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Why Grenfell Tower Burned | Bedford Corners Real Estate

Flames and smoke engulfed Grenfell Tower in London this month, resulting in at least 79 deaths.CreditToby Melville/Reuters

LONDON — The doorbell woke Yassin Adam just before 1 a.m. A neighbor was frantically alerting others on the fourth floor of Grenfell Tower about a fire in his apartment. “My fridge blew up,” the man shouted.

Residents of Grenfell Tower had complained for years that the 24-story public housing block invited catastrophe. It lacked fire alarms, sprinklers and a fire escape. It had only a single staircase. And there were concerns about a new aluminum facade that was supposed to improve the building — but was now whisking the flames skyward.

The facade, Mr. Adam said, “burned like a fire that you pour petrol on.”

The incineration of Grenfell Tower on June 14, the deadliest fire in Britain in more than a century, is now a national tragedy. The London police on Friday blamed flammable materials used in the facade for the spread of the blaze and said the investigation could bring charges of manslaughter. Hundreds of families were evacuated from five high-rises that posed similar risks.

Flames consumed the tower so quickly that arriving firefighters wondered if they could even get inside. People trapped on the higher floors screamed for their lives through broken windows. At least 79 people died, a toll that is expected to rise as more bodies are recovered. Survivors have charged that the facade was installed to beautify their housing project for the benefit of wealthy neighbors.

A formal government inquiry into the fire has just begun. But interviews with tenants, industry executives and fire safety engineers point to a gross failure of government oversight, a refusal to heed warnings from inside Britain and around the world and a drive by successive governments from both major political parties to free businesses from the burden of safety regulations.

Promising to cut “red tape,” business-friendly politicians evidently judged that cost concerns outweighed the risks of allowing flammable materials to be used in facades. Builders in Britain were allowed to wrap residential apartment towers — perhaps several hundred of them — from top to bottom in highly flammable materials, a practice forbidden in the United States and many European countries. And companies did not hesitate to supply the British market.

A Lethal Wrapping

The building was recently renovated. New insulation and cladding were installed on the exterior; both contained flammable materials.

SPREADING OF FIRE

CREATING A CHIMNEY EFFECT

CAVITY

CLADDING

PANELS WITH

PLASTIC CORE

OLD WALL

INSULATION

OLD WALL

CAVITY,

ABOUT

2 INCHES

AIR

Radiant heat from the burning cladding and insulation, combined with air rushing through the gap, increased the intensity of the fire.

Flammable cladding and insulation enabled the fire to spread rapidly on the exterior of the building.

The facade, installed last year at Grenfell Tower, in panels known as cladding and sold as Reynobond PE, consisted of two sheets of aluminum that sandwich a combustible core of polyethylene. It was produced by the American manufacturing giant Alcoa, which was renamed Arconic after a reorganization last year.

Arconic has marketed the flammable facades in Britain for years, even as it has adjusted its pitch elsewhere. In other European countries, Arconic’s sales materials explicitly instructed that “as soon as the building is higher than the firefighters’ ladders, it has to be conceived with an incombustible material.” An Arconic website for British customers said only that such use “depends on local building codes.”

Emergency services personnel inside Grenfell Tower, where a flammable facade — which had all burned away in the fire — helped spread the blaze. CreditRick Findler/Press Association, via Associated Press

For years, members of Parliament had written letters requesting new restrictions on cladding, especially as the same flammable facades were blamed for fires in Britain, France, the United Arab Emirates, Australia and elsewhere. Yet British authorities resisted new rules. A top building regulator explained to a coroner in 2013 that requiring only noncombustible exteriors in residential towers “limits your choice of materials quite significantly.”

Fire safety experts said the blaze at Grenfell Tower was a catastrophe that could have been avoided, if warnings had been heeded.

“How could that happen in our country at this time?” asked Dennis Davis, a former firefighter who is vice chairman of the nonprofit Fire Sector Federation.

Mr. Adam, 44, had seen posters hung by the management company telling tenants to shut their doors and stay inside in the event of a fire. But Mr. Adam, his wife, his daughter and his pregnant sister ignored the instructions and ran.

“Anyone who listened to the fire brigade and stayed where they are,” Mr. Adam said in an interview the next day, “they lost their lives.”

Locals watched as the fire ripped through the building, a 24-story public housing block.CreditDaniel Leal-Olivas/Agence France-Presse — Getty Images

‘How Is That Possible?’

The first call to the London Fire Brigade came at 12:45 a.m., according to an official statement. Six minutes later, as the first firefighters reached the scene, brigade veterans struggled to fathom the speed of the blaze.

