Falling Timbers: Good News for Builders, Buyers as Lumber Prices Hit Two-Year Low

While builders in Idaho typically expect lumber prices to decline during the winter months as construction slows, a weak housing market in other parts of the nation has further reduced demand for some building products. The average cost of plywood has declined more than 14% compared to a year ago, while softwood lumber has declined about 15%, according to Reed Construction Data. “It’s a bargain right now and it’s been pretty reasonable for the last few months,” said Charles Colby, operations manager at Franklin Building Supply in Twin Falls. “But we’re probably going to see those prices start to increase toward the middle of February.” Builders and developers benefit from the lower material costs, either by absorbing the cost savings or by building larger and more intricate homes that compete better in the housing market. “Right now would be a good time to get with the builder to plan out a home and get the permit process started,” said Tony Hughes, president of the Magic Valley Builders Association. “The general trend is that the cost of building rarely goes down, but right now we’re dealing with lumber prices that are at their lowest level in a couple of years.” (www.magicvalley.com)
Twin Falls Times-News (1/15/08); Joshua Palmer

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Maine Home Prices Defy National Slump

Although the number of homes sold has been declining at a double digit rate over the past year, Maine’s median home prices have continued to edge up or remain flat. In November, home sales statewide were off more than 10% compared with a year earlier, but the median price rose more than 1% to $188,000. Several factors have been supporting prices in Maine, including the fact that this market isn’t as prone to the speculative building and boom-and-bust economic growth of some other states. Another reason Maine is holding up is because the statewide economy is in better shape than that of some other states, with a 4.8% unemployment rate that’s on par with the national average but much healthier than in hard-hit locales. Also, prices didn’t soar as high here during the boom, so they don’t have as far to drop; the state saw comparatively little overbuilding and speculative buying, so there isn’t a glut of unsold homes going at bargain prices; and the area hasn’t been as hard hit by foreclosures. (www.pressherald.mainetoday.com)
Portland Press Herald and Maine Sunday Telegram (1/17/08); Tux Turkel

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With Predator Populations Rising, More Calls for Control

Around the West and in various ways, efforts to wage war on wildlife predators are increasing, reflecting the tension between rural Westerners involved in ranching, farming and logging, and those in growing urban and recreational areas where people are more likely to have a friendlier attitude toward wildlife. In all cases, wild species’ need for adequate habitat is competing against human interests. In Oregon, hunters may soon be deputized to kill cougars, whose population has grown from several hundred in the 1960s to about 5,000 since the use of radio-collared dogs to hunt them was banned in 1994. Cougars in Oregon can pose a threat to humans. Although no attacks on people have been reported, the big cats have been spotted inside the city limits of several towns. Cougars are solitary territorial animals, which means that younger males especially are increasingly being pushed toward developed areas. Livestock, horses and pets have been attacked. (www.csmonitor.com)
Christian Science Monitor (1/18/09); Brad Knickerbocker

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Lower Rate, Coming Resets: An Opening for Refinancing

Data compiled by the Mortgage Bankers Association indicated that nearly 60 percent of all new mortgage applications by mid-January were for refinancings, thanks to the lowest mortgage interest rates in a year and a half, columnist Kenneth Harney reported.  “While much of the demand is from home owners facing payment resets on adjustable-rate and interest-only loans, many of the applicants simply want to take advantage of rates in the mid- and upper 5 percent range — often with no out-of-pocket cash costs,” Harney said. What’s fuelling the drop in mortgage rates? Harney reports that Jay Brinkmann, vice president for research and economics at the Mortgage Bankers Association, believes that it’s the 10-year Treasury bond, not short-term rates. “In recent weeks, with the specter of recession on the horizon, there has been a ‘flight to quality’ in the bond market toward ultra-safe Treasuries. That demand, in turn, has helped push down long-term mortgage rates.” How long this continues will depend heavily on investors’ perceptions of where the national economy is headed. “Brinkmann’s forecast calls for 10-year Treasuries ‘to start moving back up’ at some point in the coming quarter.” (www.washingtonpost.com)
Washington Post (1/19/08); Kenneth R. Harney

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Cities Ramp Up Kid-Friendly Hospitality

After more than a decade of wooing young professionals with loft apartments, nightclubs and Internet cafes, cities are tackling a new challenge: hanging on to them once they start having children. Many cities have successfully reversed decades of population decline in downtown neighborhoods by luring 20-somethings, only to see them leave soon after they start a family. The kid-friendly campaigns are taking many forms. A report by the Institute of Design in Chicago recommends happy hours for families in local restaurants, family rest stops that include stroller lockers, car-free zones and child-only areas of public transportation. Public parks can substitute for a lack of backyards, and cultural offerings such as museums, libraries and symphonies can enrich children’s educations, it says. But urban historian Joel Kotkin, author of “The City: A Global History,” is skeptical that cities can compete with suburbs for middle-class families. “What people will tolerate as single people is different from what they’ll tolerate when they have children,” he says. Cities such as Austin, Chicago, Seattle and San Francisco, magnets for young adults, generally have low and falling concentrations of children in neighborhoods close to the center of the city, according to research by CEOs for Cities, a national network of mayors, corporate executives, university presidents, foundation officials and city leaders. (www.usatoday.com)
USA Today (1/16/08); Haya El Nasser

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Kitchens and Baths: Down But Not Out

While economists are split on exactly when the housing market will pick up again, most agree that both the housing and related kitchen/bath markets are fundamentally sound and poised for long-term growth when the current downturn subsides. While the immediate outlook may seem bleak, home owner remodeling activity — including work on kitchens and baths — is expected to grow 44% from 2008 to 2015, or 3.8% per year, according to William Apgar, senior scholar at the Harvard University Joint Center for Housing Studies. “At the same time, do-it-yourself spending should grow at a respectable 3.2% annually and increase almost 38%,” he noted. Even during today’s challenging market, kitchens and baths are outperforming the rest of the building industry, according to Ed Pell, manager of market research for the National Kitchen & Bath Association. Calling them “the one bright spot in the building industry,” Pell said that kitchens and baths “did well overall in 2007 and will likely do about the same or flatten in 2008.” According to Pell, the number of kitchen remodeling jobs rose 1.7% in 2007 to 7.6 million units. But total spending was down, highlighting the importance of dealers and designers selling upgrades that bring real value to the project, as price-conscious consumers may be more selective over the coming years. Driven more by necessity than kitchens, bath remodels rose 5.3% in 2007 over 2006, he said, with 10.9 million jobs in all, which was up 3.9%. (www.kitchenbathdesign.com)
Kitchen and Bath Design News (1/08); Lynne Vicarro

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