Harvard Sees Flat Times for Remodeling

Back from the Fall meeting of the Joint Center for Housing Studies at Harvard, where the camera battery was dead and the news was somewhat downbeat.
Home remodeling is going to go from strong growth to little or no growth over the next few quarters. The group projects a 2.3% decline in remodeling spending in the fourth quarter of this year from the same quarter in 2006, with a further year-to-year decline of 2.5% in the first quarter of 2008, and another 4.2% drop in the second quarter of next year.
The growth in remodeling spending began to ease in the third quarter of last year, as households began to see better value in more moderately priced remodeling projects. A joint study by Remodeling magazine and the National Association of the Remodeling Industry found that mid-priced improvements and replacements have had a better payback recently than more expensive upscale projects. During 2007, upscale kitchen remodeling jobs are returning 74% of their cost as increased home value, versus 78% for mid-priced kitchens. Mid-price bath remodeling jobs are also returning 78% in cost vs. value, versus 68% for upscale bath remodeling jobs.
Among danger signs for home remodeling: the broader residential downturn shows no sign of reversing. Home sales are declining, and home prices are falling in many markets. Homeowners are taking less equity out of their homes; the amount of equity cashed out nationwide, which had driven much of the remodeling surge in recent years, has dropped from $101 billion in the second quarter of 2006 to just $46 billion in the fourth quarter of this year, according to Freddie Mac.

Starts Plummet in September

Housing starts fell to the lowest level in 14 years during September, according to the latest numbers from the Census Bureau. September starts hit a seasonally adjusted annualized rate of 1.19 million units, down 30.8% from the same month in 2006. Single family starts were at an anemic 963,000-unit pace, also 30.8% below September 2006.
Through the first three quarters of 2007, nearly 1.08 million homes were started, down 25.2% from the same period of 2006. About 859,000 single family homes have been started in the first nine months of 2007, down 27.7% from the same period in 2006.
Permits were issued in September at a 1.23 million unit pace, down 25.9% from the annualized rate in September, 2006. Single family home permits dipped 28.6% during the month to a rate of 868,000 units per year.
NAHB Chief Economist David Seiders found a gleam of silver behind the dark cloud: “While there’s no question that the housing downswing continues to be played out in markets across the country, today’s numbers show that builders are pulling back on production until sales improve. This is exactly what our latest builder surveys have told us. We do expect some additional downward movement in housing production going into next year, at which point starts should begin to stabilize as sales turn upward in the second quarter.”

Haewoojae!!

Sim Jae-Duck of South Korea is building a $1.6 million dollar toilet-shaped house designed to promote his campaign to provide residents of poor countries with decent sanitary facilities.

Sim will open what is billed as the world's one and only toilet house (there are probably others, but no-one's bragging about them) on November 11 to mark the launch of his World Toilet Association.

The 4,500-sq.-ft home is being built in the city of Suweon and will be called Haewoojae, meaning "a place of sanctuary where one can solve one's worries." It will be available to rent for $50,000 a day.

At the other end of the economic spectrum, it is estimated that over 2.6 billion people in the world today are without any form of "improved sanitation".

September Foreclosures Dip From August Levels

Foreclosures in September were down 8% from August to 223,538 filings, according to online marketplace RealtyTrac. However, the number was still the second highest total ever, and almost double the number of filings in September of 2006.
"It’s too early to tell if September’s numbers represent a one-month lull or if they could signify that more buyers and investors are getting back in the market and snatching up discounted foreclosure properties, thereby providing a release valve for distressed homeowners and overwhelmed lenders," said James J. Saccacio, chief executive officer of RealtyTrac.
The national foreclosure rate for the month was one foreclosure filing for every 557 households.
The Wall Street Journal has published a handy interactive map detailing the scope of the sub-prime crisis.

Canadian Starts Up in September

Housing starts in Canada for September were up 19.6% over August to a seasonally adjusted annualized rate of 278,200 units, according to the Canada Mortgage and Housing Corporation (CMHC). The mark was 0.2% higher than levels for September of last year.
“The rise in September housing starts reflects a strong multiple starts segment,” said Bob Dugan, Chief Economist at CMHC’s Market Analysis Centre. “In particular, the robust results achieved this month can be mostly attributed to increased condominium starts, which reflect strong condo sales over the past 12 to 24 months. Despite this sizeable growth in September, we continue to expect that housing starts will decrease gradually between now and the end of 2008.”

The Facts About Your ZIP Code

Here's a really cool site that will give you detailed demographic info from the Census Bureau about any ZIP Code, including the number of housing units, the median household income, the income distribution, etc. ZIPSkinny.com also lets you compare up to 20 ZIP Codes at once.

And You Thought There Was Nothing On...

HGTV will recap K/BIS 2007 and also highlight what's new in the industry. It will feature the new NKBA consumer commercial, which informs consumers about the benefits of working with NKBA pros .
Times are:
October 7, 2007 at 9:00 PM ET/PT
October 8, 2007 at 1:00 AM ET/PT
October 14, 2007 at 5:00 PM ET/PT
October 17, 2007 at 11:00 AM ET/PT

Forbes Names Weakest and Strongest Housing Markets

Forbes.com identifies the 10 weakest housing markets in the U.S. and the ten strongest.

Construction Jobs Slip Slightly in September

There were some 7.61 million construction jobs in September, according to the Bureau of Labor Statistics, down 0.2% from August, but up 1% from September, 2006. The unemployment rate nationwide was essentially unchanged at 4.7%. Average hourly earnings during the month were $17.57, up 0.4% from the previous month and up 4.3% from September of last year.

50 years ago today...

Human beings made the first baby steps beyond the planet earth with Sputnik.

If you'd like to see some of Sputnik's great grandchildren tonight, here's how.

"And YOU want to be my latex salesman"

What can you learn from Seinfeld about marketing your business or services? Marketing guru Bill Gammell tells us.

Cancelled Mortgages Drop August Pending Home Sales by 22%

The National Association of Realtors' Pending Home Index for August fell 21.5% from the same month in 2006 to a low of 85.5 (100 = the 2001 level of sales). It was the lowest level ever for the measure, which began in 2001.
“Fewer contracts were being written because of mortgage availability issues, and a separate internal survey of our members shows more than 10% of sales contracts fell through at the last moment in August, primarily the result of canceled loan commitments,” said Lawrence Yun, NAR senior economist. “The volume of activity we’re seeing today is below sustainable market fundamentals because some creditworthy people are trying to buy homes but can’t because of the credit crunch.”