“That is not a real block with people in it!” one firefighter exclaimed, his astonishment captured in a video that later was shown on the BBC and Sky News and was shot inside his vehicle as it sped toward the building.

Other firefighters in the vehicle were heard gasping in horror.

“There are kids in there,” one said.

“How is that possible?”

“It has jumped all the way along the flats — look!”

How “are we going to get into that?” another asked, using an expletive.

Flames in an ordinary fire burst out of windows, moving from the inside out. Grenfell Tower burned in reverse, moving inward from the building’s exterior. The flames quickly tore upward in streaks through the facade, filling apartments with toxic black smoke. Torrents of orange and red branched out of the first streaks and shot upward. The flames encased the building in a cylinder of fire.

“I have never seen such a phenomenal fire, a building engulfed top to bottom in flames,” Dany Cotton, the London fire commissioner, said later that day. More than 200 firefighters battled the blaze. They brought 40 fire engines and other vehicles.

“Committing hundreds of my firefighters into a building that at points looked like it couldn’t possibly stand up due to the level of fire — I actually felt physically sick with anxiety about what was happening,” Ms. Cotton added. But the firefighters went in.

Firefighters stood amid debris in a children’s playground near the tower. CreditNeil Hall/Reuters

The building they entered was built in 1974 in an architectural style known as Brutalism, and the original concrete structure, built without cladding, would have contained the fire in one apartment long enough for firefighters to prevent it from spreading very far. But the building’s floor plan gives a picture of what happened. Refrigerators in most apartments appear to have been positioned against an exterior wall, next to a window and just a few inches from the cladding installed in the renovation.

When the refrigerator on the fourth floor burst into flames, the fire ignited the flammable cladding and shot up the side of the building. The London police confirmed that on Friday and identified the refrigerator brand as Hotpoint. But experts who saw footage of the blaze had known the culprit at once. “You can tell immediately it’s the cladding,” said Glenn Corbett, an associate professor of fire science at John Jay College of Criminal Justice in New York.

The first well-known use of aluminum cladding on a high-rise was on the Alcoa Building, in Pittsburgh, erected as the manufacturer’s headquarters. Makers of cladding promoted it as both aesthetically striking and energy-efficient, because the aluminum surface reflects back heat and light. Demand for cladding surged with rising fuel costs and concerns about global warming, and over time, producers began selling it in a thin “sandwich” design: Two sheets of aluminum around a core made of flammable plastics like polyethylene.

The cladding is typically paired with a much thicker layer of foam insulation against the building’s exterior wall, as was the case at Grenfell Tower. Then the cladding may be affixed to the wall with metal studs, leaving a narrow gap between the cladding and the insulation.

But by 1998, regulators in the United States — where deaths from fires are historically more common than in Britain or Western Europe — began requiring real-world simulations to test any materials to be used in buildings taller than a firefighter’s two-story ladder. “The U.S. codes say you have to test your assembly exactly the way you install it in a building,” said Robert Solomon, an engineer at the National Fire Protection Association, which is funded in part by insurance companies and drafts model codes followed in the United States and around the world.

No aluminum cladding made with pure polyethylene — the type used at Grenfell Tower — has ever passed the test, experts in the United States say. The aluminum sandwiching always failed in the heat of a fire, exposing the flammable filling. And the air gap between the cladding and the insulation could act as a chimney, intensifying the fire and sucking flames up the side of a building. Attempts to install inflammable barriers at vertical and horizontal intervals were ineffective in practice.

As a result, American building codes have effectively banned flammable cladding in high-rises for nearly two decades. The codes also require many additional safeguards, especially in new buildings or major renovations: automatic sprinkler systems, fire alarms, loudspeakers to provide emergency instructions, pressurized stairways designed to keep smoke out and multiple stairways or fire escapes.

And partly because of the influence of American architects, many territories around the world follow the American example. But not Britain.

Protesters tried to enter Kensington Town Hall as they sought more information about missing relatives and friends. CreditDan Kitwood/Getty Images

Safety vs. Cost

British schoolchildren study the Great Fire of London, in 1666, the way American pupils might learn about the Boston Tea Party or the first Thanksgiving. But the legacy of the fire is also still felt in Britain’s building codes, experts say. London’s original great fire leapt across wooden buildings. And since then, British building codes have focused primarily on the principle of stopping the spread of flames between buildings or, within larger structures, between units.

