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Thursday, April 28, 2016

NAHB: Single-Family Sector Leads Housing to Higher Ground

ROBERT DEITZ
WASHINGTON - Steady job growth, affordable home prices, attractive mortgage interest rates and pent-up demand will help the housing market continue on a gradual upward trajectory in the year ahead, according to economists who participated in yesterday's National Association of Home Builders (NAHB) Spring Construction Forecast Webinar. 

However, supply side headwinds led by a shortage of construction lots and labor, along with tight access to acquisition, construction and development (AD&C) loans, continue to hamper a more robust recovery.

"Builders remain cautiously optimistic about market conditions," said NAHB Chief Economist Robert Dietz. "2016 should be the first year since the Great Recession in which the growth rate for single-family production exceeds that of multifamily. And we see single-family growth accelerating in 2017 as the supply side chain mends and we can expand production." 

Steady job growth has bolstered consumer confidence and rekindled housing demand. Nationally, payroll employment has surpassed its pre-recession peak by a modest margin and only a small number of states lag behind pre-recession levels.

The Forecast

Looking at the forecast, single-family production is expected to post a 14 percent gain in 2016 to 812,000 units and rise an additional 19 percent to 964,000 units in 2017.

Using the 2000-2003 period as a healthy benchmark when single-family starts averaged 1.3 million units on an annual basis, NAHB is projecting that single-family production, which bottomed out at an average of 27 percent of normal production in early 2009, will rise to 64 percent of normal by the fourth quarter of this year and climb to 77 percent of normal by the end of 2017. Single-family production currently stands at 58 percent of normal activity.

"Consumer surveys suggest the ultimate goal of millennials is to purchase a single-family home in the suburbs," said Dietz. "We see growth for single-family looking ahead. The recovery continues and is dictated by demand side conditions and supply side headwinds."  

On the multifamily side, production ran at 395,000 units last year, above the 331,000 rate that is considered a normal level of production. Multifamily starts are expected to decline 4 percent to 379,000 units this year and rise 6 percent to 402,000 units in 2017.

Residential remodeling activity is expected to increase 3.3 percent in 2016 over last year and rise an additional 1.3 percent in 2017.

The Best Year Since 2006

Len Kiefer, deputy chief economist at Freddie Mac, cited several factors that should make this year's home sales the best in a decade:

·    Household formations are projected to accelerate. Between 2008 and 2014, the slowdown resulted in 5.1 million fewer household formations than normal.

·    Purchase applications show solid home sales that match demographics.

·    More owners are current on their mortgages, with fewer defaults and less foreclosures.

·    Solid job gains include rising salaries and wages.

·    House prices are rising about 6 percent annually and appear roughly in line with incomes and rents.

"Demographic tailwinds are helping to propel the housing market forward," said Kiefer.
Freddie Mac is projecting 5.9 million total home sales this year, the highest level since 2006, and 6.2 million in 2017.

Regionally, Kiefer said that house price growth is the strongest in the South and West, with Nevada, Oregon, Washington, Colorado and Florida all posting double-digit statewide house price appreciation between December 2014 and December 2015.

Back to Basics

Also looking below the national numbers, NAHB senior economist Robert Denk said that housing market conditions are improving across the nation, but the pace of the recovery continues to vary by state and region.

"A common theme has emerged," said Denk. "The progress of market recovery is no longer a function of the boom and bust cycle marked by price bubbles, excess supply and foreclosures. The key driver of the housing recovery is now back to the underlying housing market fundamentals of population and job growth."

The hardest hit areas during the downturn included the "bubble" states of California, Arizona, Nevada and Florida, where housing market excesses were the greatest, and the industrial Midwest, where the longer-term decline in U.S. manufacturing was exacerbated by the recession. Marked by solid job growth, housing markets in the bubble states are on the mend while the Midwest continues to languish due to an ongoing sluggish manufacturing base.

The states with the strongest housing market recoveries are also among the leaders in payroll employment gains since the end of the recession. The strongest housing recoveries to date are in Montana, North Dakota and Utah, all with robust energy sectors, which helped push them near or beyond full recovery in housing production. The next tier of leaders includes Texas, Oklahoma, Louisiana and Alaska - again, all with prominent energy sectors.

While the collapse in oil prices since mid-2014 will undermine the strength of the economies in these states as their energy sectors contract, the extent of the weakening will depend on the diversity of the economy. "The basic principle remains the same," said Denk. "A strong economy, whether helped, hindered or unaffected by the energy economy, will be a key factor driving housing recoveries going forward."

In another way of looking at the long road back to normal, by the end of 2017, the top 20 percent of states will reach at least 102 percent of normal single-family production levels, compared to the bottom 20 percent, which will still be below 65 percent.

