Existing Home Sales Stir Good News Bad News Sparring
In the National Association of Realtors’ release of June existing homes sales numbers, most of the interest is in what’s happening at the low-end, and what’s not.
First-time home buyers, the data says, account for three of every 10 resale home purchases in June, down from 40% in April, and way down from fully half of all buyers in March. The inference here, per Buck Horne, housing analyst for Raymond James, is that first-time buyers were actually plentiful enough to cause some demand among mover ups…
This is likely due to a growing number of repeat buyers who are benefiting from sales to entry-level buyers.
Horne and other analysts note that the NAR’s count of inventory was down (by .7% or 28,000 units to 9.4 months of supply). Still, NAR’s count of inventory masks “shadow inventory”–houses that people or lenders will want to sell, but are waiting out the worst of times in hopes of more pennies for their dollar of real estate asset. Raymond James’ Horne reminds us, normal inventory level is 6.3 months’ supply, and during recession times past, an 8.6 month supply is normal.
Interesting to note, though, is that the supply for single-family homes in the $250,000 and below range is tightening. CNBC’s Diana Olick snags that observation as she reports on the lift in all geographies and all product types, especially condos.
Here’s The Big Picture analyst Peter Boockvar’s take on how foreclosure, distress and short sales among prime mortgage holders skew price trends.
Prices are down 15.4% but rose to $181,800 sequentially, the highest since Oct ‘08 as prime foreclosures rise and lead to higher priced homes for sale, thus skewing the median price higher.
Calculated Risk’s big take-away is keep an eye on inventory. Price stability is captive to months’ supply. Months’ supply is doubly affected–worsened and made less predictable–thanks to foreclosures. Foreclosures are now more a function of “underwater behavior” and job losses than shaky loan policies.
Here are two contrasting interpretations of today’s report from housing sector equity research analysts:
Michael Rehaut, senior VP at JP Morgan, believes the months’ supply, foreclosures, and job loss scenarios mean home builder stocks may be trading with significant exposure to upcoming business trends:
Specifically, given our outlook for higher unemployment, still tight credit, rising foreclosures, and elevated inventory levels, our estimate for impairment charges to represent another 30% hit to builders’ book values could easily prove conservative. As a result, we believe large impairments should continue to prevent investors from gaining confidence in asset values, resulting in depressed price-to-book multiples, as well as drive further erosion of book values.
Citi’s Josh Levin, on the other hand, sees resilience playing into how the home builders perform in the near-term future.
While we think the housing market faces numerous headwinds, we view today’s data as a positive headline for the homebuilder stocks in the context of a group that we think remains a trading group. At the very least, the empirical evidence that higher rates did not adversely impact sales should be welcomed by investors who are long.
Our own take is that we’ve entered a protracted period of mirror-month performance, i.e. one-month may be positive and the next negative by precisely the same degrees.
Seasonality proved that business could revive with lots of life support. The question is what will fundamentally support sustainable positive direction. Not alot out there to do that.
Big Easy District Gets Homegrown Help
Today’s global and domestic Housing Crisis’s most eloquent metaphor formed over the Bahamas on Aug. 23, 2005. But it wasn’t just a metaphor. Six days later, early on a proverbial Stormy Monday morning, it made its second landfall. Known forevermore as Katrina, it was the costliest and one of the five deadliest hurricanes in history. At least 1,836 in New Orleans lost their lives.
Among other things, the event in hindsight serves as a bright-line moment that separates a 15-year housing boom from a bust whose duration no expert can confidently predict, and whose ravages are still being felt and dealt with.
Economics aside, Katrina marked first the exodus of investor buyers from residential real estate and, subsequently, the meltdown of mortgage finance’s international house of cards, which seemed to hiccup one moment and contract double-pneumonia the next.
Almost four years later to the month, amid a delicate balance of morale, movement forward, and memory, the wards, parishes, and neighborhoods of the Big Easy may once again serve as a metaphor–but not just a metaphor–for a painfully slow but sure show of irrepressible resiliency–more like obstinacy–that must foreshadow any noteworthy measure of re-stabilization, not to mention recovery.
Click image to access Make It Right Foundation site.
Down in the Lower 9th, the vaunted Make It Right Foundation, backed by a $5 million bump each from Brangelina and Tom Darden of Cherokee Investments as well as contributions from a number of other donors, intrepidly makes progress as it makes headlines. Some 18 homes–of an intended 150–are either done or under construction, with a number of duplexes scheduled to break ground in August. Still, at a cost of $350,000 or more per home, and a selling price at a fraction of that, the Make It Right model, while laudable in its mission, is far too expensive and time-consuming to be scaleable in its execution.
