Spreading Cement Shortages Delay Projects, Increase Prices
Builders and contractors are paying upwards of 20% more for concrete than they did last year as robust housing demand and China's building boom hinder supply. Projects in Southern California, Florida and more than two dozen other states have been delayed as a result; and the shortage eventually could put a damper on the national economy. According to Associated General Contractors of America Chief Economist Ken Simonson, "If you start seeing contractors pushed out of business because they can't get the job done, or widespread layoffs because of slowdowns in projects, there could be more of an impact on the economy." The building industry already has been hit by shortages of steel and framing lumber — the cost of the latter soaring 52% from last year — but experts expect supplies will begin to return to normal when activity slows during the colder months. (www.wsj.com)
Wall Street Journal (08/09/04) P. A2; Carlton, Jim
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Builders Dangle Cheap Financing
Residential builders of all sizes increasingly are plugging incentives to offset rising interest rates, offering such breaks as below-market rates, six-month rate locks and closing-cost assistance to buyers in sluggish markets. Research by Wholesale Access reveals that 75% of the nation's top builders have their own lenders, which are responsible for 15% of new mortgages. Because their profits are tied to home construction — not loan origination — builders can more readily offer incentives than banks can. Such incentives from builders, which also are promoting interest-only loans and hybrid adjustable-rate mortgages as a means of keeping monthly payments at affordable levels, promise to keep the housing boom alive for a little longer. (www.wsj.com)
Wall Street Journal (08/12/04) P. D1; Oster, Christopher
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Developers Jump on Old Buildings for New Housing
The high rate of vacancy among old office and industrial buildings in downtown Boston and Cambridge, coupled with the increasing demand for city housing, has given property owners the opportunity to sell their less-desirable assets to residential developers for conversion into condominiums or apartments. "So long as there is a demand for residential, developers will continue to try to find the highest and best use for buildings," says Mahmood Malihi of Legatt McCall Properties. The most recent example of this trend is One First Street in Cambridge, originally built in 1866 and formerly the home of Davenport Furniture Co. and the New England Confectionery Co. Legatt McCall recently bought the six-story, eight-building complex from Beacon Capital Partners for $14.4 million and plans to develop 199 condominium units, parking and retail facilities at the site. (www.boston.bcentral.com)
Boston Business Journal (08/09/04) Hillman, Michelle
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Trade Panel Backs U.S., But Not Its Math
A World Trade Organization (WTO) panel has voiced its support for the hefty U.S. tariffs on softwood lumber imported from Canada and rejected claims from Canadian officials that the investigations conducted by the United States to determine whether the lumber was priced below production costs were illegal. However, the panel did conclude that American officials incorrectly figured the tariff amount and need to comply with WTO rules governing calculations. The new duties have yet to be determined. (www.nytimes.com)
New York Times (08/12/04) P. C2
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Granite's New Luster
Granite countertops were once affordable only to affluent home owners; but low interest rates, better technology and widespread availability through Home Depot and other retailers have allowed buyers of more modest means to get in on the action. Home owners shell out $50-$100 per square foot on granite, compared to anywhere from $15-$85 per square foot for laminate, Corian and engineered stone. The granite industry in South Florida has grown twofold in the last 10 years. The emergence of new colors and patterns has also boosted the natural stone's popularity. Tim Hurless, president of Riviera Beach, FL-based Advance Marble Inc., says home owners now want a rusted-look granite and other versions that once were deemed undesirable. (www.PalmBeachPost.com)
Palm Beach Post (08/09/04) Salisbury, Susan
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Sticker Shock at the Lumberyard
The price of plywood and oriented strand board has soared 24% since June 2003 due to the war in Iraq, China's building boom, robust domestic demand, recent wildfires, rebuilding efforts following Hurricane Isabel, a 27% tariff on Canadian imports and the weak U.S. dollar. An error on the part of many lumberyards also contributed to a shortage, as they curtailed production in anticipation of a drop in demand due to higher interest rates. A majority of home builders have been able to absorb the increases, and those that have passed them on have heard little from buyers rushing to make their purchases while interest rates remain low. However, higher lumber prices have left many do-it-yourself remodelers with a case of sticker shock, although there are ways for them to curb their spending. Experts urge them to wait until cooler weather and higher interest rates reduce prices; buy directly from their local lumber mill; or opt for Styrofoam or medium-density fiberboard instead of plywood. (www.wsj.com)
Wall Street Journal (08/11/04) P. D1; Johnson, Avery
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NeighborWorks to Launch Center on Homeownership Education and Counseling
Though research has shown that the delinquency rate of home owners who receive credit and pre-purchase counseling is about 34% lower than that of borrowers who do not, only about 15% of first-time home buyers take part in such programs. In order to improve these statistics, the NeighborWorks Training Institute — part of the nonprofit Neighborhood Reinvestment Corporation — is launching a new initiative called the NeighborWorks Center for Homeownership Education and Counseling (NCHEC). The program aims to add more than 2,000 newly trained and certified homeownership counselors by 2006 to the existing 700 counselors who were trained this year. By increasing the number of counselors, the institute hopes to reach over 2 million home owners by 2007— almost 10 times the number of those who received counseling in 2003. "The new center will help many more moderate- and low-income families not just buy a home but succeed as home owners in the long run," according to Neighborhood Reinvestment Corporation CEO Kenneth Wade. (www.rismedia.com)
