New Home Star to market three new communities

The new Greenville office of New Home Star has been selected to manage the sales and marketing of three new home communities for Cothran Properties LLC.

The properties are Reserve at Plantation Greene, The Townes at Brookwood, and Five Forks Plantation. New Home Star Greenville is owned by Bill Durrell and Barbara Ryan. Chicago-based New Home Star is a national real estate brokerage working exclusively in the new home industry.

“Builders and developers need sales expertise more now than ever before,” Durrell said. “They also want control and visibility in order to know that they are maximizing their business opportunity.”

New Home Star operates in 14 markets across the United States and Canada, managing more than $500 million in sales revenue.

House Price Index Falls 0.8 Percent in Fourth Quarter 2010; House Prices Decline in Most States

U.S. house prices fell in the fourth quarter of 2010 according to the Federal Housing Finance Agency’s (FHFA) seasonally adjusted purchase-only house price index (HPI). The HPI, calculated using home sales price information from Fannie Mae- and Freddie Mac-acquired mortgages, was 0.8 percent lower on a seasonally adjusted basis in the fourth quarter than in the third quarter of 2010. The unadjusted national decline was 2.2 percent. Over the past year, seasonally adjusted prices fell 3.9 percent from the fourth quarter of 2009 to the fourth quarter of 2010.

South Carolina fell faster than the nation over the last year, at 6.12 percent, but rose 0.06 percent over the fourth quarter.

The news was better for Greenville, where prices fell just 1.58 percent over the last year and rose 0.05 percent during the last quarter.

To read the entire report, click here.

FHFA’s seasonally adjusted monthly index for December was down 0.3 percent from its November value. The monthly increase for the October-to-November period was revised downward from an initial estimate of 0.0 percent to -0.3 percent.

“Lingering unemployment and elevated inventories of for-sale homes contributed to the ongoing decline of house prices,” said FHFA Acting Director Edward J. DeMarco.

While the national, purchase-only house price index fell 3.9 percent from the fourth quarter of 2009 to the fourth quarter of 2010, prices of other goods and services rose 1.8 percent over the same period. Accordingly, the inflation-adjusted price of homes fell approximately 5.7 percent over the latest year.

FHFA’s all-transactions house price index, which includes data from mortgages used for both home purchases and refinancings, decreased 0.8 percent in the latest quarter and is down 1.3 percent over the four-quarter period.

Significant Findings:
The seasonally adjusted purchase-only HPI declined in the fourth quarter in 35 states plus the District of Columbia. Prices rose in the latest quarter in 15 states.
Of the nine Census Divisions, the East North Central Division and the Mountain Division experienced the most significant price movements in the latest quarter. While prices rose 0.1 percent in New England, prices fell 2.2 percent in the Mountain Division.
As measured with purchase-only indexes for the 25 most populated metropolitan areas in the U.S., four-quarter price declines were greatest in the Phoenix-Mesa-Glendale, AZ area. That area saw price declines of 15.3 percent between the fourth quarters of 2009 and 2010.
Prices held up best in the Denver-Aurora-Broomfield, CO area, where prices rose 3.7 percent over that period.

The complete list of state appreciation rates are on pages 15 and 16 of the report.

The complete list of metropolitan area appreciation rates computed in a purchase-only
series are on page 27 and all-transactions indexes are on pages 30-44 of the report.

Highlights
This quarter’s Highlights article examines whether properties that are frequently bought and sold have a different house price appreciation path than properties that are not frequently bought and sold. Using purchase-only data from California and the South Atlantic Census Division, the analysis shows that the two types of properties have very similar appreciation paths. Further, eliminating frequently transacting properties from the sample does not appreciably change the estimated price indexes for either area.

Background
FHFA’s purchase-only and all-transactions HPI track average house price changes in repeat sales or refinancings on the same single-family properties. The purchase-only index is based on more than 6 million repeat sales transactions, while the all-transactions index includes more than 42 million repeat transactions. Both indexes are based on data obtained from Fannie Mae and Freddie Mac for mortgages originated over the past 36 years.

