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Home building jumps in June after dismal spring

By DEREK KRAVITZ / www.Builderonline.com

WASHINGTON – Builders broke ground on more single-family homes and apartments in June, helping the battered construction industry gain a little life after a dismal spring.

The Commerce Department said Tuesday that builders began work on a seasonally adjusted 629,000 homes last month, a 14.6 percent increase from May.

Still, that’s roughly half the 1.2 million homes per year that economists say must be built to sustain a healthy housing market. Jennifer Lee, a senior economist at BMO Capital Markets, called the gains “just a blip in the overall flat-lining trend of homebuilding activity.”

“We have to see a rebound in job creation to sustain a recovery in housing,” she said.

Much of the increase in June came from a surge in apartment construction, a volatile part of the industry. That sector jumped more than 30 percent last month.

Renting has become a preferred option for many Americans who lost their jobs during the recession and were forced to leave their rapidly depreciating homes. Since 1992, apartments have typically made up just 20 percent of home construction. Now, they make up closer to 30 percent of the market.

Single-family home construction rose 9.4 percent. It was the biggest increase since June 2009, when the recession officially ended. But analysts said the pace of 453,000 homes per year was still too depressed to signal a turnaround.

“The underlying trend of single-family housing starts shows no signs of improving in a significant manner anytime soon,” said Joshua Shapiro, chief U.S. economist at MFR Inc.

Building permits, a gauge of future construction, increased 2.5 percent.

Home construction rose in every part of the country. The biggest gains in single-family home construction were in the Midwest and South, which saw extensive damage from tornadoes and flooding this spring. In the Northeast, the overall building pace spiked 35.1 percent and in the Midwest, it rose 25.3 percent. In the South, it rose 10.6 percent and in the West, it increased 5.4 percent.

Though new homes represent just 20 percent of the overall home market, they have an outsize impact on the economy. Each home built creates an average of three jobs for a year and generates about $90,000 in taxes, according to the National Association of Home Builders.

The weak housing industry is also holding back the U.S. economy. In past modern-day recessions, housing accounted for 15 to 20 percent of overall economic growth. This time around, between 2009 and 2010, housing contributed just 4 percent to the gross domestic product.

Cash-strapped builders are struggling to compete with deeply discounted foreclosures and short sales. A short sale is when lenders allow borrowers to sell their homes for less than what is owed on the mortgage.

New-home sales fell in May to a seasonally adjusted pace of 319,000 homes per year. That’s far below the 700,000 homes per year that economists consider healthy.

One reason is that previously occupied homes are a better deal than new homes. The median price of a new home is more than 30 percent higher than the median prices for a re-sale. That’s more than twice the markup in healthy housing markets.

Loans are also harder to get. Most private lenders are requiring 20 percent down payments and higher credit scores for the lowest mortgage rates.

In the past month, President Barack Obama said the housing market has “been most stubborn to us trying to solve the problem.” And last week Federal Reserve Chairman Ben Bernanke said the troubles facing home construction and sales were more persistent than previously thought.

The builders’ trade group said Monday that its survey of industry sentiment rose to 15 in June. Any reading below 50 indicates negative sentiment about the housing market. The index hasn’t reached 50 since April 2006, the peak of the housing boom.

I Am Woman, Hear Me Saw

From: BUILDER 2011Posted on: May 5, 2011 11:02:00 AM
I Am Woman, Hear Me Saw
Habitat For Humanity’s Fourth Annual National Women Build Week will start 257 homes by this Sunday.
By:John Caulfield

Mel Ressler has worked for Habitat for Humanity, on and off, for the past decade, including time spent with AmeriCorps. This week, she’s supervising the construction of two homes in Charlotte, N.C., that are among the 257 houses Habitat will start in different markets across the U.S. between April 30 and May 8 as part of its fourth annual National Women Build Week.

Women on construction sites may still be more the exception than the rule, but they’re more evident on Habitat’s sites, where on any given week 10,000 female volunteers are helping to build Habitat homes around the world. Over the past 20 years, all-women crews have built 1,800 homes under Habitat’s auspices, the first of which was started in Charlotte 20 years ago.

