Archive for the ‘Home Builders’ Category

Confidence among home builders in the country rose in February this year, based on the growth of the Index of Builder Confidence of the National Association of Home Builders and Wells Fargo.

In February, the index climbed up to 17, higher than the previous index of 15 and higher than the prediction of analysts. It was also the highest point reached over the past three months.

The buyer traffic gauge stood at 12 and the measure of sales prospects surged to 27, up from the January reading of 26.

According to analysts, although figures below 50 mean that most home builders view the industry situation as poor, the increase in the index meant that builders are less gloomy about their prospects for recovery. One of the factors that have encouraged builders is the expansion and extension of the homebuyer tax credit program.

The general economic index of the Federal Reserve Bank of New York also climbed up to 24.9 in February from the January reading of 15.9. Readings above zero mean that New York and portions of Connecticut and New Jersey have significant growth prospects.

According to Michigan businessman and NAHB chairman Bob Jones, optimism is growing among home builders because of the still low mortgage rates, the improvement of the tax credit scheme and the apparent stabilization of home prices.

Of the four regions tracked by the index, confidence surged in two regions, rising to a record 19 in the South and to 13 in the Midwest. In both regions, the index rose by two points.

In contrast, confidence dropped to 19 in the Northeast and to 14 in the West. The index fell by one point in both regions.

David Crowe, the chief economist of NAHB, said that the tax credit expansion has been a positive factor for builders, but the continued foreclosures are still pushing down the level of builder expectations.

As predicted by a foreclosure tracking firm, about 3 million homes will be taken back by mortgage banks this year because of depressed property values and high unemployment rates. Last year, 2.82 million homes were put into the foreclosure process.

According to survey respondents, housing starts may have increased to an annual rate of 580,000 units in January from 557,000 units in December last year. If the scheduled release of the Commerce Department report affirms the projection, the 4.1-percent increase in housing starts shows that home builders have begun to act on their optimism.

Home builders across the country, particularly the biggest home construction firms, will be receiving hundreds of millions in bonanza from tax refunds resulting from the approval of the new tax refund legislation recently.

The tax refund would enable companies to recover from their losses, especially large firms which can claim refunds of taxes they have paid over the past 5 years.

The National Association of Home Builders lobbied hard for the passage of the tax break legislation, which also includes all other types of industries. But home builders say they will be helped significantly by the tax refunds because they were directly hit by the housing meltdown and suffered huge losses.

According to several financial analysts, the tax refund would not only help home builders recover; it would also increase the cash hoard of the biggest home construction companies in the country. They claim that the largest home builders have accumulated cash after selling most of their real estate properties over the past years and not building more homes.

Based on a report released by J.P. Morgan, each of the ten top home builders in the country has a cash hoard of about $1.2 billion, compared to their average of $616 million in cash in 2007.

Rob Stevenson, an analyst with investment bank Fox-Pitt Kelton, said that home builders sold a lot of their assets over the past years and that the tax refunds would be equivalent to free money added on top of their cash hoard.

Michigan-based home builder Pulte Homes expects to receive more than $450 million in tax refunds while Lennar Corp. of Florida could receive up to $300 million. Arizona-based Meritage Homes Corp. could claim around $60 million.

With these tax breaks, the extension and expansion of the federal tax credit for home buyers and other positive developments affecting home builders, credit rating agencies such as Credit Suisse upgraded home builders, sending prices of home building stocks to higher levels.

The stocks of Lennar rose by nearly 5 percent or 63 cents to $14.14 and the shares of Meritage increased by nearly 6 percent or $1.11 to $19.90.

According to many housing analysts, what the tax breaks would really significantly help are the small home builders, which had been battered by the housing crisis and which have temporarily closed their home building activities. The cash money would enable them to restart their operations and recover.

When the mortgage industry collapsed, home builders were among those who suffered the worst of it. Those who had the foresight to prepare for the collapse of the housing market were able to survive while most of those who ignored the warning signs were left with no other option but to declare bankruptcy.

In the past months, however, nationwide home sales have displayed a steady gain which encouraged those in the home building industry to slowly inch back in Maryland’s new single-family home market. In addition, inventory of newly-constructed properties is starting to dwindle as consumers take advantage of the $8,000 tax credit that the federal government gave as an incentive to first time home buyers.

Although the market conditions are not as favorable compared to that of the boom years, home builders are starting to reposition themselves in the market, fearful that they will be left behind once the industry fully recovers.

For instance, KB Home, a Los Angeles-based construction company, resumed its plans of building energy-efficient houses to meet the growing demand for green homes in Maryland. In addition, these residential properties come with floor plans that can meet any preferences and budget, allowing them to somehow compete with re-sales as well as foreclosures.

Caruso Homes, a local builder which suffered through a bankruptcy during the worst of the mortgage crisis, is already preparing to enter the market especially after it has fully satisfied its obligations to their creditors.

Now, the scaled-down company has already sold several homes in the past couple of weeks and will begin their construction in the next two months.

Of course, there are still a lot of challenges that these builders face. Among them is the lack of credit availability to purchase land for development. The enduring mortgage problems as well as rising unemployment are also important factors that need to be considered.

In summary, home builders find the current market conditions quite challenging. The building of these planned communities will still depend on the availability of financing and the pace of the recovery of the entire housing market.

But with the right products and careful planning, recovery for the industry is no longer an elusive dream.

Home builders in FL are alarmed after finding out that Chinese drywall used by some home builders have been found to be toxic and hazardous to health. In an effort to intensify their efforts against hazardous chemicals and compounds, the
Chinese Drywall Complaint Center has been increasing its programs to educate home and property owners [...]

Green house building is getting more popular in new house construction. In fact, two newly constructed homes in Elmhurst are both green homes. This information was given by Laura Reedy Stukel, a certified agent of EcoBroker at LW Ready Real Estate.
The first house was constructed under the supervision of Styczynski Walker and Associates. The construction [...]

A number of home builders are currently experiencing the long-awaited boost in sales in the past six weeks. This is due to the new-home tax incentive in California. According to the Franchise Tax Board of the state, home buyers got more than $30 million of the $100 million pot money for California. This has created [...]

March 1 marks the start of the new state tax credit of California allotted for buyers of new and unoccupied houses. Excited home builders are now doing quick and big campaigns around about the great tax break which is suited for the new model homes soon to be out in the market.
The tax credit gives [...]

Astoria Homes, a private home building company has fallen prey to the housing market slump. The local company has been forced to fire 17 employees just last week.
Now, it only has 17 employees on its roll, a mere tenth of its entire workforce in 2005-2006, and Astoria Homes President Tom McCormick says that [...]

After several months of low record in homebuilders’ confidence, this month is no different. Things get worse and this threatens the housing market for this is a sign that housing recession will continue into a fourth year.
According to the National Association of Homebuilders/Well Fargo, builder confidence index is at 9 this month. Since this reading [...]