Kennesaw’s Ashford Capital Partners’ Managing Partners Matthew Riedemann brings you news you can use.

Following a slower than expected summer, the U.S. housing market made up some ground in September as most major indicators inched closer to stability.

Kennesaw’s Ashford Capital Partners’ Managing Partners Matthew Riedemann brings you news you can use.

The third-quarter report from RealtyTrac on flipping shows that 26,947 single-family homes were flipped nationwide in the third quarter of 2014 — where a home is purchased and subsequently sold again within 12 months — representing 4% of all U.S. single-family home sales.

Kennesaw’s Ashford Capital Partners’ Managing Partners Matthew Riedemann brings you news you can use.

Refi share slips despite declining interest rates

Breaking a three-week streak of declines, mortgage applications increased 4.9% from one week earlier, according to data from the Mortgage Bankers Association’s Weekly Mortgage Applications Survey for the week ending Nov. 14, 2014.

Kennesaw’s Ashford Capital Partners’ Managing Partners Matthew Riedemann brings you news you can use.

Where Is Homeownership Within Reach of the Middle Class and Millennials?

Despite high household incomes, San Francisco is the least affordable metro, with just 15% of homes within reach of the middle class. Affordability has deteriorated over the past year in Austin and Miami. The most affordable markets are near the Great Lakes.

Where can the middle class bear the cost of buying a home? In the past year, affordability has fallen modestly, hurt by rising home prices, but helped by lower mortgage rates. Nationally, 59% of homes for sale are within reach of the middle class, compared with 62% last October. Nonetheless, the big picture is that prices still look undervalued compared with fundamentals and historically low mortgage rates make buying much cheaper than renting. Still, affordability is a growing problem.

Kennesaw’s Ashford Capital Partners’ Managing Partners Matthew Riedemann brings you news you can use.

While the rest of the country struggled to recover from the recession, the economy in Texas has been on fire. Thanks to a boom in horizontal drilling and fracking, the state’s oil output has more than doubled over the past three years to 3.18 million barrels per day—a level not seen since 1976.

That’s sparked a surge in construction around the nation’s oil capital, Houston–residential, manufacturing, office, and even the occasional hotel–a development that makes it a poster child for the construction recovery happening around the country.

All that oil has meant plenty of jobs: last year alone, Texas added about 300,000, my colleague Chris Helman reports, and Houston has gained about 630,000 jobs since 2005. The Houston metro area is stepping up to house them, with residential towers rising in the Inner Loop, the downtown neighborhoods bordered by Highway 610. Among the most notable projects is the $147 million, 40-story Market Square Apartments, which will have luxury amenities like a poker room and a sauna, and possibly a grocery store in the retail ground space. Meanwhile, home prices in the neighborhoods close to downtown are quickly rising.

In the first nine months of 2014, the greater Houston metro area welcomed groundbreakings on $25.1 billion worth of new construction projects, a 176% increase over the same period in the prior year, according to Dodge Data & Analytics.

Eight of the 10 biggest new construction projects (in terms of cost to build) are energy and chemicals facilities. The world’s biggest oil and chemicals companies have been rapidly expanding their Houston area plants to take advantage of cheap and plentiful chemical feedstocks like ethane, recovered from booming shale fields like the Eagle Ford. Among the new projects: a $3 billion Chevron CVX -0.56% Phillips ethane cracker in Baytown and a separate $3 billion polyethylene facility at the company’s site in Old Ocean, as well as a $3 billion Exxon Mobil XOM -0.42% project in Baytown and a $1.7 billion Dow Chemical DOW +1.98% project in Freeport.

The most high-profile real estate project at the moment is Exxon Mobil’s $1 billion campus north of Houston, which will house more than 10,000 workers. Started in 2012 (and thus not factored into this year’s construction total), the project sparked rumors that the company would move its corporate headquarters from Irving, Texas—speculation that Exxon’s CEO has refuted.

Thanks to all this activity, Houston jumps two spots to top our 2014 list of the U.S. cities with the most new construction.