To finish reading the article click here: http://www.builderonline.com/construction/i-am-woman-hear-me-saw.aspx?cid=NWBD110506002

Taylor Morrison Takes Top For-Profit Private Builder Spot on BUILDER 100 List

Closings decline 21% among 10 largest private home building firms.
By:Teresa Burney www.builderonline.com

Surviving the worst housing market since the Great Depression represents a major achievement for a privately funded builder, but the top 10 for-profit private builders of 2009 were able to do more than just stay alive–they also managed to hold their own against the cash-rich publicly funded builders.

No private for-profit builder took a top 10 on the BUILDER 100 list, but one, Taylor Morrison, at No. 13 with 3,347 closings, came close. (Nonprofit Habitat for Humanity International achieved the rank of No. 8 on the list, with 5,294 closings.)

David Weekley Homes, The Villages, and Shea Homes weren’t too far behind with more than 2,000 closings for each of them. (See sidebar below for individual companies’ closings and revenue numbers.) However, Shea Homes, with a 35.2% drop in closings and a 40.1% fall in revenue, dropped several spots, falling behind David Weekley and The Villages.

Yet, as a group, the top 10 private builders were, for the most part, able to stay close to the same spots on the lists they held last year. Woodside Homes, even under Chapter 11 bankruptcy protection, only dropped one notch, from No. 20 to No. 22, with 1,788 closings in 2009.

Of course, 2009’s difficult business conditions made an undeniable impact on these firms. Business remains a fraction of what it was during home building’s peak, and most large private builders on the BUILDER 100 took a sizeable hit again last year. As a group, closings were down an average of 21%. Revenues were off as well, by 23.9%, as the companies discounted homes to get them sold.

Only one private builder, Ashton Woods Homes, grew closings last year, boosting its business by 9.7% to 1,319 deliveries. However, its revenue still declined 9.5% in 2009.

(Editor’s note: Housing nonprofit Habitat for Humanity, the No. 1 builder on this list of top 10 private builders last year, would have also been the biggest private builder this year based on last year’s criteria. However, this year we decided to restrict this list of the top 10 private builders to for-profit firms only.)

Top 10 For-Profit Private Builders in 2009

1. Taylor Morrison (B100 rank: #13*)
3,347 closings, $1.3 billion revenue

2. David Weekley Homes (B100 rank: #17)
2,229 closings; $690.million in revenue

3. The Villages (B100 rank: #19)
2,115 closings; $658.5 million in revenue

4. Shea Homes (B100 rank: #20)
2,091 closings; $838.9 million in revenue

5. Woodside Homes (B100 rank: #21)
1,788 closings; $469 million in revenue

6. The Drees Co. (B100 rank: #22)
1,500 closings; 519.6 million in revenue

7. Highland Homes (B100 rank: #23)
1,455 closings; $511.2 million in revenue

8. Ashton Woods Homes (B100 rank: #24)
1,319 closings; $319.5 million in revenue

9. McGuyer Homebuilders (B100 rank: #25)
1,280 closings; $325.7 million in revenue

10. Perry Homes (B100 rank: #26)
1,267 closings; $368.7 million in revenue

Source: BUILDER 100
* Numbers in parentheses refer to the company’s overall rank on this year’s BUILDER 100 list.

BUILDER 100’s Top Private Companies Spent Last Year Stuck in Neutral

But moves by several of the largest for-profit, private builders put them in better shape to reap rewards in 2011.
By:John Caulfield www.builderonline.com

Ask anyone at Shea Homes how tough it was to make a buck in 2010.

The Walnut, Calif.–based company was once again one of the 10 largest for-profit, privately owned builders in closings that year, according to our annual BUILDER 100 ranking. (See chart below.) But those closings were down slightly from 2009 and Shea’s revenue was flat, despite J.D. Power & Associates recently rating Shea the industry’s No. 1 builder for customer satisfaction.

No one could argue that Shea was simply waiting for the recession to recede, either. In June, it acquired a bankrupt Levitt & Son community in Florida for $5.3 million from Bank of America, which includes 345 developed homesites and undeveloped lots with the potential for another 390 homesites. In the first phase of the $2 billion Civita project in San Diego, Shea is building two subdivisions of 200 condos, townhouses, and attached homes. And the builder continued to expand its popular Spaces house design concept, which features room flexibility, to other markets.