Symbolically, efforts like Brad Pitt’s, and those of Branford Marsalis and Harry Connick Jr.–who’ve teamed up with Habitat for Humanity to create “Musicians’ Village” for musicians who lost their homes to the hurricane–may work to call attention of the world outside New Orleans for the continued need for help.
But they hardly serve as a self-sufficient, organic market-based approach to solving the sorry Jack-O-Lantern look of so many neighborhoods where many homes still sport FEMA search marking system badges, and others are either “scraped” to the slab or a still-standing, termite-ridden, mold hotel awaiting inevitable bull-dozing.
A middle-class, integrated neighborhood called Filmore (in New Orleans’ Gentilly 6th District), up toward Lake Pontchartrain and just east of the huge City Park, may well soon reflect a new stage of the city’s no-quit mentality.
Former JMP Securities investment group director Phil Whitcomb is working with a S.W.A.T. team of real estate development and construction operations folks on a concept that, if it gets buy-in from important neighborhood associations and local influencers, could pump the blood of life into a 52-block area bordered by Bayou St. John to the west, Robert E. Lee Boulevard to the north,the London Avenue Canal to the east, and Filmore Avenue to the south.
Pratt Park would get a Promethean make-over.
The idea–in contrast with the headline-grabbing Make It Right initiative–would be to home-grow a neighborhood transformation. It would be a mash-up of the best advantages of scaled production home building and economic redevelopment at the street-by-street level to create a sustainable extreme community make-over – jobs and affordable, energy-efficient homes where residents adopt a reinvigorated stake in their place. The neighborhood even has a built-in park, Pratt Park, which would morph into a prized playground and park facility in Whitcomb’s blueprint for Filmore’s renaissance.
The timing? Perhaps within weeks, floor plans that could fly with acceptable local architecture will be developed, even as several public-private partnership dimensions of the plan get traction. Still, it’s not a moment too soon.
With the exception of the higher ground along Gentilly Boulevard (which parallels the Bayou Sauvage Ridge) and the neighborhoods along the Lake that were built upon artificial fill, District 6 experienced some of the worst flooding as a result of Katrina. Many residential structures that were built upon slabs experienced flooding up to their roofs and are uninhabitable for the foreseeable future.
The best term to describe Whitcomb’s plan to build or renovate most of the homes in the neighborhood is “scattered urban.”
It would involve a combination of bidding for New Orleans Redevelopment Authority-owned lots, buying lots from owners who no longer intend to move back to The Big Easy from out of town, and in some cases, acquiring lots from current residents who may want to sell.
On building lots that have already been “scraped” or ones that should be bull-dozed, Whitcomb would work with a development company called Promethean Structures on building homes that would sell in the range of $150,000 to $240,000, a new-home that would comp in an acceptable range that existing homes are selling for in the community.
One of the secret-sauce operational details would be that each of the new homes would go up in 50 days, in part through the use of highly energy efficient and weather resistant structural insulated (polyurethane) panels.
A tighter envelope for air leakage, the ability to withstand high winds, non-combustible, and capable of meeting even the new, higher proposed energy conservation guidelines of the climate act, SIPs would cost about $10,000 more per home.
But, thanks to both builder and home buyer tax credits that could be obtained, the actual cost to home buyers would come down to about a $5,000 premium for a 2,000 sq. ft. home, says Whitcomb. “After the purchase, the electric bill’s going to run about 60% of what it would be for a house of that size,” says Whitcomb. So the cost of ownership winds up coming down over the years.
Whitcomb’s construction concept dives in not just on a box level, but the street and the neighborhood level as well. To start, he’s eyeing a retail site and an elementary school for redevelopment or land reuse to support the revitalization of the community. There are also several multi-family units near the new Greater Gentilly Technical High School under construction on Paris Avenue that need to be rehabilitated. Additional ideas will come forward through collaboration with the local homeowner associations.
Whitcomb won his production builder stripes in the Centex Homes academy in six years as vp of corporate development, and before that, in various management positions at Electronic Data Systems and as a corporate attorney specializing in real estate. Of critical importance to Whitcomb is that all the key management talent, community outreach, and labor supervision be homegrown New Orleans.
Whitcomb
“In various of my incarnations, I had occasion to spend time in New Orleans, and I love this city. But it’s more like a European city in the way business is conducted,” says Whitcomb. ”You work with people here, and you don’t tell them what to do; not if you want to get things done.
“We’re doing this to help, but we are a for-profit organization and want our concept to be scaleable and expandable to other areas of New Orleans and Gulf Coast communities,” says Whitcomb. “Hopefully, we can replicate the revitalization that took place in southern Dade County after Hurricane Andrew–-also called St. Andrew by some locals.”
