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Housing starts stall, optimism doesn’t

Thu, 18 Jul 2013 09:22:02 +0000

Despite an unexpected and substantial fall in new home construction in June, industry analysts appear undeterred in their veritable housing euphoria.

“This reflects a characteristically volatile multi-family sector rather than renewed weakness, and we expect homebuilding volumes to rise further later this year,” wrote Paul Diggle of Capital Economics.

Housing starts fell 9.8 percent, but the drop was entirely in apartment construction, which accounts for 30 percent of all residential construction activity, according to the U.S. Commerce Department. Multi-family starts fell by 26.2 percent in June compared to May. Single family housing starts fell by just 0.8 percent month-to-month.

(Read More: Map: Tracking the US Real Estate Recovery)

“Should we be concerned? Not yet,” wrote Patrick Newport of IHS Global Insight. “Builders are still not putting up enough homes. Far from it. By our estimate, underlying demand is running close to 1.4 million. Meanwhile, housing completions in July were 755,000 [annual rate], while housing permits were 911,000.”

Article source: http://www.cnbc.com/id/100893375

Home Prices See Largest Annual Gain in Six Years

Tue, 28 May 2013 23:11:39 +0000

Despite the strong gains, home prices are still down approximately 28-29 percent from their peaks in the summer of 2006 and are now back at levels not seen since late 2003.

While prices continue to improve, there are still headwinds, specifically a relatively weak employment picture and a tight mortgage market. Existing home sales are also recovering far faster than new home sales, and much of the gains in new home construction is in multi-family apartments, as single family housing starts lag.

(Read More: Record High New Home Prices to Grow)

“Housing is making a positive impact on the economy, if one goes through the GDP numbers, residential construction is adding to economic growth,” said Blitzer. “But when you look at this, buying and selling existing homes, is recognized, we all feel good, the prices are going up, it doesn’t add anything to GDP.”

—By CNBC’s Diana Olick; Follow her on Twitter @Diana_Olick or on Facebook at facebook.com/DianaOlickCNBC

Questions? Comments? RealtyCheck@cnbc.com

Article source: http://www.cnbc.com/id/100769361

Housing Recovery Shows Up In Job Gains

Sat, 04 May 2013 02:08:15 +0000

Residential construction jobs increased by just over 6,000 in April from the previous month, according to the Bureau of Labor Statistics, and residential specialty trade contracting jobs (plumbers, electricians, roofers, etc.) grew by over 7,000.

Those workers need more trucks, which has been a boon to companies like Ford and General Motors, which saw sales of pick-ups jump 24 percent and 23 percent respectively.

(Read More: Here’s Why Pick-up Truck Sales are Surging)

Retailers are also seeing the effects of housing growth. Homeowners spend an average $7,400 furnishing a newly built home, according to the National Association of Home Builders.

“Spending at furniture and appliance stores is finally coming back, which has meant more hires there since the start of the year,” added Swonk.

Home prices were up just over 10 percent nationally in February, according to CoreLogic, which continues to bring thousands of homeowners out from underwater on their mortgages. That has allowed more borrowers to refinance to lower monthly payments, which in turn gives them more spending money. It also gives them more confidence that they will be able to afford more in the coming year.

(Read More: Back in Business: Jobs Picture Brightens in April)

“Consumers’ views regarding the housing market have been increasingly more positive,” noted Fannie Mae’s chief economist Doug Duncan. “Our April National Housing Survey, to be released next Tuesday, is expected to show that the housing market is gradually approaching its sweet spot, as the share of consumers who believe that it is a good time to buy remains high while the share of those who think it is a good time to sell continues its upward trend witnessed over the past year.”

Article source: http://www.cnbc.com/id/100705522

More Jobs in Housing, but Workers Aren’t Returning

Sat, 09 Mar 2013 02:50:39 +0000

“One of the reasons is because they are not paying well yet,” said Lisa Marquis Jackson, an analyst with John Burns Real Estate Consulting. “The wages were cut so much in the downturn, so until those prices get back to where they are attractive, the labor is not going to be attracted back to the industry.

Housing starts are up 24 percent from a year ago, but residential construction employment is up only 3.1 percent, according to the U.S. Commerce and Labor Departments. Former construction workers headed to higher paying jobs, such as the trucking industry. Some in the Southwest headed north to the newly thriving energy sector, said Marquis Jackson. Others headed to highway construction jobs in Texas.

(Read More: Job Creation Surges as Rate Falls to 7.7%)

In Las Vegas, where Pardee Homes is building 150 percent more homes this year than they did last year, finding workers is increasingly difficult.

“We lost quite a bit of labor to the oil fields and to places like Wyoming and North Dakota, where you would not expect it to go,” noted Klif Andrews, Pardee’s Las Vegas president.

