other citizens but, rather, in a manner that is reasonable and intelligent. This identification should make sense in terms of City services and administrative representation.
The residents and business people in the area north of Burbank Boulevard and south of Califa Street and east of Sepulveda Boulevard and west of Hazeltine Avenue are currently caught in a political and educational no man’s land.
These citizens are within the 2nd Council District and are lucky, in my opinion, to have been represented by you as their Councilmember. So there currently exists a Los Angeles City perspective that includes these families and businesses in the community of Sherman Oaks. The children of this area all go to elementary and middle schools located south of their residences within Sherman Oaks. So the Los Angeles Unified School District and the State of California have determined that this area in question is part of the educational community of Sherman Oaks.
It has been argued that taking these residences out of Van Nuys would remove an important part of Van Nuys. I would ask, “How is that so?” and “Is this objection more important than the prior determination of City Council boundaries or the long-standing sense of school community?”
The Sherman Oaks Chamber of Commerce does not think so.
Changing the name of this area will not hurt anyone that lives or works north of this area. Changing the name of this area will not alter the governance or the school association of this area or that of anyone else.
Complaints about this area name change are based of issues of self-image and associations for which the good people of this hamlet had no responsibility. They just want to be included in their own community.
Wendy, I grew up in this very area and I know this area very well. The residents of this area have always felt affinity for Sherman Oaks. School and shopping locations, as well as political representation, have made it so. And my own father often stated, when asked, that he lived in Sherman Oaks.
I fully understand that the Van Nuys Neighborhood Council and the Sherman Oaks Neighborhood Council have voted against this request for area name change.
But I do not think that the stakeholders in this area are getting a fair hearing in those venues. I was the lead negotiator representing the Sherman Oaks Neighborhood Council in the initial border dispute with the Van Nuys Neighborhood Council at the time of NC formation. We never even discussed this area, nor did we do any due diligence and ask these residents for their input. I now realize that we erred in not doing so.
I ask, in the name of the Sherman Oaks Chamber of Commerce, and in respect for the wishes of the residents and businesses of the area in question, to right that initial wrong. Please allow the children of this area to be included in the same community as the other children at their schools. And allow the citizens of this area to be included in the same area as other citizens in your council district.
Such an action by you would cost the city little. But it would unite this area with the community that they have lived in and identified with for the last sixty years.
Yours in the interest of good citizens and stronger communities in Los Angeles, and with warm personal regard, I am
Respectfully,
Dr. Robert “Bob” Cohen
President
Sherman Oaks Chamber of Commerce
Tuesday, May 19, 2009
Battle of "Part of Sherman Oaks" heats up
Next BlogTalkRadio interview with author Anthony Downs
This Thursday, May 21st at 12 noon, I'll be interviewing Anthony Downs, author of the book "Real Estate and the Financial Crisis: How Turmoil in the Capital Markets is Restructuring Real Estate Finance," which I'll soon be reviewing for Inman News.
This is the 27th book for Downs, a PhD-educated economist with the Brookings Institution, who has also written "Niagara of Capital: How Global Capital Has Transformed Housing and Real Estate Markets," "Still Stuck in Traffic," and "Growth Management and Affordable Housing: Do They Conflict?" Earlier in his career, he also wrote "An Economic Theory of Democracy" and "Inside Bureaucracy."
Downs, also a well-known speaker, has consulted with the nation's largest corporations, developers and government agencies, so I'm looking forward to an interesting interview.
Want to listen to the interview on Thursday? Click here, although if you miss it I will post it as a podcast and link to this blog.
Want to buy his book? Click here to order from the Housing Chronicles bookstore at Amazon.com as well as his previous books and those of other authors I've interviewed.
Housing starts decline again as apartment financing dries up
Due largely to lack of financing for all types of commercial properties -- including apartments -- housing starts fell during April by nearly 13% from March levels to just 458,000 units -- the lowest seasonally adjusted level noted in half a century, although permits for single-family homes rose by 2.8%. On the plus side, such a low level of new construction for a country of over 300 million people will certainly help to clear out inventory levels. From the AP via L.A. Times:
Housing construction plunged to a record low in April as a steep drop in apartment building offset a rebound in single-family construction. Permits for new projects also hit a new low. The Commerce Department said today that construction of new homes and apartments fell 12.8% last month to a seasonally adjusted annual rate of 458,000 units, the lowest pace on records going back a half-century...