NVR is Home Building’s Curve Buster
The really smart or studious kid in the class always ruined it for the rest of us who lived off the bounty of the teacher’s grading curve. Magically, a mediocre test score or term performance could shine, providing that everybody else did varying degrees of worse than us.
The smartie always foiled that as a grade-management strategy. He or she excelled, and blew the grade curve off the map.
That’s what DC-metro-based home builder NVR ($554.34, down .65, NYSE) does to its peers. They’re sucking wind, and hoping nobody takes note of the fact that in the same headwinds, one of their rivals is actually profitable.
Reports Big Builder:
The company’s merchant builder strategy again paid off. There were no impairments or write-downs for the quarter, but instead the company booked$4.5 million in recovery of land deposits it previously thought uncollectable. It was the company’s second profitable quarter following a loss of $30.5 million in last year’s fourth quarter.
Here’s a blast from NVR’s 2nd quarter earnings announcement, which notes income of $41.4 million for the period:
New orders in the second quarter of 2009 increased 2% to 2,728 units, when compared to 2,670 units in the second quarter of 2008. The cancellation rate in the quarter ended June 30, 2009 was 14% compared to 19% in the second quarter of 2008 and 15% in the first quarter of 2009. Settlements decreased in the second quarter of 2009 to 2,048 units, 26% less than the same period of 2008. The Company’s backlog of homes sold but not settled at the end of the 2009 quarter decreased on a unit basis by 16% to 4,497 units and on a dollar basis by 27% to $1,332,056,000 when compared to the same period last year.
Homebuilding revenues for the three months ended June 30, 2009 totaled $612,488,000, 35% lower than the year earlier period. Gross profit margins increased to 19.3% in the 2009 second quarter compared to 17.9% for the same period in 2008. The 2009 second quarter gross profit margin was favorably impacted by the recovery of approximately $4,500,000 of land deposits previously determined to be uncollectible. In the second quarter of 2008, the Company had recorded a $5,800,000 land deposit impairment charge. Income before tax from the homebuilding segment totaled $62,872,000 in the 2009 second quarter, a decrease of 21% when compared to the second quarter of the previous year.
NVR has cash and equivalents of $1.24 billion. It manages a finite but challenged geographical footprint, and takes no prisoners on competing for every potential buyer prospect in the market. NVR is a win machine; other home builders simply try to copy it.
NVR was in Chapter 11 about 15 years ago. Its rules and its board won’t let it go there again.
Architects’ Billings Expectations Weaken
Caculated Risk posts this a.m. comment on the latest AIA Architecture Billings Index release, which purports to be a glimpse around the corner ahead for construction.
Here’s the association’s take:
Washington, D.C. – July 22, 2009 – After showing signs of stabilization over the last three months, the Architecture Billings Index (ABI) plunged nearly five points in June. As a leading economic indicator of construction activity, the ABI reflects the approximate nine to twelve month lag time between architecture billings and construction spending. The American Institute of Architects (AIA) reported the June ABI rating was 37.7, far lower than the 42.9 the previous month. This score indicates a sharp decline in demand for design services (any score above 50 indicates an increase in billings). The new projects inquiry score was 53.8, the fourth straight month with a score in the mid-50’s.
“It appears as though we may have not yet reached the bottom of this construction downturn,” said AIA Chief Economist Kermit Baker, PhD, Hon. AIA. “Architecture firms are struggling and concerned that construction market conditions will not even improve as soon as next year. There has also been little movement in terms of stimulus funding allocated for design projects having the desired impact of leading to new work.”
Regionally, sentiment is less-worse in the Northeast and worst in the Midwest. Institutional work takes the cake as the worst-faring product type, whereas mixed-practice eked out the best numbers of the product lines.
Calculated Risk infers the important take-away from the latest data release:
Historically there is an “approximate nine to twelve month lag time between architecture billings and construction spending” on commercial real estate (CRE). This suggests further dramatic declines in CRE investment later this year and next.
Residential caved first and most dramatically, but commercial real estate has tanked since. Residential will likely precede commercial to the bottom and into recovery mode in the next 12 to 18 months.
Implied in the AIA data is an overall weakening environment in the construction sector. Stimulus jobs haven’t come to construction yet. Question is, will they before the terms expire.
Emile Haddad’s Excellent LandSource Adventure
“Buy land, they’re not making it anymore.” Mark Twain said that.
Buy land; sell it for double what you bought it for; but keep rights to a third; and when it goes BK, buy the lion’s share back for pennies on the dollar. Where’s Mark Twain when you need him?