Tuesday, April 19, 2016

NAHB: Housing Starts Down 8.8 Percent in March

WASHINGTON - Nationwide housing starts fell 8.8 percent to a seasonally adjusted annual rate of 1.089 million units in March, according to newly released data from the U.S. Housing and Urban Development and the Commerce Department. Overall permit issuance was also down 7.7 percent.

"Single-family starts are off from their strong showing in February but this slowdown represents a return to a long-run, gradual growth trend that is consistent with builder confidence levels, which are overall positive," said NAHB Chief Economist Robert Dietz. "While we are also seeing a monthly decline on the multifamily front, multifamily construction is expected to level off at a solid rate given the high level of rental housing demand." 

"Starts are up at a double-digit rate from a year ago and builders remain fairly optimistic that more consumers will return to the housing market in the months ahead," said NAHB Chairman Ed Brady, a home builder and developer from Bloomington, Ill.

Both housing sectors posted production declines this month. Single-family housing starts fell 9.2 percent to a seasonally adjusted annual rate of 764,000 units in March while multifamily starts dropped 8.5 percent to 312,000 units. On a year-over-year basis, however, single-family starts were up 22.6 percent.

Combined single- and multifamily starts fell in three of the four regions in March. The Midwest, West and South posted respective losses of 25.4 percent, 15.7 percent and 8.4 percent. The Northeast registered a 61.3 percent gain.

Single-family permits fell 1.2 percent to a rate of 727,000 while multifamily permits dropped 20.5 percent to 359,000.

All four regions posted permit losses in March. The Northeast, Midwest, South and West posted respective drops of 17.9 percent, 3.1 percent, 3.2 percent and 15.4 percent. 

Wednesday, April 13, 2016

Crossman & Company Ranks Retail Tenant Activity; Findings in 1st Quarter Market Report Available Online

JOHN CROSSMAN
ORLANDO, Fla. (April 13, 2016) -- Crossman & Company, one of the Southeast’s largest retail leasing, property management, and investment sales firms, has released its much anticipated 1st Quarter 2016 Southeast US Market Report Update, Ranking Retail Tenant Activity: Stop, Wait Grow! 

“The first quarter report is an assessment of analytical data that reflects those retailers with bright futures, as well as those that may have to make critical adjustments to maintain their market position, grow, or even survive. We’ve evaluated public and private companies and summarized their plans and strategy heading into the remainder of 2016,” said Crossman & Company President John Crossman, CCIM, CRX.

The six-page report analyzes a wide range of retailers and their relative health and stability as indicated by announcements of store openings and closings, earnings reports, forecasts, and market activity. Groups of retailers are categorized by well-defined red, yellow, or green light designations:

Red - Retailers who have consistent losses over a number of years, filed for bankruptcy, or are trending downward. Retailers on red must evolve to suit the needs of their customers, and even “safe” categories like fast casual dining, athletic wear, and grocers need to be aware of their position in the market.

Yellow – Companies that have triggered public attention with store closures. They can reposition themselves, but are vulnerable if they misstep. It’s a cautious tale for retailers forging mergers and acquisitions to stay afloat in an increasingly complex and competitive market.

Green – Those leading the pack, and have announced major initiatives to capitalize on their momentum. Discount retailers serving price-conscious consumers continue to see strong gains as do Internet-resistant stores. Understanding the need to pair convenience and price when considering the retail mix is rewarded.

Some of the Crossman & Company report’s insightful findings:

·         Stores with relatively poor performance, locations in non-strategic markets, and those with lower demand from shoppers are getting the ax in favor of reinvesting resources in Class A locations and premium markets.
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·         Pairing complementary concepts and retailers is helpful for anchors looking to mitigate rent costs and draw customers with strong brand names.

·         Some retailers are considering mergers and acquisitions in the face of disruptive healthcare reform and ecommerce forces.

·         There is no “safe bet” category; retailers must constantly evolve to stay relevant.

The complete report is available online. Crossman & Company is a premier real estate firm with offices in Atlanta, Ga., Orlando, Tampa and Boca Raton, Fla. focused on serving retail landlords exclusively throughout the Southeast US. Founded in 1990, Crossman & Company has built an ever-growing retail portfolio in excess of 340 properties and 25 million square feet.

For a copy of the 1st Quarter 2016 Southeast US Market Report Update, Ranking Retail Tenant Activity: Stop, Wait Grow!  visit www.crossmanco.com.