FHFA analyzes the combined mortgage records of Fannie Mae and Freddie Mac, which form the nation’s largest database of conventional, conforming mortgage transactions. The conforming loan limit for mortgages purchased since the beginning of 2006 has been $417,000. Loan limits for mortgages originated in the latter half of 2007 through Dec. 31, 2008 were raised to as much as $729,750 in high-cost areas in the contiguous United States. Legislation generally extended those limits for 2009-originated mortgages. An appropriations act (PL111-88) further extended those limits for 2010 originations in places where the limits were higher than those that would have been calculated under pre-existing rules.

This HPI report contains tables showing: 1) House price appreciation for the 50 states and Washington, D.C.; 2) House price appreciation by Census Division and for the U.S. as a whole; 3) A ranking of 309 MSAs and Metropolitan Divisions by house price appreciation; and 4) A list of one-year and five-year house price appreciation rates for MSAs not ranked.

Volunteers wanted to support the HBA's Southern Home and Garden Show

If you have two to three hours free March 4 - 6, your Home Builders Association of Greenville invites you to volunteer as a shuttle driver during the Southern Home and Garden Show.

This year shuttle drivers will ride in style compliments of our Parking Shuttle Sponsor, Sitton GMC. Sitton is furnishing Suburbans as our parking lot shuttles.

If you would like to volunteer, please click on this link.

Disclosure: shuttle drivers must have a valid South Carolina drivers license.

Federal Housing Finance Agency Reports Mortgage Interest Rates

The Federal Housing Finance Agency today reported that the National Average Contract Mortgage Rate for the Purchase of Previously Occupied Homes by Combined Lenders, used as an index in some ARM contracts, was 4.58 percent based on loans closed in December. This is an increase of 0.16 percent from the previous month.

This Contract Rate series can be viewed by clicking here.

The average interest rate on conventional, 30-year fixed-rate mortgage loans of $417,000 or less increased 23 basis points to 4.61 percent in December. These rates are calculated from the FHFA’s Monthly Interest Rate Survey (MIRS) of purchase-money mortgages. These results reflect loans closed during the Dec. 23-31 period. Typically, the interest rate is determined 30 to 45 days before the loan is closed. Thus, the reported rates depict market conditions prevailing in mid- to late-November.

The contract rate on the composite of all mortgage loans (fixed- and adjustable-rate) was 4.52 percent in December, up 17 basis points from 4.35 percent in November. The effective interest rate, which reflects the amortization of initial fees and charges, was 4.63 percent in December, up 17 basis points from 4.46 percent in November. This report contains no data on adjustable-rate mortgages due to insufficient sample size.

Initial fees and charges were 0.80 percent of the loan balance in December, unchanged from November. Thirty percent of the purchase-money mortgage loans originated in December were "no-point" mortgages, up from 28 percent in November. The average term was 28.4 years in December, up 0.3 years from 28.1 years in November. The average loanto-price ratio in December was 75.6 percent, up 0.8 percent from 74.8 percent in November. The average loan amount was $209,500 in December, down $5,300 from $214,800 in November.

Free Webinar March 1: NAHB Chinese Drywall Remediation Guidelines

On March 4, NAHB’s Chinese Drywall Task Force plans to unveil new technical guidance for NAHB members who have questions about how to detect and remediate problematic drywall that has been imported from China in recent years.

In anticipation of this, NAHB is holding a free webinar on the guidance document.

The webinar will be held from 3:00-4:30 p.m. EST on Tuesday, March 1.

NAHB First Vice Chairman Barry Rutenberg will moderate the event, which will be conducted by Katherine Cahill, Global Product Risk Practice Leader, Marsh Risk Consulting, and Dr. Barbara Manis, chief medical officer at Building Health Sciences Inc. of Rockville, Md.

