Thursday, September 27, 2007

Ultimate Electronics Adds Home Appliances

The Ultimate Electronics chain has added between 8,000 and 10,000 sq. ft. to its two stores in Oklahoma City, and has begun selling washers, dryers, refrigerators, above-range microwaves, ranges, ovens and dishwashers. Brands include General Electric, Whirlpool, Maytag, Frigidaire, KitchenAid, LG, Bosch, Electrolux, Hotpoint, Amana, Jenn-Air, and Broan. The chain will introduce white goods into its remaining 29 stores early next year.

New Home Sales Plummet 21%

Sales of new homes fell 21.2% in August from the same month in 2006, to a seasonally adjusted annualized rate of 795,000 units, according to the Census Bureau. Through the first eight months of 2007, some 595,000 new homes have been sold, 21.2% behind 2006's pace. The mark was the lowest since June, 2000.
The median sales price of a new home during the month was $225,700, down 7.5% from the median price in August, 2006.

KB Home Revenues Drop 32% in Quarter

KB Home reported a sales plunge during its fiscal third quarter ending August 31. Revenue fell 32% from the same period in 2006 to $1.54 billion, the number of sales closed dropped 28% to 5,699 units, and the average selling price declined 7% to $267,700.

Wednesday, September 26, 2007

This Is Why There Ought to Be a Fortress of Solitude

A product write-up for the “superhero” of bathroom products sports an unfortunate adjective, indeed.

Tuesday, September 25, 2007

September Consumer Confidence Index Dips 6%

The Conference Board’s Consumer Confidence Index, fell 5.8% in September from the same month the year before to 99.8 (1985=100). The mark was 5.5% lower than August’s revised index.
"The Consumer Confidence Index is now at its lowest level in nearly two years,” said Lynn Franco, Director of The Conference Board Consumer Research Center. “Weaker business conditions combined with a less favorable job market continue to cast a cloud over consumers and heighten their sense of uncertainty and concern. Looking ahead, little economic improvement is expected and with the holiday season around the corner this is not welcome news."
Some 20.4% of consumers polled expect their incomes to increase over the next six months.

Existing Home Sales Tumbled 13% in August

Sales of existing homes fell 12.8% in August compared to the same month in 2006, to a seasonally adjusted annualized rate of 5.5 million units, according to the most recent figures from the National Association of Realtors. Existing single family home sales dropped 13.0% from August 2006 to a seasonally adjusted annualized rate of 4.81 million homes.
Total housing inventory rose 0.4% at the end of August to 4.58 million existing homes available for sale, which represents a 10.0-month supply at the current sales pace. That number will grow over the next few months, as foreclosures grow and consumers with adjustable rate mortgages that reset to higher payments than they can afford will sell their homes.
“The unusual disruptions in the mortgage market, including a significant rise in jumbo loan rates, resulted in a fairly high number of postponed or cancelled sales, with many buyers having to search for other financing when loan commitments fell through,” Lawrence Yun, NAR senior economist said. “Lower sales contributed to a buildup of unsold inventory.” Yun expects similar results for home sales in September.

Lennar Revenues Down 44% in Third Quarter

Lennar Corp., one of the nation’s largest home builders, reported revenues for the third quarter of 2007 of $2.3 billion, down 44% from the same period last year. The company’s third quarter net loss in 2007 was $513.9 million, compared to third quarter net earnings of $206.7 million in 2006.
The builder had new orders for 5,804 new homes, down 48% from the third quarter of last year, and a cancellation rate of 32%. It has laid off 35% of its workforce to date.

Friday, September 21, 2007

Dribs and Drabs for Friday

Masco has cut its 2007 earnings expectations. It now expects $1.55-$1.60 a share, down from $1.60-$1.70, and forecasts 2007 housing starts in the 1.35 million unit range, down from an earlier 1.40 million forecast. The conglomerate predicts a single-digit drop in fourth quarter sales.

The dollar hit a new low versus the euro, and now has parity with the Canadian dollar for the first time since November, 1976.

