Landscape Management, October 2010

TAX CREDIT AFTERMATH A look at how residential home sales are faring after government assistance expired Following the sharp drop in the months immediately after the home buyer tax credit expired April 30 pending home sales rose modestly 52 increase in July according to the National Association of Realtors While the fi gure is still 191 below July 2009 s Pending Home Sales Index fi gures this is still a positive sign according to Lawrence Yun NARs chief economist Home sales will remain soft in the months ahead but improved affordability conditions should help with the recovery OCTOBER 2010 LANDSCAPEMANAGEMENT NET S17 he says When it comes to new homes however the three months following the April 30 deadline of the home buyer tax credit were the three worst for this category in history per U S Census Bureau fi gures All four census regions recorded declines with the largest in the West 254 and Northeast 139 and smaller declines in the Midwest 83 and South 87 Now that the stimulus is over we have to let the market forces do their own work Yun insists We cant rely on federal stimulus forever sold in the 150000 to 300000 range where most fi rst time home buyers make their purchases picked up share But in homes priced between 400000 and 500000 theres not a lot of development at all When it comes to buyers 76 of consumers believe current home buying conditions are good 65 citing low prices and 46 citing low interest rates as reasons why according to the University of Michigan Consumer Sentiment Index Though most consumers recognize the market offers some of the best housing affordability opportunities in a generation that view is not refl ected in actual home buying activity In most parts of the country house prices have returned to what the National Association of Realtors loosely describes as pre boom levels For a new home U S Census data says the median sales price is 204000 down from 214200 one year ago The National Association of Home Builders expects any additional price declines to be mild and temporary the underlying trend is upward All of the bubbles have been removed from price Yun says but the recovery will proceed at a frustratingly slow pace As contractors wait for housing market stabliziation there is a bright spot in the area of home improvements where spending was up 106 this year according to the National Association of Home Builders LM UP UP UPGRADES 106 increase in spending on home improvements this year SOURCE NATIONAL ASSOCIATION OF HOME BUILDERS 76 of consumers who believe current home buying conditions are good as a result of low prices and low interest rates SOURCE UNIVERSITY OF MICHIGAN CONSUMER SENTIMENT INDEX CRITICAL CONDITIONS A CLOSER LOOK AT MULTIFAMILY PROPERTIES Weak demand for condos high rental vacancy rates and miniscule rent increases have combined with a harsh fi nancing environment to slow multifamily construction to a snails pace Spending year to date has plummeted 57 from 192 billion a year ago to 82 billion in July according to the U S Census Bureau But there is evidence that prospects for multifamily projects are slowly improving The threemonth moving average for multifamily housing starts has been generally rising throughout the course of this year which should begin to turn multifamily construction spending upward