“The [nationwide] construction expansion—which has been very hesitant to this point—is becoming more broad-based, which should enable it to become more resilient over the next year,” notes Robert Murray, chief economist and vice president at Dodge Data & Analytics (formerly McGraw Hill Construction).

To compile our list of Building Boom Towns, the folks at Dodge Data sorted through building data for the nation’s Metropolitan Statistical Areas to find the 20 places where the most money has been spent on new construction from the start of 2014 through September. (MSAs, which are delineated by the U.S. Office of Management and Budget, include cities and their surrounding suburbs.)

We looked at the dollar amount of new construction starts, or projects where ground has been broken and work begun, for structures that fall under the categories of single-family home construction, multi-family home construction, office space, retail space, warehouses, healthcare facilities, educational buildings, manufacturing plants and research facilities, among others. We did not include money spent on public works projects– bridges, streets and parks–nor did we include electric utility construction. Dodge Data defines a project’s total value as the cost to build a project at the time that construction starts (this doesn’t include land value or the cost of acquisition).

Note that while construction starts are considered a leading indicator of economic activity, they aren’t a certain representation of what will actually get built, since work could always stall if a developer loses financing or runs into other troubles. Case in point: the B2 modular tower at Atlantic Yards in Brooklyn, once touted as the world’s highest modular residential tower, now stalled amid lawsuits and construction problems.

Across the nation, new construction for the entire country was up 9% in 2013 to $535 billion, and Dodge projects it will climb another 5% to $564 billion in 2014. “The important shift is that non-residential building–which really had not shown any growth in 2012–began to show growth in 2013 and has been even stronger in 2014,” Murray says. “But to clarify, a lot of that has to do with manufacturing.”

Dodge estimates that through the end of 2014, construction starts in the manufacturing sector will be up 57% compared to 2013—and that’s after a 42% jump in the last year over 2012. By 2015, Dodge forecasts, the pace will drop by 16%, though even so the level of manufacturing building (mostly for oil and chemical companies) will be well ahead of historic norms.

Still, residential building remains the biggest chunk of the pie, forecast to account for about $227 billion in 2014’s total construction starts. Single-family residential construction has flat-lined this year, while permits for buildings with five or more units are on the rise, jumping in September to 353,000, up 18.5% over August. Dodge data shows apartment building starts rose 25% nationally from 2012 to 2013 and are forecast to climb another 22% through 2014. Overall, the firm estimates that residential building will grow by 8% this year, slower than in 2013 (up 26%) and 2012 (up 31%).

As the pace slows in residential, commercial is beginning to play a larger role in the construction upturn. This year Dodge forecasts commercial starts will climb 14%, compared to a 22% jump from 2012 to 2013. Financing for construction projects is becoming more available, thanks to easing in bank lending standards as well as the passage of more construction bonds. The total dollar value of starts for hotels and offices is up in 2014, while stores are up just barely. Institutional building – for example, of hospitals and schools – is also on the rise, after a flat 2013 it’s projected to increase by 4% in 2014.

Just behind booming Houston, the greater New York metro area takes the No. 2 slot for most new construction, after topping the list for two years running. A total of $23.3 billion in new construction starts graced the Big Apple in the first nine months of 2014, a 36% increase over the same period the prior year. The largest two are both in healthcare: the Helen L. and Martin S. Kimmel Pavilion Clinical Medical Facility at NYU and The David H. Koch Ambulatory Care Center at New York-Presbyterian Hospital on the Upper East side, both estimated at $800 million. Manhattan is also welcoming a number of new residential projects, many of them targeted at luxury buyers, including the Extell Development’s tall-and-skinny Nordstrom Tower on West 57th Street, which will rise 1,775 feet (one foot shorter than One World Trade Center) and cost about $718 million to build, according to Dodge.

