Noodling February

Running to Keep Up

I was not the first and I won’t be the last to point this out (see last week), but there is pressure building on the new home front. Builders are now running behind, and it will be expensive and costly to catch up.

In Orlando, Long Lines for New Home Lots

Rent? Okay but where?

What drives people to rent versus owning and why do they chose a house instead of an apartment, it’s due to income, children, and family size. And by the way it’s also the amenities.

Survey Single Family Renters vs. Multifamily Renters

Now for the Esoteric

In RCLCO’s latest Advisory, the subject of form-based codes is discussed, I have followed this alternative to Euclidian Zoning, or the type of zoning 90%+ of cities use (keep like uses together and don’t allow too much mixing). Form codes use a different relationship basis and can be down right confusing and costly – the administrator has to be a genius to figure it out, but they have their place, sometimes.

For Article:

Market Pitfall of Form-Based or Smart Codes

TED

And here are five TED features (videos and talks) that discuss housing and design, take a look, but I warn you there is silliness going on (masquerading as serious thought).

GO HERE

The First

James Howard Kunstler trashes suburbia in 2004, it’s like, you know, like a, diatribe, that goes and on and on, like you know, whining all the way. The man has proven that he’s just mad at everything. Nice gig if you can get it – and great speaking fees.

The Second

William McDonough in 2005, rambles on and on about design and the intentions of things designed. But there you are.

The Third

Cameron Sinclair in 2006, socially responsible architecture is discussed. It is a broad reach across many horizons and frontiers of design, very little whining. Very cool. It is a very big and complicated world out there.

The Fourth

Majora Carter in 2006, how get it done with a limited budget. New York is the focus on how to deal with cities and get back the city bits that can help people. Good speaker – no whining.

The Fifth

Thomas Heatherwick in 2011, on bio-inspired design and soulfulness of design. Cool architecture unlike the usual stuff we see. The bridge is uber-cool.

Stay Tuned . . . . . . . .

Noodling Housing

Are we up? Are we down? Are housing values increasing? Can you be optimistic about housing or do you want to pull the covers over your head? I pulled these out of my cache of stories from the last few weeks. Only a paranoid schizophrenic bi-polar manic-depressive economist would understand what’s going on.

Optimists Abound:

The good folks at RCLCO are almost always optimistic, that’s what they are paid to be. They do have a national eye on what’s happening in many layers of the building economy. So to start out this week, check out their current report by Charlie Hewlett (GO HERE). 

At RCLCO, we remain confident that the U.S. economy and real estate markets are on a path towards a sustained recovery. And while there are certainly risk factors, the likelihood of the economy slipping back into recession is low in our view. We expect to see slow to moderate growth in the U.S. for the balance of this year and through 2014, with annual GDP growth in the 2% to 3% range.   Charlie Hewlett

Price Increases Gaining Momentum:

In the category of wishful thinking, Natalie Dolce posted this article on GlobeSt.com citing that RE/MAX believes the housing recovery is real. There are sellers markets in many places (I made this call a year ago) due to lack of quality properties and the inevitable problem of selling your home – seller’s market with problems selling a house? Much of this is due to a seller who is still underwater not wanting to take a loss – the prices have not climbed high enough yet to get out. There are some good charts here for the real nerds out there. (GO HERE)  

CNBC Believes Otherwise:

While the above may make you happy, leave it to CNBC to throw water on the old campfire. Doom and gloom.

Sales of newly built homes fell hard in June, despite newfound optimism in the housing recovery, especially among the home builders themselves. Signed contracts to buy new homes fell 8.4 percent from the previous month, according to the U.S. Commerce Department, although they are still up 15 percent from a year ago. Sales levels are now at their lowest since January.    Diana Click

So you can have your cake and eat it too. (GO HERE) 

On the Contrary:

But the folks at Calculated Risk take issue with this article by Bill McBride who says that the CNBC folks are just wrong, and he lays out his case here (GO HERE). 

The bottom line, “Is the glass half empty, or is it half full. Stick your hand in and noodle it out.

Stay Tuned . . . .

The Current State or District of Housng

It is no surprise, at least to those paying attention, that the one area that doesn’t seem to have (if ever) a housing crises is the Washington D.C. area. The growth of government requires bodies, bodies require housing and there you have it. Inventories are shrinking and prices are rising. In an article in Builder by Jim Caulfield titled Nation’s Capital Continues to Lead Housing’s Recovery he goes into some detail about the numbers and the comparisons to the past. I’m reminded of the old line from Casablanca, “I’m shocked, shocked, there’s gambling going on here!” You think? The massive growth in government, at all levels, is driving this non-surprising phenomenon. It’s too bad that those agencies couldn't shift to Florida or Las Vegas or the Central Valley of California. It’s summed up with this:

Perhaps the best news for this market is its current inventory of available for-sale homes. There were 10,510 active listings in May, the lowest number for that month since 2005. “As interest rates remain low and demand rises, the low supply will continue to put upward pressure on prices,” the report states. “This price growth could entice hesitant sellers to enter the market.” However, the report also cautions that the listings might also indicate that many people, worried about the economy’s future, are still comfortable remaining in their existing homes.

You wonder if the legs were kicked out from under this anomaly whether it could stand. But that is an argument for another day and topic. Smile if you are a Washington builder.

In the never ending discussion to make the bottom call, the Wall Street Journal posted an interesting note from a few experts and participants in the current housing market. S. Mitra Kalita posted the article (GO HERE). While most begged the question to some degree, they were all optimistic, the end will come soon – say 2015. That means this bear market will have lumbered across the housing wasteland for eight – yes eight - years, 2008-2015 (inclusive). This is longer than the 1930+ Depression period. Sure housing didn’t really turnaround until the 1947 plus era, but then again there was a war to deal with and the pent-up demand of almost eighteen years.

A friend of mine, Gregg Logan with Robert Charles Lesser & Co. (RCLCO), sent this company missive out a few weeks ago, posing the questions as to whether the housing market still wants the suburbs (GO HERE). It has very good graphics and interesting charts, take a look. The trend is to the suburbs as it has been for fifty years, but as said in the current young parlance of “Friends with Benefits” – it’s now “Suburbs with Benefits.” 

And taking advantage of this “suburbs first” concept is Waypoint Homes located in Oakland. Waypoint buys foreclosed homes, fixes them up, and then rents them. It makes many adaptable agreements with its tenants, but what it really does is protect these neighborhoods from blight due to abandonment and lack of care by the banks. They rent over 1,500 homes and hope to grow this by ten times in the next few years. It has been in the local news this past week with its $20 million partnership with Enterprise Community Partners to help expand its reach into marginal hosing markets. Doug Sovern is his article on KCBS quotes Colin Wiel, Waypoint’s founder:

“Basically what we do is single-family rental. So we’re buying homes, renovating them and renting them out, which is our core business model, but to do it in certain harder hit neighborhoods in Oakland than where we’re currently operating today.”

This is an exciting company that saw an opportunity and built an aggressive business model that provides housing, protects these valuable assets in the market, and also gives hope and home to people who often desperately need it. This is not a “Government” program, it is an honest to God for-profit venture, and they are showing everyone how it can be done. I wish them continued success.

Stay Tuned . . . . .