Andrews said he is paying workers five to ten percent more now, and that has pushed his home prices higher. “We’ve raised median home prices up over 15 percent, so we’ve been able to stay a little bit ahead of it, but cost increases, it’s not just labor, it’s also materials,” he added.

Nationwide, the median price for newly built homes rose 2 percent in January and new home prices now far exceed the median price for existing homes.

(Read More: Housing: Picking Up the Pieces)

Another factor is weighing on workers. Contractors, who hire the specialty workers for builders, are small businessmen themselves. In order to fund their operations, they need to hire people to have ready, and that takes capital. Unfortunately, despite the housing recovery, banks are still not lending freely to builders. Builders are trying to find ways around that, by paying subcontractors more frequently, essentially bankrolling them so they can hire more workers.

“The wheels are starting to work, but all the gears are not working in alignment,” said Marquis Jackson.

Article source: http://www.cnbc.com/id/100537494

Allen Matkins/UCLA Anderson California Commercial Real Estate Survey Shows …

Thu, 12 Jul 2012 15:27:45 +0000

LOS ANGELES, Jul 12, 2012 (BUSINESS WIRE) –
Developer sentiment continues to show signs of optimism and solid
indications of impending new commercial development, according to the
current semi-annual release of the Allen Matkins/UCLA Anderson
California Commercial Real Estate Survey. “Since the end of the
recession we have seen developer optimism spread to all markets and
types of commercial space along with an increased willingness to go
forward with new development,” said UCLA Anderson Forecast Senior
Economist Jerry Nickelsburg. (
http://www.youtube.com/watch?v=9ex7x2VSbK4 )

Multi-family development is returning in Bay Area and LA

Promising news also comes from the first Allen Matkins/UCLA Anderson
Forecast survey of multi-family housing developers. Overall, 70% of the
survey participants in San Francisco, Silicon Valley and Los Angeles
plan to begin new multi-family housing developments in the next 12
months. This turn around in multi-family residential construction is
being driven by high occupancy rates and rising rents, particularly in
the Bay Area, as household formation begins to rebound in California.
“This growth in multi-family housing is encouraging. It is in markets
where there have been substantial job gains – especially for younger
workers who prefer to rent apartments in urban areas – and where
property values are high,” said John Tipton, partner at Allen Matkins.

New office development in LA and San Francisco

California office space market sentiment has been positive over the past
three years, but it did not immediately translate into significant new
development. After two and a half years, the Bay Area panel had
indicated a change. With the current survey, Southern California
developers have joined their Bay Area counterparts and approximately 25
percent of the survey participants are planning to start new development
in the coming 12 months.

Industrial growth driven by California manufacturing

Despite uncertainty about Europe’s economic future and moderate growth
in California import activity, there is strong optimism in California’s
industrial space markets that should generate new building activity in
the next 12 months as well. This optimism has been present in the survey
panel for more than two years, with industrial space occupancy rising to
96 percent in both Los Angeles and Orange County, driven by growth in
California manufacturing exports.

The Allen Matkins/UCLA Anderson Forecast survey indicates that
opportunities for new developments have emerged in the industrial space
market – particularly in the Los Angeles and Orange County markets.

For a copy of the latest Allen Matkins/UCLA Anderson Forecast California
Commercial Real Estate Survey and Index Research Project, please visit
www.uclaforecast.com .

The Allen Matkins/UCLA Anderson Forecast California Commercial Real
Estate Survey and Index Research Project polled a panel of California
real estate professionals in the office space and investment market on
various aspects of the commercial real estate market. The survey is
designed to capture incipient activity by commercial real estate
developers. To achieve this the panel looks at the markets three years
in the future, and building conditions over the three year period. It
was initiated by Allen Matkins and the UCLA Anderson Forecast in 2006,
furtherance of their interest in improving the quality of current
information and forecasts of commercial real estate.

About Allen Matkins

Allen Matkins, founded in 1977, is a California-based law firm with
approximately 220 attorneys in four major metropolitan areas of
California: Los Angeles, Orange County, San Francisco and San Diego. The
firm’s core specialties include real estate, real estate and commercial
finance, bankruptcy and creditors’ rights, construction, land use,
natural resources, environmental, corporate and securities, intellectual
property, joint ventures, taxation, employment and labor law, and
dispute resolution and litigation in all these matters. For more than 30
years, Allen Matkins has helped clients turn opportunity and challenge
into success by providing practical advice, innovative solutions and
valuable business opportunities. When clients’ challenges require
experienced trial counsel, Allen Matkins has a proven track record of
successful litigation before juries, judges and arbitrators. Allen
Matkins is located on the Web at
www.allenmatkins.com .