With fire prevention in Britain, “you put all your eggs in one basket,” said Edwin Galea, director of the Fire Safety Engineering Group at the University of Greenwich. And for decades, this was fairly effective. Britain has long reported far fewer deaths from fires relative to population than the United States, and typically, fewer than 350 residents die each year in fires (compared with more than 3,000 in the United States).

But as early as 1999, after a fire in Irvine, Scotland, British fire safety engineers warned Parliament that the advent of flammable cladding had opened a dangerous loophole in the regulations. The Irvine fire saw flames leap up panels at Garnock Court, a 14-story public housing block. One resident died, four others were injured and a parliamentary committee investigated the causes.

“To a certain extent, we are hoisted by the petard of what happened here in 1666, the Great Fire of London, and we look at fire as a horizontal problem, with a fire in one building affecting the exterior of another building,” Glynton Evans, a fire safety adviser to the firefighters’ union, said to Parliament. “The problem with cladding is that it will, if it is able, spread fire, and it will spread it vertically.”

The firefighters and engineers warned Parliament that British codes required only that the aluminum used in cladding resist ignition, even though the heat of a fire would breach the surface and expose the flammable material inside. Nor did the British rules require a test to evaluate risks in real-world conditions.

A fire in 2015 at the Address Downtown Dubai, a hotel in the United Arab Emirates that had flammable cladding on its exterior. CreditNicolas Cornet/European Pressphoto Agency

“If the cladding cannot resist the spread of flame across the surface, then it will vertically envelop the building,” Mr. Evans warned, in testimony that now seems prophetic. “In other words, the fire will spread to the outside of the building, and it will go vertically.” Many other fire safety experts would repeat those concerns in the following years.

But manufacturers argued against new tests or rules. Using fire-resistant materials was more expensive, a cost that industry advocates opposed.

“Any changes to the facade to satisfy a single requirement such as fire performance will impinge on all other aspects of the wall’s performance as well as its cost,” Stephen Ledbetter, the director of the Center for Window and Cladding Technology, an industry group, wrote in testimony to Parliament

“Fire resistant walls,” he added, “are not economically viable for the prevention of fire spread from floor to floor of a building,” and “we run the risk of using a test method because it exists, not because it delivers real benefits to building owners or users.” (In an interview last week, Mr. Ledbetter said his group had updated its position earlier this year to warn against the type of cladding used at Grenfell Tower.)

Business-friendly governments in Britain — first under Labor and then under the Conservatives — campaigned to pare back regulations. A 2005 law known as the Regulatory Reform (Fire Safety) Order ended a requirement for government inspectors to certify that buildings had met fire codes, and shifted instead to a system of self-policing. Governments adopted slogans calling for the elimination of at least one regulation for each new one that was imposed, and the authorities in charge of fire safety took this to heart.

“If you think more fire protection would be good for U.K. business, then you should be making the case to the business community, not the government,” Brian Martin, the top civil servant in charge of drafting building-safety guidelines, told an industry conference in 2011, quoting the fire minister then, Bob Neill. (“Should we be looking to regulate further? ‘No’ would be my answer,’” Mr. Neill added.)

Mr. Martin, a former surveyor for large-scale commercial projects like the Canary Wharf, told his audience to expect few new regulations because the prime minister at the time, David Cameron, wanted to greatly reduce the burden on industry, according to a report by the conference organizers.

An apartment at Grenfell Tower showed the devastation of the fire.CreditLondon Metropolitan Police, via European Pressphoto Agency

Two years later, in 2013, a coroner questioned Mr. Martin about the application of building regulations in the case of another London fire, which killed six people and injured 15 others at a public housing complex called Lakanal House. Mr. Martin defended the existing regulations, including the lack of a requirement for meaningful fire resistance in the paneling on the outside of an apartment tower.

A questioner told him that the public might be “horrified” to learn that the rules permitted the use of paneling that could spread flames up the side of a building in as little as four-and-a-half minutes. “I can’t predict what the public would think,” Mr. Martin replied, “but that is the situation.”

Moving to a requirement that the exterior of a building be “noncombustible,” Mr. Martin said, “limits your choice of materials quite significantly.”

After the coroner’s report, a cross-party coalition of members of Parliament petitioned government ministers to reform the regulations, including adding automatic sprinklers and revisiting the standards for cladding. “Today’s buildings have a much higher content of readily available combustible material,” the group wrote in a letter sent in December 2015 that specifically cited the risk of chemicals in “cladding.”

“This fire hazard results in many fires because adequate recommendations to developers simply do not exist. There is little or no requirement to mitigate external fire spread,” added the letter, which was first reported last week by the BBC.

