South Carolina and North Carolina end Water Dispute

South Carolina and North Carolina have ended a lawsuit over water withdrawal from the Catawba-Wateree River Basin and agreed to a joint plan to regulate water withdrawal from the river. The dispute involved a proposed withdrawal of water from the Catawba River by a North Carolina city that is in a different river basin, commonly referred to as an "inter-basin transfer."

The lawsuit, and the settlement, could have long-term implications for the Upstate. The Greenville area, which is in the Saluda-Reedy River basin, withdraws water from Lake Keowee, a part of the Savannah River basin.

Read the full report on the settlement at GSA Business.

Builder Review, December 28, Published

Builder Review is an e-newsletter published twice a month by the HBA of Greenville. The latest issue, published December 28, 2010, is ready for you to read.

Click here to read Builder Review.

Reports indicate positve signs for housing market in 2011

Three national reports show positive signs for the housing market in 2011.

• New home sales rise 5.5 percent in November.
  
• Pending home sales were up more than expect in November.
• Housing starts seen rising to three-year high.

NAHB projects a 60 percent rise in new home starts in the Greenville area in 2011. Reasons cited for the rise are low inventory, low foreclosures, low interest rates, and high demand generated by job creation.

New NAHB Report Finds Small Builders ar the Maintstay of the Nation

Small home builders are the mainstay of the nation’s housing industry, including a sizable number of self-employed mom-and-pop operations, according to a new study by economists at the National Association of Home Builders.

“Small businesses have always been the predominant force in housing and they lend this industry its economic vitality,” said Bob Jones, NAHB chairman and a builder from Bloomfield Hills, Mich.

“We are seeing market conditions returning to normal in many parts of the country after a long, hard downturn, and these companies have the agility to move quickly and start leading the economy forward,” Jones said. “But first they need access to financing to build, which remains scarce during this critical phase of the recovery.”

The study notes that the small builders and tradesmen who produce the majority of the nation’s new homes “compete in a fierce marketplace that challenges their economic survival. A much higher share of small businesses both enter and fail in the residential construction industry when compared to all U.S. firms,” according to the report.

“The residential construction industry is very dynamic, and a large number of firms enter the industry each year and a large number exit each year,” the report says. “With few barriers of entry, start-up builders can launch their business with a single new home.” Most home builders and remodelers are small businesses, “further facilitating movement into the industry when opportunities improve, and exiting either because of business failure or life-cycle decisions.”

The report concludes that housing remains the domain of small businesses and looks at the Census Bureau’s Economic Census, which provides information on the size of businesses in various industries. Conducted every five years, the most recent census is based on business activity that occurred in 2007. Final tables for the construction industry were published this fall, on Oct. 19.

Among the data that provides a profile of the housing industry as of 2007:

• Slightly more than 65 percent of all home building establishments had annual receipts below $1 million. Almost 31 percent generated between $1 million and $10 million; and 4.1 percent had more than $10 million.
• In 2007, 41,483 new single-family general contractors (who build on the owner’s land) did less than $1 million in business, about a 70 percent share of the 59,679 businesses in this group. Although multifamily general contractors tend to be somewhat larger, 42 percent of them also recorded less than $1 million in yearly sales or receipts. About 60 percent of the 35,378 “operative builders” (who own the land upon which they build) did less than $1 million in business. Eighty-four percent of 73,888 residential remodelers and 61 percent of 6,462 land developers saw less than $1 million.
• Some 25 percent of $89.3 billion in total construction value delivered by single-family general contractors in 2007 was subcontracted out. Subcontracting amounted to half of $34.6 billion worth of construction among multifamily general contractors, 22 percent of $180.1 billion for operative builders and 23 percent of the $52.1 billion for residential remodelers.
• These results are consistent with findings from NAHB’s monthly Builder Economic Council survey. Among the single-family builders responding, 40 percent said they subcontracted 100 percent of their work and another 39 percent subcontracted 76 percent to 99 percent of the work. The same builders used 24 specialty trade contractors in the process of building the average single-family home.
• Seventy-four percent of a total of 477,950 specialty trade contractors rang up less than $1 million in business in 2007.
• Under U.S. Small Business Administration standards, at least 96 percent of residential builders and remodelers were small (defined as doing no more than $33.5 million in annual business). Also considered small were 94 percent of land developer (less than $7.0 million) and 98 percent of specialty trade contractor (less than $14 million) establishments. Most of the home building and trade contractor establishments were far below the SBA ceilings.

Looking beyond the Economic Census, which only counts establishments with employees on the payroll, NAHB estimates that the ratio of the income of usually small, self-employed independent contractors to wages and salaries generated in the construction industry is one to four. This is compared to a ratio of one to 10 in some other industries, such as manufacturing.

Housing is also providing more opportunities for Hispanic businesses than U.S. industries overall, the study found.

The 2007 Survey of Business Owners (SBO) recently reported that in 8.3 percent of a total 27 million businesses -- or 2.3 million -- at least 51 percent of the stock or equity was Hispanic-owned. The Hispanic share for the construction industry (both residential and nonresidential) was higher -- at 10.0 percent, or 340,766 out of 3.4 million construction firms.

Of the 2.6 million construction non-employers found in the SBO survey, 11.6 percent were Hispanic-owned, as were 12.2 percent of the 1.9 million non-employer specialty trade contractors. For several trades, the Hispanic share among non-employers was around 20 percent -- including structural steel and precast concrete, drywall and insulation, tile and terrazzo and poured concrete.