Given the strength of Texas’ economy, perhaps it’s not surprising that three other Lone Star cities make the list of Top 20 Building Boom Towns: Dallas (No. 3), Austin (No. 13), and San Antonio (No. 19)

Dallas, which welcomed $10.8 billion in new construction in 2014’s first nine months, nabs the No. 3 spot, with less than half the new construction seen in Houston or New York. Still, that city is experiencing an increase in projects breaking ground across industries: the $170 million mixed-use development of office, retail, and apartments at Olive and McKinney in downtown Dallas, as well as the new, $150 million six-story tower at the Cook Children’s Medical Center’s Fort Worth campus.

Author: Erin Carlyle – http://www.forbes.com/sites/erincarlyle/2014/11/11/building-boom-towns-metro-areas-with-the-most-new-construction-in-2014/

Come back tomorrow to http://www.AshfordCP.com/blog  where Kennesaw’s Ashford Capital Partners’ Managing Partners Matthew Riedemann brings you news you can use.

Kennesaw’s Ashford Capital Partners’ Managing Partners Matthew Riedemann brings you news you can use.

A weekend-house remodel uncovers a neglected Long Island gem.

“First, do no harm.” A foundation of medical practice, that principle applies equally to the remodeler’s art. Especially in cases like this one, a weekend home in Amagansett, N.Y., whose humble origins and tired finishes might have marked it for demolition. “It was a kit house that was sold through the local lumberyard in the 1960s,” says architect Paul Masi, of Bates Masi + Architects, in Sag Harbor, N.Y. 

On closer inspection, Masi found much to like in this vintage version of modernism on a budget. “It didn’t really fit the owners’ lifestyle as it was,” he says, “but it had a good structure and a nice, simple layout.” Building on those inherent virtues, Masi and general contractor Brian Mannix, of Mannix Custom Builders, in Amagansett, conducted a thorough yet restrained remodel that transformed a bit player into a real heartthrob, which won a Grand Award for Whole-House Remodeling $250,000–$500,000 in the 2014 Remodeling Design Awards. (See a slide show of this project and the other 2014 Design Award winners online in Remodeling’s Project Gallery.)

A Few Good Moves

The core of the original house consisted of a living space with an open ceiling above a high clerestory. Flanking that central element were two lower wings containing a kitchen, a dining area, four bedrooms, and three bathrooms. “The structure had a nice rationale,” Masi says. “It had some volume in its main space and a fair amount of glazing. And it was quite efficient; there were almost no hallways in the house.” As a result, Masi was able to retain the building’s basic interior layout with only a few judicious adjustments. The new floor plan shifts the kitchen and dining area toward the center of the house, freeing up space for a new media room, and includes only enough new area for a larger master bath.

Changes to the building’s structural shell were similarly restrained. Expanded window area—all of the glazing in the house is new—exposes more of the structural frame (the new roof over the master bathroom follows suit, with a tier of clerestory windows all around). Dark-stained cedar siding and matching window frames highlight the contrast between structure and openings. A reconfigured deck spans the home’s rear elevation, punching out at its center to accentuate the building’s basic symmetry. Mannix removed a brick patio and gave the existing swimming pool a narrow apron of cut stone surrounded by a carpet of grass. In keeping with the spirit of the original house, Masi says, his design approach was “just about keeping it simple.”

Grace Notes

While Mannix saved the bones of the house, he took a wrecking bar to its existing finishes. “We gutted the entire house down to the frame,” says the builder, who updated the home’s plumbing, electrical, and mechanical system, and replaced the existing lumberyard-grade interior with an abbreviated palette of earthy, natural materials. The dark cedar of the exterior extends into the house, wrapping the exposed ceiling beams and framing the clerestory windows. Wall paneling and cabinetry fabricated from weathered barn boards highlight Masi’s simple modernist detailing. “We felt like there were a lot of areas that we Sheetrocked,” Masi says, “and this became a counterbalance.”

At the kitchen island, barn board panels and a volcanic stone countertop frame prefabricated laminate cabinets. “We just clad the boxes,” explains Masi, who says that simple stock cabinets represent an attractive, cost-saving option, even for high-style installations like this one. “You’ve just got to find a way to balance them using other materials,” he says. A volcanic stone tile backsplash lines a recess in the opposite wall, which holds another run of laminate cabinets and a pair of weathered plank shelves with hidden cantilevered supports.

