Houses Are Engines of Economic Growth
Recent figures from the U.S. Commerce Department indicate that the real estate market is continuing to boom as interest rates remain below 6%. Sales of new homes rose 0.2% in October to the third-highest recorded level, and the new-home median and average sales price also were on the rise. The trend is expected to last as economic recovery picks up; and with every new home built and sold, the overall economy receives a boost in return. When a new home or development is built, the project provides numerous trades and industries with the opportunity for work and financial gain. In addition to the primary builder, there are subcontractors such as plumbers, electricians, painters, various installers, landscapers and utility workers who will be needed to put the finishing touches on the home. Manufacturers specializing in major appliances, bathroom items, building materials and other household amenities also benefit from new-home construction. Once the unit is complete, inspectors are called upon to give it final approval before the sales process — which involves Realtors® and title companies as well as mortgage, insurance and credit providers — can begin. (www.washtimes.com)
Washington Times (12/03/04) P. F3; Carr, M. Anthony
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U.S. Home Building to Remain Economic 'Stimulant' Into 2005
Fitch Ratings reports that U.S. home building statistics are likely to drop for the rest of this year and into 2005, but the sector will continue to serve as a key economic stimulant for at least the foreseeable future. Fitch's primary home building analyst, Robert Curran, observes, "While it appears quite unlikely that housing will deteriorate meaningfully during the next year or so, housing demand is unlikely to improve much over the next 12-15 months." He adds that a surge in the stock market could prompt wealthier households to upgrade to bigger and better housing. From a credit standpoint, public home builders are expected to maintain their financial ratio prudence into '05, despite fears that spikes in adjustable-rate loans and speculative housing levels could signal a decline in credit worthiness in the sector. (www.ntxe-news.com)
North Texas e-News (12/02/04)
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Boston May Adopt Rent Control
The Boston City Council is preparing to vote on a rent control measure that would enable elderly and disabled tenants to challenge annual increases of more than 5% and other tenants of more than 10%, even though a recent survey found that the average rent for a new lease in the city is $90 a month lower than it was two years ago. Since Massachusetts voters ended rent control in 1994, multifamily housing production has risen in the city, helping to alleviate a tight supply of rental units and keeping rents in check. The average asking rent for a Boston apartment is $1,775 a month today, and one large landlord is reporting a vacancy rate of close to 5%, compared to 3% normally. There are an estimated 112,000 market-rate rental units in Boston, according to the city. (www.boston.com)
Boston Globe (12/01/04); Chris Reidy
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Investors Eye Properties, Areas Cultivated by Hispanic Users
With growth in the country's Hispanic population booming and the Census Bureau predicting that Hispanics will make up almost a quarter of the total U.S. population by 2050, institutional and regional private investors in Texas — in El Paso, San Antonio and the border towns along the Rio Grande Valley — are looking for apartment deals with Hispanic tenants. A similar trend has been found in Phoenix, often involving individual investors with ties to the Hispanic community; the west and northwest parts of that city are expected to sustain the fastest population growth in the next 10 years because the land is affordable and ripe for industrial and commercial expansion. Hispanic tenants in blue-collar markets tend to make good long-term tenants, according to Todd Braun, senior director with Cushman & Wakefield, Inc., because they are less likely to move into for-sale, entry-level housing. (www.commercialpropertynews.com)
Commercial Property News (12/01/04); J. W. Elphinstone
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It's a Little Easier Being Green
Construction companies increasingly are using environmentally friendly products to save money. Carpet manufactured from recycled plastic, for instance, costs $8-$25 per square yard versus petroleum-based nylon carpet, which is $10-$30 per square yard, and wool-based carpet, which is $20-$80 a square yard. While prices for recycled carpets stayed flat in 2004, the cost for petroleum-based products such as nylon has risen several times due to increasing oil prices. Although upfront costs for "green" buildings usually are 2% higher than traditional buildings, higher energy savings frequently offset original costs by up to 20% over a green building's lifespan, a 2003 report by the U.S. Green Council found. Grant Barnhill, a Denver developer, has utilized recycled carpet in recent projects. "Some of the green items that make a home more efficient also make (the design) more profitable," he notes. (www.denverpost.com)