In 2014, the Fire Protection Research Foundation, an organization in the United States, counted 20 major high-rise fires involving cladding. In at least a half-dozen — in France, Dubai, South Korea, the United States and elsewhere — the same type of panels installed at Grenfell Tower caught fire. A 2014 fire in Melbourne, Australia, resulted in multiple investigations into the dangers of combustible cladding. Another fire broke out in Dubai, around a 60-story skyscraper, on New Year’s Eve of 2015, and yet another, around a 70-story skyscraper there, this April.

But in Britain, still no changes were made. “The construction industry appears to be stronger and more powerful than the safety lobby,” said Ronnie King, a former fire chief who advises the parliamentary fire safety group. “Their voice is louder.”

A wall covered with tributes to the victims. CreditMarko Djurica/Reuters

‘Pray for Us’

As recently as March, a tenant blogger, writing on behalf of what he called the Grenfell Action Group, predicted a “serious and catastrophic incident,” adding, “The phrase ‘an accident waiting to happen’ springs readily to mind.”

For many tenants, an object of scorn was Grenfell Tower’s quasi-governmental owner, the Kensington and Chelsea Tenant Management Organization. It was created under legislation seeking to give public housing residents more say in running their buildings, and its board is made up of a mix of tenants, representatives of local government and independent directors. But Kensington and Chelsea is the largest tenant management organization in England, a sprawling anomaly supervising roughly 10,000 properties, more than 30 times the average for such entities. Tenants came to see it as just another landlord.

The organization had promised residents of Grenfell Tower that the renovation last year would improve both insulation and fire safety. Board minutes indicate that it worked closely with the London Fire Brigade throughout the process, and local firefighters attended a briefing afterward “where the contractor demonstrated the fire safety features.” During a board meeting last year, the organization even said it would “extend fire safety approach adopted at Grenfell Tower to all major works projects.”

Dany Cotton, the London fire commissioner, said that she had never seen “such a phenomenal” blaze, and that sending hundreds of firefighters into it made her “sick with anxiety.” CreditMatt Dunham/Associated Press

But the principal contractor, the Rydon Group, based in East Sussex, England, assigned the facade work to a specialist firm that was struggling financially during the project. The firm, Harley Curtain Wall, went out of business in 2015 and transferred its assets to a successor, Harley Facades.

Another subcontractor, Omnis Exteriors, said on Friday that it had not been told that the flammable Reynobond cladding was going to be combined with flammable interior insulation. That was a problem, the firm said in a statement, adding that the cladding “should only be used in conjunction with a noncombustible material.”

The cladding itself was produced by Arconic, an industry titan whose chief executive recently stepped down after an unusual public battle with an activist shareholder. Arconic sells a flammable polyethylene version of its Reynobond cladding and a more expensive, fire-resistant version.

In a brochure aimed at customers in other European countries, the company cautions that the polyethylene Reynobond should not be used in buildings taller than 10 meters, or about 33 feet, consistent with regulations in the United States and elsewhere. “Fire is a key issue when it comes to buildings,” the brochure explains. “Especially when it comes to facades and roofs, the fire can spread extremely rapidly.”

A diagram shows flames leaping up the side of a building. “As soon as the building is higher than the firefighters’ ladders, it has to be conceived with an incombustible material,” a caption says.

But the marketing materials on Arconic’s British website are opaque on the issue.

“Q: When do I need Fire Retardant (FR) versus Polyethylene (PR) Reynobond? The answer to this, in part, depends on local building codes. Please contact your Area Sales Manager for more information,” reads a question-and-answer section.

For more than a week after the fire, Arconic declined repeated requests for comment. Then, on Thursday, the company confirmed that its flammable polyethylene panels had been used on the building. “The loss of lives, injuries and destruction following the Grenfell Tower fire are devastating, and we would like to express our deepest sympathies,” the company said. Asked about its varying product guidelines, the company added, “While we publish general usage guidelines, regulations and codes vary by country and need to be determined by the local building code experts.”

Aluminum coils at a plant in Tennessee belonging to Arconic, the manufacturer of the combustible cladding used at Grenfell Tower. CreditLuke Sharrett/Bloomberg

Hassan Ibrahim, who lived in an apartment on the 23rd floor of Grenfell Tower, was traveling outside England the day of the fire. His wife, Rania, and their two small children were not so lucky. As the smoke and flames drifted upward, Ms. Ibrahim debated with a neighbor whether to risk opening her door.