Moves made in late 2009 benefited two private builders, Ashton Woods USA and Woodside Homes. Georgia-based Ashton Woods USA converted $125 million of its public debt to private debt, which appears to have given this company breathing room to grow. The company has since expanded its operations into Raleigh, N.C., and Austin, Texas. Ken Balogh, a former Centex executive who was Ashton Woods’ COO, was promoted to CEO after Tom Krobot, who had held that post since 1995, retired on Dec. 31, 2010.

North Salt Lake City, Utah–based Woodside came out of bankruptcy in November 2009 and soon afterward began jumping on distressed land opportunities. Its strategy, says CEO Joel Shine, has been to “go where there’s a little less competition” from builders or existing homes, with an emphasis on being near job centers. As of November 2010, Woodside’s biggest deal since coming out of Chapter 11 was in Temecula, Calif., where this builder/developer placed in escrow $7.2 million to buy 210 finished and unfinished condominium lots. The company also acquired lots in Las Vegas; Mesa, Ariz.; and Roy, Utah.

Many private builders are hoping that 2011 presents their companies with a more robust business climate. Arizona-based Taylor Morrison, at the top of the list, is looking to return to profitability after its British parent, Taylor Wimpey plc, sold Taylor Morrison and Canada’s Monarch Homes in April of this year to an investment consortium for nearly $1 billion.

Texas-based David Weekley Homes, which incurred double-digit dips in revenue and closings last year, looked East for growth—to Indianapolis, to be precise, where last month it entered that market by acquiring The Estridge Cos., which only weeks earlier had discontinued its home building operations because it couldn’t get financing to continue. Paul Estridge will become president of Weekley’s Indianapolis division, which is already selling homes and is expected to restart construction next month.

Rank Company 2010 Closings Change 2010 Gross Revenue Change
14 Taylor Morrison 2,570 -23% $1,500 million 14%
16 The Villages of Lake Sumter 2,208 4% $512 million n/a
18 Shea Homes 2,002 -4% $835 million 0%
19 David Weekley Homes 1,857 -17% $612 million -11%
20 Highland Homes 1,704 17% $599 million 17%
21 The Related Group 1,634 n/a $961 million n/a
22 The Drees Co. 1,511 1% $513 million -1%
23 Woodside Homes 1,444 -19% $361 million -23%
24 Perry Homes 1,298 2% $364 million -1%
25 Ashton Woods 1,197 -9% $310 million -3%

John Caulfield is senior editor for Builder magazine.

Learn more about markets featured in this article: San Diego, CA, Raleigh, NC, Austin, TX, Indianapolis, IN.

Texas Housing Market Shoulders the Burden of Performing Well Under Pressure

From www.bigbuilderonline.com

While the nation mostly zigged, Texas zagged. While most corporations stockpiled cash and plunked all their lean-production savings on the bottom line of profits, Texas’ oil-driven economy kicked and buckled and kept people in jobs, and even expanded some capacity beyond the immediate, foreseeable demand for its inventories.

What’s more, Texas dodged the bullet of a bubble housing economy, which didn’t feel so very good during the last-decade boom, but feels pretty derned blessed right now. Consequently, hordes of folks weren’t buying homes as part of the national Ponzi Scheme of getting something for nothing, then flipping it to go onto the next square in the game. On the contrary, folks in Texas mostly bought their homes to live in them. What a concept!

This is why Texas tends to break the model when it comes to matching up failed loans with loan types. So many of those folks in Texas who bought homes during the past decade were among the riskier quality borrowers, with semi-ok credit scores and low- to no-down payments. Yet, percentage-wise, more of their loans are intact today than in most other regions of the country. Which is why there’s a relatively normalized–although low-pulse–marketplace for housing in the Lone Star State.

The big issue there is access to home loans and down payments. Since all regions are tarred with the same brush as the worst of them when it comes to rolling up the statistics on loan risk, banks don’t tend to look at Texas and say, “well, okay, we’ll accept a 580 FICO on a Federal Housing Administration-backed loan.” Just isn’t happening. So qualifying your average paycheck-to-paycheck style household, the backbone of home buyer populations for lo, these many yeaers, is well nigh a pipedream.

So, Texas, being Texas, is going to have to set a good example at helping the rest of the nation figure this dilemma out. And it probably will do just that.

Here is the Texas Housing Update from equity research analyst Buck Horne and his team at Raymond James & Associates.