RisMedia.com (08/11/04) Bresnahan, Beth
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Program Offers Advantage for Smart Builders Marketing to New Home Buyers
Florida led the nation in residential construction permits in March, according to the U.S. Census. Local builders looking to get an edge on the competition can do so by constructing energy-efficient BuildSmart homes, which are inspected and certified by Florida Power & Light (FPL) Co. Dwellings built in accordance with the BuildSmart program feature high-efficiency heating and cooling systems, efficient windows and lighting, programmable thermostats and other components that help shave 10%-30% off monthly energy bills. "FPL provides sales and marketing support, and credibility, and reinforces our customers' trust that the home they are buying is built to a higher standard," says WCI environmental stewardship manager Karen Childress, whose company was named the nation's best builder of 2004 by NAHB. (www.businesswire.com)
Business Wire (08/11/04)
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Realtors Group Says Home Sales on Fire
For the eighth time this year, the National Association of Realtors® has boosted its outlook for 2004 home sales. Pointing to economic recovery and low mortgage rates, the trade group predicted that 6.45 million resale properties would change hands this year — up from an estimate of 6.31 million cited just a month ago. In the new-home sector, meanwhile, NAR raised its sales forecast from a previous guess of 1.16 million to a new projection of 1.2 million. If those figures come to fruition, they would be the best results on record in both segments of the industry. (www.chron.com)
Houston Chronicle (08/10/04) P. 1C
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Fed Rate Hike Not Seen Hurting Real Estate, Home Builders
The residential and commercial real estate markets are not likely to falter as a result of the Federal Reserve's latest hike in interest rates — the second in two months — because it has already been factored into the current prices, according to W.R. Hambrecht & Co. analyst Christopher Hartung. However, he and some other observers believe that a third boost in rates will drive up the cost of refinancing and spark an adjustment in commercial property prices. Meanwhile, Public Home Builders Council of America Senior Vice President Rick Anderson does not foresee a drop in housing demand unless mortgage rates surge 200 basis points. He notes that builders remained profitable after rates surpassed 8% in 1995 and 2000 and are well equipped to survive a period of higher rates due to solid balance sheets; limited speculative construction; geographical diversity; and substantial backlogs. Anderson predicts that higher rates could hurt first-time home buyers, however, although he hails adjustable-rate loans and other fixed-rate alternatives for making housing more affordable. (www.djnewswires.com)
Dow Jones Newswires (08/10/04) Morrissey, Janet
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Bring Down the Barriers to Enjoy a 'Home for a Lifetime'
With the elderly population set to hit 40 million by 2011, Universal Design Housing Network Drector Paul Levy is pushing the idea of "aging in place" to make homes accessible to people of all ages and abilities. "True independence comes down to the freedom of living wherever a person chooses, and staying there," remarks Levy, who was himself diagnosed with multiple sclerosis as a teen. He believes the principals of Universal Home Design can help disabled people integrate into neighborhoods; keep seniors out of nursing homes or assisted-living communities; and prevent many accidental in-home deaths. Home owners can implement many of these principals themselves, including additional lighting, lever faucets and doorknobs, higher electrical outlets and shower grab bars. They can even hire contractors to remodel existing homes to accommodate wheelchairs with stairless entryways, wider doorways and hallways, and larger bathrooms and kitchens. As for new homes, Levy says designs can be modified without boosting costs. (www.kcstar.com)
Kansas City Star (08/08/04) Brozanic, Linda
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Glass Blocks Lite
Plastic, already used in flooring and countertops, is now being used to create faux-glass blocks. Acrylic blocks look just like their glass counterparts and are available in a multitude of sizes, colors and surface patterns. However, they are lighter than glass and therefore can be used in windows, doors and partitions without reinforcements. They also can be used to make functional windows or as inserts in doors — unlike the real thing, which is too heavy for these uses. Moreover, they come in pre-assembled panels; whereas glass blocks must be put together one at a time. Both acrylic and glass blocks can simultaneously ensure privacy and allow natural light to brighten the home. They are most commonly used as room dividers, windows, kitchen backsplashes, shower enclosures and staircase railings. (www.philly.com)
Philadelphia Inquirer (08/08/04) Walsh, Michael
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Options Blossom for Mobile Internet Access
There are a multitude of options available to consumers when it comes to high-speed wireless Internet access. Verizon Wireless and AT&T Wireless are among the cellular carriers rolling out 3G networks, and a number of telecommunications companies are unveiling broadband wireless services. Wi-Max and an innovative service from Nextel Communications, dubbed FLASH-OFDM, also provide mobile Internet access. Rather than forcing users to plug into a certain spot to gain entry to wireless networks, wireless Internet service providers are shifting their focus to portability so users can access the Internet without being tied down. Meanwhile, cellular carriers are more interested in higher data rate services. Nextel is opting for a different route with the FLASH-OFDM technology developed by Bedminster, NJ-based Flarion. The technology is not based on any standards, but users will still be able to purchase equipment from different vendors. Using FLASH-OFDM, Nextel can offer higher speeds for data downloads for less than what cellular carriers charge. (www.seattletimes.nwsource.com)
Seattle Times (08/09/04) Gohring, Nancy
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