NAHB: Homeownership Works Rally at the S.C. State House on January 12

UPDATE: Speaker Newt Gingrich will appear at the Homeownership Works Rally.

The National Association of Home Builders is planning a rally at the South Carolina State House in January in to support the housing industry and homeownership in America—The American Dream.  Every member of the Home Builders Association of Greenville is encouraged to travel to the State House in Columbia to participate.

• Homeownership Works Rally
• Thursday, January 12, 12 noon
• South Carolina State House, Columbia, SC
• Presented by the National Association of Home Builders

The goal of this event is to publicize the state and national impact of homeownership and the housing industry.  The Republican Presidential Preference Primary will take place less than two weeks after the rally.  Numerous Republican candidates for President of the United States will be in South Carolina campaigning the week of the rally, and one or more are expected to attend the rally.  They will be followed closely by the national media.  This rally is an opportunity for Home Builders to help their National Association of Home Builders to showcase the importance of homeownership and new home construction to America.

The rally, which starts at 1 p.m., is preceded by lunch on the State House grounds at 12 noon.

Please let your HBA of Greenville know your intentions about attending this rally by registering.  We will plan to arrange transportation either by bus or carpool, depending on the level of participation.  Please register as early as possible so we can plan accordingly.  Click here to register at HBAofGreenville.com to participate in the Homeownership Works Rally at the South Carolina State House.

Federal Home Loan Bank Chief Business Officer will Speak at January Membership Meeting

Make plans to attend the January Membership Meeting and Awards Luncheon.  Our speaker will be Robert F. Dozier, Jr., Executive Vice President and Chief Business Officer of the Federal Home Loan Bank Atlanta.

• Membership Meeting and Awards Luncheon
• Thursday, January 19, 11:30 a.m.
• TD Convention Center
• Sponsor: Piedmont Natural Gas
• Speaker: Robert F. Dozier, Jr., Federal Home Loan Bank Atlanta

Dozier will discuss trends in banking, particularly as they impact residential construction and development.  Also on the agenda will be the installation of our 2012 Board of Directors and announcement and recognition of our 2011 Builder of the Year and Associate of the Year.

Click here to register for the January Membership Meeting and Awards Luncheon at HBAofGreenville.com.

Robert Dozier oversees FHLBank Atlanta’s Member Sales and Trading, Community Investment Services, Corporate Communications, and Government and Industry Relations functions.  Prior to joining FHLBank Atlanta in 2011, Dozier was president and chief operating officer for Homeowners Mortgage Enterprises (HME), a subsidiary of CoastalStates Bank, where he began as a loan officer in 1992. Dozier also served on the board of directors for CoastalSouth Bancshares, the holding company of CoastalStates Bank, and the board of directors for FHLBank Atlanta from 2002 to 2004. He earned a Bachelor of Arts degree in political science from the University of South Carolina.

Girder Span Review is Creating Confusion in South Carolina

The load-carry capacity of Southern Yellow Pine has come into question in recent weeks, and a regulatory body is currently reviewing a proposal to reduce the spanning capacity of Southern Yellow Pine by up to 39 percent.

Late last week the Chairman of the South Carolina Building Codes Council, Greg Parsons, PE, sent out an email that prematurely states that the spanning capacity of Southern Yellow Pine has already been reduced.

The Southern Pine Inspection Bureau is currently reviewing is 1991-published design values for Southern Yellow Pine and is expected to issue a ruling on January 5, 2012, as to the load carrying capacity of Southern Yellow Pine.  However, no change in the rule will be valid in South Carolina until the South Carolina Building Code Council takes action.

Currently in South Carolina, the span tables that are approved and in force include those in the 2006 International Residential Code and as an alternative, an "Altnernative to IRC Table R503.5 (1)."  Scroll to Page 14 for the table.

Wall Street Journal: Realtors to Restate Home Sale Estimates

The National Association of Realtors announced this week that it will restate its estimates of existing home sales for the past four years.  The group said its overstated estimate of existing home sales was caused by reliance on inaccurate data from local multiple listing services, and some sales being counted more than once.

Read the full report at the Wall Street Journal by clicking here.

UPDATE: CNBC weighs in, says numbers may be 20 percent high.  Click here to read the CNBC.com report.
UPDATE: Fox Business News weighs.  Click here to read the foxbusiness.com report.

Federal Reserve: Speculative Investors Played a Larger Role in Housing Bubble than Previously Thought

A new federal report shows that speculative real estate investors played a larger role than originally thought in driving the housing bubble that led to record foreclosures and sent economies plummeting in Nevada, California, Arizona, Florida and other states. Researchers with the Federal Reserve Bank of New York found that investors who used low-down-payment, subprime credit to purchase multiple residential properties helped inflate home prices and are largely to blame for the recession.

Read the full report at the Huffington Post by clicking here.

NAHB: Flawed Appraisals Killing Home Sales, Hampering Housing Recovery

One out of three builders are reporting losing signed sales contracts during the preceding six months because appraisals on their homes are less than the contract sales price, according to a recent nationwide survey conducted by the National Association of Home Builders (NAHB).

