Nailing Down a Reason Home Prices Are Rising
NAHB statistics indicate that the cost of construction materials — from lumber and nails to insulation and roofing cement and coatings — has spiked higher over the past 12 months. As a result, the price of a typical residence has been pushed up almost 3% — or by an extra $5,000-$7,000. This type of business climate is a capricious one for builders, one that industry sources say can land them in financial trouble if they are not careful. That's because residential contractors usually sign contracts with buyers six months before the residence is completed. Any increase in building costs that occur in the meantime generally are absorbed by the company. While contract language can be tweaked to help defray the cost of higher commodity prices, some builders are loathe to create uncertainty for their clients. "I think buyers like to know ahead of time what their house is going to cost," agrees Seth Shapiro, an executive with Fort Washington, PA-based Westrum Development Co. (www.philly.com)
Philadelphia Inquirer (04/23/04) P. C1; Brubaker, Harold
An Empty Nest — Now What?
"The House to Ourselves: Reinventing Home Once the Kids Are Grown" co-author Todd Lawson says empty nesters have a number of housing and lifestyle options to choose from when their children leave home. They first must decide where they want to live, and Lawson notes that most opt to stay near family and friends. They also must choose between downsizing to a smaller house or condominium or remaining in the family home. Empty nesters need to think about maintenance responsibilities and the ways in which they want to use space to help them make this decision. Some choose to relocate to eliminate maintenance, discourage long-term visits from family or free up money to travel; while others undertake extensive renovation projects to create home offices, hobby rooms or space for family gatherings. (www.csmonitor.com)
Christian Science Monitor (04/21/04) P. 15; Gardner, Marilyn
Clear Skies Ahead for Home Values
Housing experts do not see a bubble about to burst — mainly due to fewer speculative purchases and construction projects, continued demand from immigrants and the fact that prices have steadily climbed during the last five decades. Even Boston, San Francisco and other overheated markets are not expected to experience jarring declines because of demand for the lifestyles associated with these cities. Experts believe that residential prices will continue their uphill trek unless the supply of new homes significantly increases, unemployment posts double-digit gains or interest rates shoot up unexpectedly fast. The National Association of Realtors®, for instance, predicts that appreciation will cool from the 7.5% rate recorded last year but that the median resale and new-home prices still should jump 4.4% this year to $177,400 and $202,900, respectively. (www.christiansciencemonitor.com)
Christian Science Monitor (04/19/04) P. 13; Teicher, Stacy A.
One Is Not Enough
The National Association of Realtors® reports an estimated 445,000 second-home sales last year, attributing the success of the market to post-Sept. 11 nesting, fears of terrorism, the sluggish stock market and rapid price appreciation. In Southern California, prices in the vacation hot-spots of Crestline, Palm Springs and Laguna Beach surged 53.6%, 51.6% and 31.3%, respectively, during the year-over-year period ended in February. Though most second-home buyers are making their purchases for personal reasons, they still are reaping the benefits of their investments. In some areas, vacation-home owners earn $100,000 or more in annual rental income. However, double-digit appreciation rates have some owners choosing to sell rather than collect rent. (www.latimes.com)
Los Angeles Times (04/18/04) P. K1; Cohen, Allison B.
From 'Project' to Palace
In many cities, low-income housing units are being transformed from barracks-style structures into buildings that boast brick detailing, oak cabinets, private entrances and other features common in more upscale dwellings. Some of these newer complexes are being built near higher-value properties, and their modern façades and affluent-sounding names help them mesh with the existing community. Moreover, National Low Income Housing Coalition President Sheila Crowley believes the improved designs help residents feel better about themselves and their communities. However, the redevelopment process leaves some low-income residents without shelter because the focus on lower-density housing means that fewer affordable units are being built to replace the ones that are demolished, notes Harvard University's Joint Center for Housing Studies Director Nicholas Retsinas. Housing authorities also are facing challenges when it comes to obtaining funding, since HUD's HOPE VI grant program is being phased out and replaced with private-sector financing. (www.wsj.com)
Wall Street Journal (04/21/04) P. B1; Smith, Ray A.
