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UPDATE: Just a quick Update on Housing Starts. The US Census is showing a 46% increase in 1 unit housing starts from August 2011 to September 2011 for the Midwest Region. I will update the Minnesota and Twin Cities figures when they become available.
The NAHB (National Association of Homebuilders) are reporting an increase in permits for September 2011. The increase has been primarily in multi-family housing starts, however single family units were up modestly as well.
September housing starts were up 15% but the increase was almost entirely within the multifamily sector. Single-family starts increased a modest 1.7% to 425,000, essentially the same as the second and third quarter averages. Multifamily starts (2 or more units in a structure) roared ahead 51.2% to 233,000, the highest in three years.
Read Full Article from NAHB
As you can see by their housing starts graph, we are gradually picking up. This graph shows a similar prediction that the National Association of Realtors economists predict. That housing starts will increase dramatically in the 3rd and 4th quarters of 2012 and increasing throughout 2013.
I will post the September housing starts for the Twin Cities when they become available.
The National Association of Home Builders released their Improving Market Index. This index was started a couple of months ago by NAHB and First American. This index hasn’t hit upon the Twin Cities area yet, primarily because we are not an improving market yet… I do want to keep an eye on this because eventually we will be showing up on this index, hopefully.
Here is a pretty good video explaining the latest index results from NAHB. NAHB: October 2011 Improving Market Index.
Basically, the improving markets are in Energy Producing areas (a.k.a. oil drilling). So this is further evidence our biggest struggle is jobs, not inventory.
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October 6, 2011 – The second edition of the National Association of Home Builders/ First American Improving Markets Index (IMI), released today, shows 23 individual housing markets now qualifying as “improving” under the new gauge’s parameters. This is nearly double the 12 housing markets that made the list last month.
The index reveals metropolitan areas that have shown improvement for at least six months in housing permits, employment and housing prices. The following metros were listed in October:
- Alexandria, LA
- Amarillo, TX
- Anchorage, AK
- Bismarck, ND
- Casper, WY
- Fairbanks, AK
- Fayetteville, NC
- Houma, LA
- Iowa City, IA
- Jonesboro, AR
- Kankakee, IL
- McAllen, TX
- Midland, TX
- New Orleans, LA
- Odessa, TX
- Pine Bluff, AR
- Pittsburgh, PA
- Sherman, TX
- Sumter, SC
- Waco, TX
- Waterloo, IA
- Wichita Falls, TX
- Winston-Salem, NC
“Both the number and geographic diversity of improving housing markets expanded this month, with Iowa, Illinois and South Carolina all newly represented by one entry or more on the list,” said National Association of Home Builders (NAHB) Chairman Bob Nielsen, a home builder from Reno, Nev. “This is further evidence that, despite the tough conditions that persist in many cities, pockets of improvement are emerging in local housing markets across the country.”
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The National Association of Home Builders has started a new data series called the NAHB/First American Improving Markets Index (IMI). This is new so there is not a detailed history to get much perspective. They did however identify 12 areas that are improving first. These are as follows:
NAHB/First American Improving Markets Index (IMI) 9/07/2011
Unfortunately Minneapolis/St Paul didn’t make this first list… I was curious about why these Cities are recovering. Judging by the locations, most of them being in oil producing fields, I suspected employment was behind this. So I pulled together the unemployment rates in the Cities highlighted. This isn’t scientific, but of the 4 I looked up, they were all between3% and 6% unemployment rates. Nationally we are around 9.1% and Minneapolis/St Paul is around 7.2%.
Unemployment Rates of 4 of the Cities listed on the IMI
Again, this isn’t “scientific” proof, but it sure supports the theory of correlation between housing and employment…
Marty Andrade wrote an interesting post about unemployment rates, he also broke it down to the Twin Cities level in the comments section.
I will continue to watch this and keep you updated. This information may be of value, hard to tell right now with so little data available so far.
Image by joanna8555 via Flickr
Just a reminder that the Parade of Homes starts today and runs until Oct 2nd.
Pick up your Parade Guide at any Holiday gas station or visit them online. www.paradeofhomes.org
Enjoy the Parade!
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Saw this article from the Wall Street Journal. Apparently the Labor Department is going after Residential Homebuilders for overtime and minimum wage violations, which to me sounds like they are really targeting the sub-contractors and their status of sub-contractors.
Sounds like a political witch hunt to me. Most homebuilders use sub-contractors not employees to do the trades, I wonder if they are hoping to snare sub-contractors that do a large portion of their business with one home-builder as “employees” not sub-contractors.
The Leading Builders of America, an association of 19 major home builders, called the document demands overly broad and said the inquiry was “especially troubling given that no issues have been identified to warrant an investigation.”
“These demands could require significant resources and thousands of hours of work,” the association said in a statement.
The last line in the article I think sums the whole article up:
Many construction unions have urged the Labor Department to crack down on wage violations in part to embarrass nonunion contractors that unions hope to organize.
Read Full Article
I am really curious on how the Builders Association of the Twin Cities (BATC) and the National Association of Home Builders (NAHB) will respond to this.
One of the key components we need for a healthy real estate market recovery is Jobs. If you don’t have a job, it is rather difficult to buy a home. Unfortunately this report is bad news. We are back up to 7.2% unemployment rate in Minnesota.
For your property values to recover, we need people working. If this trend of higher unemployment continues in Minnesota, we will continue to see the housing prices fall.
August 19, 2011 Minnesota Unemployment Rate
There is a ratio used when we calculate housing units needed in an area. This number is general number used from NAHB
, and it can vary depending on the type of jobs created.
But for general purposes, for every 1.1 job created there is need for 1 housing unit.
Instead of adding 1.1 job, we are taking away 1.1 jobs. What do you suppose will happen to the price of the homes?
No more Location, Location, Location. Now it is Jobs, Jobs, Jobs!
I discovered an interesting study conducted by the National Association of Home Builderson the County Property Tax rates. They conducted this study based off of 2005-2009 property taxes throughout the nation. This data probably reflects some errors as I know my property taxes have gone up since 2009, but it is still an interesting illustration of effective property tax rates.
Median Property Tax
- Median Tax Rate per $1000 of value
If you are anything like me, you are asking yourself right now: Why did I choose to live in the highest taxed County?
This data is a little out of date being that it is from 2005-2009 and property taxes are continuing to climb. It does however show where you might want to move to in the metro area to pay the least amount in property taxes..
If you are curious on the county property taxes for the entire country, goto NAHB’s sudy