Panelists will share what the guidance document says about the health risks associated with problematic drywall. They also will discuss techniques for determining whether problematic drywall is present in a home, and if so, how to execute a partial or total remediation and perform clearance testing to ensure all of the problematic drywall has been removed.

To Register

To register for the Chinese Drywall Remediation Guidelines Webinar, click here.

We encourage you to let your members know about this free members-only educational event. Space is limited so register early.

If you need help with registration, contact the Office of the Registrar or call 800-368-5242 x8338.

Briefing on new Energy Star standards

Dean Benton of Benton Green Energy will brief HBA members on the new standards for Energy Star. Sponsored by Benton Green Energy. Refreshments will be provided.

When: February 24, 4 p.m. until 5 p.m.
Where: HBA of Greenville Office

To register for the briefing, click here.

Crossman Communities v. Harleysville Mutual Insurance Company

By Scott Bradley, Esq., Gallivan White & Boyd

On January 7, 2011 the SC Supreme Court issued its opinion in the matter of Crossmann Communities of North Carolina, Inc. v. Harleysville Mut. Ins. Co., Op. No. 26909 (S.C.Sup.Ct. filed Jan. 7, 2011). As you may be aware, the ruling created a significant change in the law with respect to the potential obligations of insurance companies to provide a legal defense and indemnity to builders and contractors for construction defects under a commercial general liability (CGL) policy of insurance. The Crossmann case involved alleged property damage to a condominium project resulting from ongoing and continuous water intrusion caused by allegedly improper siding installation.

In plain terms, the Court in Crossmann ruled that where the property damage at issue "is no more than the natural and probable consequence" of the faulty workmanship, it does not constitute an "occurrence" necessary to trigger coverage under a CGL policy. The Court reasoned that water intrusion is just such a consequence of faulty siding installation, thus, it did not constitute an occurrence. No occurrence means no coverage, whether the faulty workmanship was performed by you or a sub-contractor. The Court's opinion is not limited to water intrusion.

While faulty construction was not considered an occurrence under the pre-Crossmann law, the resulting damage to non-defective components of the construction was. Under the previous caselaw, using the facts of Crossmann, there would have been no occurrence/no coverage for the faulty siding installation, but the damage to the remaining parts of the structure from the resulting water intrusion would constitute an occurrence and trigger coverage. That was significant in that it would not only provide coverage for the policyholder for the resulting water damage, but would also trigger the duty of the carrier to provide a legal defense. In the vast majority of the construction defect scenarios, however, that is no longer the case. In most construction defect situations, the builder or contractor will be left totally exposed, as the insurance carriers should be able to rely on the Crossmann decision to conclude that the defective work and any resulting damage no longer constitutes an occurrence under the law in SC. As noted above, when there is no occurrence there is no coverage or duty to defend.

It should be noted that the final word on Crossmann has not yet been written. There will be a re-hearing of the case in front of the SC Supreme Court. Additionally, there have been bills introduced in both the SC Senate and the House of Representatives seeking to legislatively define "occurrence" in a manner that would provide coverage to builders and contractors for construction defects in certain situations. The ultimate success or failure of the re-hearing or legislative process is unknown.

To register for a briefing on this issue, click here.
To read an article in Charleston Regional Business Journal providing further details of this issue, click here.

Briefing on changes to general liability insurance policies

HBA members Scott Bradley, Esq., Gallivan White & Boyd, Howard Cox, Palmetto Insurance, and Jason Freeman, ChFC, J. Freeman and Associates, will brief members on the implications of a recent Supreme Court ruling that impacts contractor general liability insurance. Refreshments will be provided. Sponsored by Gallivan White & Boyd.

When: February 22, 4 p.m. until 5 p.m.
Where: HBA of Greenville Office

To register for the briefing, click here.

To read more about this issue, click on this link to read the article "Crossman Communities v. Harleysville Mutual Insurance Company."