The Feng Shui of Real Estate
Feng shui, the ancient Eastern art of balance and harmony of design, is becoming increasingly popular with home buyers in Arizona's Paradise Valley. Though the trend still represents a niche market, property agents, builders and interior designers in the area are trying to keep abreast of the trend by educating themselves about the key principles of feng shui — which involves design techniques that convey a sense of visual and emotional calm. Real estate agent and educator Susan Sweetow noticed the budding trend several years ago and responded by offering a new continuing education class on the subject, called "From Frank Lloyd Wright to Feng Shui," at the real estate school she runs with her husband. Though not everyone takes it seriously, Sweetow says the principles of feng shui are becoming increasing popular, as more real estate and design professionals are expressing an interest in her class. "We felt that a lot of our clients are into this practice and that we should be aware of what it is," says Barbara Graham, a real estate agent for Scottsdale's Sandra Wilken Properties. (www.abgnews.com)
Arizona Business Gazette (04/22/04) Sagon, Erica
Fastest Growing Market
Hispanics will make up 17% of the nation's population by 2015 and ultimately account for three out of five first-time home buyers. Hispanic buyers differ from others in that they are younger, have larger families and pool their resources to buy multiple properties. A Fannie Mae survey reveals that nearly three-quarters of Mexican Americans and 70% of all other Latinos consider homeownership a top priority, compared to 61% of all immigrants. According to Geo Advertising & Marketing Vice President Theodore Serrano, real estate professionals need to understand the Hispanic culture, treat Latinos as individuals and avoid stereotyping. (www.philly.com)
Philadelphia Inquirer (04/18/04) P. J1; Heavens, Alan J.
Raw Deal on Steel
Purchasing magazine reports substantial increases in steel prices over the last six months. Prices rose by 44% for eight-pound steel beams, 28% for rebar, 33% for the wire used in concrete mesh and 41% for construction-grade steel plates. Higher prices and robust demand are cutting into contractors' profits and causing project delays, and many construction firms are stockpiling to avoid additional price hikes. The weak dollar and demand from China are credited for the recent price jumps, but many observers think prices will cool over the coming months due to China's monsoon season and a drop in steel surcharges imposed by manufacturers. Meanwhile, price gouging, rebuilding projects in Iraq and demand for steel alternatives have forced contractors to pay more for gypsum wallboard, cement and wood as well. "In our industry, we'll probably see a bunch of projects that will not be economically feasible because of increased steel prices," remarks Houma Chairman and Chief Executive Kerry Chauvin. In response, members of the Louisiana Associated General Contractors want state lawmakers to make government contracts more flexible. If prices continue to rise and companies cannot make adjustments in their bids, firms could be forced into bankruptcy, says the group's chief executive, Derrell Cohoon. (www.nola.com)
New Orleans Times-Picayune (04/18/04) P. 1; Mowbray, Rebecca
Rising Steel Cost Hurting Builders
A boost in global manufacturing, the weak dollar and fewer steel imports have significantly driven up the cost of steel. Builders of office buildings, schools and bridges have been hit the hardest as hot-rolled sheet metal and structural steel prices surged 89% and almost 50%, respectively, between December and April. Many contractors in Delaware have been forced to lay off workers, purchase directly from steel mills and include escalation clauses in their contracts to adjust for price jumps. Residential builders are also affected, with the cost of appliances, plumbing materials, metal studs, nails and reinforcement bars on the rise. In fact, NAHB economist Michael Carliner says new-home prices are up $500-$1,000 due to higher steel prices. Though some contractors are worried about steel shortages, Economy.com's Mark Zandi expects both prices and supply to return to healthy levels in 2005. (www.delawareonline.com)
Delaware Online (04/18/04) Tadesse, Luladey B.
A Three-Car Party Room?"
