In the News

Builder Confidence Declines In July
Thu, 29 Jul 2010 08:00:00 PST

WASHINGTON -- Builder confidence in the market for newly built, single-family homes declined for a second consecutive month in July to its lowest level since April of 2009, according to the National Association of Home Builders/Wells Fargo Housing Market Index (HMI) released today.  The HMI fell two points from a downwardly revised number in the previous month to 14 for July.

"We continue to see a lull in home buying activity following the expiration of the federal home buyer tax credit program, as many of the sales that would have occurred this summer were likely pulled forward to meet that program's deadline," noted NAHB Chairman Bob Jones, a home builder from Bloomfield Hills, Mich. "In addition, builders are reporting continuing consumer hesitancy regarding home purchases due to uncertainty in the overall economy and job markets."

"This month's lower HMI reflects a number of underlying market conditions that builders are seeing, including hesitant home buyers, tight consumer credit, and continuing competition from foreclosed and distressed properties that are priced below the cost of construction," said NAHB Chief Economist David Crowe. "The pause in sales following expiration of the home buyer tax credits is turning out to be longer than anticipated due to the sluggish pace of improvement in the rest of the economy. That said, we do believe that favorable factors such as low mortgage rates, affordable prices, and demographic trends will help revive consumer demand for new homes this year, and that new-home sales will improve by 10 percent in 2010 from 2009."

Derived from a monthly survey that NAHB has been conducting for more than 20 years, the NAHB/Wells Fargo Housing Market Index gauges builder perceptions of current single-family home sales and sales expectations for the next six months as "good," "fair" or "poor." The survey also asks builders to rate traffic of prospective buyers as "high to very high," "average" or "low to very low." Scores for each component are then used to calculate a seasonally adjusted index where any number over 50 indicates that more builders view conditions as good than poor.

Each of the HMI's component indexes recorded declines in July. The component gauging current sales conditions fell two points to 15, while the component gauging sales expectations in the next six months edged down one point to 21 and the component gauging traffic of prospective buyers fell three points to 10.

Regionally, the HMI results were mixed in July. The Northeast, which has a smaller survey sample and therefore is prone to greater monthly volatility, posted a seven-point increase to 23 this month, while the Midwest posted a one-point improvement to 15. The South and West each posted five-point declines to 14 and 9, respectively.

New Home Sales Rise 23.6 Percent in June
Thu, 29 Jul 2010 08:00:00 PST

Sales of new single-family houses in June 2010 were at a seasonally adjusted annual rate of 330,000, an increase of 23.6 percent, according to estimates released jointly this week by the U.S. Census Bureau and the Department of Housing and Urban Development.

The median sales price of new houses sold in June 2010 was $213,400; the average sales price was $242,900. The seasonally adjusted estimate of new houses for sale at the end of June was 210,000. This represents a supply of 7.6 months at the current sales rate.

"Today's numbers are an encouraging sign that new-home sales are coming back from an expected slow period that followed the expiration of the home buyer tax credit program," said Bob Jones, chairman of the National Association of Home Builders (NAHB) and a home builder from Bloomfield Hills, Mich. "While we still have quite a way to go on the path to recovery, it's good to see that we are headed in the right direction."

"It's worth noting that some of the new-home sales in June were due to move-up buyers who were able to sell their previous home to a tax-credit-eligible buyer while that program was active," said NAHB Chief Economist David Crowe. "Also, while sales activity is still far from robust, it has picked up some momentum as positive factors such as historic low mortgage rates, great selection and attractive prices help draw potential home buyers back to the market. We anticipate that this momentum will continue along with a gradually improving economy, although other factors such as a critical lack of production financing remain a drag on housing's recovery."

Sales of new homes rose strongly in three out of four regions in June. The largest percentage increase was the Northeast's 46.4 percent gain, followed by a 33.1 percent gain in the South and a 20.5 percent gain in the Midwest. The West was the only region where new-home sales did not improve in June, instead falling 6.6 percent to a new record low.

Remodeling Spending Expected to Accelerate Moving into 2011
Thu, 29 Jul 2010 08:00:00 PST

CAMBRIDGE, MA -- A recovery in home improvement spending will soon be underway according to the Leading Indicator of Remodeling Activity (LIRA) released today by the Remodeling Futures Program at the Joint Center for Housing Studies of Harvard University. Remodeling spending is expected to increase on an annual basis by the end of the year, and the LIRA points to growth accelerating to the double-digit range in the first quarter of 2011.

"Absent a reversal of recent economic progress, there should be a healthy upturn in home improvement activity by year-end and into next year," says Eric S. Belsky, managing director of the Joint Center for Housing Studies.

