From RISMEDIA:
RISMEDIA, March 19, 2011—Nationwide housing starts and issuance of permits for new housing construction both posted disappointing declines in February 2011 as concerns about a growing number of factors caused builders to pull back on production of new homes, according to newly released figures from the U.S. Commerce Department. Total housing starts declined 22.5% from January to a seasonally adjusted annual rate of 479,000 units, the second-slowest pace on record. Equally disconcerting, total permit issuance for new homes fell 8.2% to a record low pace of 517,000 units in February.
“The decline in new construction and permits in February is the culmination of a great deal of nervousness that both builders and consumers are feeling right now,” said Bob Nielsen, chairman of the National Association of Home Builders (NAHB) and a home builder from Reno, Nev. “In an already-fragile market where credit for building and buying homes remains extremely tight, additional concerns about energy costs, interest rates and other factors are contributing to an atmosphere in which many have adopted a very cautious stance.” Nielsen noted that, as part of NAHB’s annual legislative conference, hundreds of home builders are personally taking the message to Congress that the flow of credit for housing must quickly be restored.
“While our latest member surveys showed a slight uptick in expectations for the future, there are just too many uncertainties out there for most builders and buyers to comfortably move forward with a new-home project at this time,” acknowledged NAHB Chief Economist David Crowe. “We need to see several months of consistent improvement in economic factors, plus concrete signs that the flow of credit to housing is improving, in order for the industry to return to a steady recovery and facilitate job growth.”
The declines in February housing starts were broad-based, reaching to every sector and region of the country. While single-family starts declined 11.8% to a seasonally adjusted annual rate of 375,000 units, multifamily starts—which tend to display greater volatility on a month-to-month basis—declined 46.1% to a rate of 104,000 units. Regional declines amounted to 37.5% in the Northeast, 48.6% in the Midwest, 6.3% in the South and 28% in the West.
Declines in permit issuance were also widespread in February. The single-family sector posted a 9.3% drop to 382,000 units while the multifamily sector posted a 4.9% drop to 135,000 units, and regional declines amounted to 27.8% in the Northeast, 5.4% in the Midwest, 1.4% in the South and 13.6% in the West.
For more information, visit www.nahb.org.
From RISMEDIA:
New Homes Will Be Smaller, Greener and More Casual by 2015, According to NAHB Study
RISMEDIA, March 10, 2011—A recent study conducted by the National Association of Home Builders (NAHB) shows that while consumer hesitation on home buying is waning, the recent housing downturn has changed what Americans are looking for in their next home.
The survey research on consumer preferences, which is presented annually at the NAHB International Builders’ Show, suggests that the severity of the recession has left an indelible mark on prospective home buyers, who have shifted their perspective on the housing they want and need.
Builders who were surveyed expect homes to average 2,152 square feet in 2015, 10% smaller than the average size of single-family homes started in the first three quarters of 2010.
To save on square footage, the living room is high on the endangered list—52% of builders expect it to be merged with other spaces in the home by 2015 and 30% said it will vanish entirely.
“As an overall share of total floor space, 54% of builders said the family room is likely to increase,” said Rose Quint, NAHB’s assistant vice president for survey research. “That makes it the only area of the home likely to get bigger.”
In addition, the relative size of the entry foyer and dining room are likely to be diminished by 2015. However, opinions were fairly evenly divided on the fate of the kitchen, master bedroom and bath and mudroom, said Quint.
The average new home of 2015 is likely to feature a great room comprised of the kitchen, foyer and living room; a walk-in closet in the master bedroom; a laundry room; ceiling fans; a master bedroom on the first floor in homes with two stories; and a two-car garage.
In addition to floor plan changes, 68% of builders surveyed say that homes in 2015 will also include more green features and technology, including low-E windows; engineered wood beams, joists or tresses; water-efficient features such as dual-flush toilets or low-flow faucets; and an Energy Star rating for the whole house.
For more information, visit www.nahb.org.
Taylor Morrison is giving away a new home and a bunch of other prizes. Click the link below to enter.
Enter the drawing here.
From NAR (National Association of Realtors):
New single-family home sales dipped 12.6 percent in January to a seasonally adjusted rate of 284,000 homes, marking one of the sector’s worst years in half a century, according to the Commerce Department’s latest new-home sales report, released Thursday.