“Don’t open the front door,” her neighbor told her. “You are not going to be able to breathe — you are just going to bring the smoke in. You have your children. Standing near the door with all the smoke is not going to help you.”

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https://www.nytimes.com/2017/06/24/world/europe/grenfell-tower-london-fire.html?_r=0

U.S. EPA settles with firm for failure to protect residents from lead-based paint | Bedford Corners Real Estate

The U.S. Environmental Protection Agency announced a settlement with Powerstar Home Energy Solutions for failing to comply with federal lead-based paint rules at several residential properties in Southern California.  The company will pay a civil penalty of $11,429.

Powerstar has also agreed to spend about $34,000 to purchase equipment to test blood lead levels in children. Blood lead analyzers will be donated to ten community health clinics in San Bernardino and Orange counties. The analyzers measure lead in blood samples and give results in as little as three minutes, allowing immediate follow-up by health care providers. The clinics will receive enough kits to test 480 children.

“Children are highly susceptible to lead-based paint and symptoms are not easily recognized,” said Alexis Strauss, EPA’s Acting Regional Administrator for the Pacific Southwest. “This settlement will give hundreds of families the opportunity to have their children tested, giving parents the information they need to protect their loved ones.”

Powerstar Home Energy Solutions, a trade name of Smithlum & Friend, Inc., is headquartered in Anaheim and offers residential coatings and window replacements. In 2014, EPA found the company violated EPA’s Renovation, Repair and Painting rule by renovating five homes built before 1978 in the cities of Anaheim, Brea, Chino and Redlands without following practices required to reduce lead exposure. The company failed to:

  • Become certified by EPA to perform residential work;
  • Distribute the “Renovate Right” brochure to educate occupants about lead-safe work practices;
  • Keep complete records documenting whether the work followed lead-safe practices.

Common renovation activities like sanding, cutting, and demolition can create hazardous lead dust and chips. When companies fail to follow lead-safe practices, the resulting lead dust and chips can contaminate home surfaces. Contractors who disturb painted surfaces in pre-1978 homes and child-occupied facilities must be trained and certified, provide educational materials to residents, and follow safe work practices. The U.S. banned lead-based paint from housing in 1978 but EPA estimates that more than 37 million older homes in the U.S. still have lead-based paint.

Though harmful at any age, lead exposure is most dangerous to children because their bodies absorb more lead, and their brains and nervous systems are more sensitive to its damaging effects. Babies and young children can also be more highly exposed to lead because they often put their hands and other objects that can have lead from dust or soil on them into their mouths. The effects of lead exposure can include behavior and learning problems, slowed growth, hearing problems, and diminished IQ.

Often lead poisoning occurs with no obvious symptoms, so it may go unrecognized. Parents or caregivers who think their child has been in contact with lead should notify their child’s health care provider who can help decide whether a blood test is needed or recommend treatment.

EPA enforces the federal Toxic Substances Control Act and its Renovation, Repair, and Painting rule and the lead-based paint Disclosure Rule. The Renovation, Repair, and Painting rule protects residents and children from exposure to lead-based paint hazards from activities that can create hazardous lead dust when surfaces with lead-based paint are disturbed. The Disclosure Rule requires those who sell or rent housing built before 1978 to provide an EPA-approved lead hazard information pamphlet, include lead notification language in sales and rental forms, disclose any known lead-based paint hazards and provide reports to buyers or renters, allow a lead inspection or risk assessment by home buyers and maintain records certifying compliance with applicable federal requirements for three years.

 

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https://www.epa.gov/newsreleases/us-epa-settles-anaheim-home-improvement-firm-failure-protect-residents-lead-based-paint

British house prices flat in October | Bedford Corners Real Estate

British house prices were unchanged in October after rising in monthly terms each of the previous 15 months, mortgage lender Nationwide said on Wednesday, a new sign of the market cooling after the Brexit vote.

House prices were flat last month, compared with a monthly increase of 0.3 percent in September and a median forecast for a rise of 0.2 percent in a Reuters poll of economists.

Compared with October last year, prices rose by 4.6 percent, slower than September’s increase of 5.3 percent and below a median forecast of 5.0 percent in the Reuters poll.

It was the slowest annual price growth since January, but Nationwide economist Robert Gardiner said it was still in line with rates since early 2015.

He said a 10 percent fall in housing market activity in recent months might be a lingering after-effect of April’s introduction of a higher level of tax on properties bought by landlords and second homes.

Howard Archer, an economist with Markit HIS, said he expected house prices to fall by about 3 percent next year when Britain launches its negotiations to leave the European Union, probably adding to uncertainty about the economy.