Homeowner optimism is bolstering a trend toward investing in the home again. "The recovery in home improvement activity appears to be moving beyond simple replacement projects and energy retrofits to broader remodels and upgrades," says Kermit Baker, director of the Remodeling Futures Program at the Joint Center for Housing Studies. "A wider activity base would help generate the expected growth in the quarters ahead."

The Leading Indicator of Remodeling Activity (LIRA) is designed to estimate national homeowner spending on improvements for the current quarter and subsequent three quarters. The indicator, measured as an annual rate-of-change of its components, provides a short-term outlook of homeowner remodeling activity and is intended to help identify future turning points in the business cycle of the home improvement industry.

The Remodeling Futures Program, initiated by the Joint Center for Housing Studies in 1995, is a comprehensive study of the factors influencing the growth and changing characteristics of housing renovation and repair activity in the United States. The Program seeks to produce a better understanding of the home improvement industry and its relationship to the broader residential construction industry.

The Joint Center for Housing Studies is Harvard University's center for information and research on housing in the United States. Established in 1959, it is a collaborative unit affiliated with the Graduate School of Design and the Harvard Kennedy School. The Joint Center analyzes the dynamic relationships between housing markets and economic, demographic, and social trends, providing leaders in government, business, and the non-profit sector with the knowledge needed to develop effective policies and strategies. For more information, please visit www.jchs.harvard.edu

Toll Brothers Forms Division to Acquire Distressed Real Estate
Thu, 29 Jul 2010 08:00:00 PST

HORSHAM, PA -- Toll Brothers, Inc., the nation's leading builder of luxury homes, has announced the formation of Gibraltar Capital and Asset Management LLC, a wholly owned subsidiary of Toll Brothers, Inc., to pursue a broad range of real estate acquisition and investment opportunities.

Douglas C. Yearley, Jr., Toll Brothers' chief executive officer, stated: "We are excited to launch Gibraltar Capital at a time when we believe there are many potential investments arising from the distress in the real estate industry. We intend to leverage Toll Brothers' relationships, nationwide presence and well-known brand name, as well as our capital access, land acquisition and development strength and experience in distressed acquisitions and workouts, to pursue opportunities that have synergies with, but may fall outside, our core home building operations. These opportunities may include the acquisition and disposition of loan and property portfolios; the development of sites for sale to other builders; providing assistance to banks and developers in the workout of troubled real estate; and a myriad of other potential investments where our capabilities and capital access can add value.

"We are thrilled to have this initiative led by Toll Brothers veterans Roger A. Brush and Michael L. LaPat. Roger brings a legal background, experience in the distressed acquisition arena and 17 years of Toll operational home building experience to this new venture. Mike, who has been a senior manager in our Finance group, has over a decade of experience at Toll in mergers and acquisitions, due diligence, valuations and the structuring and financing of complex ventures."

Accu-Weld Changes Corporate Name to Haddon Windows & Doors
Wed, 28 Jul 2010 08:00:00 PST

BENSALEM, PA -- Haddon Windows LLC, operating as Accu-Weld, recently announced its new corporate name of "Haddon Windows & Doors."

The name change is part of a strategic integration and revamp of the 29-year-old Accu-Weld Company and Speyer Door & Window, the assets of which were acquired by the Haddon family in 2009. Haddon's new name represents the company's vision for the future, creating innovative products, new processes to enhance quality and commitment to excellent service.

"With over 150 years in the industry, my brothers, my father and I, as a family, are committed to building a lasting company supplying innovative products to our customers based on enduring relationships," said John Haddon Jr., president of Haddon Windows LLC. "This step reflects the hard work of integration of assets and building a lasting company platform. Our product line and company is well positioned to support the weatherization and energy efficiency upgrading of American homes."

Haddon Windows & Doors is a vertically integrated manufacturing company based in Bucks County, PA. Haddon supplies energy efficient windows, patio doors and entry doors to its dealer channel.

"In this very challenging market, we believe that innovation, service and quality are paramount to increasing market share. Since acquiring the assets of the two companies, we've made many enhancements in our manufacturing processes, product design and product pipeline and have over 20 patents filed and issued. Haddon Windows & Doors is all about innovation, energy efficiency and lasting customer relationships," said Sam Jadallah, Chairman of the Board. "Manufacturing in the United States is under the most stress of the past 50 years. Rebuilding our economy will be driven by the commitment of families and local businesses like ours, focused on preserving and creating American-based jobs and showcasing the innovation and perseverance of our employees. It is no easy task, but we are committed with our sweat equity, financial resources and talented people," added Jadallah.