BuilderBytes' MetroIntelligence Economic Update for 4/29/13

Please click here to see the edition of BuilderBytes for 4/29/13 on the Web.

In this issue of the MetroIntelligence Economic Update, I covered the following indicators:

• Durable goods orders fall for second consecutive month
• Consumer sentiment eased in April due to concerns about jobs and finances
• First Quarter 2013 GDP rose by 2.5% in first estimate

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BuilderBytes' MetroIntelligence Economic Update for 4/24/13

Please click here to see the edition of BuilderBytes for 4/24/13 on the Web.

In this issue of the MetroIntelligence Economic Update, I covered the following indicator:

• New home sales in March rise by 1.5% to annual rate of 417,000
• Existing home sales dip slightly in March due to constraints on listed inventory
• FHFA House Price Index rises by 7.1% over the past year

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Want to make sure your company or event is included in the events calendar? Contact editor Evan Lancaster at elancaster@penpubinc.com.

BuilderBytes' MetroIntelligence Economic Update for 4/22/13

Please click here to see the edition of BuilderBytes for 4/22/13 on the Web.

In this issue of the MetroIntelligence Economic Update, I covered the following indicator:

• Empire State Manufacturing Survey improves slightly in April
• Mortgage applications rise by 4.8% in latest survey

Want to advertise in the newsletter and reach over 130,000 readers? Contact National Sales Manager Nick Cosan at nkosan@penpubinc.com.

Want to make sure your company or event is included in the events calendar? Contact editor Evan Lancaster at elancaster@penpubinc.com.

April column for Builder & Developer magazine now online

My column for the April issue of Builder & Developer magazine is now posted online.

For this issue, entitled "In Search of a Great Market Study," I reviewed the lessons I've learned working as a consultant as well as for a public home builder with projects in multiple markets and a private land developer with holdings throughout the western U.S. An excerpt:

With the positive news regarding the housing market continuing to pile up over the past year, we’re also starting to see a rebound in the demand for more traditional market studies for new or re-energized projects by builders, developers and investors. Yet because almost anyone can call themselves a new home market research consultant — requiring little more than business cards, a decent Web site and attending various networking events — like with any other product or service, the term ‘buyer beware’ is certainly relevant.

Following is a list of three questions I made sure to ask when working for a home builder and in the position to hire such firms: 

To read the entire column, click here.

To read the entire April 2013 issue in digital format, click here.

BuilderBytes' MetroIntelligence Economic Update for 4/19/13

Please click here to see the edition of BuilderBytes for 4/19/13 on the Web.

In this issue of the MetroIntelligence Economic Update, I covered the following indicators:

• Leading Economic Index dips in March as growth slows
• Initial unemployment claims rise by 4,000 in latest report
• Philadelphia Fed's Business Outlook Survey remains steady in April

Want to advertise in the newsletter and reach over 130,000 readers? Contact National Sales Manager Nick Cosan at nkosan@penpubinc.com.

Is the Housing Market Rebound Sustainable?

By almost any measure – and as noted regularly in BuilderBytes’ MetroIntelligence Economic Update -- the housing market is not only on the mend, but rebounding much faster than most economists and housing analysts predicted.    Not only did the median price for existing homes rise by nearly 10% nationally over the past year, but they continued rising during the seasonally slow winter months, and already show signs of gaining altitude as the spring buying season continues.

Meanwhile, a combination of reduced new home construction, fewer foreclosures, investors paying cash for homes to rent out and owners still sitting on under-water homes means inventory levels that have fallen to 12-year lows.  So is the current scenario just an economic blip, or have we finally launched onto a sustained rebound that will last?

This answer is that this rebound may have some legs.  For one, home prices nationally are still below their long-run average compared to incomes, and affordability has rarely been higher.  Home builders, who have long struggled to gain traction with skittish buyers and had to compete against discounted foreclosures, are now facing shortages of labor, credit and finished lots to fulfill the rising demand for new housing, pushing NAHB’s Housing Market Index (HMI) in April down by two points to 42 (anything above 50 indicates more builders view conditions as good).  Consequently, whereas housing starts in March rose by nearly 47% over the past year, building permits rose by a much smaller 17% as builders must now address the rough edges of the rebound.