Texas Housing Update: March Sales Fall 11% Y/Y; Median Price Flat Y/Y

* Sales fall 11% y/y. Existing home sales in Texas dropped 11% y/y in March, which was comparable to February’s 10% y/y decline. From our view, the negative y/y sales totals are not terribly surprising and should be kept in the context of 1) increasingly difficult y/y tax-credit sales comparisons, 2) relatively fewer foreclosure liquidations in the region, and 3) the state’s price stability. Overall, Texas remains a very competitive market, but over the past two years, it has been one of the few bright spots for many homebuilders. More recently, though, increasingly difficult mortgage underwriting and higher fee structures for GSE/FHA loans are creating new challenges in Texas, in our view, given its higher mix of credit-constrained buyers. Thus, with difficult tax-credit comparisons still ahead, we suspect y/y existing home sales results will likely remain negative at least through May until the tax credit comparisons are lapped. Locally, North Texas pending sales (Dallas area) were down 13% y/y in March. Similarly, Austin area pending home sales dropped 17% y/y. Houston area pending sales only fell 1% y/y in March, but both KB Home and Lennar recently noted renewed signs of pricing pressure among new homes for sale in Houston.

* Major market sales drop 10% y/y. Transaction activity in the four largest markets for public homebuilders (Austin, Dallas, Houston, and San Antonio) outperformed the state as a whole but were still down 10% y/y in March (versus a -7% y/y comparison in February). Drilling down, sales in Dallas fell 14% y/y, and Austin sales declined 12% y/y. Meanwhile, Houston reported the least severe decline among the major markets in March, falling 6% y/y. Overall, we believe San Antonio area home sales have been buoyed by the Defense Base Closure and Realignment Commission (BRAC) initiative. That said, sales dropped 10% y/y in March as this submarket lapped a difficult year-ago comparison (+28% y/y).

* Inventory slides 2% y/y. March listings in Texas were down 2% y/y but up 3% from February to 126,051 units. Since 2004, the average seasonal sequential increase between February and March has been roughly 4%. Texas’ total listings represent 7.5 months of supply, which is up from 7.1 months of supply reported in March 2010 but still below the 8.4 months of existing home supply reported nationally as of March. Existing home inventory declined in three of the four major markets. The only y/y increase among the major markets continues to be reported in Houston, where inventory grew by 5% y/y (a deceleration from the 9% y/y increase reported last month). Elsewhere, San Antonio listings dropped 4% y/y and Dallas listings fell 2% y/y. The most substantial y/y decline was registered in Austin, where listings dropped 12% y/y.

* Median home price flat y/y. After climbing 4% y/y in February, the median home price remained flat y/y in March. Over the last 24 months, y/y median price comparisons have oscillated in a narrow range between -3% and +4%. In our view, this suggests that Texas home prices have remained relatively stable. At a median price of $143,700, Texas’ existing median home price is 10% below the March national median price of $159,600 (-5.9% y/y). Thus, in our view, Texas will likely avoid the level of price declines seen in markets still flooded with distressed properties. On a local level, two of the four major markets reported a y/y increase in the median sales price in March, with the breakdown as follows: Dallas (-2% y/y), Houston (-2% y/y), Austin (+3% y/y), and San Antonio (+3% y/y).

* Fewer foreclosures in Texas. Recently released fourth quarter mortgage delinquency data from the Mortgage Bankers Association revealed only 1.9% of loans (69,000 mortgages by our estimate) in the state were in foreclosure versus 4.6% nationally. While slightly above the rest of the nation, the level of implied future foreclosure activity is still far less threatening than many other key states for the homebuilders. Specifically, 9.2% of Texas mortgages were delinquent versus 8.9% nationally and 10-12% in the states hardest hit by the foreclosure crisis. Supporting the Mortgage Bankers Association data, according to Lender Processing Services, the “non-current” rate (delinquency rate + foreclosure rate) in Texas for February remained comfortably below the national average (10.5% versus 13.0%).

