MHMSM.com presents Factory Built Housing Industry News at Noon with Erin Patla
Coming up, Restoring AD&C Lending Key to Promoting Job and Economic Growth
But first…these stories:
Reasons for optimism as signs of economic rebound emerge in area
By LARRY P. VELLEQUETTE [VELL-eh-ket]
TOLEDO BLADE BUSINESS WRITER
Economists say nearly all of the economic indicators that measure whether a community is growing or contracting are finally pointing in the right direction in metro Toledo after the worst recession in generations.
In the last six months:
• Housing prices have stabilized after years of declines.
• Jobless rates are moving downward again, although they remain uncomfortably high.
• Numbers of foreclosures and bankruptcy filings have declined for several months in a row.
• Auto sales are up locally, local auto production is up, and manufacturing continues to regain strength.
• After a sharp contraction, personal household income is growing again.
“Toledo is moving toward economic recovery, though there is a good deal of progress that needs to be made before conditions start to feel more stable,” PNC Bank economist Craig Thomas writes in his latest quarterly assessment of the region’s economy.
“We’re still in an economic recovery, maybe not quite as strong as we originally thought,” said George Mokrzan [MOCK-er-zon], chief economist for Huntington Bancshares in Columbus. Supported by the U.S. Department of Labor figures showing that Ohio led the nation in April in net increase in jobs, Mr. Mokrzan said, “Overall, our part of the country is doing pretty good.”
“Unless we have some unforeseen problem or issue, we’re probably going to hold pretty steady” through the rest of the year, said Steve Weathers, president and chief executive officer of the Toledo Regional Growth Partnership… “So, we actually see some pretty good things coming up on the horizon.”
[Besides the automotive industry], home sales and construction are also huge parts of the local economy. Sales of existing homes were buoyed by now-expired federal tax credits that helped to resuscitate a once moribund market over the last 18 months. But the go-go days of May—when local real estate agents sold more than twice as many houses as they had four months earlier, thanks to the tax credit—are likely to turn into ho-hum days of summer, local agents and national economists say.
“The third quarter is probably going to be a little bit on the light side, other than we’ve got some of this carryover stuff that didn’t get closed in time for the tax credit that will get pushed into the third quarter,” said Dave Browning, a principal at Welles-Bowen Realty in Toledo.
Richard DeKaser, of Woodley Park Research in Washington, formerly chief economist for National City Bank, said the next few months are likely to be pretty rough for those who make their living in real estate.
“I think the second half of the year is going to get off to a very rough start, because of the on-again, off-again nature of the home-buying tax credits over the last year and a half,” Mr. DeKaser predicted. “Thereafter, I expect conditions to improve. We’re in the most affordable housing market in the last 40 years, and that will support sales growth, even if it’s not at a torrid pace.”
Mr. DeKaser said he is more optimistic that the pace of home construction will pick up during the latter half of this year. “The availability of new homes nationwide is at a generational low,” he said. “Builders went into a free fall after 2007, and as a consequence, you have to go back to 1972 to see the availability of newly built homes on the market as low as they are today.”
Forrester Wehrle [WERE-lee] Homes’ Jeff Wehrle said, “Definitely, there’s a lot more interest right now, but there are still some challenges. There are more people who are interested, coming out to our showroom and coming out to visit our model [homes].”
MHMSM.com Market Report, July 13,
By the end of the day Monday, it became more apparent the Senate would be able to pass financial reform. The picture came into focus as Senators Olympia Snowe of Maine and Scott Brown of Massachusetts announced they will be joining Susan Collins of Maine as three crucial Republican votes needed to pass the bill when it comes up for a vote later in the week. The bill aims to create a consumer financial protection bureau at the Federal Reserve, a council of regulators to monitor firms for systemic risk and a mechanism for liquidating large financial firms whose collapse could threaten the economy. The House of Representatives has already approved a final version of the bill. Some critics contend the final bill should do more to make changes to Fannie Mae and Freddie Mac, which have taken more than $145 billion from taxpayers since being seized in 2008.
