GRANBY — What began in the spring with a “Building Brigade” at 48 Chicopee St., Granby, to erect a new home for wounded veteran Sgt. Joshua Bouchard, continued on June 9, when the Home Builders Association of Western Massachusetts sponsored a Volunteer Day. Those who gathered on June 9 landscaped the property by planting trees, bushes and other assorted shrubberies, laying down grass and mounting the flagpole. The photo on the left was taken on June 6 prior to the Volunteer Day. The overall build is being made possible by Homes for Our Troops, a non-profit organization. Read Full Article >>
Massachusetts tornadoes, 1 year later: Impact still seen in landscape, lives Massachusetts tornadoes, 1 year later: Impact still seen in landscape, lives 7:30 AM The impact of sudden, traumatic events, such as tornadoes, can linger for both victims and the broader population, according to Dr. Barry D. Sarvet, chief of child psychiatry at Baystate Medical Center. Read Full Story >>>
NEW YORK (Reuters) – Pending sales of existing U.S. homes dropped far more than expected in April to touch a seven-month low, a trade group said on Friday, dealing a blow to hopes of a recovery in the housing market.
U.S. consumer sentiment improved in May as job gains offset high gasoline prices, while inflation expectations diminished, a survey released on Friday showed.
MARC PADO, U.S. MARKET STRATEGIST, CANTOR FITZGERALD & CO. IN SAN FRANCISCO
“The bigger picture is that housing isn’t really at the heart of the economic recovery in the first place so to see a down number like this while disappointing is probably not critical to the bigger picture in the economy.”
PIERRE ELLIS, SENIOR ECONOMIST, DECISION ECONOMICS, NEW YORK
“The pending home sales figure is very negative when taken at face value, but it’s not clear that this is a valid reading. Compared to government releases, it’s a small survey and still a bit experimental. Taken at face value, it’s an indication that people have become unwilling to buy houses. Last month pending sales were relatively strong, but the actual existing home closings that occurred a month later were flat so a lot of contracts apparently were not financed. This month it looks like the willingness to buy at all seems to have evaporated.
“The sentiment numbers were good. The inflation expectations were also a good result. The number from late in May declined from the early month reading for both the near-term and longer-term inflation expectations.
“The five- to 10-year expectations are of great importance to the Fed because they amount to a vote of confidence in the Fed’s ability to control inflation. We’re finding out that the short-term inflation developments do impact short-term inflation expectations, but don’t seem to be impacting longer-term inflation expectations.”
JACOB OUBINA, SENIOR U.S. ECONOMIST, RBC CAPITAL MARKETS, NEW YORK
“Pending home sales saw a sizable increase earlier this year as people were front running the increase in PMI insurance. Now we are seeing some payback from that. This is a testament to the spring selling season and what we have at hand is pretty horrendous.”
“This paints a picture for existing home sales to fall back below the 5 million mark as pending home sales lead existing home sales by one to two months. There was absolutely nothing positive in this report. Housing remains in a depression right now. People are talking about a double-dip, but we never even recovered.”
SEAN INCREMONA, ECONOMIST, 4CAST LTD, NEW YORK
“Very disappointing. We kind of had a base-case scenario that housing was going to improve in the second quarter but now it looks like things are not getting off the floor at all.
“This would offset any positive outlook for the economy. The Fed knows housing’s weak, the Fed’s still on the dovish side of the game. This is unlikely to affect policy, especially if this does turn out to be below the other data.”
RUDY NARVAS, SENIOR ECONOMIST, SOCIETE GENERALE, NEW YORK
“Pending home sales were pretty much a disaster, well below market expectations. They are saying this had to do with inclement weather, but overall the headline does not look good and this points to pretty dismal new homes sales and existing homes sales for May.”
GUS FAUCHER, DIRECTOR OF MACROECONOMICS, MOODY’S ANALYTICS, WEST CHESTER, PENNSYLVANIA
“There may some temporary factors like bad weather in the Southeast. Higher gasoline may be making potential home buyers a bit cautious. It is signaling further weakness in housing, but we do expect housing to turn around later this year. It just hasn’t happened yet.”
“Lending has loosened up a bit. It’s a not a good sign it’s not happening yet. To get a really strong rebound in the economy, you really need some pickup in housing.”
DAVID ADER, HEAD OF GOVERNMENT BOND STRATEGY AT CRT CAPITAL GROUP, STAMFORD, CONNECTICUT
“U.S. April pending home sales fell 11.6 percent from previous month, led by 17 percent drop in the South. Weather surely had an impact. March pending sales rose 3.5 percent, revised from a 5.1 percent gain. The (Treasury bond) market firms further.”
