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Monthly Archives: April 2013
The gap between large and small homebuilders widens | Bedford Hills Real Estate
The 14% increase in land values during the first three quarters of 2012 was four times greater than the rise in house prices, Capital Economics said in a new report.
The report calls the rising cost and reduced availability of building materials, labor and land “thorns in the side of the homebuilding recovery.” But for some homebuilders, this has widened the gap of success between large and small homebuilders.
In its 2012 annual report, Toll Brothers ($30.91 0.61%) writes, “Our financial strength gives us a competitive advantage over the small and mid-sized private builders in our luxury niche whose access to capital and land remains constrained.”
Despite plenty of anecdotal evidence that many of the lots, which are ready for building, are generally far away from city centers, according to Capital Economics, Toll Brothers says its philosophy has always been to acquire exceptionally located sites.
In its annual report, Toll Brothers writes, “In contrast to the just-in-time model of some land-light builders, we often take this land through approvals while we have it under option and then improve it.” This helps increase the company’s profit margins and enables it to position the company for the future.
Another large homebuilder, Lennar Corporation ($38.17 0.94%), has dedicated a large amount of its spending toward purchasing land.
“Against this backdrop of recovery in the housing market, we have continued to be a very active land purchaser spending almost $500 million on land in the first quarter,” said Start Miller, CEO of Lennar Corp. in the builders’ first-quarter report.
He added, “We are well positioned for 2013 and 2014 so our land focus is now primarily on homesites for 2015 and beyond.”
Publicly traded homebuilder Meritage Homes ($41.56 1.79%) has also been actively buying land since 2009.
Meritage Homes’ CEO wrote in the company’s 2012 annual report, “Based on our better-than-anticipated growth in 2012 and expectations for this recovery to continue for several years, we invested approximately $480 million in land and development during 2012.’
The company ended the year with almost 21,000 lots, representing a five-year supply based on its trailing twelve months’ closings, according to its annual report.
The financial strength of these large homebuilders continues to give them a competitive advantage against smaller builders.
“We believe our land positioning strategies have helped to pave the way for achieving future growth and profitability,” said Toll Brothers, who spent $106 million on land development in 2012.
“The opportunity to purchase substantially finished lots in desired locations is becoming increasingly more limited and competitive,” the builder said. “As a result, we are spending more dollars on land development as we are purchasing more undeveloped land and partially finished lots than in recent year.”
via housingwire.com
Apartment Markets Still Look Good | Cross River Real Estate
Neither an upswing in home sales nor a wave of new multifamily construction is affecting apartment vacancy rates so far this year. Rates are down and rents are strong across the nation.
Apartment markets improved across all areas according to the National Multi Housing Council’s (NMHC) April Quarterly Survey of Apartment Market Conditions. All four indexes — Market Tightness (54), Sales Volume (55), Equity Financing (56) and Debt Financing (59) — came in above 50, which indicates improving conditions. This reverses last January’s findings, where Market Tightness and Sales Volume dipped below 50 for the first time since 2010.
“The apartment industry is operating on cruise control, as the expansion continues unabated,” said Mark Obrinsky, NMHC’s Vice President for Research and Chief Economist. “While concern about overbuilding has begun to crop up, demand for apartment residences remains strong. New construction may have finally recovered fully, but most units under construction won’t be delivered until 2014 or later. The dearth of recent completions has contributed to relatively low product availability. As deliveries increase, we expect to see an even greater pick-up in sales volume.”
Key findings include:
Financing remains constrained. One in ten reported construction financing as available for all types of apartments in all markets. In addition, only one quarter thought acquisition financing was available for all properties in all markets.
Market Tightness Index rose to 54 from 45. The index has been above 50 for 12 of the past 13 quarters, with only January 2013 indicating contraction. One quarter of respondents saw markets as tighter, up from 16 percent last quarter.
The Sales Volume Index increased to 55 from 49. Like the Market Tightness Index, the pickup in the Sales Volume Index showed improving conditions again this quarter. Almost one-third (30 percent) reported sales volume was higher while only 20 percent indicated that sales volume was lower.