Loans to small businesses have declined some $40 billion, and Federal Reserve Chairman Ben Bernanke said Monday that addressing the situation should be front and center on the way to economic recovery. Loans to small businesses dropped from more than $710 billion in the second quarter of 2008 to less than $670 billion in the first quarter of 2010, according to bank financial reports submitted to the Federal Financial Institutions Examination Council. Credit for small businesses, the chairman says, is key to recovery. Bernanke noted small businesses employ roughly half of all Americans and account for about 60 percent of gross job creation.
Realty Trac released its U.S. Foreclosure Market Report Monday for May 2010, which shows that foreclosure filings were three percent lower than in April and one percent higher than in May, 2009. Filings in just ten states accounted for 70 percent of the national foreclosure filing total.
Markets were mostly flat on Wall Street Monday as investors awaited earnings reports, but stocks edged higher toward the close. Manufactured housing-related stocks appeared to more likely down than up, with Cavco Industries, Equity Lifestyle Properties, Palm Harbor Homes, Skyline Corp, Sun Communities and UMH properties all off Friday’s closing price. Nobility Homes was the exception Monday, closing up 62 cents at $9.48. The DOW closed at 10,216.30, up 18.24.
“Up next, Restoring AD&C Lending Is Key to Promoting Job and Economic Growth”
But first, this podcast of News at Noon is sponsored in part by Tap into Excellence, your ONE-STOP Resource for the Manufactured Housing Industry, the Leader in Land Lease Communities information!
Tap into Excellence – on the Web at CommunityDASHinvestor.com or call 317-346-7156.
“And now, back to the news…”
Restoring Acquisition, Development and Construction (AD&C) Lending Is Key to Promoting Job and Economic Growth
from National Association of Home Builders
July 12, 2010—With the Obama Administration and Federal Reserve this week sponsoring events that focus on how to ease regulatory burdens on the small business community that are constricting job growth, the National Association of Home Builders (NAHB) today urged policymakers to address the lack of financing for housing production that is impeding the housing and economic recovery.
“In normal times, housing accounts for about 17 percent of Gross Domestic Product (GDP),” said NAHB Chairman Bob Jones, a home builder from Bloomfield Hills, Mich. “However, in the current economic climate, lenders have basically stopped making acquisition, development and construction (AD&C) loans and are calling in existing loans, even when the borrower’s payments are current. Policymakers must act now to restore credit availability for viable home building projects; otherwise countless construction jobs will be lost, further jeopardizing the fragile economic recovery.”
Federal Reserve Chairman Ben Bernanke said that the objective of a conference today at the Federal Reserve is to develop policies that will support the flow of loans to creditworthy small businesses. Meanwhile, the White House has asked business leaders and lawmakers to attend a jobs summit at the U.S. Chamber of Commerce on Wednesday to help identify regulatory obstacles that are hampering job and economic growth.
NAHB is reaching out to regulators, banks, Administration officials and members of Congress to seek action to reduce regulatory restrictions on AD&C credit and rein in overzealous bank examiners.
The vast majority of NAHB builder members are small businesses situated in communities across the nation who employ workers that contribute to the local economic base. NAHB estimates the one-year local impacts of building 100 single-family homes in a typical metro area result in the creation of 324 local jobs and an additional $21.1 million in local income and $2.2 million in taxes and other revenue for local governments.
Beyond its negative effect on home builders, the lack of AD&C lending has major implications for the economy and the nation, said Jones. “Over the next decade, population growth will trigger demand for an average of at least 1.7 million additional homes per year,” he said. “This translates into five million jobs and significant economic activity, including tax revenue. But without increased AD&C lending, this demand will not be met, jobs will be lost and job creation will suffer.”
“On behalf of Production and IT Manager Bob Stovall, Associate Editor Catherine Frenzel, Industry in Focus reporter Eric Miller, Editor L.A. ‘Tony’ Kovach, and the entire MHMSM.com writing and support team, this is Erin Patla, G’day!”