Friday, April 8, 2016

LandSouth named one of nation’s top apartment builders by National Multifamily Housing Council

JACKSONVILLE, Fla. -- LandSouth Construction, a Jacksonville, Fla. based general contractor specializing in multifamily, senior housing and mixed use development, has made the prestigious National Multifamily Housing Council’s (NMHC) 2016 ranking of the nation’s largest apartment contractors at No. 16.

Record renter demand continues to fuel apartment industry growth, as evidenced in NMHC’s just released Top 50, the authoritative ranking of the country’s largest apartment owners, managers, developers and contractors. 

Last year LandSouth was No. 25. General contractors are ranked based on the number of units started in 2015.

“It is an honor to be named the nation’s 16th largest apartment contractor. This ranking is another validation of the dedication and expertise of our team,” said LandSouth President/CEO James Pyle. “Our ability to effectively meet the needs of owners and developers has put LandSouth in this coveted position.”

LandSouth Construction is currently working on apartments and mixed-use developments throughout the Southeast including Lawrenceville, Ga., Boynton Beach, Daytona Beach, Delray Beach, Sanford, Jacksonville, Davenport, Casselberry, Odessa, Lakeland and Orlando Fla., Mt. Pleasant, S.C. and senior housing in Bonita Springs, Fla.

“For us, this recognition represents our mission to ensure our clients are highly successful with their developments and communities,” said LandSouth’s Senior Vice President of Development Joe Passkiewicz. “Demand for apartment housing has been at an all-time high over the last several years, especially in our Southeastern markets where the development pipeline continues to grow.”

NMHC partners with Kingsley Associates, a leading real estate research and consulting firm for the NMHC 50’s research and analysis. Apartment contractors are invited to answer a survey questionnaire that asks about their prior year activities. 

For more information, visit www.landsouth.com or call 904.273.6004.

ABOUT LANDSOUTH CONSTRUCTION...Building Ideas 
LandSouth Construction, the Southeast's premier general contractor specializing in multifamily, senior housing and mixed use development, was recently named one of the nation’s Top 16 apartment builders by the National Multifamily Housing Council and Fastest Growing Companies in Florida and a Best Place to Work by the Jacksonville Business Journal. Since 1998 the firm has transformed ideas into first-class communities by providing superior construction management services while building long-term relationships. Headquartered in Jacksonville, Fla. LandSouth has completed more than 12,000 multifamily units including apartments, hotels, senior living, student and military housing, condominiums, townhomes and mixed use. LandSouth builds projects of the highest quality, aesthetic relevance and enduring value. For more information, call 904.273.6004 or visit www.landsouth.com.

ABOUT THE NATIONAL MULTIFAMILY HOUSING COUCIL
Based in Washington, D.C., the National Multifamily Housing Council (NMHC) is the leadership of the trillion-dollar apartment industry. We bring together the prominent owners, managers and developers who help create thriving communities by providing apartment homes for 38 million Americans. NMHC provides a forum for insight, advocacy, and action that enables both members and the communities they help build to thrive. For more information, contact NMHC at 202/974-2300, e-mail NMHC at info@nmhc.org, or visit NMHC's Web site at www.nmhc.org.

Tuesday, March 29, 2016

Solar Energy Systems Can Increase Home Values: The Appraisal Journal

CHICAGO  – Homes with host-owned solar photovoltaic systems are sold at a premium compared to homes without PV systems, according to a study reported in an article published this week in The Appraisal Journal.

The Appraisal Journal is the quarterly technical and academic publication of the Appraisal Institute, the nation’s largest professional association of real estate appraisers. The materials presented in the publication represent the opinions and views of the authors and not necessarily those of the Appraisal Institute.

“An Analysis of Solar Home Paired Sales across Six States,” by Sandra K. Adomatis, SRA, LEED Green Associate, and Ben Hoen, examines a first-of-its-kind study that uses appraisal methods to compare sale prices of homes with host-owned PV systems across six states to the sale prices of similar homes without PV systems. 

The study found that homes with PV systems sold at a premium in all six states and supports the use of cost- and income-based PV premium estimates when paired sales analysis is impossible.

Adomatis is involved in the development of educational materials in the Appraisal Institute’s Valuation of Sustainable Buildings Professional Development Program. She is the author of Residential Green Valuation Tools, an author and co-author of articles in The Appraisal Journal and assisted in the development of the Appraisal Institute’s Residential Green and Energy-Efficient Addendum.

Hoen is a staff research associate in the electricity markets and policy group at Lawrence Berkeley National Laboratory. He has a master’s degree in environmental policy from Bard College, and bachelor’s degrees in finance and business from the University of Maryland; he is an Affiliate member of the Appraisal Institute. 