* Texas faces fewer headwinds than most markets. In our view, once a sustained recovery is underway, homebuilders with a strong presence in Texas will ultimately benefit from the state’s 1) limited foreclosure overhang, 2) highly affordable housing markets, 3) business-friendly growth policies, and 4) relatively small percentage of borrowers in a negative equity situation. Specifically, based on data from First American Core Logic, only 10.4% of properties with a mortgage were “underwater” in Texas as of December (versus 23.1% nationally). After ending its streak of 16 straight months of y/y declines in employment last May, job growth has steadily accelerated in Texas. Specifically, based on seasonally-adjusted data provided by the Bureau of Labor Statistics, Texas payrolls rose by 251,100 jobs, or 2.4% y/y, in March. Evidencing the favorable market dynamics, M/I Homes announced in early April it acquired the assets of privately held TriStone Homes, based in San Antonio.

* Builder exposure. For reference, as a percentage of their total 2009 unit closing volumes, Meritage Homes, The Ryland Group, and Lennar Corp. have the largest respective exposures to Texas.

Aussie-Based Franchisor Maps Out Expansion Plans for U.S.

From www.builderonline.com

G.J. Gardner Homes expects to open franchise offices in at least five new states this year.
By:John Caulfield

By the end of 2011, G.J. Gardner Homes, a franchised custom home builder with offices around the world, expects to open franchises in Texas, Massachusetts, Tennessee, and the Carolinas. At presstime, the company was getting franchises up and running in Indianapolis and Lafayette, Ind.

Based in Australia, G.J. Gardner has been operating in the United States since 2005 and sold its first U.S. home in Visalia, Calif., in January 2006. It recently opened its 10th franchise office in California, in Elk Grove, and the company has another eight franchise offices in Colorado. Last year, its franchisees built and sold 114 homes in California and 48 in Colorado.

The company has built more than 30,000 homes worldwide over the past 25 years, and has more than 100 franchises in Australia, New Zealand, the U.S, Europe, and South Africa. Last year, its franchisees built and sold around 3,000 homes, whose average price was roughly US$250,000 but ranged from 900-square-foot homes selling for under $100,000 to 12,000-square-foot homes priced at more than $3 million.

(The franchisees do not purchase land, but will help home buyers find suitable lots to build on through Gardner’s network of Realtor and developer contacts.)

“One of the keys to our success is we don’t isolate ourselves to one particular kind of home,” says Greg Dettwiler, a former building contractor in Australia who has been with G.J. Gardner since 2005 and runs its California operations.

G.J. Gardner started franchising 16 years ago in Australia. “The company felt that in order to grow internationally, each area office has to have a vested owner,” explains Dettwiler. The corporation’s M.O. in the U.S. is to establish a master franchise in each state to which other franchises in the state report. The company provides marketing, setup, and training support (it has a training center in Los Angeles), for which it takes a 1% royalty fee on the value of each building contract. A franchisee takes a minimum equity position of $100,000, and further investment depends on how quickly the franchisee wants to grow.

Franchising has been relatively rare in America’s housing sector, Epcon Communities being the industry’s best-known franchisor. Dettwiler says that his company’s business model lures independent builders who are interested in expanding their businesses but often don’t have the time or expertise. “One of the big misconceptions [among builders] is that if they are building fewer than five homes a year they are managing their time,” when in fact they are working an ungodly number of hours per week juggling many balls, says Dettwiler.

He continues that as a franchisee, the builder “has the marketing support and the system in place that give him more time to do other things.” Gardner’s website features Jeff Kreiter, who owns the franchise in Fresno, Calif., with his wife, Mona. “Before, I was pretty much a slave to the business,” says Kreiter, who in his pre-franchise days ran his business out of the family’s barn. When he joined G.J. Gardner two and a half years ago, he was building around five homes a year; now he’s averaging 30 per year and isn’t working nearly as hard because, he says, Gardner’s system showed him how to run a business that doesn’t need to rely on him 24/7.

The couple is now talking about opening a new sales office three times the size of their existing digs, and buying other franchises for their sons to run.

Dettwiler is the first to admit that franchising isn’t for everyone. While none of Gardner’s franchises in the U.S. have failed, at least four now have new owners, as their former franchisees decided to take another path. “We have more people interested in becoming franchisees than we can accommodate, but we’re also looking for people who are growth oriented,” he says.

John Caulfield is senior editor for Builder magazine.

6 Housing Markets Hitting Bottom!

Great news for 6 US housing markets!! – JCP

Via www.bigbuilderonline.com

Source: USA TODAY
Publication date: April 7, 2011

By Julie Schmit
The U.S. housing market looks like a scorched landscape.

Nationwide, home prices are down almost 32% from their 2006 peak. Many economists expect them to fall at least 5% more this year. Some predict even steeper declines.