Economists had expected home construction and building permits to post modest increases in April as signs that the worst collapse in housing activity in the post-World War II period was drawing to a close. Even in last month's big decline, there were some signs of stabilization.
Construction of single-family homes rose 2.8 percent to an annual rate of 368,000, following a 0.3 percent gain in March and no change in February. The stability in single-family construction likely will be viewed as a hopeful sign that the three-year slide in housing could be bottoming out...
Housing construction fell 30.6 percent in the Northeast, the largest drop for any region. Housing starts dropped 21.4 percent in the Midwest and 21.1 percent in the South. The West was the only region showing strength with a 42.5 percent jump in housing starts. The National Association of Homebuilders reported Monday that its survey of builder confidence increased for the second straight month in May, reflecting growing optimism on the part of many builders...
But analysts cautioned that the wave of foreclosures hitting the market means that builders still face tough competition to sell new homes...
SoCal home prices now at $247,000 as sales rise
The latest data from Dataquick for the month of April is out, and prices fell from $250,000 to $247,000 as sales rose by over 31% from the same month of April. Yet the story is certainly not the same for the various counties here, with much of the pricing decline due to foreclosures in the Inland Empire. For now, sales in the coastal markets -- where owners generally have more staying power to wait for prices to stabilize -- remain low. From an L.A. Times story:
Southern California's median home price in April was $247,000, down slightly from the previous month, a real estate research firm reported today.
The price drop -- a decline of 51% from the 2007 peak -- came after three months in which the median price had held steady at $250,000, according to the data from San Diego-based MDA DataQuick. The brief respite from price declines had raised hopes the housing market may have been close to its bottom.
Last month's price drop, however, drove home purchases up. The total of 20,514 homes sold in six Southland counties last month was up 5.2% from March and up 31.4% from a year ago, DataQuick reported.
The rise in home sales is an important step to housing market recovery, said UC Irvine economist Kerry Vandell, because the sales help to clear the surplus of homes -- many vacant -- still flooding the market...
Previously foreclosed homes -- many of them deeply discounted -- accounted for 54% of the sales total. April was the seventh consecutive month in which the majority of homes sold in Los Angeles, Orange, Riverside, San Bernardino, San Diego and Ventura counties had been foreclosed.
Sales were at record or near-record levels in foreclosure-heavy inland areas. Higher-priced coastal areas, including Malibu, Pacific Palisades, the Palos Verdes Peninsula and Manhattan Beach, as well as Beverly Hills, saw record or near-record lows in sales.
A tale of two markets is clear in Southern California, with low-priced areas appearing close to recovery, while wealthier areas face greater uncertainty as sales languish amid an economic downturn...
Wealthier areas may face new troubles because "we still face two big threats to price stability: layoffs, which can cause foreclosures across the home price spectrum, and possibly a new round of foreclosures triggered by defaults on 'option ARM' and 'stated income' loans used in mid- to high-end markets," Walsh said.
San Bernardino County showed the sharpest price decline in April, with its median price falling 48% from a year ago, to $138,500. Riverside County's median price of $180,000 was a 39% decline. Los Angeles County prices were down 31% to a median of $300,000. Orange County's median price was down 24% to $380,000. Ventura County's median of $340,000 was down 24% from April last year and San Diego's median of $290,000 was down 28% from a year ago...
The typical monthly mortgage payment that Southern California buyers committed themselves to paying was $1,030 last month, down from $1,074 the previous month, and down from $1,831 a year ago. Adjusted for inflation, current payments are 52.9% below typical payments in the spring of 1989, the peak of the prior real estate cycle. They are 61.4% below the current cycle's peak in July 2007.
Phoenix re-rises
In an ode to its namesake as the bird which rose from the ashes of destruction, the housing market in Phoenix, due to tremendous price declines, has suddenly turned from bust to boom. So is this a temporary blip or something to watch for other hard-hit areas? From an L.A. Times story:
Phoenix's housing bust has turned into a quasi-boom, a sign that its market may have hit bottom and a sneak preview of what a national housing recovery could look like.