He has authored or co-authored papers published in the Journal of Real Estate Research, Contemporary Economic Policy, and Energy Economics as well as a chapter in the book Towers, Turbines and Transmission Lines: Impacts on Property Values (Wiley-Blackwell).

Thursday, March 24, 2016

Construction Industry Safety Coalition voices concerns with final silica ruling

WASHINGTON, March 24--The Construction Industry Safety Coalition (CISC) has concerns with the final rule on respirable crystalline silica released today by the Occupational Safety and Health Administration (OSHA). 

It appears, upon initial review, that the 1,772-page final rule contains some of the same problematic provisions that the CISC previously identified and shared with the agency. CISC has been a highly engaged participant in the rulemaking process since OSHA put forth the proposed rule two and a half years ago.

"NAHB has long advocated the importance of the rule being both technologically and economically feasible," said Ed Brady, chairman of the National Association of Home Builders (NAHB) and home builder and developer from Bloomington, Ill. "While we're still reviewing the final rule, we're concerned that it may not adequately address these issues and take into consideration real-world application."

"The construction industry submitted hundreds of pages of comments in response to OSHA's proposal, as we review the final rule we will see whether OSHA has taken these comments into account in developing a standard that is workable," said ABC Vice President of Regulatory, Labor and State Affairs Ben Brubeck. "Associated Builders and Contractors will remain an engaged stakeholder with OSHA in developing viable standards that will promote healthy and safe construction job sites."

"Instead of crafting a new standard that the construction industry can comply with, administration officials have instead opted to set a new standard that is well beyond the capabilities of current air filtration and dust removal technologies," said Stephen E. Sandherr, the CEO of the Associated General Contractors of America.  "Our concern is that this new rule will do little to improve workplace health and safety, which is why we will continue our review of the new measure, consult with our members and decide on a future course of action that will best serve the health and safety of millions of construction workers across the country."

"At first glance, we have observed that a number of provisions that concerned us in the proposed rule have been left in the final rule. This makes us continue to question the final rule's technological and economic feasibility for the construction industry. In addition, OSHA has added several new provisions not in the proposed rule that we have not had a chance to thoroughly review and consider the impacts.  Once we complete our review we will be able to be more specific about what was released today," said Jeff Buczkiewicz, president of the Mason Contractors Association of America  

The members of the CISC include: The American Road and Transportation Builders Association, American Society of Concrete Contractors, American Subcontractors Association, Associated Builders and Contractors, Associated General Contractors, Association of the Wall and Ceiling Industry, Building Stone Institute, Concrete Sawing & Drilling Association, Construction & Demolition Recycling Association, Distribution Contractors Association, Interlocking Concrete Pavement Institute, International Council of Employers of Bricklayers and Allied Craftworkers, Leading Builders of America, Marble Institute of America, Mason Contractors Association of America, Mechanical Contractors Association of America, National Association of Home Builders, National Association of the Remodeling Industry, National Demolition Association, National Electrical Contractors Association, National Roofing Contractors Association, National Utility Contractors Association, Natural Stone Council, The Association of Union Constructors and the Tile Roofing Institute.

Tuesday, March 22, 2016

Kevin Lee Elected as Chairman of the International Housing Association

WASHINGTON, March 22--Kevin Lee, chief executive officer of the Canadian Home Builders' Association (CHBA), was installed as the 2016-2017 chairman of the International Housing Association (IHA) during the group's recent annual meeting in Washington, D.C. The National Association of Home Builders serves as the Secretariat of IHA.

"During my tenure as chairman, I look forward to continuing to help IHA and its members take action on priority issues facing the housing and the home building industry across the world," said Lee. "IHA provides members the opportunity to collaborate to address common issues and concerns impacting housing, home owners, home buyers and the home building industry on a global level and in each member country." 

Since taking the helm at CHBA three years ago, Lee has worked actively with the board and the provincial and local levels of the association to strengthen CHBA as the "voice of the residential construction industry." Strengthening the government advocacy, communications and strategic alliances of the CHBA has resulted in greater impact for CHBA and its members. 

Prior to his position at CHBA, Lee ran his own housing consulting business for 11 years. He also worked in the federal government for nine years overseeing such programs as the $1 billion ecoENERGY Retrofit Homes Program. In 2009, he became Natural Resources Canada's first ever member of the Canadian Commission on Building and Fire Codes. 

Lee is a professional engineer with a master's in architecture and has worked in the housing industry for 25 years. 

Jons Sjogren of the Norwegian Home Builders' Association, who was the 2014-2015 chairman, will now serve as the group's immediate past chairman. IHA benefitted greatly from Sjogren's leadership, seeing a growth in participating organizations from around the world addressing an ever-growing array of global industry issues.