VIMOMBI NSHOM, ECONOMIST, IFR ECONOMICS, A UNIT OF THOMSON REUTERS:
“After March’s unexpected 5.1% increase (now a softer rise of 3.5%), pending home sales sank by 11.6% in April to an index score of 81.9, more confirmation that surprise monthly readings reflecting the housing data eventually level out to general trend of a flat market at a depressed level.
“While April’s decrease is nearly four times that of March’s gain, sales activity — measured by signed contracts — still reflects scores seen in the summer of 2010 just after the expiration of the tax credit, thus despite the magnitude of the decline, we’ve seen this weak level of activity before.
“Pending home sales had indicated a positive existing home sales performance in April — that didn’t materialize — so it would be safe to say that forthcoming sales data will post on the down side. Three of the four regions experienced lower activity, led by the South — the largest home market– with only Northeastern sales rising.” Read Story >>
May 23 (Bloomberg) — Jane King summarizes the top stories this morning on the Bloomberg Business Report. (Source: Bloomberg)
Great Homes Right Out of a Box
|High-end prefab homes feature modern amenities and eco-friendly materials.
Photo: Resolution: 4 Architecture
Prefab is often synonymous with cheap and shoddy when it comes to homebuilding.
Houses partly built in a factory are known for their low costs and fast construction. You just need some land to build on. The manufacturer simply delivers the home in pieces and sets it up.
But like many construction advancements, prefab homes have come a long way in recent years, making them attractive to even affluent buyers. Prefabrication techniques reduce waste, making it a more eco-friendly homebuilding method, and factory precision keeps modern clean edges and angles all in line.
Here are some cutting-edge prefab home options:
|Solar-power panels, bamboo floors and eco-friendly insulation come standard.
Photo: Blu Homes
This company builds its prefab modules in its 80,000-square-foot Massachusetts factory and “folds” them using proprietary methods to facilitate shipping in more compact forms. The modules are “unfolded” on-site, allowing for up to 12-foot ceilings and more than 20-foot room spans. The homes can also be “folded up” and moved if necessary.
A Blu prefab will arrive on a flatbed, 90% complete, in as little as five to seven months after your initial purchase is made. Blu has six basic designs that can all be modified for size and tweaked with several additions and options. The three-bedroom single-story “Element” model starts at $168,000 complete from the factory.
The base price includes standard fixtures, stainless steel Energy Star appliances and fittings, delivery and setting on your foundation and finishing by Blu Homes’ crew. The homes unfold with full kitchens, bathrooms and finished floors included. Cabinets, sinks, toilets and all sorts of fittings and fixtures are already in place. For this reason it takes only a week or two on-site to finish the home.
Marmol Radziner Prefab
|Marmol Radziner homes have preinsalled tiles, fixtures and cabinets.
Photo: Jim Simmons
Marmol Radziner Prefab is a Los Angeles-based firm that builds modular prefabs and offers pre-designed models starting at $200/per square foot for its Locomo Series, which can be built from 800 to 2,200 square feet (not including delivery or the cost of foundation). Pictured here is the company’s Hollywood Hybrid home, located in the Hollywood Hills above Runyon Canyon. It combines prefab and traditional site-built construction that meets the needs of this challenging, sharply down-sloping site.
Marmol Radziner Prefab homes are delivered in nearly finished condition with most of the flooring, tiling, countertops, cabinets, windows, appliances and fixtures already installed. It owns its factory and is a licensed general contractor. Once delivered and installed, the modules typically require another two to three months to be “buttoned up” in preparation for move in.
Resolution: 4 Architecture
|The interior of this prefab home is very contemporary.
Photo: Resolution: 4 Architecture
Resolution: 4 Architecture (RES4) designs its prefabs based on its Modern Modular concept – a series of modular typologies that can be arranged into nearly endless permutations. The concept allows the company to design quickly, make very accurate cost estimates and build prefab homes that are tailored to every design requirement, site condition, budget and local code restriction.
About 80% of a typical RES4 prefab home is built in a factory using a combination of modular, panelized and hybrid delivery methods, while leveraging the efficiency of factory prefabrication. Joseph Tanney, a Principal at RES4, says the method allows them to offer the “highest level of design and quality at the lowest cost.”
While construction costs vary across the country, RES4 recommends budgeting around $225 – $275 per square foot for a typical RES4 prefab complete with basic finishes, plus a 15% fee for architectural services. Complete finishes include Anderson windows, cedar siding, EPDM rubber roofing membrane, hydro-air heating/AC system, bamboo flooring, high-end kitchen cabinets & vanities, Ceaserstone and Corian counters, Kohler plumbing fixtures, Zuma tubs, Lutron dimmers and Lightolier light fixtures.