Analysts say new-home sales were particularly pulled down by a drop in activity in the West, mostly due to the ending of a home buyer tax credit for new homes in California. Sales in the West dropped 36.5 percent in January, after jumping 62.5 percent the month prior.
Overall, new-home sales were down 18.6 percent compared to January 2010. The median sales price for a new home dropped 1.9 percent from December to $230,600. Compared to last January, the median price still was up 5.7 percent.
The drop in January new-home sales follows last month’s unexpected surge in December new-home sales, which had risen to some of their highest levels in eight months (325,000 unit annual rate) and in which prices were at the highest since April 2008. Economists had viewed last month’s gains as a significant step in stabilizing the new-home market, which has faced lows the past five years.
New-home sales remain at about half the 600,000 a year pace that economists view as healthy.
New-home sales continue to feel pressure from the glut of foreclosed homes on the market, analysts say. Meanwhile, foreclosures and all-cash deals drove up existing-home sales in January, the National Association of REALTORS® reported this week.
Read more about NAR’s latest housing report: Existing-Home Sales Up Again in January
I would have like to have seen some follow through from December's jump in new home sales, but maybe there was a push to get as many homes closed by year end 2010 as possible. Maybe it's a little bit of a hangover effect as one may expect after a stellar month, so while not great news, I'll be very interested to see how February '11 reports.
From NAR (National Association of Realtors):
Housing starts in January reached their highest rate in four months, increasing more than analysts expected, the Commerce Department reports. Housing starts jumped 14.6 percent to a seasonally adjusted annual rate of 596,000 units.
Housing starts in January were helped by a 77.7 percent jump in multi-family homes. Single-family home construction, on the other hand, fell 1 percent.
Meanwhile, new home completions dropped to a record low of 512,000 units in January, falling 9.5 percent from the previous month.
And after housing permits surged in December by 15.3 percent, housing permits for future housing projects sank in January. New building permits dropped 10.4 percent to a 562,000-unit pace in January--mostly pulled down by a drop in multi-family and single-family unit permits.
Read the Entire Article: “U.S. Housing Starts Surge in Jan., Permits Tumble,” Reuters News (Feb. 16, 2011)
Some good and some bad news here as I see it. It is certainly good to see building start to pick up again, but it seems that multi-family developments are what are driving the surge. New homes are still a little beat up right now, and possibly ripe for some good deals. With the increase in people wanting/needing to rent, it makes sense to see more multi-family projects being built. Good or bad, it is an increase which does mean more people will be employed and that should have an overall positive effect on the economy down the road.
From NAR (National Association of Realtors):
Home builders are using the energy efficiency of new homes to try to get buyers buying. For example, KB Home is giving buyers an estimate up-front of what their monthly gas and electric bill will be in their new home, as well as insight into where the home ranks on an energy efficiency scale.
Similarly, McGuyer Homebuilders Inc., based in Houston, has begun providing its customers with estimates of what the annual heating and cooling portion of their utility bills will be on homes. If the buyer ends up with higher utility bills than what’s estimated, McGuyer will even reimburse them the difference in the first two years.
Sales of new homes have fallen flat in the last few years, sinking last year to its lowest level since 1963. Home builders are banking on energy efficiency to try to lift new-home sales.
They call their approach similar to that of automakers, which have provided miles-per-gallon labels on vehicles, a move that ultimately helped make fuel-efficient cars more popular in the market.
"It's the biggest purchase decision that people are making at that time in their lives, and typically they have no idea what it's going to cost to truly own the thing until they've been there for several months," Jeffrey Mezger, KB Home's president and CEO, told the Associated Press. "It's a cost of home ownership that hasn't been out there."
Read the entire article here: “Homebuilders Take Page From Automakers, Tell Buyers What Their Monthly Utility Bill Will Cost,” The Associated Press (Feb. 14, 2011)
As homes are built "greener", Builders are able to really get a better sense of what the total utility bills will be. Hence, they are now able to offer what they are offering. It's a nice feature as utility bills are always a wildcard when buying a home.
Homebuilder Introduces Its Regency Community With A $10,000 VIP Discount When You Purchase A Home By February 15
PRLog (Press Release) – Feb 08, 2011 – The wait is over and the time is now! Lennar, one of the nation’s leading names in the homebuilding industry, is excited to announce it is building homes in Parker with the introduction of its newest community called Regency.