More homes are selling than at any time since 2006. Prices are slowly stabilizing. Buyers are once again finding themselves in frantic bidding wars -- only this time over foreclosed houses selling at deep discounts rather than ranch homes listing for vast sums...
Home prices continue to plummet or tread water in much of the nation, but there have been tentative signs of life. Pending home sales rose 3.2% nationally in April, the second month of increases after a record low in January...
Phoenix experienced one of the most dramatic real estate crashes in the nation. Median home prices for resold homes peaked at $268,000 in June 2006. Now the median price is $120,000. It is the biggest decline in the top 20 metropolitan areas tracked by the Standard & Poor's/Case-Shiller home price index.
The collapse was devastating in a city that has long depended on housing to power its economy. In the last year, Phoenix lost 41,000 construction jobs and 136,000 overall, accounting for 7% of its workforce.
Home building came to a halt. Many illegal immigrants, discouraged by the sudden lack of jobs, returned to Mexico. Realtors cut staff. Home prices dropped faster and faster each month for two years.
Until March. For the first time in two years, the decline in home prices slowed -- from 37% in February, compared to the previous year, to a still-painful 36%...
Skeptics of the turnaround note that the competition for foreclosed homes may be artificial. They argue that the number of bank-owned properties has shrunk because some lenders held off on foreclosures early in the year as they waited for President Obama to unveil his plan to aid distressed homeowners.
Some warn that a potential flood of new bank-owned properties could drive down prices further...
Monday, May 18, 2009
Should you buy earthquake insurance?
As a California native, I've felt almost all of the large earthquakes in the state in my lifetime (including 1994 - Northridge and 1989 - Loma Prieta), and yet am still surprised to learn than only 1 of every 8 homeowners carries earthquake insurance. Although such insurance for multi-family buildings can be very pricey -- and is therefore rejected by many HOA boards -- for single-family homes it can be much cheaper, depending of course on building type, age and location.
The Orange County Register's Jon Lansner has a podcast interviewing Pete Moraga from the Insurance Information Network of California, which you can listen to by clicking here.
For more information on earthquake insurance, visit the California Earthquake Authority.
For more information on preparing for the next big quake, visit The Great Shakeout -- the next statewide drill is set for October 15, 2009. My 70-year-old mother, a dedicated American Red Cross volunteer, has certainly helped bring me up to speed on this issue!
Fannie and Freddie reportedly in critical condition
Remember those wild childs Fannie Mae and Freddie Mac, taken over the federal government (i.e., all of us) last fall? Apparently they're still beset by multiple problems and are still not able to operate without government assistance. From a CNN story:
Fannie Mae and Freddie Mac, charged with helping lead the nation out of its housing crisis, are facing "critical" financial problems, federal regulators said Monday.
The companies suffer from severe financial, operational and compliance weaknesses, the Federal Housing Finance Agency said a report to Congress detailing its annual examinations of the firms. Taken over by the government in September, Fannie and Freddie are not able to operate without federal assistance.
"With new senior management teams, each enterprise has made strides in remediating problems," the agency said. "But they still face numerous significant challenges including building and retaining staff and correcting operational and credit management weaknesses that led to conservatorship."...
To continue functioning, the firms have drawn down about $60 billion of their combined $400 billion lifeline from the federal government. Fannie reported a $23.2 billion quarterly loss and Freddie a $9.9 billion quarterly loss earlier this month.
One hurdle to putting Fannie and Freddie back on firm financial footing is the many vacancies in their executive ranks. Hiring has been slowed by compensation concerns, the agency said.
While the housing meltdown prompted the companies' near collapse in 2008, this year will also be difficult. Fannie Mae will face challenges as it works with servicers to help troubled borrowers and to manage and sell a growing inventory of foreclosed properties, the agency said. Freddie Mac, meanwhile, needs to improve its internal controls and find a chief executive officer.
MIA: fair and comprehensive coverage on the housing market?
I was very saddened recently to hear about the death of a reporter I had befriended at the Los Angeles Times by the name of Annette Haddad (I had written about this before on April 22nd the same day I had heard from a former Times staffer) .