“The inappropriate use of distressed and foreclosed sales as comparables in determining new home values is needlessly driving down home prices, killing home sales, causing more workers to lose their jobs and delaying a housing and economic recovery,” said NAHB Chairman Bob Nielsen, a home builder from Reno, Nev.

Too often, due to faulty appraisal practices, brand new homes with sparkling appliances and interior upgrades get compared to a distressed property that has been sitting vacant and in disrepair. The result, in many cases has been that the new house winds up getting appraised at less than the cost of construction.

That is precisely what is occurring in today’s marketplace, according to the NAHB survey, where a full 60 percent of respondents reported they were experiencing appraisals coming in below their contract sales price.

Of those reporting that they had encountered this problem, 53 percent said the appraisal amount was actually less than the cost of building the home.

“This is not only unfair and unreasonable, but it perpetuates the cycle of declining home values, drives more home owners underwater, harms local economic activity and acts as an obstacle to the recovery of the housing market,” said Nielsen.

These appraisal practices are a major contributing factor to the current acquisition, development and construction (AD&C) lending crisis that has choked off credit for home builders and threatens to prolong the current housing downturn.

Falling appraised values for land and subdivisions under development have led some financial institutions to stop lending to developers and builders, to demand additional equity and even to call performing loans.

Since Sept. 2009, NAHB has held four appraisal summits in Washington with representatives of federal banking regulators, the appraisal industry, the housing finance industry, the real estate and housing sectors and others to find solutions that will allow appraisers to develop realistic valuations based on sales that are truly comparable.

The need to give top priority to addressing the complexity of property valuations in distressed markets and impediments to the flow of appropriate information on homes between appraisers and interested parties was discussed during the most recent summit, which occurred on Oct. 19.

“Major reforms in appraisal practices and oversight are needed to ensure that appraisals accurately reflect true market values and don’t contribute to price volatility or harm aspiring home owners and move-up buyers,” said Nielsen. “We will continue to work with all stakeholders in this debate to find solutions.”

With the decline in home prices appearing to have ended or be coming to an end in most parts of the country, resolving the appraisal and credit crunch issues remain a top priority for the association.

NAHB’s latest Improving Markets Index has shown modest signs of improvement in scattered housing markets where employment is gaining and distressed properties are not as numerous.

New-home construction stands ready to serve as an engine for economic recovery. Building 100 single-family homes creates more than 300 full-time jobs and provides $8.9 million in federal, state and local tax revenues.

“Resolving inappropriate appraisal practices and restoring the flow of credit to home builders will not only help to put America back to work, it will provide badly needed tax revenues that is essential for local governments to support schools, police and firefighters in communities across the land,” said Nielsen.

NAHB: Index Shows Continued Improvement for Apartment and Condominium Market

The Multifamily Production Index (MPI), a leading indicator for the multifamily market, released by the National Association of Home Builders (NAHB) today showed continued improvement for the fifth consecutive quarter for the apartment and condominium housing market.

The MPI, which tracks the sentiment of builders and developers about the conditions of the multifamily market on a scale of 0 to 100, increased from 44.4 in the second quarter to 47.3 in the third quarter—the highest reading since the fourth quarter of 2005.

The index provides a composite measure of three key elements of the multifamily housing market: construction of low-rent units, market-rate rental units and “for-sale" units, or condominiums. The index and all of its components are scaled so that any number over 50 indicates that more respondents report conditions are improving than report conditions are getting worse. In the third quarter of 2011, the MPI component tracking builder and developer perceptions of market-rate rental properties recorded an all-time high of 63.8, while low-rent units remained steady at 50.1. For-sale units rose to 31.9, the highest recording since the second quarter of 2006.

“Multifamily construction continues to be the bright spot in the overall housing market,” said NAHB Chief Economist David Crowe. “While household formations have been below trend, those who are forming new households are becoming renters and this trend is likely to continue until consumers’ confidence returns.”

“Apartments and condominiums play an integral role in the overall housing market, now more than ever,” said Stillman Knight, chairman of NAHB’s Multifamily Council Board of Trustees and president and CEO of the Knight Company of Alexandria, Va. “The construction of these units not only brings jobs to local communities, but also provides an adequate stock of housing for areas with rapid population growth.”

Looking forward to the next six months, builder and developer expectations improved in the third quarter for market-rate rental properties and for-sale properties, up to 67.2 and 37.3, respectively. Expectations for low-rent units decreased slightly, to 50.2.

The Multifamily Vacancy Index (MVI), which measures the multifamily housing industry's perception of vacancies, decreased from 36.1 in the second quarter to 35.1 in the third quarter. With the MVI, lower numbers indicate fewer vacancies. The MVI has improved considerably since reaching a peak of 70.2 in the second quarter of 2009.

“NAHB’s Multifamily Production Index and Multifamily Vacancy Index have emerged as leading indicators for the multifamily market,” Crowe said. “For example, the MVI began to improve strongly in the third quarter of 2009, one quarter before a similar trend emerged in the Census Bureau’s rental vacancy rate for buildings with at least five apartments. Although the Census shows a slight surge in rental vacancy rates in the latest quarter, our survey suggests that this will only be a temporary setback.”

For data tables on the MPI and MVI, visit www.nahb.org/mms.