About UCLA Anderson Forecast

UCLA Anderson Forecast is one of the most widely watched and often-cited
economic outlooks for California and the nation and was unique in
predicting both the seriousness of the early-1990s downturn in
California and the strength of the state’s rebound since 1993. More
recently, the Forecast was credited as the first major U.S. economic
forecasting group to declare the recession of 2001. Visit UCLA Anderson
Forecast on the Web at
http://www.uclaforecast.com .

About UCLA Anderson School of Management

UCLA Anderson School of Management is among the leading business schools
in the world. UCLA Anderson faculty members are globally renowned for
their teaching excellence and research in advancing management thinking.
Each year, UCLA Anderson provides a distinctive approach to management
education to more than 1,800 students enrolled in its MBA,
Fully-Employed MBA, Executive MBA, Global Executive MBA for Asia
Pacific, Global Executive MBA for the Americas, Master of Financial
Engineering, doctoral and executive education programs. Combining
selective admissions, varied and innovative learning programs, and a
worldwide network of 37,000 alumni, UCLA Anderson develops and prepares
global leaders. Follow UCLA Anderson on Twitter at
http://twitter.com/UCLAAnderson ,
or on Facebook at
http://www.facebook.com/uclaanderson .

SOURCE: UCLA Anderson School of Management


        For the UCLA Anderson School of Management
        Elise Anderson, 310-206-7707
        elise.anderson@anderson.ucla.edu
        or
        Gary Pike, APR, 415-585-2100
        gary@pikecompany.com

Article source: http://www.marketwatch.com/story/allen-matkinsucla-anderson-california-commercial-real-estate-survey-shows-evidence-of-recovery-in-key-markets-2012-07-12

Bay Area could lead the way for jobs recovery — but it won’t happen right away

Wed, 15 Jun 2011 15:41:45 +0000

California won’t recover the jobs it lost during economic meltdown until at least 2014 — but the Bay Area could recapture its losses sooner than that, a report released Wednesday suggested.

Urban centers along the coast such as the Bay Area, Los Angeles, Orange County and San Diego are poised to rebound more rapidly than California overall. The most sluggish pace of recovery is expected for inland areas such as Sacramento, the Central Valley and the Riverside-San Bernardino-Ontario region.

“This is a bifurcated recovery,” said Jerry Nickelsburg, a senior economist with the UCLA Anderson Forecast, which released the report.

A jobs recovery will materialize in regions such as the Bay Area that are being bolstered by the tech rebound, along with exports and imports, the Anderson Forecast economists said.

“Coastal California, particularly the Bay Area with its technology and software industries, will lead in job growth,” according to the forecast.

Areas that depend more strongly on residential construction — such as inland regions of California — will struggle to produce an employment revival, Nickelsburg said.

A region such as the East Bay, however, could experience an uneven pace of recovery.

The East Bay has some high-tech in places such as Fremont, Pleasanton and Livermore. It also a considerable amount of cleantech operations sprinkled through the region. The East Bay also enjoys manufacturing and distribution

operations that are enhanced by the Port of Oakland’s import and export activity.

Housing and financial services, which melted down during the recession, also are a big part of the East Bay economy, however. Those anchors could drag down the pace of the employment rebound in the Alameda County-Contra Costa County region.

“The East Bay is pretty interesting,” Nickelsburg said. “It’s kind of a mix of industries.”

The biggest benefit for the East Bay could be its location near the primary recovery engines that are powered by the digital boom in Silicon Valley, San Francisco and San Mateo County.

“The spillover from high-tech in Silicon Valley will create employment opportunities in the East Bay,” said Jeffrey Michael, director of the Stockton-based Business Forecasting Center at University of the Pacific.

Real estate will remain a problem for job creation in the East Bay, however.

“High tech and exports and imports somewhat offset the housing hangover,” Michael said. “But the East Bay was hit as hard as anyplace else through the recession when it comes to jobs.”

In contrast, things appear more solid in Santa Clara County.

“Silicon Valley is already recovering,” Michael said.

The Anderson Forecast predicted that California will experience “slow growth” through the end of this year.

The forecasters also predicted:

Statewide unemployment, now at less than 12 percent, will continue to fall through the second half of 2011 and average 11.7 percent.

Job growth in 2012 will push the jobless rate down “marginally.”

The unemployment rate won’t reach 9.9 percent until the second quarter of 2013.

Growth in real personal income is forecast to be 1.7 percent in 2011 and 3.3 percent in 2012.

“The bifurcated recovery will be with us for some years to come,” the Anderson Forecast said.

Contact George Avalos at 925-977-8477. Follow him at Twitter.com/george_avalos.

Article source: http://www.mercurynews.com/crime-courts/ci_18272384