Another mortgage lender, Halifax, said last month that British house prices rose at their slowest pace in more than three years in the three months to September.

But there have been other signs recently that the housing market slowdown might be bottoming out

 

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http://uk.reuters.com/article/uk-britain-houseprices-nationwide-idUKKBN12X0LH

Consumer Confidence Rises | Bedford Corners Real Estate

The Consumer Confidence Index, reported by the Conference Board, rose in September. Compared with last month, consumers were more optimistic about both the current situation and the near term outlook.

The Consumer Confidence Index rose to 104.1, from 101.8 in August. The present situation index rose to 128.5, from 125.3, and the expectations index increased to 87.8, from 86.1.

Consumers’ assessments of current business conditions were mixed. Assessments shifted from both “good” and “bad” to “normal”. The share of respondents rating business conditions “normal” rose by 4.9 percentage points from 51.5% to 56.4%. A net decline of 2.9 percentage points in assessments of “good” combined with a 2.0 percentage point net decline in assessments of “bad” for the total.

Similar to consumers’ assessments of current business conditions, expectations of business conditions over the next six months were mixed. The share of respondents expecting future business conditions to be the same rose from 71.0% to 73.3%. About half of the increase was the result of a net decline in respondents expecting future business conditions to be worse, an upgrade, while the rest was the result of a net decline in respondents expecting future business conditions to be better, a downgrade.

Consumers’ assessments of current employment conditions improved. The share of respondents reporting that jobs were “hard to get” dropped to 21.6%, from 22.8%. Most of the 1.2 percentage point decline (1.1 percentage point) upgraded to “jobs plentiful”.

Also, consumers’ expectations of employment over the next six months were more upbeat than in August. The share of respondents expecting “more jobs” rose to 15.1%, from 14.4%. Most of the 0.7 percentage point increase (0.5 percentage point) shifted from “fewer jobs”, while the rest shifted from “same jobs”.

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The Conference Board also reports the share of respondents planning to buy a home within six months. The share of respondents planning to buy a home declined to 5.1%, from 6.9%. The share of respondents planning to buy a newly constructed home and an existing home were 0.6% and 3.5%, respectively; the share of respondents who were “uncertain” whether they would buy a newly constructed or an existing home was 1.0%.

 

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http://eyeonhousing.org/2016/09/consumer-confidence-in-september-another-optimistic-month/

Existing home sales drop 7.1% | Bedford Corners Real Estate

U.S. home resales fell sharply in February in a potentially troubling sign for America’s economy which has otherwise looked resilient to the global economic slowdown.

The National Association of Realtors said on Monday existing home sales dropped 7.1 percent to an annual rate of 5.08 million units, the lowest level since November.

Sales have been volatile and prone to big swings up and down in recent months following the introduction in October of new mortgage regulations, which are intended to help homebuyers understand their loan options and shop around for loans best suited to their financial circumstances.

February’s decline weighed on investor sentiment, with the S&P 500 stock index falling after the data was released.

Sales fell across the country, including a 17.1 percent plunge in the U.S. Northeast.

Economists had forecast home resales decreasing 2.8 percent to a pace of 5.32 million units last month. Sales were up 2.2 percent from a year ago.

The median price for a previously owned home increased 4.4 percent from a year ago to $210,800.

The housing report runs counter to data showing strong job growth and a stabilization of factory output, which had taken a hit from weaker demand overseas and a strong U.S. dollar.

Housing continues to be supported by a tightening labor market, which is starting to push up wage growth, boosting household formation. But a relative dearth of properties available for sale remains a challenge.

“Finding the right property at an affordable price is burdening many potential buyers,” said NAR economist Lawrence Yun.

In February, the number of unsold homes on the market rose 3.3 percent from January to 1.88 million units, but was down 1.1 percent from a year ago.

 

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http://www.reuters.com/article/us-usa-economy-housing-idUSKCN0WN1I6

Homebuilder Sentiment drops | Bedford Corners Real Estate

A gauge of home-builder sentiment fell in February to its lowest level since May, a sign that housing-market growth could be moderating amid rising prices, and shortages of labor and land.

An index of builder confidence in the market for new single-family homes fell three points to a seasonally adjusted level of 58 in February, the National Association of Home Builders said Tuesday. A reading over 50 means most builders generally see conditions as positive.

“Though builders report the dip in confidence this month is partly attributable to the high cost and lack of availability of lots and labor, they are still positive about the housing market,” said NAHB Chairman Ed Brady.