Well, inside the machinations that saw big black eyes for investors that included the likes of Barclay’s and the California Public Employees Retirement System (Calpers), there was derring-do on the ground by home builder Lennar’s chief land strategist Emile Haddad.
Big Builder senior editor Teresa Burney reports today on LandSource’s emergence from Chapter 11 bankruptcy protection. Somehow, all that land is still there, it’s just that the money that went into paying for it seems to have gone where the sun doesn’t shine.
Click image for news release on Newhall Land plan.
Management of the reorganized company will also provide a shot of déjà vu. Emile Haddad, Lennar’s mega California land dealmaker who engineered the original purchase of the LandSource assets by Lennar, will resign from his job at Lennar to head a new management company that will manage the Newhall Land Development assets. As part of the plan, Haddad would put $1 million of his own money into the company as a requirement and receive some ownership in the new company in return. The management company itself will have 2.5% interest in the new company.
Debra Dandeneau, an attorney for Weil, Gotshal & Manges who represented LandSource in the bankruptcy, said the company is happy to finally strike an agreement that was palatable to the company’s many creditors. It took the company, which filed for bankruptcy court protection June 8, 2008, nearly 14 months to navigate through the process.
“We are very pleased that all our key constituencies–our DIP lenders, our second lien lenders, and our trade creditors–ultimately came together to support the emergence of LandSource from bankruptcy,” she said late Monday via e-mail. “In this wave of restructurings, I believe this is the first real estate-oriented case that did not end up in liquidation.”
Inns and Outs
Sound familiar? The note is $40 million. The bidding opens at $25 million. Bidders listen to the auctioneer drone, repeating the $25 million minimum bid price.
No one budges. So it goes for the notorious Watergate Hotel in Washington, DC. The Washington Post reports:
Ultimately, in 2007, Monument Realty decided to close the Watergate for an 18-month, $170 million renovation. At the time, Darby said the landmark would be developed into a premier hotel, with plans for $2,000-a-night suites.
The hotel liquidated everything – beds, Greek-style columns, silver teapots, toilets and more – to prepare for the renovation. But frozen credit markets scuttled plans for the multimillion dollar refurbishment, and Monument Realty defaulted on the loan from PB Capital.
PB Capital’s got it back now, and says it’ll find a buyer.
CNBC’s Diane Olick broadened her coverage of the Watergate Waterloo with some analysis of the commercial real estate meltdown.
A Different Housing Crisis: Now and Then
You’re thinking what we’re thinking, right?
Nouriel Roubini’s gloominous look ahead on CNBC today sees good outmatched by bad.
Here’s an excerpt from “The Modern Economics of Housing,” by Randall Johnston Pozdena.
New construction of housing units during the depression was far below the levels recorded in the prosperous mid-1920s. Approximately 900,000 new housing units were built each year between 1923 and 1926. In 1930 only 330,000 new units were added and in 1933, at the nadir of homebuilding activity, a mere 93,000 new housing units were reported to have been started. As recovery from the depression proceeded (perhaps, the effects of government housing assistance began to have an effect), new construction activity gradually recovered. However, as late as 1940, the volume of new housing starts was still 30 percent below the levels recorded in the 1920s.
Here’s another way to look at the data, in housing starts per thousand households. First, though, consider what happened to household formations during The Depression. In the nine years from 1920 to 1929, about 600,000 new households per year formed. In the following nine-year stretch, household formation dropped by more than 100,000 homes a year.
Here went demand for a sustained amount of time, and the subsequent nine-year period, household formations averaged over 60% more than during the Depression years, at about 760,000 a year.
That’s why many parents remember living during the 1930s with their grandparents in three-generation harmony.
At any rate, housing’s 1920s peak came in 1925, when there were 34 housing starts per 1,000 households. Six years later, that number had fallen to single digits, 8.3 starts per 1,000 households, and the low point was 1933, when only 3 starts per 1,000 households got a start. It was 1937 before starts per thousand households broke double-digits again, and the start of World War II before the stat came close to 20 starts per thousand.
Here’s a quote from Jeff Booth’s BuildDirect blog:
But by looking at the Great Depression, we can draw parallels to when we can expect a bottom in housing in the current cycle.
As I said previously, housing starts fell by 90% to 93,000 units at the low of the Great Depression. If we were to assume that we were to reach the lows of 1933, housing starts per person would translate into a current day housing start number of 213,000.
I believe it is highly improbable that we see housing starts fall to that level. Why?
The main difference between the Great Depression and today is in terms of housing starts is the speed of the decline. Four years after the peak of the cycle in 1925 housing starts were still at .0041 starts per person or 509,000 units. That would be the equivalent of building 1,165,054 new units today. (or using the same 4 years - a higher number today and 1,165,054 units in 2010).