Annette had taken over the housing beat shortly before I became one of her sources, and over the course of several years we built a friendship based on mutual expertise: she taught me how to effectively work with reporters and improve my chances for getting some ink, and I schooled her on the economic, political and social workings of the building industry. But it was what we had in common which was what drew us together: a genuine interest in the housing industry and a desire to ensure that the story which got published -- even after several editing iterations -- was both accurate and fair.
Annette didn’t just write about housing – she lived and breathed it, visiting model complexes and open houses on weekends in order to interview potential home buyers, even sometimes calling me and others on a Sunday afternoon for input.
Today’s reporters, often working under considerable time constraints, simply don’t have the time to provide the sort of detail that’s required for a balanced story on the steadily unfolding story of housing sales, prices, foreclosures and financing. Moreover, either out of habit or necessity, many reporters continue to call on the same sources ad infinitum looking for a controversial quote with little regard to whether it’s either responsible or even correct.
Other media outlets, working with a skeleton crew, figure it’s better to re-print a wire story from AP or Reuters or publish the latest press release verbatim from a well-known data provider rather than nothing at all. By the end of the month, readers are left with an unconnected mish-mash of often-conflicting housing stories with little or no analysis to tie it all together. No wonder so many are confused!
Of course many readers, increasingly viewing traditional journalism as an unnecessary luxury -- and forgetting that it’s crucial to a properly functioning democracy – refuse to pay for online content, believing that any blogger with an opinion and the ability to type will somehow provide an adequate substitute (full disclosure: I am also a blogger).
Add to this toxic mix an industry which often shoots itself in the foot by ignoring requests to defend itself, and it’s little wonder that when the average person opines on the housing market, it’s typically a regurgitation of something heard on talk radio or cable television – hardly bastions of objective discourse.
Since this is not something which will get any better in a world of bloggers with an axe to grind, how can the housing industry address this issue?
Firstly, when a reporter calls for a quote for a story about your company, don’t just ignore it. To most readers, when they read, “Company x did not return calls for comment,” that just makes the firm look flaky, and even a canned response is better than nothing. Secondly, develop long-term relationships with reporters or influential bloggers with the intent of pitching them story ideas.
Thirdly, be bold about arguing your case against pundits who only care about seeing their own controversial – and often irresponsible – opinions in print. If the reporter refuses to write a balanced story, take your case up with their editor, and, if need be, write a letter to the editor and get your story told on the many housing-related blogs that abound on the Internet.
Fourthly, make sure there’s a responsive person on your staff who will be the responsible point person for all media requests, and be able to introduce in-house experts to address the particular topic.
Forcing a reporter to call multiple offices and corporate communications departments not only wastes valuable time, but reveals something potentially unpleasant about a company’s culture: unresponsive, incompetent or uncaring. And that’s hardly the sort of brand image any of us want to convey to a nervous populace already shell-shocked by an economic meltdown.
Recession expected to permanently impact jobs of blue-collar males
In the recession of 2001, the number of men who lost their jobs was about even with job losses by women. But this time, on top of a much larger magnitude of job losses for men versus both that recession and the one of 1990-91 -- 4.5 million and counting -- men are carrying 80% of the unemployment burden. For blue-collar men working in manufacturing as well as semi-skilled and unskilled positions, those jobs may never return. What does that mean for the future American work force? From a Reuters story:
One statistic that stands out in America's recession-stung economy is the unemployment rate for adult men: in April for the second month in a row it surged ahead of the national average to 9.4 percent versus 8.9 percent for all workers. The jobless rate for adult women was 7.1 percent.
The reasons are clear: male-heavy sectors such as construction and manufacturing have been hard hit. But the implications may be dire for the broader economy and hamper the recovery as families that once had male breadwinners struggle.
"In the 2001 recession, 51 percent of all job losses were for men. It was evenly split. But in this recession 80 percent of the jobs that have been lost have been men's," said Andrew Sum, a labor economics professor at Northeastern University who has studied this issue in detail.
Men also incurred about 80 percent of the job losses in the 1990-91 recession, but Sum said by his calculations the numbers this time were dramatically different. In the 1990-91 recession, men lost 1.037 million jobs. They have lost 4.5 million to date in this one...