One reason that demand now exceeds supply is that while household formations were in hibernation as people doubled up with roommates, families or simply postponed divorce, population growth continued unabated.  Today, there are potentially millions of renters and households living in shared quarters who are ready to become home buyers given that they pass muster with today’s tougher credit standards.

Another reason for the supply imbalance is that investors -- large and small, foreign and domestic -- have increasingly funneled cash into what is now viewed as a safe investment:  U.S. real estate.  Currently, nearly one-third of all home sales are due to cash buyers, and it was this fairly consistent level of activity over the past two years which put that long-awaited floor under prices (which had foundered as federal and state tax credit gimmicks wore off.)

That fear of catching the falling knife, which froze the housing market for several years, has been replaced by the boom-era fear of missing out on the upside.  For these investors – which include brand-name private equity firms such as Blackstone Group and Colony Capital as well as smaller outfits issuing their own private placements for debt – they’ve managed to ignite a rental property boom, which has in turn put pressure on owners of traditional apartments.  What remains to be seen is what happens to these rentals when prices are no longer rising and rents have stalled, yet fund investors are still demanding the returns they were promised.  In contrast, traditional ‘mom and pop’ landlords can simply pay off the mortgage and then rely on the additional cash flow when they retire.

If there is one unknown which may derail the strength of this recovery, it is interest rates:  what happens when rates return to 5% or 6%, or even the 8.38% average noted over the last 49 years?  It’s hard to over-estimate the power that historically low interest rates have on affordability levels:  the same buyer whose $1,000 monthly payment would allow them to purchase a $165,000 mortgage at 6.1% (the rate in late 2008) could purchase a $222,000 mortgage at 3.5%, thereby boosting their purchasing power by a third.  This provides today’s buyers with a classic dilemma:  pay more today than they did a year ago, or pay even more in the future when interest rates may be higher.

In addition, home equity lines of credit are almost certain to rise as soon as the Federal Reserve ends its current policy of near-zero interest rates.  If the minutes from the most recent Federal Open Market Committee (FOMC) meetings are to be believed, then “QEIII” (the third round of quantitative easing) could end before the end of this year, and that could send variable rates higher – albeit slowly.  But for that to happen, the economy will have likely proven that it’s definitely on the mend, and that’s the sort of problem the federal government –and the yawning deficit – would almost certainly like to face.

BuilderBytes' MetroIntelligence Economic Update for 4/17/13

Please click here to see the edition of BuilderBytes for 4/17/13 on the Web.

In this issue of the MetroIntelligence Economic Update, I covered the following indicator:

• March housing starts up by 7.0% from February and by 46.7% from March 2012
• March building permits dip by 3.9% from February but still 17.3% above March 2012
• Builder confidence dips by two points to 42
• CPI fell by 0.2% in March but still up by 1.5% over last 12 months
• Industrial production continued to rise in March

Want to advertise in the newsletter and reach over 130,000 readers? Contact National Sales Manager Nick Cosan at nkosan@penpubinc.com.

Want to make sure your company or event is included in the events calendar? Contact editor Evan Lancaster at elancaster@penpubinc.com.

BuilderBytes' MetroIntelligence Economic Update for 4/10/13

Please click here to see the edition of BuilderBytes for 4/15/13 on the Web.

In this issue of the MetroIntelligence Economic Update, I covered the following indicator:

• Consumer confidence dips to 9-month low in April
• Retail sales in March drop by the most in nine months
• Producer Price Index falls in March after two months of increases
• Business inventories rise less than expected in February

Want to advertise in the newsletter and reach over 130,000 readers? Contact National Sales Manager Nick Cosan at nkosan@penpubinc.com.

Want to make sure your company or event is included in the events calendar? Contact editor Evan Lancaster at elancaster@penpubinc.com.