The subprime crisis has exceeded even the most pessimistic estimates, Fed Chairman Ben Bernanke told the House Committee on Financial Services yesterday. He said that delinquencies and foreclosures are going to rise, and that more homeowners in foreclosure are likely to lose their homes than in normal times, when about half of those foreclosed upon do. The fed plans more consumer protection rules later this year.

Interactive art done well: The Wall Street Journal has published a map of US delinquencies and housing prices.

Thursday, September 20, 2007

New "Healthy Homes" Resource Available

Available in English or Spanish, Healthy Homes: Assessing Your Indoor Environment is a new manual just released by Cornell University Cooperative Extension. Produced in cooperation with the Healthy Homes Division of the Department of Housing and Urban Development and the Cooperative State Research, Education & Extension Service, this 90-page manual is accompanied by a 20-minute DVD of the same title. Both resources discuss indoor environmental pollutants, their health effects, and mitigation strategies. Free copies are available while supplies last. To order yours, send an e-mail message with your mailing address to Professor Joseph Laquatra at Cornell: Specify if you want the English or Spanish version.

Location Beats Service for Big Box Giants

Although Lowe's ranks higher than Home Depot in product selection and customer service, Home Depot is where consumers spend more due to its store locations, says a new study by Consumer Specialists, a Germantown, TN, marketing research and consulting firm.
Interestingly, consumers spend money at both chains, no matter which they prefer. People who prefer Home Depot spent an average of $763 at Home Depot in the previous six months, while fans of Lowe's spent $454 at Home Depot stores during that period.
Over that span, Lowe's got an average $604 in spending from homeowners who prefer Lowe's, and an average of $322 from customers who actually prefer Home Depot.

Fed Plans Consumer Protection Rules by End of '07

Federal Reserve chairman Ben Bernanke tells Congress the Fed will issue new consumer protection rules to help protect consumers following a surge in foreclosures and delinquencies on subprime mortgages. The Fed cut its benchmark interest rate by half a point to 4.75% earlier this week.
C-Span coverage is here.

Wednesday, September 19, 2007

Will the Fed's Rate Cut Turn Around Housing?

The New York Times' David Leonhardt weighs in.

Average Hourly Earnings Up 4% in August

Average hourly earnings were up 3.9% from August 2006 to $17.39 last month, according to the Bureau of Labor Statistics. The figure was slightly under July's $17.43. Average weekly earnings in August were up 3.6% year to year to $591.26.
The BLS's Consumer Price Index for August was up 2.0% from August of last year to 207.9 (1982-1984 = 100). Housing prices were up 2.9% year to year, and virtually flat with July figures.

August Starts Dip 19%

Housing starts in August slipped 19.1% from the same month last year to a seasonally adjusted annualized rate of 1.33 million units, according to the Census Bureau, with single family starts down 27.1% over that span to a rate of 988,000 units per year.
Permits were down 24.5% to an annualized rate of just under 1.31 million per year, with single family permits down 27.9% to 926,000 units per year.
Through the first eight months of 2007, some 977,900 homes have been started, down 24.3% from the first eight months of 2006, and 779,900 single family homes have been started in that span, a 27.0% drop from last year.

Avast ye!

Today is a great day to make your co-workers think you've lost your mind.

Tuesday, September 18, 2007

Bathroom Blogfest ’07 to Run during National Kitchen and Bath Month

Stephanie Weaver, Experienceology author and consultant, is leading a group of female bloggers taking a look at women’s bathrooms around the world and posting their findings online. As a tribute to National Kitchen and Bath Month, this group of female bloggers will be posting on Bathroom Blogfest ’07 their observations about “ladies rooms” they encounter and their importance in creating great customer experiences. The Blogfest, which will begin October 28, is the brainchild of Weaver and Susan Abbott, a business consultant and consumer researcher in Toronto.
More information on the event and on the blogs participating will be posted shortly.

