Home Sellers Sweeten Deals
To attract buyers, 75% of builders are now offering some kind of incentive, up from 50% last year, according to NAHB. “These builder-developers understand the solution to the slowdown to the market is to quickly liquidate their inventory,” says Ron Peltier, CEO of HomeServices of America. Builders prefer free upgrades over cutting prices, which can hurt resale values for their customers who bought in the same communities, and they are offering everything from free swimming pools to granite kitchen counters to vacations. Promotions are the highest they have been in seven years. In Las Vegas, builders are offering commissions to buyers’ agents far above the typical 3%. And home owners are finding that they have to follow suit, offering commissions of 4% and even 5%. A couple in Woodbridge, Va. is trying to move their home, which has been listed since March for $449,000, by sprucing up the interior and landscaping, shaving $10,000 off the sales price and parking a 2006 Corolla in the driveway that is included in the deal. (www.usatoday.com)
USA Today (7/28/06); Noelle Knox
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Building Industry Cutting Workers
Still finishing residences ordered last year, home builders in Southwest Florida are bracing themselves for a cooling marketplace by trimming their workforces through attrition and, in some cases, actual layoffs. “I think probably what you are seeing is a little retrenchment,” said Lawrence Anderson, executive vice president of the Home Builders Association of Sarasota County. WCI Communities, a major builder active in Sarasota and Manatee counties, has confirmed that it is laying off an unspecified number of workers “to be more consistent with the current business environment.” A company spokesperson reports that new orders in the first part of the year have been much lower than those experienced in previous years. Lee Wetherington, whose company builds homes priced at $500,000 and up in Sarasota County, says that he is resorting to a hiring freeze. “We have 12 positions that we are not going to fill, and probably by the end of the year we will lose another six through attrition, and we are just not hiring.” “The market is definitely slowing down,” said NAHB economist Michael Carliner. “I think the outlook is for declining employment by sometime next year, perhaps before then.” (www.heraldtribune.com)
Sarasota Herald-Tribune (7/25/06); Michael Pollick
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How U.S. Homes Are Hurt by Rising Energy Prices
Analyzing Bloomberg data going back to 2004, Chicago columnist John Wasik has discovered an inverse link between rising gas prices and single-family home sales. Home sales perked up slightly during the first two months of this year when gas prices dropped slightly and then housing declined through April, correlating with another jump in fuel costs. “Those who are furthest from their jobs are most vulnerable to energy-cost run-ups,” he writes. “As home prices rose in the frothiest areas, home buyers mainly have done two things to augment housing affordability: They financed with risky, interest-only loans to ensure the lowest-possible payments and moved farther out from employment centers, where prices are lower.” If gasoline prices remain at or above $3 a gallon, Wasik predicts, properties in outlying counties in Los Angeles, San Diego, Silicon Valley or Orange County, Calif., will become less attractive. Daily commutes from southern New Jersey into New York will also be more discouraging. Buyer reluctance will also emerge in far-flung collar counties of Atlanta; Orlando, Tampa and Miami-Fort Lauderdale in Florida; San Francisco and Denver. (www.bloomberg.com)
Bloomberg (7/24/06); John F. Wasik
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Naked Ambition
In-town enthusiasts, inspired by the carefree hedonism of beach showering — also known as being naked outside — have discovered that there is more to an outdoor shower than keeping grit off the floors. Designer and builder Ethan Fierro, author of a new book, “The Outdoor Shower,” says that showers outside the house “get us in touch with a deeper and more primordial sense of ourselves and life. Bathing outside — whether in the open or in an enclosed space — allows us to feel sensual, vibrant and alive.” Kai Tong, director of the architecture department of Hopkins & Porter in Potomac, Md., has designed outdoor showers for several clients and says that the primary challenge is finding a spot convenient to the main house that also offers seclusion and garden views. But in a dense urban or suburban setting, bathers must consider more than their own privacy. The view and sounds of the shower that the neighbors will be sharing require finesse as well. On a purely practical note, the location needs good drainage. Plumbing and local codes will help determine whether the water drains into the indoor plumbing system or an outdoor storm drain, and some local codes prohibit having a shower emptying into a gutter. (www.washingtonpost.com)
Washington Post (7/27/06); Eliza McGraw
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A Growing Force in Home Buying; Singles Seek Amenities as They Select Housing
After renting for three years, 25-year-old Deb Fox, of Chicago, decided to become a home owner and her criteria were: a condo that was in a new building, close to her job, within her budget and with lots of storage space. She did not need extra bedrooms, a parking space or a view of the lake. "Fox is typical of the single buyers who are flooding the new-home market,” said Gopal Ahluwalia, vice president of research at NAHB. “They know what they want,” he said. Fox’s want list is typical, he said, but singles with children also cite quality schools as a priority. In the last 10 years, the number of single home buyers has increased by 50%, said Ahluwalia, and unlike their parents, many young people are deciding to establish themselves as home owners before they marry. Despite the growing number of single buyers, not all developers take them seriously. “A lot of [developers’] salespeople treated me like I was 10,” reported Fox. “When my mother went with me, they talked to her instead of me, even though she told the salespeople I was buying, not her.” To these developers, Ahluwalia said, “It’s a new world. These buyers are professionals and they qualify for loans. They know what they’re doing.” (www.chicagotribune.com)
Chicago Tribune (7/28/06); Leslie Mann
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Despite a City’s Hopes, an Uneven Repopulation
Across New Orleans this summer, hundreds of former residents have returned with their children to jump-start the city’s recovery from last year’s Hurricane Katrina, despite great uncertainty about the future. But the renaissance is uneven from neighborhood to neighborhood, or even block to block, and the summer that was supposed to be a bellwether for recovery has led to only patches of hope, raising just as many doubts. Since the hurricane, the city has granted more than 28,000 building permits for residential and commercial construction projects worth more than an estimated $1.8 billion. More than 60% of the permits have been issued since March, in anticipation of a summer spent working on repairs. Yet it is hard to know how many people have returned to work on those projects, and it is clear that many have not despite the city’s estimate of a population of 225,000, about half its pre-Katrina size. People who have flood insurance or savings are in the best position to recover quickly, but many people who have the resources are still waiting, uncertain that the levees will hold in this year’s hurricane season or that schools will reopen. Some home owners are still anticipating the arrival of billions of dollars in federal aid, which is expected to begin flowing in late August or early September. (www.nytimes.com)
New York Times (7/30/06); Susan Saulny
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