Be one of the first to take advantage of the biggest savings and the best homesite selection. Lennar has homes at Regency ready for January and February move-in. Plus, don’t miss the opportunity to receive a $10,000 VIP discount when you purchase a home by February 15.
Lennar’s Regency community is located at the heart of downtown Parker with convenient access to Interstate 25 and E470. Homes are from the Inaugural Collection featuring four two-story homes and two ranch-style homes. Homes range in size from approximately 1,446 to 2,214 square feet and include three or four bedrooms, 2.5 to 3.5 bathrooms, three-car garages and full unfinished basements. Prices start in the $280s.
A limited-time interest rate offer, beautiful homes and a gift of premier Godiva chocolates. What's not to love?
Standard Pacific Homes has announced The February Love Fest, a limited-time opportunity for homebuyers to get a great low interest rate and savings on a new home that will make their hearts soar. Plus, in partnership with premier chocolatier Godiva, every home shopper will receive Godiva chocolates while supplies last, just for stopping by.
Shoppers will find a home they'll love at this event that showcases Standard Pacific Homes' award-winning architectural designs and industry-leading quality. Plus, with the valuable "Be Mine" financing package on select homes purchased by February 28, 2011, it's a sweetheart of a deal that homebuyers can't afford to miss.
While they tour the homes, buyers will be able to see for themselves the exceptional quality and design that recently earned Standard Pacific Homes top rankings by J.D. Power and Associates for customer satisfaction and new home quality.
Interested in New Construction? - Read This Report!!!
From NAR (National Association of Realtors)
Most home owners opt to add some upgrades to a new home, which can be rolled into the mortgage opposed to paying for them later on their own. But the choices of what flooring, lighting, or other upgrades to choose can be overwhelming.
Designer Candice Olson, author and host of HGTV's "Candice Tells All," says lighting and extra wiring are key upgrades new home buyers should consider.
"Adding lighting -- or at least the wiring for it -- means you'll be able to have bathroom sconces instead of that one overhead light the builder gives you,” Olson says. “Your flat-screen TV can be where you want it. You'll have a floor outlet for the lamp in middle of the open room. And you won't be ripping out walls later to do all this."
Also, she says home owners shouldn’t forget about the exterior lighting either. "Outside lighting, plus landscaping, will set apart your house from the others in the neighborhood where buyers chose from plans A, B and C," Olson says.
As for flooring, Olson recommends hardwood floors for the main living areas, and cork floors for the basement, since there’s potential for water leakage in basements.
She also says the addition of taller baseboards, chair rails, crown molding, coffered ceilings, built-ins or a banquette also are smart investments for upgrades.
Source: “Decisions, Decisions: Add Character to Your Home With a Few Choice Upgrades,” Chicago Tribune (Feb. 4, 2011)
Wise words, but I'll add my two cents. Ultimately, all of this does boil down to your financial capability. Do you have the ability to afford payments with all of the upgrades? If you do, that's great. If you don't look at upgrading stuff that will be tough to upgrade later (much like her wiring comments). Items similar to her mention of baseboards, etc..., and in my opinion kitchen cabinets are not items that are easily replaced. Keep this in mind when making a decision as to what to upgrade - the builder has marked these upgrades up and they will be put into a loan, so you are not only paying more for the upgrade, but you are also financing them over 30 years, hence you are paying a lot more for the upgrade than it may seem. There are many items that you can base out and upgrade at a later date for a lot less money - read my Vital Information about Buying a New Home to get more information.
From NAR (National Association of Realtors):
New-home sales may bounce back this spring, and the rebound could last through at least 2012, predict market watchers.
The Mortgage Bankers Association forecasts a 10 percent jump in volume; while Fannie Mae and the National Association of Home Builders project gains of 18 percent and 20 percent, respectively.
The groups are optimistic despite tighter underwriting, the absence of a home buyer tax credit and stiff competition from bargain-priced foreclosure properties.
Read the entire article here: "New-Home Recovery Seen as Post-Super Bowl Selling Season Starts" Business Week (02/11)
A step in the right direction, but this is only a forecast, not a statement of fact. However, it is better than a forecast in the other direction. Are we scraping bottom in the housing market and will we start to see some substantial gains? That is the $64,000 question right now. There are a lot of indicators pointing in the right direction, but that has not translated into more homes sold as of yet. As always, time will tell.
Follow the link below to view where Standard Pacific is building in the Metro Denver Area and also get a synopsis of each development.