New Tax Credits Provoke Curiosity
People in the real estate, energy efficiency and home improvement businesses say approval of an $8,000 tax credit for first-time home buyers and a $1,500 credit for making existing homes more energy-efficient is certainly welcome in a tough economy. Still, plenty of questions remain. “People are wondering how it works, or if it’s retroactive, but at least people are curious,” said Lynn Raymond, who has worked in Springfield, Ill. real estate since 1984 and has seen difficult markets come and go. “This one is tough, though I don’t know if it’s as tough as it was in the 1980s,” said Raymond, referring to double-digit interest rates early in that decade. Reaction has been similar to the $1,500 tax credit for energy efficiency improvements. “We’re starting to hear about it (from customers), but we’re still looking at it from the standpoint of what exactly is in it,” said Bill Mills, manager of energy efficiency programs for City Water, Light & Power in Springfield. Mills said he believes the federal incentives will only add to the already strong demand for energy efficiency programs. CWLP has rebate programs intended to encourage customer use of energy-efficient heat pumps, water heaters and refrigerators, as well as energy audit assistance and other assistance. “People are hurting. I think everybody is waiting to see if the stimulus is big enough. It’s pretty complicated on how it gets down to the household level,” said Mike Johnson, executive director of the Illinois Solar Association. (www.sj-r.com)
Springfield State Journal-Register (2/23/09); Tim Landis
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Banks Foreclose on Builders With Perfect Records
Dave Brown, one of the best-known home builders in Tempe, Ariz., had kept his head above water through the housing downturn, not missing a single interest payment on his loans. So he was confounded a few months back when one of his banks, spooked by the decline in his company’s revenue, suddenly demanded millions of dollars in additional collateral to continue carrying loans on his projects. He was unable to come up with the money, and in October, JPMorgan Chase foreclosed on his developments. Shortly thereafter, Brown Family Communities, 33 years in the business, decided to shut its doors. “They treated me like a deadbeat who missed his car payment,” said Brown. “They wanted their money now.” As defaults and delinquencies rise, home builders, once prized banking customers, have become pariahs. Even builders up to date on their interest payments or still managing to sell houses are getting trampled. “They’re not distinguishing the track records of one borrower against another,” said John Fioramonti, a real-estate consultant in Scottsdale, Ariz. “If you’re a builder, you’re a bad risk.” With the pullback accelerating, complaints among builders of hardball tactics and shoddy treatment by banks are mounting, as is a general sense of betrayal. “The behavior of the banks is unprecedented,” said Mick Pattinson, a home builder from Carlsbad, Calif. who has organized a national coalition of builders to draw attention to what they regard as unreasonable treatment. “Yes, there was overleveraging in the industry. But the aftermath doesn’t need to have been as brutal as it has been.” (www.seattletimes.com)
Seattle Times (2/14/09); John Collins Rudolf, New York Times
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Money to Fix Housing Is Coming
A wave of early stimulus money will soon be cleaning up and re-marketing abandoned and foreclosed homes in Albuquerque and elsewhere in New Mexico. About $19.6 million in federal money is available to buy up, rehabilitate and sell the homes to qualifying families. The money was allocated under a housing stimulus plan passed by Congress last summer. The city says it expects it can rehabilitate 42 homes and 20 rentals with the $7 million it expects to receive as its share of the funds. “A place that has previously been the site of crime can now elevate and improve the community,” said Mayor Martin Chavez. New Mexico Home Builders Association Executive Vice President Jim Folkman said that the rehabilitation program and new stimulus spending will be helpful. “Things are starting to move in the construction industry,” Folkman said. (www.abqjournal.com)
Albuquerque Journal (2/1/4/09); Sean Olson
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Housing in Alaska Stable Amid National Woes
Alaska’s real estate markets are stable, although they are cooling from the go-go years from 2004 to 2007, according to the head of the Alaska Housing Finance Corp. “We’re not seeing anything that concerns us,” Dan Fauske, CEO of the housing corporation, told the House Special Committee on Economic Development, Trade and Tourism in Juneau on Feb. 17. “New housing construction is slow but contractors and subcontractors are busy with remodeling,” Fauske said. The state is pumping several hundred million dollars into the economy for weatherization and home conservation measures, and that is also helping, he said. Alaska isn’t alone among states that are in better shape, Fauske said. There are many areas in the South and Midwest where conditions are better. The problems are concentrated in a few places, such as the Southwest, he said. Luckily, only a few Alaska banks dabbled in subprime home mortgages and AHFC has none in its portfolio. “We were under a great deal of pressure to get involved in the subprime market and people actually got angry with us,” he said. “Now they look at us and wonder how we saw something they didn’t see.” Despite Alaska’s strengths, the problems of the national economy are having their effects. Banks in Alaska have money to lend but they are tightening credit for home buyers and home builders. New lending guidelines discourage speculative building or building on land a developer doesn’t own. (www.juneauempire.com)
Alaska Journal of Commerce (2/23/09); Tim Bradner
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Despite Housing Woes, Annual Valley Home Builders Association Tour Draws a Crowd
The health of the national economy may be in question but neither money worries nor crummy weather Saturday kept people away from the Valley Home Builders Association’s 2009 Winter Wonderland of Homes. Jenni and Tim Olson, of Darboy, Wis., and their children were among hundreds who braved snow and slippery roads to flock to opening day of the tours of 52 homes. The Olsons have purchased land and plan to build in two years, they said, and are content to wait out the current crisis. “We’re hoping the market rebounds by the time we are ready,” Jenni Olson said. Christine Shaefer, VHBA executive vice president, is not surprised at the strong interest. Turnout is expected to reach 7,000 by the tour’s end March 1. “The Fox Valley has really not seen the intense housing crisis experienced by other parts of the country,” Shaefer said. “We’re not as overbuilt as other parts of the country, and home buying and building makes very good sense with interest rates as low as they are right now.” She said she is hopeful the tax credit for first-time home buyers will attract more people into the housing market, and allow more existing home owners to sell and “move up to their next homes.” While some local builders have gone under because they were “leveraged too far and speculated too much,” said Brad Uecker, his family-owned firm, RUCON Construction, has been more conservative. “Most of our business has been word of mouth, and we believe that helps.” The last two years have been “two of RUCON’s best years ever,” he said. “This year won’t be our best, with the economy the way it is, but people are still buying.” (www.postcrescent.com)
Appleton Fox Cities Post-Crescent (2/22/09); Kathy Walsh Nufer
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Sensors Help Keep the Elderly Safe, and at Home
Increasingly, many older people who live alone are not truly alone. They are being watched by a flurry of new technologies designed to enable them to live independently and avoid expensive trips to the emergency room or nursing homes. Bertha Branch, 78, discovered the power of a system called eNeighbor when she fell to the floor of her Philadelphia apartment late one night without her emergency alert pendant and could not phone for help. A wireless sensor under her bed detected that she had gotten up. Motion detectors in her bedroom and bathroom registered that she had not left the area in her usual pattern and relayed that information to a central monitoring system, prompting a call to her telephone to ask if she was alright. When she did not answer, that incited more calls — to a neighbor, to the building manger and finally to 911, which dispatched firefighters to break through her door. She had been on the floor less than an hour when they arrived. Technologies like eNeighhbor come with great promise of improved care at lower cost and the backing of large companies like Intel and General Electric. But the devices, which can be expensive, remain largely unproven and are not usually covered by the government or private insurance plans. (www.nytimes.com)
New York Times (2/13/09); John Leland
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