AGC Construction Barometer rising in the Upstate, falling in the Lowcountry

The construction outlook is more optimistic in the Upstate than the Lowcountry, according to the latest construction barometer released by Carolinas Associated General Contractors.

The report showed a 1% uptick overall in North Carolina and South Carolina for the third quarter, despite the disappearance of federal stimulus spending, particularly in the highway and utility segment.

In the Upstate, the barometer increased 2.7 percent while it fell 3.4 percent in the Lowcountry.

Read the entire report at GSA Business by clicking here.

New Federal Construction Work Opportunity

The Federal government continues its improvements to certain military installations around the country. The latest announcement is the construction of more than 300 housing units at the Marine Corps base at Camp Lejeune, NC, and the Marine Corps Air Station at Cherry Point, NC.

These projects are opportunities for construction work for various trades. Below are details on the construction projects:

MARINE CORP AIR STATION CHERRY POINT – HAVELOCK, NC

• Project Name: Nugent Cove Section 3B
• Description: 46 new home mix of single family and duplex – vertical construction only
• Start date: May / June 2011
• Finish date: May 2012
• Total value of the project is roughly $10M
• Trades: Concrete Slabs and Flatwork, Termite Protection, Rough Carpentry, Exterior and Interior Doors & Windows, Finish Carpentry, Plumbing, HVAC, Electrical, Roofing, Vinyl Siding, Gutters, Screen Porches, Landscaping, Wood Fencing, Vinyl Fencing, Chainlink Fencing, Insulation, Gypsum Board, Painting, Vinyl Flooring, Carpet, Cabinetry, Countertops, Cleaning, Bath Accessories, Mirrors, Playground Equipment, LEED Certification, and Energy Star Testing.

MARINE CORP BASE CAMP LEJEUNE – JACKSONVILLE, NC

• Project Name: Watkins Grove
• Description: 136 unit new home mix of single family and duplex – vertical and civil construction
• Start date: April 2011
• Finish date: April 2012
• Total value of the project is roughly $25M
• Trades: Surveying, Civil Sitework (Earthwork, Storm Sewer, Water Distribution, Paving, Site Concrete), Engineering Testing Services, Waste Disposal, Concrete Slabs and Flatwork, Playground Equipment, Termite Protection, Rough Carpentry, Exterior and Interior Doors & Windows, Finish Carpentry, Plumbing, HVAC, Electrical, Roofing, Vinyl Siding, Gutters, Screen Porches, Landscaping, Wood Fencing, Vinyl Fencing, Chainlink Fencing, Insulation, Gypsum Board, Painting, Vinyl Flooring, Carpet, Cabinetry, Countertops, Cleaning, Bath Accessories, Mirrors, LEED Certification, and Energy Star Testing.

MARINE CORP BASE CAMP LEJEUNE – JACKSONVILLE, NC

• Project Name: Midway Park Phase 3 (LEED project)
• Description: 134 unit new home mix of single family and duplex – vertical and civil construction
• Start date: March 2011
• Finish date: August 2012
• Total value of the project is roughly $28M
• Trades: Surveying, Civil Sitework (Earthwork, Storm Sewer, Water Distribution, Paving, Site Concrete), Engineering Testing Services, Waste Disposal, Concrete Slabs and Flatwork, Playground Equipment, Termite Protection, Rough Carpentry, Exterior and Interior Doors & Windows, Finish Carpentry, Plumbing, HVAC, Electrical, Roofing, Vinyl Siding, Gutters, Screen Porches, Landscaping, Wood Fencing, Chainlink Fencing, Insulation, Gypsum Board, Painting, Vinyl Flooring, Carpet, Cabinetry, Countertops, Cleaning, Bath Accessories, Mirrors, LEED Certification, and Energy Star Testing.

To inquire about this work, contact:

David E. Bollenbacher, Assistant Construction Manager
Actus Lend Lease
30 Cont Maryland Avenue, Camp Lejeune, NC 28542
Telephone: 910-219-6374
Fax: 910-219-6336
Cell: 910-376-5442
Email: David.Bollenbacher@actuslendlease.com
www.actuslendlease.com

Mortgage interest rates continue to deline

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 4.42 percent based on
loans closed in November. This is a decrease of 0.07 percent from the previous month.

The recent rate history can be viewed by clicking here.

The average interest rate on conventional, 30-year fixed-rate mortgage loans of $417,000 or less decreased 12 basis points to 4.38 percent in November. These rates are calculated from the FHFA’s Monthly Interest Rate Survey (MIRS) of purchase-money mortgages. These results reflect loans closed during the Nov. 23-30 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-October.

The contract rate on the composite of all mortgage loans (fixed- and adjustable-rate) was 4.35 percent in November, down 9 basis points from 4.44 percent in October. The effective interest rate, which reflects the amortization of initial fees and charges, was 4.46 percent in November, down 11 basis points from 4.57 percent in October. 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 November, down 0.07 percent from 0.87 in October. Twenty-eight percent of the purchase-money mortgage loans originated in November were "no-point" mortgages, down from 33 percent in October. The average term was 28.1 years in November, up 0.1 years from 28.0 years in October. The average loan-to-price ratio in November was 74.8 percent, up 2.6 percent from 72.2 percent in October. The average loan amount was $214,800 in November, down $200 from $215,000 in October.

View the press release from FHFA by clicking here.