Denver Post (11/30/04) Shanley, Will
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A Tall Order
Voters in Jacksonville Beach, FL, recently approved an amendment that caps building heights at 35 feet and rejected a separate measure that would have allowed higher structures in certain areas. Supporters of the height restrictions believe that banning high-rises will protect the community's quality of life, but critics of the amendment insist that it will not stop high-density development. Local realty professionals predict that developers will minimize open space between buildings and turn away from what Morgar Realty Inc. President Fitch King calls "architectural creativity." Others worry that the amendment will make it impossible for developers to build mixed-use communities, considering that there would not be enough room for ground-floor retail or office space. As for property values, many expect them to rise as the amendment limits the number of new units coming onto the market. Critics, however, fret that fewer units will translate into fewer retail sales as high-income buyers are forced to look elsewhere for housing. (jacksonville.bizjournals.com)
Jacksonville Business Journal (11/29/04) Pittman, Laura Jane
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Living Like Lincoln
More Americans are turning to log homes as a way to fulfill their desire for a rustic lifestyle; but they are building them with such features as high ceilings, at least six bedrooms, a great room for entertaining, floor-to-ceiling windows and detailed stone and marble work. The Log Home Council of NAHB reports that the number of log homes built each year has risen from about 7,000 in the mid-1980s to more than 25,000 today. Sales in the United States and Canada have more than doubled since 1998 to $1.37 billion, and they now represent 7% of the custom home building market. According to Jason Goodman, publisher of Log Homes Illustrated, the cost to build a log home ranges from $125 to more than $1,000 per square foot — depending on the type of logs, style of home and amenities. Prospective home buyers are encouraged to own land for building the home; talk to builders, contractors and other log-home owners to get a better understanding of the cost; and secure financing for the entire project before construction begins. (www.time.com)
Time (11/29/04) P. 153; Epperson, Sharon
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Urbane Renewal
Urban centers are on the rise among young employees, according to experts. Many downtown immigrants are seeking homes, work and entertainment at their fingertips — demand that has launched a new effort to invest in the urban landscape. Downtown areas in Baltimore, St. Louis and Pittsburgh gained in population between 1990 and 2000, although most population growth occurred in rural areas, according to the Census Bureau. Figures also show that most urbanites are in creative professions without children, immigrants and retired Americans; and as more Americans age or choose to live without children, 75% of U.S. homes will be childless by 2020. These demographic changes have been attributed to the increase in revitalization projects in American cities, and many old factories and machine shops are being converted into housing units as a result. (www.worth.com)
Worth (11/04) Vol. 13, No. 11, P. 36; Rosan, Richard M.
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Small-Business Survival Guide
Though small businesses often do not have enough time to devote to technology, there are several solutions on the market than can help them save money, boost efficiency and productivity, manage their finances and improve communications. Most of the applications available to small businesses are installed on desktop computers, but they are increasingly being given access to Web-based solutions like QuickBooks Online and Salesforce.com. While small businesses can save on upfront acquisition costs by paying the monthly fees charged by Web-based service providers, they should keep in mind that off-line access may be limited and moving data to a rival's site when switching providers can be difficult.
(www.pcmag.com)
PC Magazine (11/30/04) P. 141; Clyman, John
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E-mail Filter Programs Offer Help for Costly, Wasteful Spam
Postini, a California-based firm that offers anti-spam solutions, says companies lost $23 billion in 2003 due to spam and computer viruses that resulted in productivity losses, business interruptions and damages. Small businesses with fewer than 100 users cannot purchase Postini's spam-filtering service directly, but resellers like Nashville-based Network Solutions Group (NSG) have made it available to those with fewer than 30 employees for just $150 per month. Though Postini's solution blocks most spam, NSG Project Management Director Mike Proctor says the filter sometimes misses junk mail and blocks messages from legitimate senders. Messages are sent to Postini and filtered, with approved messages moving on to the company's internal server. (nashville.bizjournals.com)
Nashville Business Journal (11/29/04) Nannie, Philip
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