The exposed brick chimney, which stands prominently at the center of the living room’s entry wall, gained a bit of artificial aging. “It had a sort of patina that was starting to be interesting, but it wasn’t quite there yet,” Masi says, “so we added some paint and rubbed it off. We did that over and over. It was sort of this layering process.”

Bound for Glory

The project’s most distinctive feature is its use of a material not usually associated with residential interiors: manila rope. Masi specified the rope as a finish and accent throughout the house. Mannix fastened CNC-milled “looms” to the sides of the roof beams and wove the rope back and forth to form continuous screens. The assemblies create visual interest overhead, tying together the home’s existing and new elements. By dampening sound, they also create a warmer environment for music, which is an important consideration for the owners, one of whom is a professional DJ. “There’s quite a lot of glass there, and glass is such a reflective surface,” Masi says. “[The loomed rope] helps balance that out.”

Woven rope also fills the wood-framed sliding door between the master bedroom and the bath, and appears to suspend the long mirror over the master bath vanity. “In a lot of our projects we try to come up with a concept that’s going to carry through not just the big elements, but also the smaller details,” Masi explains. And while he had never worked with rope before, it wasn’t his first experiment with unconventional materials. “Our projects have a tendency to drive us into products and industries that we’ve never delved into,” he says. Fortunately, a member of the crew had relevant experience. “One of the guys was a fisherman,” Mannix says, “I used him specifically because he knew how to work with the rope.”

Sense of Intimacy

The only entirely new room in the house, the master bath offered additional opportunities for creativity. The space centers on a barn board–clad vanity wall, which also encloses the shower and toilet area. Because the wall stops short of the ceiling, Mannix explains, it depends on cantilevered posts that extend into the floor framing for lateral rigidity. “I ran engineered lumber at the corners, straight through the floor, and sheathed the wall with plywood,” he says.

Mannix lined two of the shower walls with stone tile and two with barn boards sealed behind sheets of glass. “We simply laid the glass on top of the wood and siliconed all the corners,” he says, “just like a standard frameless shower stall.” The result is as watertight and easy to clean as a conventional installation, he says, but “it has a very raw feel to it.”

As the 2014 election results roll in from all the local, state and national races across the country, NAHB members demonstrated that they are deeply involved in the political process by not only supporting pro-housing candidates but by throwing their hat in the political ring and winning elected office in a number of races.

Regardless of whether they won or lost, NAHB wishes to congratulate all of our members who fought for housing and ran for public office.

Led by Maryland Governor-elect Larry Hogan (R) and Pennsylvania Governor-elect Tom Wolf (D) (under his firm’s name The Wolf Organization), more than two dozen NAHB members were elected to various government posts across the nation on Nov. 4.

Also on the national stage, Republican Steve Daines, who literally grew up in the home building industry, was elected to the U.S. Senate seat in Montana. His father, Clair Danes, is an NAHB board member.

In South Carolina, Rep. Joe Wilson won re-election to the U.S. House of Representatives.

NAHB also wishes to congratulate the following members who won their local elections:

Housing is an American Issue

Housing is neither a Democratic nor a Republican issue. It’s an American issue. This is why NAHB is officially a non-partisan association. We support housing-friendly candidates on both sides of the aisle, regardless of party affiliation.

Short of running for office, staying politically active by helping get out the vote for housing-friendly candidates and contributing to BUILD-PAC is the best possible way to lay the foundation for future success that will benefit our industry and nation.

If you attended a fundraiser, campaigned door to door, put up signs on your lawn, made phone calls or wrote a check, your contributions helped to make housing’s presence all the stronger and all the more effective on Election Day.

by NAHB Now on November 8, 2014 – http://nahbnow.com/2014/11/from-national-to-local-races-nahb-members-win-office-on-election-day/

Come back tomorrow to http://www.AshfordCP.com/blog  where Kennesaw’s Ashford Capital Partners’ Managing Partners Matthew Riedemann brings you news you can use.