The fact that American males without a college degree are especially vulnerable in this cycle point to more hard times ahead for the U.S. working class, which has endured stagnant and declining wages for the last three decades.
The skilled and semi-skilled jobs they traditionally held have been moving overseas to places like China and Vietnam. The jobs that remain pay less, amid declining union membership.
One study by Julia Isaacs of the Brookings Institution think-tank found median U.S. family income rose to $53,280 by the middle of this decade in 2004 dollars from $37,384 in 1964. But for males aged 30 to 39, average annual personal income fell from the mid-1970s by around $5,000 to $35,000.
The growth in family incomes is mostly from women entering the workforce. But during this recession that will hardly compensate given the scale of male job losses...
This is grim news for struggling blue collar families. While women's role in the workforce has expanded, by some estimates the male remains the main breadwinner in about 75 percent of two-income U.S. households...
though construction jobs are seen coming back eventually, spurred in part by President Barack Obama's $787 billion fiscal stimulus plan that includes funds for road and bridge construction.
But many manufacturing jobs are gone for good, as huge sectors like the auto industry suffer profound cuts.
Doeringer said the recession will leave the economy "sharply restructured".
"The construction jobs will return, but we are seeing an unusually sharp drop in what is left of manufacturing and much of that drop will not be recovered when the recession ends, and much of what does remain will have be at lower wages with reduced fringe benefits," he said.
"Youth market" cities hitting midlife crisis
One of the greatest challenges for the building industry for the future lies in predicting population changes, especially for those 'youth-oriented' cities which not only attract 'the creative class,' but in so doing benefit from the higher education levels and innovation such people bring with them. Today, although younger people (especially age 25-39) continue to move to 'cool places,' there are fewer jobs for them -- a disconnect (hopefully temporary) that places like Phoenix or Portland now have to address. From a Wall Street Journal story:
The worst recession in a generation is disrupting migration patterns and overturning lives across the country. Yet, cities like Portland, along with Austin, Texas, Seattle and others, continue to be draws for the young, educated workers that communities and employers covet. What these cities share is a hard-to-quantify blend of climate, natural beauty, universities and -- more than anything else -- a reputation as a cool place to live. For now, an excess of young workers is adding to the ranks of the unemployed. But holding on to these people through the downturn will help cities turn around once the economy recovers...
Indeed, the trend has appeared to continue. Between 2005 and 2007, only eight metropolitan areas -- many of them bigger -- added more college-educated migrants of any age than did Portland, the nation's 23rd largest metro area, according to an analysis of Census data by William H. Frey, a demographer at the Brookings Institution. A more detailed breakdown by age isn't yet available, but Mr. Frey and other demographers say the bulk of the movers are likely between the ages of 25 and 39, the most mobile age group by far...
Portland isn't discouraging the young and educated from coming, though the glut of workers puts more stress on city services. One of the most important factors in a city's economic success is the education level of its work force, says Harvard University economist Edward Glaeser. Cities such as Detroit and Cleveland that have exported college graduates in recent years are trying to retain them with everything from internship programs to building artists' lofts.
"I'm hopeful people will stick around," says Portland mayor Sam Adams. "Even if they come to my city without a job, it is still an economic plus."...
Thursday, May 14, 2009
Inland Empire Economic Forecast Conference - May 19, 2009!
A quick reminder for the Beacon Economics 2009 Inland Empire Economic Forecast Conference next Tuesday, May 19th, at the University of Redlands campus. Want to sign up? Click here.
Email us at info@metrointel.com for the special discount code you can use to save money on admission! MetroIntelligence Real Estate Advisors has written the real estate sections (residential and commercial) which appear in the 100+ page book that's given out to all conference attendees.