More Troubles with American Home Mortgage

Bankrupt lender American Home Mortgage Company is bouncing checks that were supposed to pay the property taxes of more than 70 homeowners in the Baltimore metropolitan area, and Baltimore County has stopped accepting checks from the company. Meanwhile, attorneys for former employees claim the lender is improperly trying to seize $27 million in retirement funds to pay its creditors. American Home Mortgage was the nation’s 10th largest mortgage company until it crashed in midsummer, a victim of the subprime crisis.

August Foreclosures More Than Double

Nearly 244,000 foreclosure proceedings were started in August, according to RealtyTrac, up 115% from August, 2006 levels. The number is 36% higher than July’s number. One in every 510 households was in foreclosure during the month.
“The jump in foreclosure filings this month might be the beginning of the next wave of increased foreclosure activity, as a large number of subprime adjustable rate loans are beginning to reset now,” commented James J. Saccacio, chief executive officer of RealtyTrac. “Another significant factor in the increased level of foreclosure activity is that the number of REO filings (bank repossessions) is increasing dramatically, which means that a greater percentage of homes entering foreclosure are going back to the banks.”
Seven of the top ten states for foreclosure activity in August are in the Sun Belt, with Nevada leading the pack. One in every 165 households in Nevada is in foreclosure.

Ayn Rand Taught That We Must Take Personal Responsibility

Her most famous disciple puts that principle into action.

Friday, September 14, 2007

Building Materials Sales Dip 1.5% Through August

Sales by building material/garden equipment and supply retailers for the first eight months of 2007 hit $242.6 billion, down 1.5% from the same period last year, according to the Commerce Department. Sales in the category for the month dipped less than 1% from July, at just under $31.3 billion.
Sales for electronics and appliance stores increased 3.0% over the eight-month span, to $68.7 billion.

ED+C Plans Indoor Air Quality Webinar

Environmental Design + Construction magazine is planning a free webinar on design strategies to improve indoor air quality on October 11 at 2:00 p.m. Those who sign up will have 12 months to access the information presented.

Tuesday, September 11, 2007

NAR: No Quick Recovery for Home Sales

Sales of existing homes will bottom out at about 5.92 million units in 2007, down 8.6% from last year’s levels, according to the National Association of Realtors. The group foresees a 5.9% recovery next year, to about 6.27 million existing homes sold.
Existing-home prices are likely to slip 1.7% to a median $218,200 this year before rising 2.2% in 2008 to $223,000.
“The mortgage markets will calm further in the months ahead, but it’s important to underscore the fact that conventional loans – the vast majority of available financing – are available to creditworthy borrowers,” Lawrence Yun, NAR senior economist said.
NAR sees new home sales dropping 23.7% this year to 801,000 units, and slipping another 7.5% in 2008 to 741,000 units. The median new-home price is estimated to drop 2.2% to $241,100 in 2007, and then increase 1.7% next year to $245,100.
The group pegs 30-year fixed-rate mortgages at 6.4% for the balance of the year and up to the 6.5% range in 2008. “We expect the Fed to cut rates two times before the end of the year, which will lower interest rates for prime borrowers and FHA-insured loans,” Yun said.
Growth in the U.S. gross domestic product (GDP) is forecast by NAR at 2.0% in 2007, and at 2.7% in 2008. The unemployment rate is expected to average 4.6% for 2007, unchanged from last year. Inflation, as measured by the Consumer Price Index, is predicted to be 2.8% in 2007, while inflation-adjusted disposable personal income is likely to increase 3.6% by the end of 2007

Canadian Starts Dip 4.5% through August

Housing starts in Canada came in higher than expected in August, but the first eight months’ total for 2007 lag behind the same period of 2006 by 4.5%. That’s according to the Canada Mortgage and Housing Corporation, which pegged August’s seasonally adjusted annualized rate at 226,500 units. Said Bob Dugan, Chief Economist at CMHC’s Market Analysis Centre, “Despite the increase in August, the pace of housing starts remains consistent with our view that residential construction will decrease gradually between now and the end of 2008.”
CMHC expects there will be 220,000 starts in Canada during 2007 and that starts will cool to 207,200 units next year.