Even if home prices bottom later this year — a big “if” for many markets — they’re not likely to rise much for several years, forecasters predict.

“It’ll take a long time for markets to recover,” says Paul Dales, economist at Capital Economics.

That’s because millions of homes still face foreclosure. Lending standards are tight. Almost one-quarter of homeowners with mortgages are underwater, which means it will be tough for them to move up into nicer homes because they owe more than their current house is worth.

Yet, even charred terrain sprouts green shoots eventually. And some areas have laid the groundwork for better days, according to an analysis for USA TODAY by real estate website Zillow.com.

Of the nation’s 100 largest metropolitan areas, Zillow identified six — Las Vegas; Fort Myers, Fla.; Stockton and Vallejo, Calif.; Hartford, Conn.; and Columbus, Ohio — that show best what housing markets look like when they are bottoming out but not yet in recovery mode. To identify them, Zillow considered factors such as the trajectory of home prices, housing affordability based on a ratio of prices to local incomes, and foreclosure rates.

None of the six is seeing price gains, just lessening declines that are expected to continue. Their foreclosure rates have peaked, so the worst could be behind them. Homes in these markets also are becoming more affordable, relative to local incomes, than they were before the real estate boom and bust of the past decade. Investors in many of the markets say the housing deals won’t get much better.

“In these markets, you can kind of see a light at the end of the tunnel, and it’s been a pretty long, dark tunnel,” says Stan Humphries, Zillow.com chief economist.

Las Vegas

Flat: The new up

Investors are betting that the home market here has bottomed — or is about to.

Daniel Callihan, 57, a former mortgage company officer, sees that when he hits foreclosure auctions held in a parking lot near downtown. There are twice as many bidders as a year ago, Callihan says. He’s bought and sold 10 Las Vegas homes in the past two years.

Many Las Vegas investors are paying cash. In February, more than half of southern Nevada’s existing homes were bought with cash, local agents say. Investors also are turning many homes into rentals, says Paul Bell, president of the Greater Las Vegas Association of Realtors. No wonder: Homes that sell for $60,000 can fetch $800 a month in rent — an investment return almost three times the rate in Manhattan or Los Angeles, says Patrick ONeill, CEO of ONeill Group, which is buying Las Vegas homes.

Before softening in recent months, Las Vegas home prices had been largely flat for more than a year. “Flat, for us right now, is very good,” Bell says. Whether prices will stay flat is another matter. Moody’s Analytics doesn’t expect Las Vegas single-family-home prices to bottom until mid-2012. One problem: The city still has thousands of homes headed to foreclosure, says University of Las Vegas economist Stephen Brown. He says it will take at least three years for the market to absorb the excess homes.

Perhaps the only sure bet in Vegas? That its housing bottom “will be a long one,” Brown says.

Vallejo, Calif.

Bruised but with ‘good bones’

Realtor Ramon Torres has a front-row seat on the housing wreckage in this San Francisco suburb.

Seated next to a living room window during one of his recent open houses, he saw just one couple coming up the steps in the first hour. They stayed less than five minutes, apparently underwhelmed by the $269,000 five-bedroom house with streaked windows and chipped paint. The owner, who owes $470,000 on the house, wants a short sale.

Sixteen similar homes are for sale within a 1-mile radius, and Torres fears that the “worst is yet to come” for Vallejo as more homes are lost to foreclosure.

Last year, one in 16 homes here received a foreclosure filing, the nation’s 10th-highest rate, RealtyTrac says. Torres also fears that Vallejo’s reputation will scare off home buyers, given that the city declared bankruptcy in 2008 and has made deep cuts in city services, including police and fire personnel.

But Vallejo, along with Stockton, Las Vegas and Fort Myers, also was hit early and hard by the national housing bust and will be one of the first to recover, Zillow says. Last year, Vallejo’s foreclosure filings dropped 12%, while they edged up nationwide almost 2%.

Today’s Vallejo buyers are mostly investors who can get good rent for some of the lowest-cost housing in the San Francisco Bay Area, real estate agents say. “There’s a very strong investor presence,” says David Tipp, owner of Tipp Realty at Glen Cove.

