Housing Prices Put Americans on the Move
Housing prices are driving a continuing trend of the movement of the American population from the North to the South, with a net out-migration of residents from high-priced Northeastern and West Coast cities to more affordable housing markets in the Sun Belt, according to Marc Perry, a demographer for the Census Bureau. On the losing side are metro areas like New York, Los Angeles and Chicago, with big gains coming to Dallas, Atlanta and Phoenix. Of the nation’s 25 largest metro areas, the New York region, with a median house price in 2005 of $427,600, twice the national median, lost the most people, with an average annual outflow of 211,014 residents from 2000 to 2004; this was an average loss of 11.4 people per 1,000 per year. In California, San Francisco, with an average house price of $718,700, had a net domestic outflow of 60,984 over the five-year period, averaging 14.7 per 1,000 per year; and Los Angeles, averaging $568,400, lost 117,780 of its population, or 9.3 per 1,000 annually. “Florida has been a sponge for migrants,” says Perry. It has attracted more residents than any other state, a net gain of 190,894, including many retiring or relocating New Yorkers, but Nevada had the highest average annual increase per 1,000, of 23.3. (www.cnnmoney.com)
CNNMoney.com (4/20/06); Les Christie
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Foreclosures Soar 63 Percent Over Last Year
RealtyTrac reported that 101,597 properties across the country entered some state of foreclose in March, a 13% decrease from February but a 63% increase from the same month a year earlier. “After rising more than 20% during each of the first two months of the year, foreclosure numbers experienced a fairly sharp correction in March,” said James Saccacio, chief executive officer of RealtyTrac. “We saw a similar drop in March of ’05 followed by four consecutive months of increases. Many buyers and investors typically start looking for properties in the spring, and that could have provided distressed home owners a better chance of selling their properties to avoid default or foreclosure. Colorado had the highest foreclosure rate last month, followed by Georgia, Indiana, Utah and Michigan. Texas had the most new foreclosures of any state for the fourth month in a row even though foreclosures there were on the decline for the second consecutive month. (www.rismedia.com)
RisMedia (4/18/06); Beth Bresnahan
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Lawsuit Boosts Pressure on Corps to Issue Rule on Water Act Scope
A lawsuit from NAHB, the latest in a series of legal challenges, is putting growing pressure on the U.S. Army Corps of Engineers to issue a rule clarifying the scope of waters protected under the Clean Water Act. In its recently filed suit, NAHB is challenging a policy by the Corps’ Philadelphia district of regulating ditches that eventually connect to navigable water on the grounds that the Corps’ 1986 rules defining “waters of the United States” do not include ditches. The case, NAHB v. U.S. Army Corps of Engineers, could have broad implications if the industry is successful because numerous federal courts have allowed Clean Water Act jurisdiction over wetlands based on their proximity to ditches that eventually connect to navigable waters, say NAHB representatives. If the D.C. federal district court rules in NAHB’s favor, other courts could be forced to re-examine the issue in future cases. (www.iwpnews.com)
Inside EPA Weekly Report (4/21/06)
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Brownfield Lending Perks Up as Developers Eye Sites
Scrambling to invest more money in real estate, pension funds, insurance companies and hedge funds are lending more frequently to projects developed on brownfields, and even banks are stepping up to lend to experienced brownfield developers. The U.S. has $2 trillion of contaminated real estate that investors could buy if it were cleaned up. Although developers are being attracted to these sites as available land grows increasingly scarce in hot markets, financing for brownfield projects has lagged behind because many traditional lenders fear liability for health or other problems that may crop up. “When we first got into this business, no bank really wanted to do this product,” says Mike O’Neill, chief executive of Preferred Real Estate Investments of Conshohocken, Pa., which has redeveloped about three dozen brownfield sites in the past 15 years. Banks that once lent him 40% of the cost of a project now offer to finance 80% of the cost, he says. “I did not think that there would come a time that people would bang down our doors.” Even so, brownfield developers still pay significantly more for financing. (www.realestatejournal.com)
RealEstateJournal.com (4/18/06); Christine Haughney, the Wall Street Journal Online
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The Next Martha?
Connecting celebrity brands to new homes is an emerging phenomenon, which started late last year with an announcement by KB Home that it would offer its first Martha Stewart community in North Carolina. Also late last year, Mitchell Homes, based in Alabama, announced it would build the first Kathy Ireland community in Florida. Ireland — one of Sports Illustrated magazine’s most popular swimsuit models of the late ‘80s and early ‘90s but also an actress in family-friendly movies made for television — creates specific style guides that allow her manufacturing partners to create product lines that can be coordinated with design themes such as “Americana,” “Aloha” and “European Country.” Central Indiana home builder Estridge Companies has announced a partnership with Ireland that is starting with coordinated home interiors but is expected to lead eventually to Kathy Ireland-designed homes in a Kathy Ireland-designed community built by Estridge. Charlie Scott, executive vice president for Estridge, says Ireland’s team brings a proven ability to connect to female customers, who influence about 80% of home-purchasing decisions. “The home building industry has a lot of male influence,” he said. “But her brand is highly recognized by the female demographic.” (www.indystar.com)
Indianapolis Star (4/18/06); Ellen Miller
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Smart Money — the Comfort Craze
During a slowdown for remodeling in general, home owners are turning to projects that are focused on “remodeling for me,” with plush gathering places full of creature comforts for themselves and their families. There’s “a desire to have something no one else has, to customize, to make the home their own,” says Vince Butler, chairman of the NAHB Remodelors™ Council. For example, although there are still a lot of bathroom makeovers under way, overall spending has bogged down. At the same time, spending on outdoor projects has soared, rising by 47% in 2004 to $21 billion, according to the Census Bureau. Home Depot saw double-digit earnings and revenue growth last year and the year before, and some of its biggest sales surges are in high-end product lines that help home owners pamper themselves. Elaborate barbecue grills and restaurant-quality kitchen appliances are claiming more and more shelf space. Last fall, the home-improvement chain launched 10 Crescent Lane, a spinoff retailer that sells plush furnishings like wicker armchairs and $1,500 outdoor loveseats. (www.smartmoney.com)
Smart Money Magazine (4/17/06); Jim Rendon
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Dressed-Up Closets; Expanded Spaces Have Mini-Fridges, Sound Systems and Dressing Islands
It used to be that the master bedroom closet was simply a place to hang clothes and stow stuff, but more home owners are demanding bigger closet spaces and are commandeering space from elsewhere in the house to accommodate dressing islands, rich cabinetry, minibars and other amenities. Even lesser-priced homes are getting in on the trend. Closet space in new homes increased roughly 40% from 1978 to 2005, according to Steve Melman, director of economic services at NAHB. “A high-end closet used to be $10,000. Now they’re $60,000,” says Kristina Ferrigan, director of marketing for Elmhurst, Ill.-based Closet Works. She says that closet companies have seen 15%-20% annual sales growth for the past several years. Although closets can run anywhere from 36 square feet to as much as 600 square feet, 100 square feet is the norm in the Chicago area. (www.chicagotribune.com)
Chicago Tribune (4/21/06); Elizabeth Brewster
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