Week of April 3, 2006
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  • KB Leader Addresses Housing Challenges
  • Dispute Could Increase Flood Insurance Cost
  • Anti-McMansions Have Every Comfort of Home
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  • Sellers Learning New Language
  • Top 10 Millionaire Counties
  • Custom Installed A/V Offered by More Builders, Says CEA/NAHB
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    KB Leader Addresses Housing Challenges

    Land availability and entitlements are the biggest challenges for Los Angeles-based KB Home in California’s East Bay market, company president Drew Kusnick told a reporter for the Contra Costa Times. An urban limit line approved by Contra Costa County voters in November has reduced opportunities to find land that’s entitled, he said, but “it helps create different types of opportunities, like urban infill (dense development within city borders), which is more where our business is moving as well.” Kusnick said that eight years ago his company didn’t do much infill, but today it accounts for a third of KB business and it’s growing to half. Land prices in Northern California are the largest obstacle to the housing affordability that KB sees as one of its competitive advantages. “There is a shortage of land,” he said, “and great challenges in getting it entitled for land development. That underlines the basic constraint of supply. By adding more density per acre, we’re driving down the land-cost component. Typically, it also opens up more opportunities, you can deal with smaller sites. A few years ago we wouldn’t have looked at a three- or four-acre site.” (www.contracostatimes.com)
    Contra Costa Times (1/1/06); James Temple

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    Dispute Could Increase Flood Insurance Cost

    In a move that could increase flood insurance premiums in North Carolina by at least $1.4 million a year, FEMA officials are threatening to reduce flood insurance credits in 18 coastal communities in the state unless the N.C. Building Code Council extends miles inland a new rule requiring storm shutters for windows and doors on all new homes built within 1,500 feet of the ocean. In Wrightsville Beach — long considered a model of storm readiness — flood insurance discounts may drop from 25% to 10%, and that would force roughly 2,500 policyholders there to pay $242,000 more for flood insurance, or about $96 per home. The code in question requires doors and windows to be strengthened against flying debris propelled by tropical storm or hurricane winds. Solutions include pre-cut plywood sheets that can be nailed to window casings and doorjambs, as well as more expensive metal shutters and pricier windows made of armored glass. The code council found little scientific or engineering evidence that the rule would be needed far from the beach. (www.starnewsonline.com)
    Wilmington, N.C. Star-News (3/15/06); Mark Schreiner

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    Anti-McMansions Have Every Comfort of Home

    Jay Shafer, who started the Tumbleweed House Co., helped Gregory Johnson build a 7-foot-wide by 10-foot-long chalet in Iowa City, Iowa in 2003. Bigger than a child’s playhouse but much smaller than a typical Manhattan studio apartment, the house features metal roofing, exposed stud interior walls, red oak flooring and wheels that enabled it to be parked in the back yard of his parent’s house. The anti-McMansion has high ceilings and a sleeping loft, which make it feel more spacious, says Johnson, who is the founder of the Small House Society. With a mailing list of more than 200, including architecture firms and urban planners, the group’s monthly e-mail newsletter provides tips on a range of topics, including housing code battles and home owners insurance, two common stumbling blocks for enthusiasts. A Hurricane Katrina refugee who lost her home in Bay St. Louis, Miss., Julie Martin has worked with Shafer to design a special Gulf Coast model of a tiny house, with a front porch, asymmetrical windows and doors, porcelain faucet handles and other details typical of the area’s old homes. The homes come with two essentials — a full bathroom and a walk-in closet — and because they’re built to last and can be set on property later as a guest cottage, Martin says that the tiny houses, which start at $37,000, will appreciate, unlike a trailer. (www.chicagotribune.com)
    Chicago Tribune (3/31/06); Craig LeMoult, Columbia News Service

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    Sellers Learning New Language

    Alan Nevin, chief economist for the California Building Industry Association, says that Latinos remain underrepresented among California home owners, but their children will dominate the entry-level housing market within the next decade. Currently, 44% of the state’s Latino households are home owners, compared with 57% for all of the state’s households, because of lower income and cultural influences, particularly an aversion to buying on credit. Nevin said Latino home buyers generally won’t buy condominiums as their first homes because they want a yard. And he said extended Latino families often prefer a fixer-upper near a downtown where they work rather than commute to a nicer house on a suburban fringe; one reason is that not everyone in the family may own a car. Laura Castro de Cortes, a banking consultant, says that financial institutions must recognize the needs of Latino customers. Many choose not to have credit cards, preferring to pay in cash, she said, leaving them with limited credit histories when they apply for loans. Latino purchasing power nationally will top $1.08 trillion by 2010, up 413% from 1990, according to the Selig Center for Economic Growth at the University of Georgia. By 2010, Latinos will account for 9.2% of total U.S. consumer buying power and 17.2% in California. (www.pe.com)
    Press-Enterprise (3/21/06); Michael Fisher, Leslie Berkman and Josh Brown

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    Top 10 Millionaire Counties

    Although real estate is not their sole source of wealth, it remains a staple for many of the nation’s 8.9 million households with a net worth in excess of $1 million excluding their primary residence. Forty-six percent of those surveyed last year by TNS Financial Services, a market research and polling firm, said they owned investment real estate like a second home or rental properties, a smaller share than in the previous year, compared to 70% owning stocks and bonds and 68% mutual funds. America’s millionaires are disproportionately located in four counties in California. Other states where they are easier to find include Illinois, Arizona, Texas, New York, Florida and Massachusetts. Millionaire households last year reported total income averaging $119,000. Those who drew some of their income from jobs reported earning an average of $82,000 in salaries or professional fees. (www.cnnmoney.com)
    CNNMoney (3/29/06); Jeanne Sahadi

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    Custom Installed A/V Offered by More Builders, Says CEA/NAHB

    A new study by the Consumer Electronics Association and NAHB found that 74% of builders who offered home technology last year offered multi-room audio as a standard or option, up from 68% in 2004 and 56.8% in 2004, and actually installed them in 15% of the homes they built. The survey also found that builders selling home technology increased their sales of everything but structured wiring, perhaps because of “the plethora of inexpensive wireless networking technologies.” The overwhelming majority of the builders surveyed — 86% — agreed that home technologies are important to marketing homes, the study said. A third of builders who install home technology believe that this helped them both sell homes and boost their revenues last year. Builders “are becoming more involved with home technologies as a means to compete and differentiate themselves,” the study said. “And to compete effectively, many builders have reached out to somewhat nontraditional partners. This year we see evidence of new-home builders working more closely with custom installers, retailers and service providers to collaborate on offerings and installations." (www.twice.com)
    TWICE, Reed Business Information (3/27/06); Joseph Palenchar

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    Freddie Mac, Louisiana HFA Help Hurricane Victims Repair, Rebuild Homes
    Montana State Representative Bob Lake Cautions Against Extensive GSE Reform
     
       
     
    Find and manage projects right from your desktop.
    Get your company listed in the new McGraw-Hill Construction Directory.
     
       
     
    Building for Boomers & Beyond: 50+ Housing Symposium 2006
    NAHB Multifamily Pillars of the Industry Conference and Gala
    Construction Forecast Conference - Spring 2006
     

     
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