More about this conference:
2009 Inland Empire Economic Forecast ConferenceUniversity of Redlands1200 East Colton Avenue | |||||||||||||||
Recession or Depression in 2009? |
Featured Speakers | |||
 Christopher Thornberg Founding Principal Beacon Economics |  Brad Kemp Director, Regional Studies Beacon Economics |  Stuart Dorsey President University of Redlands |  Johannes Moenius Associate Professor University of Redlands |
Inland Empire: Current and Emerging Issues Panel | ||
 Jim Brulte Principal California Strategies LLC |  John Husing Vice President Economics and Politics Inc. |  John Rossi General Manager Western Municipal Water District |
- Special recession pricing: $75
- until May 15, after which: $100
- 2009 Inland Empire Economic Forecast Book
- 1 year of quarterly updates to the Inland Empire forecast
- 1 year subscription to The Beacon, our new quarterly national and state forecast report
Latest article for Builder & Developer now online
My May column for Builder & Developer magazine is now online; this month's issue focuses on green building techniques, so I discuss what's happening with efforts by the NAHB and LEED for Homes, although I recently received a clarification from Callie Schmidt, the Director of Environmental Communications for the NAHB.
For the record, Ms. Schmidt was not one of the persons I contacted prior to writing this recent column, but I will certainly do so when writing future ones on green building.
First, an excerpt from the article:
When green building terms and techniques first entered the construction industry’s policies and procedures manuals, they were initially designed for new commercial office buildings, allowing developers and cities to advertise their forward-thinking designs with iconic structures in well-trafficked locations.
Today, however, with increasing consumer sensitivity towards sustainability and a higher awareness among home builders that energy-efficient homes can boost both absorption rates and profits, building green homes will likely become the most important trend this industry has seen in a generation.
The market could be huge: according to a McGraw-Hill Construction Residential Building SmartMarket Report from 2006, green homes could make up as much as 10% of new construction by 2010 – a quintupling from a comparatively measly 2% in 2005. Seeking to retain its leadership in a quickly changing world, the National Association of Home Builders (NAHB) recently announced that more than 2,700 builders, remodelers have achieved the Certified Green Building (GCB) designation, which requires 24 hours of classroom instruction, two years of industry experience and a commitment to continuing education.
Not to be outdone, the U.S. Green Building Council’s now-ubiquitous LEED certification (Leadership in Energy and Environmental Design) -- which began for commercial structures in 2000 -- naturally led to “LEED for Homes” in late 2007 following a two-year pilot program. The national certification program, which awards points for various categories and ranges from simple certification (45-59 points out of 136) to Platinum (90-136 points), has quickly become a powerful marketing strategy that now mirrors the EnergyStar® label for appliances...
Next, the clarification from Callie:
First of all, the NAHB University of Housing educational designation that's growing so quickly is the Certified Green Professional (CGP) designation, not the Certified Green Builder. At the time you wrote the column the numbers stood at 2,700; just so you know, it's now at 3,000.
Secondly, it's inaccurate to compare the CGP designation to the LEED rating system. LEED certifies projects; CGP certifies people. A more apt comparison might be the National Green Home Certification offered through the NAHB Research Center as part of NAHBGreen. This certification applies not only to new single-family homes, but also to multifamily projects, subdivisions and residential remodeling and renovation.
The rating system now gaining popularity at NAHBGreen is the National Green Building Standard, which is the only residential green rating system to be approved by the American National Standards Institute, a distinction that, as you know, lends must more authenticity in the home building community.
Wednesday, May 13, 2009
Foreclosures jump even over March numbers
After rising to a new high in March, homes going through various stages of foreclosure rose even higher in April, although repossessions fell by 11%. From a CNN story:
Foreclosures in April exceeded even March's blistering pace with a record 342,000 homes receiving notices of default, auction notices or undergoing bank repossessions, according to a regular industry report.
One of every 374 U.S. homes received a filing during the month, the highest monthly rate that RealtyTrac, an online marketer of foreclosed properties, has recorded in four-plus years of record keeping...
There were 63,900 bank repossessions, the last stop in the foreclosure process. More than 1.3 million homes have now been lost to foreclosure since the market meltdown began in August 2007...
Ten states accounted for 75% of all foreclosure activity, and they fell generally into two categories: one-time bubble markets and the Rust Belt.
California easily outpaced every other state with with 96,560 filings. Other hard-hit former boom states were Florida, Nevada and Arizona.
Those Rust Belts states with the most filings were Illinois, Ohio and Michigan.
Georgia, Texas and Virginia filled out the rest of the top 10 list...