The Equity Financing Index remained at 56, unchanged from the previous two quarters. This reflects the 15th quarter in a row with the index above 50. This is the seventh quarter in a row in which the most common response was that equity finance conditions were unchanged from three months ago.
Debt Financing Index increased by two points to 59. One quarter of respondents viewed now as a better time to borrow compared with three months ago, while six percent viewed now as a worse time. This was the ninth consecutive quarter in which the share of respondents who thought debt financing had worsened was in single digits.
Jobless rates plummet in U.S. states with housing recovery | Cross River Homes
via reuters.com
NYC agent workforce clobbered in March | Waccabuc NY Homes
New York City real estate employment got clobbered last month, with the real estate agent workforce in The Big Apple shedding more jobs than other sector except government, The Real Deal reported, citing a study released by Eastern Consolidated.
Why? The report doesn’t explain the drop in real estate employment — 1,200 jobs were supposedly lost in March alone — but the real estate investment firm’s chief economist expects those jobs will come back.
The report wasn’t a complete downer for local market observers. It also found that construction jobs shot up, with the industry sprouting 900 jobs for the local economy, partly due to reconstruction in the wake of Hurricane Sandy, The Real Deal reported.
The positive news for New York City construction mirrors nationwide improvement in the sector that has steamed ahead, even as other sectors have struggled to add jobs.
Construction job growth hit a seven-year high in March, according to a recent jobs report. The 3.8 percent annual growth rate in construction jobs in March towered over the 1.4 percent overall jobs growth rate.
The industry has added 317,000 jobs to the economy in the last two years with over half of that increase occurring in the last six months, the White House said in a statement last month.
via inman.com
Housing markets characterized by ‘egotistical’ prices, gun-shy buyers | North Salem NY Homes
his post — the first of what will be a regular series — is based on an email response from real estate agent Mary Giroux to this week’s “Taking Inventory” Facebook post. Every week, Inman News invites readers to share thoughts and insights about the real estate sector. Your input helps Inman News shed light on the latest issues and trends that are redefining the industry.
Today’s housing market is a weird animal.
Consumers traumatized by the housing crisis are treading with caution as they wade into a market that, to many observers, is still brimming with once-in-a-lifetime deals. At the same time, many sellers are seeking to capitalize on the inventory shortage, pricing their homes unreasonably high, in the opinion of some agents.
The tendency is so strong that some sellers are listing their homes at prices one agent has described as outright “egotistical.”
Perhaps that isn’t so surprising. People who saw their home values plummet during housing bust are probably more than eager to demand a price that pushes the limits of fair value — and recoup some of the wealth that they lost.
But the specter of the housing crisis is also sharp in buyers’ minds. Once lured by the promise of a “buyer’s market,” many are now finding themselves locked in bidding wars.
via inman.com
Assemblyman David Buchwald to open downtown Mount Kisco office | Mt Kisco NY Homes
State Assemblyman David Buchwald will host a grand opening for his new district office in Mount Kisco today.
“I want my constituents to know that this office is for you, and we are open for business,” Buchwald wrote in a press release. “We’ve moved to an accessible location within walking distance of both bus stops and the Metro-North train station in the heart of our district. My doors are open to hear your concerns firsthand and to ensure we keep Westchester a great place to live, work and raise a family.”
Mount Kisco Chamber of Commerce President Philip Bronzi wrote in the press release that he’s pleased by the development.
“The Chamber is very much looking forward to the opening of Assemblyman Buchwald’s Mount Kisco district office,” Bronzi wrote. “We hope visitors and families will take the opportunity to interact with our downtown business community. We are also excited to have truly local representation in Albany for our members and this wonderful community.”
The office is located at 125-131 E. Main St., Suite 204 in Mount Kisco. Today’s event will last from 3 p.m. to 6 p.m., and the ribbon cutting will be held at 4:30 p.m.
Rentals Spotlight: Chicago | Bedford Hills NY Homes
via zillowblog.com
Christopher Meloni Flipping New Canaan Country Estate | Pound Ridge NY Homes
via zillowblog.com