Fallon Research Poll Shows Public Opinion Still Strong in Support of Homeownership

By Paul Fallon, Fallon Research

Recent newspaper articles and editorials have raised intriguing questions about whether the faltering housing market foreshadows a fundamental shift in cultural values about the importance of homeownership and if it remains an integral aspect of the American Dream. Survey topics from a recent nationwide poll of adults in the United States conducted by Fallon Research & Communications, Inc. explored some attitudes that current homeowners and renters have toward homeownership.

Mixed Signals
Despite the current malaise of the housing market, a narrow majority (54%) of U.S. residents that were surveyed said they disagree with the assertion that being a homeowner is not as important as it used to be. Looking at the results by sub-groups, the ones most likely to disagree are 18 to 29 year-olds (59%) and 30 to 44 year-olds (61%), which suggests that, as they foresee changes in their lives, homeownership is an integral part of the futures to which they aspire. Other groups with high proportions who disagreed were homeowners (58%) and those with annual household incomes of more than $100,000 (63%). Although all the aforementioned sub-groups are vital parts of the housing industry, the fact that, overall, one-third of the respondents agreed that being a homeowner is not as important as it used to be paints a sobering picture which suggests that attitudes among some segments of the U.S. culture are changing or, possibly, that conventional wisdom about the importance of homeownership should, in some way, be re-considered. Those who were more likely to agree with the assertion that being a homeowner is not as important as it used to be (33% overall) were respondents with incomes of between $60,000 and $100,000 (40%), and, perhaps not surprisingly, renters (45%). The latter finding suggests that, contrary to popular beliefs, a substantial proportion of the people in the U.S. who rent their homes make such decisions based on their lifestyles and needs, rather than necessity.

Still a Good Investment!
Even though there is some ambivalence about the importance of being a homeowner, one aspect that there seems to be little question about is the monetary value of homeownership. Overall, 87% of respondents said that homeownership is a good investment of financial resources. It is a sentiment that is so consistent and widely held across the spectrum that even 72% of renters agreed, suggesting that they believe there is inherent value to owning, even if they do not choose to do so.

Renters Remorse?
Although it appears that some renters choose to rent for a variety of reasons which are predicated upon their preferences, the data indicates many believe that they also are forsaking an improved quality of life by choosing to rent. While an overall total of 81% of respondents agree that people and families who own their own homes experience a better quality of life because they live in more stable communities, and homeowners take greater pride in their neighborhoods, what is astonishing is that 68% of renters share this sentiment, and just 24% disagree. This implies that the decision to rent may be one that is seen as a compromise which results in misgivings that are not unlike the remorse that some homebuyers may initially experience. Interestingly, there also seems to be a strong relationship with age, as agreement with the sentiment steadily increases, ranging from 69% for 18 to 29 year-olds, increasing to 76% for 30 to 44 year-olds, 81% for 45 to 59 year-olds and reaching 86% among respondents 60 and older.

Paul Fallon is a public opinion researcher, political pollster and advisor for interest groups, political candidates and trade associations. He specializes in land-use policy research, referendums and public funding issues. He is the former Director of Public Opinion Research for the National Association of Home Builders. Paul has worked on policy issues and campaigns in more than 34 different states throughout the country. He has served as the pollster for numerous campaigns to get voter approval for new housing and commercial developments, protect and strengthen property rights, defeat growth proposed moratoriums, change zoning designations, urban growth boundaries, impact fees and transfer taxes. His clients include development companies, apartment associations, REALTOR® associations and homebuilding associations.

This information is based on survey research that was conducted through telephone interviews of 1,006 randomly-selected adults in the United States. The interviews were performed over land-line and cellular telephones during the period of February 1, 2011 to February 8, 2011. The overall estimated margin of sampling error is +/- 3.1%, based on a confidence level of 95%, although it varies for each individual question. This means that if this survey was repeated, 95 times out of 100 the results would be within plus or minus 3.1% of those provided herein. Adjustments were made to proportionately weight the results to ensure each area of the country is represented in proportion to its percentage of the U.S. population.