Entries Tagged 'New Construction' ↓

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Weyerhaeuser, the lumber and forest company, recorded a loss of 148 million in the first quarter this year. The loss was due mainly to the weak United States new construction market. When stick built homes are not being built it makes it very hard on the supply companies.

Of course if you are planning a remodeling job or replacing a deck, this is a great time to buy lumber as prices are dropping. Excuse me while I head over to Home Depot to get my decking lumber…

“Business conditions are extremely challenging,” President and Chief Executive Daniel S. Fulton said, noting that single-family housing starts are below the lows of 1979-82. “Since many of our products are dependent upon single-family housing starts, we’ve experienced record-low product prices when adjusted for inflation.” via WSJ.com

Centex cut it’s losses today on 8,500 properties that were in various stages of development. The joint venture that purchased them paid roughly 455 million dollars for the properties that were on the books for 528 million dollars.

To me this is a smart move by Centex. First they got some cash for the properties. But more importantly they got them out of their hair. We all have those things that nag at us and need to be taken care of. They typically suck the energy from things we need to be doing to improve for the future.

Centex by taking a clean loss now will be able to refocus their attention on their business of building the right new homes for the market. Sure odds are the joint venture will make some extra money on the deal, but Centex will be able to move the company in the right direction, and that is the most important part of the deal.

Dallas-based Centex said it sold 8,500 developed, partly developed and undeveloped lots in 11 states to a joint venture led by RSF Partners Inc and includes funds managed Farallon Capital Management LLC and Greenfield Partners LLC. Most of the properties are in Nevada and California.
Centex said its proceeds include the $161 million purchase price and an anticipated $294 million tax refund. via Reuters

If you are a fan of big buildings expect to be thrilled because Prince al-Wahid bin Talal of Saudi Arabia is planning on building a tower that will stand a mile high into the sky.

No, that is not a misprint.

If you do not think that the 100 dollar barrels of oil are creating a windfall for the Saudis then this will change your mind. In the Red Sea port town of Jeddah they are planning on building the largest building in the world, doubling size of the Dubai Tower that is nearing construction and tripling the size of the CN Tower in Toronto.

On a clear day, the view from the top will take in the Middle East, North Africa and the Indian Ocean - providing you’ve a head for heights.
Plans for a mile-high tower in the Saudi Arabian desert have been unveiled by the billionaire owner of London’s Savoy Hotel.
At 5,250ft, the £5billion project, masterminded by two British engineering consultancies, will be twice as high as its nearest rivals, skyscrapers under construction in Dubai and Kuwait, and almost seven times as high as the Canary Wharf tower in London’s Docklands.  via the Daily Mail.

Alphonso Jackson, Secretary of Housing and Urban Development, is expected to resign his post as head of the Cabinet Department. The timing of this resignation is not a great indicator of how the White House and Congress are dealing with housing issues.

There have been reports that one of the stumbling blocks is the relationship between Jackson and the Democrats in the Congress. While this can not be a surprise, the Democrats want huge spending programs enacted to counter the housing issues while the administration is fighting for a market solution, it will put back any agreement between the two.

One of the problems facing the housing industry right now is they do no know how Washington is going to react to the housing and credit problems out there. Companies do not want to make the hard decisions if there is a bailout from Washington coming.

Mr. Jackson, a former top housing official in Texas, Washington, D.C., and Missouri, has consistently denied any improper behavior while leading HUD. Still, his poor relationship with Democrats has hurt the White House’s efforts to broker deals in response to the housing crisis. For example, Democrats have criticized the way he handled public housing after Hurricane Katrina, an issue that has dogged him ever since.

HUD, usually out of the spotlight among the federal agencies, has been at the heart of the administration’s attempts to ease problems for homeowners. Mr. Jackson has been the junior partner to Treasury Secretary Henry Paulson in that effort. At events, the HUD secretary generally stressed the human cost of the nation’s housing-induced financial woes, while Mr. Paulson handled the technical details. via WSJ.com.

Hat tip to the Industry Report.

IKEA, the name that savvy 20 somethings think of when buying inexpensive furniture for their first home, is getting into the English home building business. They are focusing on their core strength, low cost, high quality construction that is modular.

The apartments and townhouses range from £99,500 to £149,500 if purchased outright or less if purchased under a shared-ownership agreement.
IKEA has adopted guidelines to ensure the homes reach the targeted consumer. Potential buyers are required to put down a 5 percent deposit, and total mortgage costs cannot exceed 40 percent of the buyer’s annual net income.
To avoid speculators flipping the homes and driving up prices, qualified buyers are randomly chosen in a lottery, and Live Smart @ Home will handle all resales. via  Portfolio.com.

Now it looks like a good idea as long as the home you have bought does not have to be picked up at the store and put together by oneself. That is what a forty something now thinks of IKEA.

I came across this using twitter as someone posted the story. I clicked the link and now can not remember who brought it to my attention. If it was you, send me an email to tom@therealestatebloggers.com and I will give you a link.

Very cool, I use Twirl for my Twittering and it has a search function. So after 10 minutes of useless scrolling I clicked the filter button and determined that Jeff Turner of Real Estate Shows made the find. Thanks Jeff!

D.R. Horton is having a hard time moving their inventory. They have 399 homes that have been on the market for over 12 months and they are desperate to move them. The homes are being offered at up to 50 percent off if you can close by March 31^st, the end of their fiscal quarter.