BuilderBytes' MetroIntelligence Economic Update for 4/12/13

Please click here to see the edition of BuilderBytes for 4/12/13 on the Web.

In this issue of the MetroIntelligence Economic Update, I covered the following indicators:

• Initial unemployment claims fall by 42,000 in latest report
• Trade deficit falls in February as exports rise faster than imports
• Mortgage loan applications rise by 4.5% in latest survey
• Federal Reserve meeting notes show pressure to end QEIII by year end

Want to advertise in the newsletter and reach over 130,000 readers? Contact National Sales Manager Nick Cosan at nkosan@penpubinc.com.

BuilderBytes' MetroIntelligence Economic Update for 4/10/13

Please click here to see the edition of BuilderBytes for 4/10/13 on the Web.

In this issue of the MetroIntelligence Economic Update, I covered the following indicator:

• Wholesale trade up by 1.7% from January and by 3.7% from February

Want to advertise in the newsletter and reach over 130,000 readers? Contact National Sales Manager Nick Cosan at nkosan@penpubinc.com.

Want to make sure your company or event is included in the events calendar? Contact editor Evan Lancaster at elancaster@penpubinc.com.

BuilderBytes' MetroIntelligence Economic Update for 4/8/13

Please click here to see the edition of BuilderBytes for 4/8/13 on the Web.

In this issue of the MetroIntelligence Economic Update, I covered the following indicators:

• Job growth stalled in March as labor force shrunk by 0.2%
• U.S. trade deficit dipped from $44.5 to $43.0 billion in February
• Mortgage applications mixed in latest survey

Want to advertise in the newsletter and reach over 130,000 readers? Contact National Sales Manager Nick Cosan at nkosan@penpubinc.com.

Want to make sure your company or event is included in the events calendar? Contact editor Evan Lancaster at elancaster@penpubinc.com.

BuilderBytes' MetroIntelligence Economic Update for 4/5/13

Please click here to see the edition of BuilderBytes for 4/5/13 on the Web.

In this issue of the MetroIntelligence Economic Update, I covered the following indicators:

• Private sector jobs rose by 158,000 from February to March
• Planned job cuts in March fell by 11% but still 30% higher year-over-year
• Initial unemployment claims rise by 28,000 in latest report
• Service sector economy grew slower in March than February

Want to advertise in the newsletter and reach over 130,000 readers? Contact National Sales Manager Nick Cosan at nkosan@penpubinc.com.

Want to make sure your company or event is included in the events calendar? Contact editor Scott McCourtney at smccourtney@penpubinc.com.

BuilderBytes' MetroIntelligence Economic Update for 4/3/13

Please click here to see the edition of BuilderBytes for 4/3/13 on the Web.

In this issue of the MetroIntelligence Economic Update, I covered the following indicators:

• Construction spending in February up by 1.2% from January and by 7.8% from February 2012
• Manufacturing sector expanded in March for fourth straight month
• Durable goods orders and inventories in February rise to highest level since 1992

Want to advertise in the newsletter and reach over 130,000 readers? Contact National Sales Manager Nick Cosan at nkosan@penpubinc.com.

Want to make sure your company or event is included in the events calendar? Contact editor Evan Lancaster at elancaster@penpubinc.com.

BuilderBytes' MetroIntelligence Economic Update for 4/1/13

Please click here to see the edition of BuilderBytes for 4/1/13 on the Web.

In this issue of the MetroIntelligence Economic Update, I covered the following indicators:

• Personal income, consumer spending and savings rates all rose in February
• Consumer confidence continued to improve in March
• Chicago PMI veers downward in March
• Mortgage applications rise by 7.7%, due both to refinances and purchase loans

Want to advertise in the newsletter and reach over 130,000 readers? Contact National Sales Manager Nick Cosan at nkosan@penpubinc.com.

Want to make sure your company or event is included in the events calendar? Contact editor Evan Lancaster at elancaster@penpubinc.com.