The index stood at an upwardly revised 61 in January, and 60 December. Economists surveyed by The Wall Street Journal expected a reading of 60 in February.

The index has been at 60 or above since June, and has been in positive territory since mid-2014. The index averaged 59 in 2015.

Ongoing upbeat sentiment in the housing market suggests it could maintain its strength in the face of headwinds, such as a relatively strong dollar and economic turmoil overseas, which have buffeted other sectors of the economy. Mortgage rates, which rose slightly in December following the Federal Reserve’s first interest-rate increase in nearly a decade, are hovering again near 2015 lows, according to Freddie Mac.

NAHB Chief Economist David Crowe said builders “are reflecting consumers’ concerns about recent negative economic trends,” but noted that many of the fundamentals were in place to see continued strong demand for housing.

 

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http://www.foxbusiness.com/markets/2016/02/16/homebuilder-sentiment-hits-lowest-level-since-may.html

U.S. Real Estate 25% to 60% Overvalued: Analyst | Bedford Corners Real Estate

Will another housing bubble bring down the U.S. economy?

Nearly a decade after the peak of the American real estate bubble, there’s no shortage of fear that we’ll repeat the whole nightmare again.

For years now, economy watchers have fretted over the run up in student loan debt, while more recently the collapse in junk bond prices had analysts drawing paralells to what happened in the subprime mortgage market in 2008. Legendary investor George Soros this week was quoted as saying the upheaval in China’s financial markets reminds him of the “crisis we had in 2008,” The Sunday Times in Sri Lanka reported on Thursday.

But what if the next crisis isn’t just similar to the last one, but a word-for-word rip-off? That’s what a viewer of Quicken Loans’ latest ad for its new mortgage product, Rocket Mortgage, might just think. The tagline is, after all, “push button, get mortgage.”

After seeing that video (or an ad for the product on Fortune.com), you might be forgiven for having flashbacks to the last crisis. Meanwhile, competitors like Guaranteed Mortgage have resorted to hiring celebrities like Extreme Makeover Home Edition host Ty Pennington to pitch its online lending products.

But a hard look at the numbers should convince you that mortgage lenders aren’t handing out loans like a dentist giving out toothbrushes. Lending standards have come down a bit, but they remain tighter than they were before the mid-2000s bubble began inflating, and seemingly qualified buyers are still complaining about getting shut out of the real estate market.

For its part, Quicken Loans President and CMO Jay Farnar argues that products like Rocket Mortgage enable his firms to improve the quality of its lending, because it enables a more efficient collection of consumer data that helps make underwriting more robust.

Meanwhile, mortgage originations have remained flat for the past two years, and lenders are giving out fewer mortgages today then they were in 2012, when the housing recovery was just getting underway, according to data from the Mortgage Bankers Association.

In other words, it doesn’t look like irresponsible mortgage lending is inflating real estate prices beyond their fundamentals, but that doesn’t mean another form of capital won’t. That’s what housing analyst Marc Hanson has been arguing for sometime now. Housing prices, he contends, are about 25% to 60% above what the fundamentals of the U.S. economy can justify, but the market is being propped up by “unorthodox. . .incremental demand using unorthodox capital.”

This time around the unorthodox capital isn’t coming in the form of international investors piling money into the U.S. mortgage bond market, creating a doomsday machine that cranked out home loans with very little scrutiny, but from domestic institutional investors, folks buying second and third homes and serving as landlords, and foreign buyers stowing cash in American real estate.

 

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http://fortune.com/2016/01/11/real-estate-bubble/

Existing Home Sales fall 4.8% | Bedford Corners Real Estate

Existing Home Sales in the United States fell 4.8 percent to a seasonally adjusted annual rate of 5310 Thousand in August from a downwardly revised 5580 Thousand in July of 2015. It is the lowest figure since April, below market expectations. The median sale price went up 4.7% yoy and the months’ worth of supply rose 0.3 to 5.2. Existing Home Sales in the United States averaged 3842.52 Thousand from 1968 until 2015, reaching an all time high of 7250 Thousand in September of 2005 and a record low of 1370 Thousand in March of 1970. Existing Home Sales in the United States is reported by the National Association of Realtors.

United States Existing Home Sales

 

Actual Previous Highest Lowest Dates Unit Frequency
5310.00 5480.00 7250.00 1370.00 1968 – 2015 Thousand Monthly
SA
Existing Home Sales occurs when the mortgage is closed. Mortgage closing usually takes place 30-60 days after the sales contract is closed. . This page provides the latest reported value for – United States Existing Home Sales – plus previous releases, historical high and low, short-term forecast and long-term prediction, economic calendar, survey consensus and news. Content for – United States Existing Home Sales – was last refreshed on Monday, September 21, 2015.