Kennesaw’s Ashford Capital Partners’ Managing Partners Matthew Riedemann brings you news you can use.

For one, the housing market never truly recovered from the recession. Trulia Chief Economist Jed Kolko points out that, while the third quarter of 2014 saw improvement in a number of housing key barometers, none have returned to normal, pre-recession levels. Existing home sales are now 80 percent of the way back to normal, while home prices are stuck at 75 percent back, remaining undervalued by 3.4 percent. More troublingly, new construction is less than halfway (49 percent) back to normal. Kolko also notes that the fundamental building blocks of the economy, including employment levels, income and household formation, have also been slow to improve. “In this recovery, jobs and housing can’t get what they need from each other,” he writes.

Second, Americans continue to overspend on housing. Even as the economy drags itself out of its recession, a spate of reports show that families are having a harder and harder time paying for housing. Part of the problem is that Americans continue to want more space in bigger homes, and not just in the suburbs but in urban areas, as well. Americans more than 33 percent of their income on housing in 2013, up nearly 13 percent from two decades ago, according to newly released data from the Bureau of Labor Statistics (BLS). The graph below plots the trend by age.

(Bureau of Labor Statistics)

The result, of course, is that more and more American households, especially middle- and working-class people, are having a harder time affording housing. This is particularly the case in reviving urban centers, as more affluent, highly educated and creative-class workers snap up the best spaces, particularly those along convenient transit, pushing the service and working class further out.

Last but certainly not least, the rate of homeownership continues to fall, and dramatically. Homeownership has reached its lowest level in two decades—64.4 percent (as of the third quarter of 2014). Here’s the data, from the U.S. Census Bureau:

Homeownership currently hovers from the mid-50 to low-60 percent range in some of the most highly productive and innovative metros in this country—places like San Francisco, New York, and Los Angeles. This range seems “to provide the flexibility of rental and ownership options required for a fast-paced, rapidly changing knowledge economy. Widespread homeownership is no longer the key to a thriving economy,” I’ve written.

What we are going through is much more than a generational shift or simple lifestyle change. It’s a deep economic shift—I’ve called it the Great Reset. It entails a shift away from the economic system, population patterns and geographic layout of the old suburban growth model, which was deeply connected to old industrial economy, toward a new kind of denser, more urban growth more in line with today’s knowledge economy. We remain in the early stages of this reset. If history is any guide, the complete shift will take a generation or so.

The upshot, as the Nobel Prize winner Edmund Phelps has written, is that it is time for Americans to get over their house passion. The new knowledge economy requires we spend less on housing and cars, and more on education, human capital and innovation—exactly those inputs that fuel the new economic and social system.

But we’re not moving in that direction; in fact, we appear to be going the other way. This past weekend, Peter J. Wallison pointed out in a New York Times op-ed that federal regulators moved back off tougher mortgage-underwriting standards brought on by 2010’s Dodd-Frank Act and instead relaxed them. Regulators are hoping to encourage more homeownership, but they’re essentially recreating the conditions that led to 2008’s crash.

Wallison notes that this amounts to “underwriting the next housing crisis.” He’s right: It’s time to impose stricter underwriting standards and encourage the dense, mixed-use, more flexible housing options that the knowledge economy requires.

During the depression and after World War II, this country’s leaders pioneered a series of purposeful and ultimately game-changing polices that set in motion the old suburban growth model, helping propel the industrial economy and creating a middle class of workers and owners. Now that our economy has changed again, we need to do the same for the denser urban growth model, creating more flexible housing system that can help bolster today’s economy.

Richard Florida – 11/4/2014 – http://www.citylab.com/housing/2014/11/the-next-housing-crisis-may-be-sooner-than-you-think/382311/

Come back tomorrow to http://www.AshfordCP.com/blog  where Kennesaw’s Ashford Capital Partners’ Managing Partners Matthew Riedemann brings you news you can use.