MH NewsWire – June 2014


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Top National News
Builder Sentiment Rises Despite Weak Sales

Despite anemic sales, the country’s home builders are showing greater optimism regarding the housing market. The National Association of Home Builders/Wells Fargo index of industry confidence moved up to 49 this month from 45 in May. The reading is the best since January but nonetheless remains below 50 — the threshold at which sentiment is considered favorable rather than unfavorable. “Consumers are still hesitant, and are waiting for clear signals of full-fledged economic recovery before making a home purchase,” remarked NAHB chief economist David Crowe. “Builders are reacting accordingly, and are moving cautiously in adding inventory.”

From “Builder Sentiment Rises Despite Weak Sales”
Associated Press (06/17/14)

Fannie Mae and Freddie Mac Seeing More Competition on Multifamily Loans

Fannie Mae and Freddie Mac lenders have stepped up the competition with banks to finance apartment communities. Banks have proven more than willing to make permanent loans to apartment owners at extremely low interest rates. To keep up, lenders at the two government-sponsored enterprises (GSEs) are offering the lowest rates they can along with faster service. Nevertheless, the competition continues to cut into Fannie Mae’s multifamily lending business. In 2013, federal regulators ordered the two GSEs to limit their lending to apartment communities, contending that agency lenders had become too dominant in the multifamily housing sector. Although the watchdogs appear to be less demanding this year, competitive pressure has picked up where they left off. Through the first five months of this year, Fannie Mae’s multifamily lending business totaled just $6.0 billion — less than half the $13.6 billion in multifamily loans that Fannie Mae closed and sold to bond investors from January through May of 2013. The shrinking volume has had a surprising side effect in the form of lower interest rates for apartment loans. Fannie Mae and Freddie Mac currently have fewer multifamily loans to turn into bonds, which means bond investors are now having to vie for the limited supply. In the process, they are paying higher prices and accepting lower yields.

From “Fannie Mae and Freddie Mac Seeing More Competition on Multifamily Loans”
NuWire Investor (06/16/14) Anderson, Bendix

Senate Panel to Investigate Ways to Ease Flood Insurance Refunds

U.S. Senate Homeland Security Appropriations Subcommittee will hold a hearing to discuss the ways in which the Federal Emergency Management Agency (FEMA) can provide insurance companies with guidance on how to calculate refunds for individuals who paid more than they should after a flood. Subcommittee Chair Mary Landrieu (D-LA) said the scheduled June 23rd hearing would seek to “hold FEMA accountable” for effectively implementing the Homeowner Flood Insurance Act. She also wants to restore $11 million in funding to FEMA’s mapping budget because “inaccurate” maps have failed to take into account the protection provided by levees in many low-lying areas of the country. “Hard-working middle-class families should not have to pay flood insurance rates based on inaccurate and flawed maps that fail to recognize the levees that have protected their communities for decades. That’s why I will lead the effort to reverse [President Obama’s] $11-million cut to FEMA’s program that corrects out-of-date and flawed maps,” she said.

From “Senate Panel to Investigate Ways to Ease Flood Insurance Refunds”
BestWire (06/16/14) Jeffrey, Jeff

Coast-to-Coast Condo Boom Follows Apartment Surge

For the first time since the U.S. housing market collapsed, new condominium high-rises are being built in downtown Boston, Los Angeles, and Seattle as developers wager on a resurgence of the riskiest type of residential property. Construction work crews are also busy in Houston, Miami, New York, San Francisco, and the District of Columbia as financing gradually returns to a sector that lenders have shunned in recent years. Condos are making a comeback following a surge in rental demand that pushed the country’s apartment-vacancy rate to the lowest level in at least 10 years. This, in turn, has caused urban rents to skyrocket. Sam Khater, deputy chief economist for CoreLogic, remarks, “Now you’re seeing rental booming, but today’s renters are going to be tomorrow’s condo buyers.” Builders broke ground on 22,000 for-sale multifamily homes in 2013 — a 4.8 percent increase from the year before and a 47 percent jump from 2010, reports the U.S. Census Bureau. In the first three months of this year, 8.5 percent of the 71,000 multifamily housing units that started construction were built as for-sale units. However, that share is still far from what it was during the housing boom that peaked eight years ago. In 2006, for-sale units made up 45 percent of multifamily home starts. Meanwhile, National Association of Realtors data shows that the median U.S. resale condo price rose 8.3 percent in April from a year ago to $205,500 versus a 4.7 percent gain for single-family homes to $201,100. “There’s a lot of pent-up demand from first-time homebuyers and condos are a good first stop,” notes National Association of Home Builders chief economist David Crowe.

From “Condo Towers Rise From Boston to Los Angeles”
Bloomberg (06/11/14)

Industry News
Atlantis Homes a Retailer of the Year for Its Performance

Norris Homes — a member of the CMH Family of Brands under Clayton Homes — has declared Atlantis Homes of Delmar as its Independent Retailer of the Year. The company, based in Smyrna, Del., has been serving the Mid-Atlantic area since opening in 2001, locating new homes for more than 2,500 customers. According to Norris Homes general manager Charlie Hemphill, the success of the family-owned and operated Atlantis “is a clear indication of the team’s high level of professionalism and commitment to making sure their homebuyers are well taken care of.”