Many home owners are transforming their garages from messy storage areas to multi-functional spaces with room not only for cars but also for storage and even televisions and refrigerators. NAHB found that half of the respondents to a 2000 survey who planned to spend $250,000 or more for a dwelling preferred three-car garages, and even home owners with two-car garages are demanding more space. Whirlpool Corp., Sears, GarageTek and other retailers and manufacturers are catering to home owners undertaking garage improvements by rolling out products and services that enable them to organize their belongings and create areas for work or entertainment. Home owners could shell out more than $10,000 to have GarageTek assist in the remodel, but those without a significant amount of cash have access to various do-it-yourself products from different retailers at more modest prices. (www.chicagotribune.com)
Chicago Tribune Online (04/16/04) Bertagnoli, Lisa
Home Owners Chase Waterfalls
Many home owners are trading in their tabletop fountains for more elegant indoor waterfalls in their living rooms, foyers, bedrooms and bathrooms. Designs range from wall hangings and fountains to steel or copper pillars, with price tags anywhere from $300-$30,000 or more. Experts believe home owners were inspired by waterfalls in many hotel and hospital lobbies. Indoor waterfalls are gaining popularity as a means of calming and soothing stressed-out home owners. (www.usatoday.com)
USA Today (04/16/04) P. 4D; Puente, Maria
Home Owners Sluggish on Remodeling
The Joint Center for Housing Studies at Harvard University reports a modest 2.5% jump in spending on home repairs and remodeling to about $125 billion during the last year. Kermit Baker, director of the Joint Center's Remodeling Futures Program, attributes the sluggishness to "the transition from remodeling activity generated by falling mortgage rates to activity generated by rising employment levels and growing incomes." However, Joint Center Director Nicholas Retsinas expects spending on improvements to remain high as long as the resale market continues to reports gains. (www.inman.com)
Inman News Features (04/16/04)
A Laptop Made for the Desktop
Fujitsu Computer Systems' LifeBook N5000 laptop is equipped with a 3.2GHz Pentium 4 by Intel, a gigabyte of memory and a DVD burner, as well as one of the largest and brightest screens in the industry. The LifeBook goes for $2,599, with a $100 mail-in rebate through the end of this month. The LifeBook, which weighs 9.9 pounds and is 11.9 by 14.0 by 1.8 inches, has a 1.44MB floppy drive and internal optical and hard drives. On the right edge of the keyboard is a Memory Stick/SD card slot and four USB 2.0 ports, as well as one IEEE 1394 port. While the 802.11a/b/g wireless can interface with any small business office setup, Fujitsu's software offerings are geared for Windows XP Home Edition, Microsoft Works 7.0, InterVideo's WinDVD 4 and WinDVD Creator, and Sonic's RecordNow. (www.smallbusinesscomputing.com)
Small Business Computing (04/16/04) Grevstad, Eric
Automated Title Search Saves Time, Money
Zenodata Corp. has developed new title search technology that promises to accelerate land record searches and improve their accuracy as well as provide complete electronic results. The company combined its proprietary Land Record Database with the Spider-Search search engine and webJAZ user-interface application to create the Land Record System — which is able to deliver full title abstracts as well as extract and import information from the original source documents, all without the need for manual data entry. The Land Record System can produce abstract sheets in 10 minutes or less, producing cost savings on title work on average of 20%-30 percent. "The best part of a completely electronic database is that search results can auto-populate abstract sheets in PDF or HTML format, or interface to other software packages and databases using XML," says Zenodata CEO Mark Stevenson. (www.inman.com)
Inman News Features (04/21/04)
Considering Document Management
In today's workplaces, documents can be in paper or electronic form. When paper was the norm, document management involved tracking documents as they moved through the office and into filing cabinets or trash receptacles. The term has evolved to encompass the entire life cycle of a document to include indexing, retrieval, editing, storage, distribution and disposal. Companies can use multifunctional printers (MFPs) with workgroup-specific software to improve document management, ultimately slashing storage and retrieval costs, making information more easily accessible and facilitating electronic document transmission and data backup and recovery. These devices also allow companies to cut down on paper usage. Before employing an MFP, companies need to figure out where the document will be stored and how it will be distributed. Given that most documents stored on hard drives are never retrieved, experts urge companies to minimize expenditures on document imaging, which ensures that documents are converted into a format suitable for reading or transmitting. (www.os-od.com)
Office Solutions (04/04) Vol. 21, No. 2, P. 24; Sostilio, Bob |
