New Loop On Housing Rollercoaster

While new home sales may have fallen in October, the National Association of Realtors reported today that existing home sales were up over 10% during the same period! An exisiting federal tax credit, low prices and mortgage rates are credited. So market conditions remain favorable for resales.

 

New-Home Starts Drop In October But Expected To Improve

Bad weather and uncertainty over extension of a homebuyer tax credit are being blamed for a 10.6% drop in new home starts in October, according to the Commerce Department. Starts of single family homes dropped 6.8%. However, earlier this month Congress extended and expanded the homebuyer tax credit program. The program now runs through April 2010 so new home construction should improve.

 

Home Buyer Credit Extended & Expanded

A tax credit is available for first-time home buyers and some existing homeowners who have a binding contract on a house in place on or before April 30, 2010. Contact me for information.

 

Build Your Smaller Dream Home

Today’s Wall Street Journal reports that the average new single-family house peaked at 2,507 square feet in 2007 and has since slipped to 2,392 square feet, according to Census Bureau data.   On the Journal’s Real Estate webpage, you can tour a builder’s recent design to appeal to today’s buyers of newly constructed luxury homes.  The houses are smaller and the 2 -story family rooms and butler’s pantries are gone.

 

Construction Boom in Macau

While new construction development has slowed in the United States and much of the world, it is back on track in the Cotai area of Macau. Today’s Wall Street Journal reports that Las Vegas Sands is resuming construction of a 13.3 million square feet casino and 3 new hotels and conference halls slated to open by June 2011. Las Vegas Sands plans to hire 12 to 13 thousand construction workers ober the next 12 to 18 months. Las Vegas Sands already operates the Venetian Macau casino-hotel.

 

Mad Men Season Finale

I really enjoyed watching Mad Men on AMC this season.  Last night’s season finale was extremely well done and one of  if not the best segments this season.  In just one hour,  the heads of the Sterling Cooper ad agency decide to go out on their own, create a new agency and attract and retain employee talent and important clients. Sadly, the drappers finalize their separation and a divorce is imminent.   It should be a different but exciting new next season.

 

Current State of the Mortgage Market

The Federal Government has taken important steps to increase mortgage activity, including increasing loan limits for Fannie Mae, Fredie Mac and the FHA and agreeing to buy $600 billion of mortgage debt from Fannie and Freddie.  The latter announcement resulted in mortgage rates on government backed loans dropping by a third of a percentage point.  However, self-employed borrowers and nonconforming or “jumbo” loan borrowers (loans in excess of $417,000 to $729,000, depending on the market) are finding it difficult to obtain a bank loan, even with good credit and savings, because lenders are relying heavily on loans gauranteed by Fannie Mae and Freddie Mac and the FHA.    The Personal Journal of today’s Wall Street Journal has an informative article on this situation including some tips from mortgage brokers on how borrowers can improve their chances of obtaining mortgage financing.

 

Time to Renovate?

Here is a positive effect of the current economic slowdown:  many home improvement contractors have more time to take on new projects and can be expected to be very competitive in pricing new jobs.  In addition, with oil prices plummeting in recent weeks, prices for material supplies that depend on oil for fabrication and delivery are expected to drop.   So now may be a good time to schedule a new roof project or build a new deck that you have been thinking about for a while.  Of course, the financial crisis has made it more difficult (but not impossible) to obtain a new loan such as a home equity line of credit to finance the renovation project.  If you are ready to take on a construction project, you still need to do due diligence and I recommend you obtain multiple contractor bids before proceeding.  My firm can review your contract before you proceed and make sure your legal rights are adequately protected before construction begins!

 

Construction Development In NoMa Section of Washington DC

http://www.nytimes.com/2008/09/24/business/24noma.html?ex=1379995200&en=d3d9dd71cb9ced7f&ei=5124&partner=permalink&exprod=permalink

 

Global CFO Economic Survey Results

A 3rd quarter survey of 1299 CFOs from global public and private companies reports that CFOs say they will reduce domestic jobs and make few capital expenditures, they expect inflation to climb and the credit crisis to continue to spread, with more firms directly affected this quarter than last quarter.    However, many CFOs believe the economy is beginning to bottom out and will rebound next summer.  Full results of the 2008 Duke University/CFO Magazine Global Business Outlook Survey are at http://www.cfosurvey.org/