Cocooning, Outdoor Living Likely to Grow More Popular

A survey of more than 1,000 homeowners by the Propane Education & Research Council found that half of all respondents say they are spending more time at home than they were five years ago. Four out of five homeowners said it is very or somewhat important to them to have an outdoor living space where they can relax and entertain, including 89% of homeowners with kids under the age of 18 living at home.
Some 34% of homeowners said they are planning to add or remodel an outdoor room, including 44% of homeowners ages 18-44. Approximately three in five homeowners said it was likely that they would do some home remodeling or renovations in the near future, with 74% of homeowners aged 30-44 planning to do so. Some 53% said they were planning to remodel their kitchen, and 51% said they planned to design and furnish an outdoor room.
When it comes to outfitting that outdoor room, 94% of homeowners said they were likely to include outdoor lighting units and 86% said they would have a gas grill. Nearly 80% also were likely to include mosquito eliminators; 67% were likely to include an outdoor fireplace or pit; and just over half (53%) were likely to include patio heaters.

Monday, September 10, 2007

Kitchen, bath lead home buyers’ improvement projects

About six out of ten consumers who bought a home between late 2005 and early 2007 took on a remodeling project within three months of the purchase, according to a recent survey by the National Association of Realtors.
The 2007 Profile of Buyers' Home Feature Preferences found that the average amount spent on home improvement projects in that period was $4,350. Nearly half of those home buyers remodeled or made improvements to their kitchens, and about half improved or remodeled a bathroom.
More than 90% of buyers thought energy efficiency was an important consideration. Buyers said they would be willing to pay extra (more than $2,000) for a home with two or more full bathrooms.
The typical home purchased in the study was 12 years old, measured 1,840 sq. ft., and had two bathrooms.

Friday, September 7, 2007

Job Market Still Weak; Job Losses Grow for Sector

Nearly 100,000 construction jobs have been lost since September of last year, according to the Bureau of Labor Statistics. August saw some 22,000 construction jobs lost, most of which were in the specialty trades, including the kitchen and bath industry.
Employment has stalled overall at about 44,000 jobs a month for the past three months. The national unemployment rate held at 4.6% with a net 4,000 jobs lost during the month and the average hourly earnings increased a nickel during August to $17.50. Over the year, average hourly earnings have risen by 3.9%.

1 in 20 Mortgages Now Delinquent

Late payments are plaguing the housing market. Delinquency on residential mortgages hit 5.1% of all loans in the second quarter of 2007, according to the Mortgage Bankers Association’s National Delinquency Survey. The rate does not include mortgages in foreclosure. About 1.4% of all mortgages are in the foreclosure process, and 0.7% went into foreclosure during the quarter.
“While the seriously delinquent rate for prime fixed loans was essentially unchanged from the first quarter of the year to the second, and the rate actually fell for subprime fixed rate loans, that rate increased 36 basis points for prime ARM loans and 227 basis points for subprime loans,” noted Doug Duncan, MBA’s Chief Economist and Senior Vice President of Research and Business Development.
MBA notes that four states, California, Florida, Nevada and Arizona, are where most of the problems are concentrated.
According to the MBA, 30-year fixed-rate mortgages increased to 6.42%; 15-year fixed-rate mortgages remained unchanged at 6.10%; and one-year ARMs increased to 6.52%.

Tuesday, September 4, 2007

Kiss Your Astrodome Goodbye

Ameriquest Capital, once so successful that it held naming rights to the Texas Rangers’ stadium in Arlington, has shut its doors, another victim of the subprime mortgage crisis. Ameriquest once held a $65 billion portfolio; the remnants have been bought by Citigroup.
This year so far, Quality Home Loans Inc., Home Banc Corp., American Home Mortgage Investment Corp., New Century Financial Corp. and Alliance Bancorp have all filed for bankruptcy.
It is estimated that some 2 million adjustable rate mortgages will reset before the end of the year, and many homeowners may have trouble meeting higher payments.

July Residential Construction Spending Dips 16%

The value of private residential construction put in place tumbled 16.1% in July, according to a report from the Census Bureau. The seasonally adjusted annualized rate for the month was $534.0 billion for the month, down 1.4% from June's pace.