Five other California metro areas ranked in the top 10: Modesto was fourth, Riverside-San Bernardino fifth, Bakersfield sixth, Vallejo seventh and Stockton eighth. Miami and Orlando rounded out the list.
Friday, May 8, 2009
Manufactured homes go high-tech
One of the little-known facts about manufactured homes (i.e., those built in factories and then assembled on site as opposed to being built from scratch on the lot), is that they're often better built than 'stick-built' homes. Since builders can provide a much more consistent level of quality control in a factory, that certainly makes sense, but of course there's always been the 'trailer park' factor and sketchy financing that's prevented manufactured homes from selling more than 300,000 or 400,000 homes per year.
But in a bid to make such homes more upscale and trendy, builder Clayton Homes -- one of the companies in Warren Buffett's arsenal -- has, in a bid to the iPhone and the iPod, introduced the "iHouse," a souped-up manufactured home with energy efficiency in a decidedly modernistic style. Perhaps now buyers' irrational snobbishness about preferring stick-built homes, no matter the quality, will change, if at least slowly. Clayton even hopes that the new iHouse will make up 10% of their sales within 12-18 months. From an AP story via MSNBC:
From its bamboo floors to its rooftop deck, Clayton Homes' new industrial-chic "i-house" is about as far removed from a mobile home as an iPod from a record player.
Architects at the country's largest manufactured home company embraced the basic rectangular form of what began as housing on wheels and gave it a postmodern turn with a distinctive v-shaped roofline, energy efficiency and luxury appointments...
Clayton's "i-house" was conceived as a moderately priced "plug and play" dwelling for environmentally conscious homebuyers. It went on sale nationwide Saturday with its presentation at the annual shareholders' meeting of investor Warren Buffett's Berkshire-Hathaway Inc. in Omaha, Neb.
"This innovative 'green' home, featuring solar panels and numerous other energy-saving products, is truly a home of the future," Buffett wrote his shareholders. "Estimated costs for electricity and heating total only about $1 per day when the home is sited in an area like Omaha."...
Clayton Homes plans to price the "i-house" at $100 to $130 a square foot, depending on amenities and add-ons, such as additional bedrooms. A stick-built house with similar features could range from $200 to $300 a square foot to start, said Chris Nicely, Clayton marketing vice president.
The key cost difference is from the savings Clayton achieves by building homes in volume in green standardized factories with very little waste. Clayton has four plants in Oregon, Tennessee, California and New Mexico geared up for "i-house" production...
"It does not look like your typical manufactured home," said Thayer Long with the Manufactured Housing Institute, a Washington-based group representing 370 manufactured and modular home-building companies.
And shattering those mobile home stereotypes is a good thing, he said. "I think the 'i-house' is just more proof that the industry is capable of delivering homes that are highly customizable at an affordable price."...
Where will California's Central Valley be in 2019?
Picture it: Central Valley. 2019. Ten years from now, some planners think growth will have continue to add to the population, especially in and around Sacramento. From a Sacramento Bee story:
There are too many 3,000-square-foot homes for the low median incomes in the Valley," said Chelsey Norton, a planning consultant with Sacramento-based Mintier Harnish. She said it's not just that most people can't afford them. Many won't want them.
In 2015, just 10 percent of Valley households will be the traditional nuclear family with a mom, dad and kids, she said. The Valley, said Norton, "is increasingly graying." It's filling with a multitude of varying lifestyles, "with people who don't need isolated large suburban houses."
Norton said today's "millennial" generation, born between 1981 and 2001, may have grown up in suburbs. But it wants to live near work and not necessarily in the single-family homes that the boom brought to the Valley.
"How to keep this generation in the Valley?" she asked a crowd of people mostly older than herself. "They want different kinds of housing than that found in the Valley."...
Don't worry, there will be another housing boom. A competing panel at the Great Valley Center conference predicted 13.6 million people living between Bakersfield and Redding in 2050. That's about the time this month's high school graduates will retire.
Today, there's just shy of 7 million people in that area – about one-third of them in the Sacramento region. The good news for the capital: It has been gaining brains and income with its growth, according to Joseph Hayes, research associate at the San Francisco-based Public Policy Institute. Not so for the rest of the Central Valley, he said.