Jay Boberg, 52, a Los Angeles-based investor, has bought four Vallejo properties in the past two years. He’s rented them all and immediately went cash-flow positive. He sees Vallejo as a city with “good bones,” including a waterfront, views of the San Francisco Bay and proximity to San Francisco.

“The fact that you can rent an apartment or a house here, with a view of the (San Francisco) Bay, for $800 to $1,300 a month is incredible,” Boberg says. “I can’t believe real estate here won’t be worth much more in 15 years.”

Columbus, Ohio

Getting in young and cheap

First-time home buyers are having a hard time in today’s market, given tight lending standards and competition from all-cash buyers. In February, 34% of existing-home buyers were first-timers, a National Association of Realtors survey says. In a healthy market, that would be 40%, the NAR says.

But Columbus and the five other markets Zillow analyzed for USA TODAY have become so affordable that people who didn’t think they could afford to own are finding that they can. Lisa Lee, a 25-year-old business analyst, recently bought a $60,000 three-bedroom home in a suburb here that had gone through foreclosure.

Her monthly mortgage, including insurance and property taxes, will run about $140 less per month than the rent she paid on her two-bedroom apartment. She secured an FHA-backed loan. Her down payment and closing costs came to about $2,900.

“I couldn’t believe the house was so cheap,” Lee says. “Why keep wasting money on rent?”

Columbus is also getting a little boost from consumers with stable finances who put off buying homes during the recession, says real estate market analyst Robert Vogt of Vogt Santer Insights. Given signs of a national recovery, people are “getting the confidence to move,” Vogt says.

Fort Myers, Fla.

New values ‘wow’ buyers

Ray Bayer, 59, of Pittsburgh has long planned to retire in Florida, but prices were too high. In January, the postal worker finally bought a $255,000 Fort Myers home that he says would have fetched $400,000 at the market’s peak. Bayer and his wife, Kathy, 57, a nurse, expect to retire to it in a few years.

Fort Myers, like much of Florida, has been battered by foreclosures. In 2010, one in 12 Fort Myers homes had foreclosure filings, the nation’s second-highest rate after Las Vegas.

Even so, Fort Myers’ foreclosure pace last year was down 28% from 2009. And recently, banks have slowed the pace at which they put homes on the market. That’s driving multiple offers and buyers who have to settle “for their third or fourth choice,” says broker Terri Lodge of Century 21 Sunbelt Realty.

In February, the number of single-family homes for sale in Fort Myers was down 52% from the same month in 2009 and sales were up 2.4%, says Bob Groves, managing broker of Coldwell Banker Residential Real Estate. Snowbirds and retirees are fueling much of the activity, Realtors say.

“They’ve seen the deals and said, ‘Wow,’ ” says Rob Keller, a Coldwell Banker agent.

Hartford, Conn.

Jobs to help

Adam and Clare Baroncelli have been on the open-house circuit for several months and have seen good homes get snapped up more quickly.

The increased activity drove them off the fence. They have made an offer on a $370,000, four-bedroom home in Simsbury, near Hartford. “There’s a lot more activity,” says Clare, 34.

The Baroncellis moved in August from Florida to Connecticut because of Adam’s job change. Job growth is expected to help the Hartford region.

Of the four major labor markets in the state, Hartford has the best prospects for job growth, says Steven Lanza, editor of The Connecticut Economy, the University of Connecticut’s economic publication. Late last year, just 12% of homeowners with mortgages in the Hartford region owed more on their homes than they were worth, Zillow data show. That’s far better than the national average, then 27%. Fewer underwater homeowners means there are more homeowners who can move up into more expensive homes.

Rob Giuffria, president of Prudential Premier Homes in Farmington, Conn., says there are huge differences among Hartford areas in terms of the current housing market. Some upper-scale neighborhoods — fueled by white-collar workers and executives — may be bottoming, while some inner-city areas are worsening, he says.

Lanza looks for a broader “recovery” soon. As with the other markets Zillow analyzed, that doesn’t necessarily mean improvement.

“It means you’re not getting worse and maybe you’re getting better,” he says.

Stockton, Calif.

Pain and opportunity

Few areas have been through a longer and darker tunnel than this central California city.

Since peaking in 2006, Stockton’s median home price is down 62%. For three of the past four years, Stockton ranked in the top five nationwide for foreclosures, says market researcher RealtyTrac. In January, six of 10 homes for sale in the city either were bank-owned, in foreclosure or tied to a delinquent mortgage.