From “Atlantis Homes a Retailer of the Year for Its Performance”
Newszap (05/24/14)

Cavco Industries Reports Fiscal 2014 Fourth Quarter and Year End Results

Phoenix-based Cavco Industries improved its financial performance in the fourth quarter as well as for the full fiscal year ended March 29, 2014. For its quarterly results, the manufacturer of factory-built homes saw net revenue surge 20.6 percent to $131.2 million from $108.8 million a year earlier. It also posted net income of $4.2 million, compared to $3.0 million in the fourth quarter of 2013. Net revenue for fiscal year 2014 rose to $533.3 million from $452.3 million, for a gain of 17.9 percent. Net income for the year also increased on a per-share basis compared to fiscal 2013. “We are pleased to report that our improved annual financial results were from increased earnings in both our factory-built housing and financial services segments as homes sold increased 13.6 percent from the prior year,” remarked Cavco Chairman, President, and CEO Joseph Stegmayer.

From “Cavco Industries Reports Fiscal 2014 Fourth Quarter and Year End Results”
IT Business Net (05/22/14)

A Good Step Toward More Affordable and Efficient Manufactured Homes

The U.S. Department of Energy (DOE) has assembled a formal working group to hammer out new and tougher energy-efficiency standards for manufactured homes, which now number about 9 million nationwide. The niche is a vital source of workforce and affordable housing as well as a higher-end option, accommodating almost 20 million Americans; but, the efficiency standards that govern the sector are more than two decades old. DOE estimates that introducing new guidelines for manufactured housing constructed over the next 30 years could save 200 billion kilowatt-hours of electricity and curtail carbon-dioxide emissions by 40 million metric tons. Consumers not only would enjoy greater comfort but also save nearly $500 million annually.

From “A Good Step Toward More Affordable and Efficient Manufactured Homes”
Natural Resources Defense Council (06/05/14) Roy, Robin

Interest in Factory-Built Homes Revived

The market for manufactured and modular housing is gaining steam in Marion County, FL, where Nobility Homes and a number of other builders are expanding their product lines and/or adding workers. Nobility’s latest Securities and Exchange Commission filing reports production of 86 factory-built homes in the quarter ended Feb. 1, up from 65 a year earlier. Executive Vice President and CFO Thomas Trexler says the company is offering new products and floor plans to customers and also is looking to increase its payroll from about 100 employees currently to at least 110. He notes that recovering housing markets to the north and employment gains are again making it possible for retirees to sell their homes and move south. Nobility — which has four age-restricted manufactured home communities in Florida, all outside of Marion — plans to cater to this segment through its 10 Prestige Home Centers statewide. Elkhart, Ind.-based Skyline Corp., which also has operations in Marion County, is looking for more skilled construction laborers to keep up with growing demand there as well. “People are looking to retire in Florida,” according to sales and marketing director Terry Decio. “It’s a great, great place to go.” The company’s SEC filing for the first quarter points to a 5 percent jump in net sales from a year earlier to about $38.8 million. Other area manufactured and modular firms steadily rebuilding their presence in Florida include Chariot Eagle and Southern Structures Inc., which is doing a lot of business along the state’s coastal areas.

From “Interest in Factory-Built Homes Revived”
Ocala Star-Banner (FL) (05/31/14) Anguiano, Richard

NYC’s First Modular Multi-Story Property Opens to Renters

The Stack, the first modular multifamily apartment building in New York City, is now officially on the market, with the first residents slated to take occupancy in June. The seven-story steel-and-concrete edifice was constructed in Pennsylvania by DeLuxe Building Systems, which then shipped it to the property site in Manhattan’s Inwood community as dozens of individual modules. The finished product boasts high-performance aluminum windows; Corian countertops, stainless steel appliances, and maple cabinets in the kitchens; mosaic tiles, modern vanities, and WaterSense faucets in the bathrooms; and private outdoor space and washer/dryers in some of the units. “This project exemplifies the opportunity to create an exciting design for living, while enjoying the benefits and efficiencies of controlled, off-site fabrication,” according to developers Jeffrey Brown and Kimberly Frank. “The completed building provides a well-designed, modern structure incorporating 28 beautiful, comfortable, light-filled homes.”

From “NYC’s First Modular Multi-Story Property Opens to Renters”
Multi-Housing News (05/14) Steele, Jeffrey

Arkansas Co-ops’ Energy Efficiency Makeover Contest

The Electric Cooperatives of Arkansas is gearing up for its seventh annual Energy Efficiency Makeover Contest, which this year switched the focus from site-built homes to manufactured housing. The grand prize revamp will include geothermal heat pump technology; membrane roofing; and energy-efficient doors, windows, lighting, and appliances. “Technological advancements of energy-efficient retrofit components and measures can benefit owners of manufactured dwellings,” said Sandra Byrd, an official with the Electric Cooperatives. Homes are eligible to enter if they are at least 320 square feet large, permanently anchored, and occupied and owned by a consumer-member of one of the state’s distribution co-ops. According to the Arkansas Manufactured Housing Association, the industry accounts for one in three new residential units in the state.

From “Arkansas Co-ops’ Energy Efficiency Makeover Contest”
Electric Co-op Today (05/29/14) Holly, Derrill

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