 

Calendar GMT Reference Actual Previous Consensus Forecast (i)
2015-07-22 03:00 PM Jun 5.49M 5.32M(R) 5.4M 5.2M
2015-08-20 03:00 PM Jul 5.59M 5.48M 5.44M 5.4M
2015-09-21 03:00 PM Aug 5.31M 5.58M 5.53M 5.4M
2015-10-22 03:00 PM Sep 5.6M
2015-11-23 03:00 PM Oct 5.6M
2015-12-22 03:00 PM Nov 5.5M

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http://www.tradingeconomics.com/united-states/existing-home-sales

 

U.S. home repossessions reach 30-month high | Bedford Corners Real Estate

The U.S. housing market appears to be shedding the last vestiges of the subprime mortgage crisis. As foreclosures reached their lowest level in nearly 10 years, home repossessions hit a 30-month high in July 2015, according to real-estate website RealtyTrac.

There were 45,381 U.S. properties that were put into foreclosure for the first time in July, down 8% from the previous month and 9% from a year ago, the lowest since November 2005, while banks repossessed 46,957 properties in July, up 29% from the previous month and 81% from a year ago, hitting the highest level since January 2013. (Foreclosure refers to the process your lender goes through if you stop making payments on your home or go into default. Repossession is when the lender takes ownership of your home. This can’t occur until a foreclosure is final.)

A decade-low in foreclosure activity shows that a recent surge in bank repossessions represents “banks flushing out old distress rather than new distress being pushed into the pipeline,” says Daren Blomquist, vice president at RealtyTrac. “Properties that foreclosed in the second quarter had been in the foreclosure process an average of 629 days, the longest in any quarter since we began tracking in the first quarter of 2007,” he said. Some 61% of loans in the foreclosure process originated during the housing bubble between 2004 and 2008. That number was 75% two years ago.

 

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http://www.marketwatch.com/story/us-home-repossessions-reach-30-month-high-2015-08-20

Exterior Home Improvements That Increase Value | Bedford Corners Real Estate

Yesterday on Housecall, we discussed ways to increase your home value with indoor décor. Today, we’re focusing on what you can do outside the home to give it an added monetary boost.

Curb appeal is everything when it comes to selling your home, and that means your home’s exterior needs to be in optimal condition. In fact, 71 percent of prospective home buyers say that a home’s curb appeal is an important factor in their buying decision. This infographic fromLawnStarter shows seven exterior home improvements that can increase resale value and help sell your home even faster:

LawnStarterIG

Replace Your Front Door

Believe it or not, a front door says a lot about you and your home. A quality front door can be a huge asset for your home’s value, and how secure your home feels upon entrance. Kelly Fallis of Remote Stylist says, “It’s the first thing a buyer walks through. Repaint or replace; their first impression rests on it.” According to House Logic, a standard 20-gauge steel door can cost around $1,230, but that investment can more than pay for itself with the amount of value it adds to your home. A quality front door replacement can bring you a return of around 102 percent, which makes it a great bang for your buck.

Updated Landscaping

Over 92 percent of prospective home buyers use the Internet at some point during their search process, meaning a lot of eyes are going to be looking for pictures of your home. You want to be able to showcase your property in the best light possible to drive interested parties in for a closer look. According to Bankrate, a quality landscaping job has the potential to net you a whopping 252 percent return in increased home value. John Harris, a landscape economist, has stated that updated landscaping can increase a home’s value by 28 percent and have it sold 10-15 percent quicker.

New Paint

Most prospective homeowners tend to look at what they need to update or work on in the homes that they look at. Repainting your home can cause less stress on the buyer since they know that the job is fresh and adds to the look of the home. That being said, don’t go overboard with color choices. Choose warm and inviting colors, such as taupe, tan or white. “Individuals too often minimize the impact of a first impression,” says James Alisch, managing director of WOW 1 DAY PAINTING. “The exterior paint job of a home greatly impacts how potential buyers feel about a place.” You want to make sure that potential buyers can envision themselves inside your home, and having a neutral exterior color is appealing to a larger pool of buyers. If you do feel the need to add some brighter colors, make sure that they aren’t overpowering and can work well with the neutral base. It’s best to consult your local home improvement store to discuss your options and budget.

 

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http://blog.rismedia.com/2015/7-exterior-home-improvements-that-increase-resale-value/