I am not sure if the neighbors will be happy that the empty homes will be filled or whether they will be pissed that the homes are selling for 50 percent off what they paid.

My guess will be both.

Unlike other publics including K. Hovnanian and Standard Pacific which, over the last few months, launched nationwide initiatives to spur sales in all their active markets, Horton is focused on Southern California, where the company’s new orders plummeted by 72% last quarter.

Promoting “unheard of savings” of up to 50%, the company is hoping dramatic pricing on Saturday, Feb. 16, and again on Saturday, Feb. 23, will move the 399 homes the company has carried in standing inventory for more than 12 months. Under the terms of the sale, buyers must close before the company’s quarter ends on March 31.

Townhomes, condominiums, and single-family homes are being offered in select neighborhoods in Kern, Ventura, Riverside, San Bernardino, and Imperial Counties. Details on the 25 specific neighborhoods included can be found at http://DRHortonUnAuction.com. via Big Builder Online

Found via Business Week Hot Property

The National Association of Home Builders has announced that they are discontinuing their contributions to Congressional campaigns. They are doing this to protest the failure of Congress to address their concerns.

So let me get this straight. The money grubbing Congressman are going to be all a twitter over the collective loss of 1.4 million dollars a year and decide they must do something for the homebuilders? Yeah, right.

Odds are the Congressman are going to do something horrid to them so that this precedent is never tried again. They would have been much better off providing double the money and a collection of ladies of the night and Cuban cigars than this ill fated maneuver.

In an unusual move for a Washington lobbying group, the National Association of Home Builders’ political action committee said in a statement it has ceased contributions to candidates until further notice.

“This extraordinary action was taken because … over the past six months Congress and the administration have not adequately addressed the underlying economic issues that would help to stabilize the housing sector and keep the economy moving forward,” said NAHB President Brian Catalde. via Reuters.

The Toll Brothers Inc. is in a public relations predicament. They have sold a home to the daughter of founder Bruce Toll. Now she has told the company that she is not planning on purchasing the  2 and a half million dollar home.

Yikes! It is bad enough that the company can not close many of the homes they are building for others, but you have to wonder how they could let a public relations disaster like this happen.

Heck, Bruce, ante up and buy the home for her and make this go away. Even if you hold the not on the home for a year and then sell it it will look much better than your own daughter telling you the home is not worth the investment in this market.

The daughter of Vice Chairman and co-founder Bruce Toll informed the company last month that she and her husband “did not intend to make settlement” on a $2.47 million home they had previously agreed to purchase, the company said in a regulatory filing.

Toll Brothers went on to say that it intends to pursue its rights under the agreement of sale with Toll’s daughter, Wendy Topkis.

A company spokesman was not immediately available for comment on the filing, which was made public on Friday. via Reuters.

A grant of 3 million dollars by Baltimore developer John Colvin and his wife will be used for a new green real estate program at the University of Maryland.

I am not a big fan of environmentalism for the sake of environmentalism. What I am a fan of though is taking the best of technology and applying it to reduce the energy usage by innovation without sacrificing the quality of life for typical Americans. Those that fly around in their private jets, Al Gore, to tell us to stop global warming really drive me batty.

But for a developer to donate money for green innovation I think is great. As long as the pointy headed academics do not take over the program and politicize it, I think the potential to add to innovation and energy saving features in homes makes a great deal of sense.

It is a win win situation, we use less energy, we save the homeowner money, and the technology that is developed can be shared across the world. That is the right way to be green in my book.

The donation from John Colvin and his wife, Karen, will be used to create the Colvin Institute of Real Estate Development in Maryland’s School of Architecture, Planning and Preservation. The donation will be used to create a new track in the program focusing on green design, sustainable development and energy financing.

Colvin, a University of Maryland graduate, is a principal at Baltimore-based real estate development Questar. The new institute will be the academic home for the university’s master’s degree in real estate development track.  via Washington Business Journal

In an interesting twist, as the United States housing market is hitting the dip after a huge run up, the Mexican real estate market is taking off. The combination of new lending rules, a history of self financed homes, and a shortage of 6 million dwellings in the country is providing the spark for the emergence of a new mortgage market.

This is music to the ears of pension funds such as CALPERS who are investing nearly 300 million in the mortgage market south of the border. A young mortgage market combined with an expanding housing market will provide room to grow and invest in while the United States gets it’s legs underneath itself and with lots of investment dollars looking for a home, Mexico is in the perfect storm for rapid growth and investment.

The trend could even slow emigration from Mexico, by generating millions in jobs and personal savings as a fresh supply of loans gives many their first chance to own a house.
President Felipe Calderon has set a national goal of a million new mortgages a year by 2010. On Monday, he unveils a set of measures to ensure growth continues, with plans to boost Mexico’s small resale market and combat the urban sprawl that has begun to carpet valleys with hundreds of thousands of matchbox rowhomes.
Behind the boom are six years of economic growth and stability, and a national shortage of 6 million dwellings. While interest rates are falling, just 6 percent of Mexico’s 25.7 million homes are financed with mortgages — compared to about 67 percent in the U.S. Most Mexicans still inherit their homes, buy them with cash, or build them by hand. via The Associated Press