With a traditional, but thoroughly modern approach to building and materials, this Hawaii-based company produces the only certified all-bamboo living structures in the world. The company is committed to using bamboo because it is a renewable, ecologically friendly and extremely versatile resource, using one of the fastest growing plants in the world. The company’s panelized home packages can be designed, built and delivered in as fast as three months, but usually they will arrive about six months after placing your order.
|Features include exposed bamboo rafters and vaulted ceilings.
Photo: Bamboo Living
The homes can be shipped anywhere in the world, but to date, most sales have been in Hawaii, the Caribbean and Central America. Bamboo Living recently introduced a new “cavity wall” system, which allows the homes to be fully insulated, so now they can be built in any climate.
The David Sands Signature collection is designed by Bamboo Living’s senior architect and co-founder with artisan features, including exposed bamboo rafters, high vaulted ceilings and a wrap-around covered porch. There are six models that start at a base price of $80 /square foot for the kit. The base price includes timber bamboo structure and walls, sheathed roof panels, painted interior with bamboo trim, split bamboo exterior siding or painted/stucco-ready exterior walls, hand-crafted bamboo bolt covers and Feng Shui color themes. However, this doesn’t include construction and finishing costs.
NEW HOME SALES in February 2011 were at an annualized rate of $250,000, a 40-year low; sales of existing homes, despite very affordable prices, were 30% off their peak; and home prices fell for the sixth consecutive month in January.
Anthony Sanders, director of Real Estate Entrepreneurship at George Mason University, speculates the tougher credit standards may have stripped as much as 30% of the buyers — or more — off the market, compared with normal times.
And it’s about to get harder for buyers. Federal regulators proposed rules last week that are designed to discourage risky lending but that will also likely further restrict lending.
Banks would be required to keep 5% of some loans, specifically those with less than 20% down payments, on their books rather than selling them all off as securities. As a result, banks make be unlikely to issue loans where less than 20% is put down. So much for first-time buyers.
“We think the new rules are appalling,” said the NAHB’s Howard. “Only the wealthy will be able to buy homes at low interest cost.”
It could also further erode consumer demand for homes.
“It’s disturbing,” said Lennox Scott, head of John LA. Scott Real estate in the Pacific Northwest. “We’re just starting to feel healthier in inventory levels and prices and this is a potential headwind.”
The immediate impact, should the new regulations get adopted, should be minor, according to Steve O’Connor, spokesman for the Mortgage Bankers Association. That’s because Fannie, Freddie and FHA loans are all exempt from the requirements and they represent more than 90% of the market right now.
The government, however, wants to reduce the presence of all three agencies in favor of private lenders, and banking experts fears the long-term impact of abandoning the field to mostly private companies.
“For the first time in 100 years,” said Howard, “the government is discouraging you. It’s saying ‘We intend to make it more difficult for you and your kids to buy homes.'”
Existing home sales plunged nearly 10 percent in February to their lowest level in nine years. It was the largest drop since July. Forty percent of those sales were on distressed properties. And new home sales are on track to come in at just 250,000 this year, the fewest since the Kennedy administration, when there were 120 million fewer people in the United States.
“What is discouraging in many markets is that it appears as if some of the local builders are creating the volume,” says Wayne Yamano, vice president with John Burns Real Estate Consulting.
Across the country, real estate agents are reporting a rise in traffic at open houses. But they say buyers are reluctant because of the shellshock they suffered after the free-money machine blew up in everyone’s face. The foreclosure epidemic. The plague of employment insecurity. The fear that the U.S. is on a downward slide. They’re all playing into buyer commitment phobia, brokers say.
There’s also confusion over the conflicting signals. Prices are low, but unemployment is high. Mortgage rates are attractive, but lending standards are strict. Renting is newly chic. “Everybody is now self-loathing about how we’re greedy Americans and we shouldn’t want to own homes,” says Jonathan Miller, CEO of real estate consulting firm Miller Samuel.
The U.S. will certainly have a spring home buying season this year. But even if sales rise as usual, they won’t pull the zombie housing market out of its stupor. Nationwide, forecasters expect house prices to drop at least 5 percent more this year. And no one in housing land is murmuring about anything like price stabilization until 2012. At least. “We don’t expect a dramatic rebound,” says Paul Ashworth, managing partner at Capital Economics. “We expect stagnation for several more years.”
The housing problems certainly aren’t easing. Foreclosures are expected to peak this year. A third of homeowners owe more than their homes are worth. Normally the number of people with negative equity is 5 percent. And strategic defaults, where people simply walk away, are rising.
The buying that is happening isn’t coming from first-time homebuyers. A recent study by Capital Economics found that 60 percent of sales are to foreigners and investors, most of them paying cash. In fact, in international real estate circles, the U.S. is viewed as the “new emerging market,” says Thomas M. Shapiro, president of global real estate investment firm GTIS Partners.