Yet there are glimmers of change. Last year, Stockton dropped to No. 7 in foreclosures nationwide. Local Realtors say there are more non-distressed homes for sale now than there were a few years ago. More low-ball offers are being refused. And multiple offers are common on lower-end homes. “It’s a very competitive market,” says Jerry Abbott of Grupe Real Estate in Stockton. He recently got six offers for one home priced at $121,000, a short sale in which the lender agrees to sell a property for less than is owed.

The big concern is when banks will begin to list for sale more of the distressed homes they’ve kept off the market, which could hurt prices. Banks slowed their foreclosure processes last fall after a public outcry over thousands of improperly documented foreclosure cases. The other issue is when Stockton will regain jobs. The unemployment rate in the local county — 17.6% in February — is one of the nation’s highest. Moody’s Analytics predicts Stockton-area home prices won’t return to their 2006 peak for more than 20 years.

Still, some people say it’s time to buy, including Cary Fopiano, 41. Since 1996, she and her husband, Steve, 50, have made money on two of the Stockton homes they’ve owned. They lost money on one but are still far ahead.

The stay-at-home mom and manufacturing manager bought their fourth home last year, on a lake in an upscale neighborhood. They’re shopping for another to turn into a rental investment.

“Prices are about as low as they can go,” Fopiano says.

(c) Copyright 2011 USA TODAY, a division of Gannett Co. Inc.

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Thank you to our 1000th LinkedIn Group Member!

“Joseph Chris Partners Connection”, our Company Group on Linked In just reached it’s 1000th member today!  If you are in the real estate, development and construction industries and you are on LinkedIn, be sure to join “Joseph Chris Partners Connection” group to read the latest industry news, forecasts, market intelligence, and to learn about new job opportunities!

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Press Release: Joseph Chris Partners and MPKA form Alliance

Joseph Chris Partners is excited to announce that we have formed an alliance in our real estate division with MPKA. This partnership will allow us to fully service the residential, development and construction industries. MPKA owners include: Bill Albers, David McCain and Joe Walsh.

Bill Albers was formerly an Executive Vice President for Centex Homes where he also served as Corporate CFO. Most recently, Bill was a Partner with IHP Capital Partners. David McCain previously led Lennar Financial Services as CEO and was formerly General Counsel and Secretary for Lennar Corporation. Joe Walsh, led one of the most geographically diverse and profitable regions at US Home and Lennar Corporation as a Regional President.

By partnering with MPKA, Joseph Chris Partners now offers expanded services which include capital sourcing as well as debt restructuring which include: renegotiating the terms of existing debt and personal guarantees. MPKA has successfully restructured more than $1.5 billion of homebuilder and developer debt over the last 24 months. Further, MPKA provides strategic advice, including board advisory services and services related to Mergers and Acquisitions, Land and Project Acquisition & Disposition, and Model Sale Leaseback Programs.

In addition, MPKA provides Operational Consulting based upon your Company’s strengths and challenges.
No matter your needs, MPKA’s team of experienced homebuilders will analyze your operations, recommend practical solutions for improvement, and work with you and your management team on implementation.

Together, Joseph Chris Partners’ 33 years of driving business connections by recruiting and consulting in the Real Estate, Development and Construction industry in combination with MPKA’s expertise and services, look forward to working with you, by collaborating, creating, and developing meaningful and rewarding partnerships.

For inquiries about MPKA and their services, please call Claire Spence, Executive Partner, at 281.359.2127.

Veronica Ramirez, CEO
Joseph Chris Partners

Lennar closes Rialto Capital's first fund with $300 million in equity

Lennar announced, “its Rialto Capital subsidiary has completed the first closing of a real estate investment fund with initial equity commitments of approximately $300 million (including $75 million committed by Lennar). The Fund’s objective during its three-year investment period is to invest in distressed real estate assets and other related investments that fit within the Fund’s investment parameters.” Rialto landed a $3.05 billion FDIC portfolio, and a $740 million pool of loans from large banks to generate value, “one asset at a time.” Since new-home sales volume may not approach normalcy until well into 2012, Lennar’s Rialto plan is a masterstroke.

Click here to read more: http://phx.corporate-ir.net/phoenix.zhtml?c=65842&p=irol-newsArticle&ID=1500584&highlight=