There are two issues here to draw insight from.
One is that the economy slowed down sustainably for long enough to seriously impact demand for either for-sale or for-rent product, and only a strong recovery in the 1940s set up a big, lasting housing bounce in the latter ’40s and 1950s.
The other is, we don’t know where homeownership will settle as a policy initiative. Real questions and no small amount of rancor have built up around the issue of trying to expand the ownership universe via imaginative financing options and economic growth.
Here’s what we’ve learned from the debate so far.
- people don’t like that idea in concept, especially in hindsight, even if they benefited hugely from the economic run up.
- punishment for those who financially miscalculate must be harsh and immediate–just the way some people treat a puppy who’s had an accident–in order to satisfy economic principles, one would think
- Bottom-calling is becoming the preferred full-contact sport of the blogosphere.
What else we know as we listen to econ icon Roubini is that policy needs to mind the business of the long haul and ensure that the artificial and unscrupulous inflators of growth that cropped up in the past 15 years get dealt with.
Countdown to December 1 Boosts Housing Starts
Some regard housing and real estate as a nice place to visit. A goodly number of those individuals used to have jobs in Wall Street’s extended dysfunctional family of traders, analysts, ne’er-do-wells, hangers-on. They’ve left, but they won’t go away.
Oh well. They can be ignored.
They don’t report the news, because that would require more work and different disciplines than they’re accustomed to or capable of. Instead, they consider it their calling to take potshots on a free-for-all basis at both newsmakers and news reporters alike. They’re the business and politics world’s Greek Chorus; they always have something smart to say.
They weighed in Friday about June housing starts data from the Census Bureau. The Wall Street Journal–known among the know-it-all bloggers as the leader of the MSM (mainstream media)–reported the story as follows:
Construction of new homes rose in June by 3.6% from the prior month to a seasonally adjusted annual rate of 582,000, the Commerce Department said Friday. It was the third consecutive monthly gain, leaving the level of new-home construction at its highest since November, although the pace remains well below the 1.1 million rate seen in June 2008.
Wrong, the Greek Chorus said. Not up 3.6%, but down 46%, because the right way to look at the data is year on year, not sequential. Here’s the Barry Ritholtz The Big Picture retort to a positive reading of June’s starts data.
Then there were the slew of MSM who insist each month on reporting that 3% (+/- 11%) is a positive integer. We disposed of that silliness on Friday.
For those who eat, sleep, and breathe housing, June housing starts and permits data cheered rather than disheartened.
The smarter of housing’s blogger analysts, Calculated Risk, took up consideration of how to view the latest data from Census and the Commerce Department. This one is readable and credible:
For the last few years, whenever housing starts increased, I wrote that was bad news because there was already too much inventory.
Now, even though there is still too much existing home inventory, and too much new home inventory in some areas, it appears that new home sales have stabilized. Since single family housing starts (built for sale) have been below new home sales for six consecutive quarters (through Q1), this suggests single family housing starts should also bottom soon. There is a good chance that has already happened.
Those who are in the trenches can be cheered because they know the difference between themselves and national data. They know that the battle is on the submarket front. They know the war is with financial duress on the commercial and home mortgage front.
The question we’ve been asking, and will continue to, is if home builders beyond the publics are able to put starts in the ground, how are they putting their hands on money to do it? Is it rainy day cash reserves knifed out of the mattress? Is it newfound friends-and-family investors? Is it local private equity? The biggest question of all is: At what risk?
We can imagine that at least in some areas, there’s some betting going on with some of these starts, and we can only hope that the bets pay off.
Home Builders’ Challenge to Change: Part II
For years, it sounded so Harvard Business, so empowering. “Reinvent Yourself.” An imperative case, transitive verb with the pronoun, it gave armies of consultants big, rich engagements, all a luxury of the days when the apparent purpose of budgets was to blow through them, to the good and the bad.
A friend was talking with us about reinvention. Let’s assume reinvention is necessary. Picture the business world with its financial system, government structures, households as three spinning platters, rods balanced on the nose and two outstretched hands–sort of Ed Sullivan meets Charles Darwin. It’s all deleveraging, but without the benefit of growth or money.
So we’ve got wonder, “how much will reinvention be by choice and design, and how much will it take place as a result of intelligence that doesn’t obey human intentions or control?” How much evolution has ever been intended?
We’re averse to change. We only do it when it’s change we design, and even then it’s tedious and uncertain. We know home building’s business must change.
HMI–the National Association of Home Builders’ sentiment index among its home builder universe– is out today, and up from 15 to 17. Simplistically, it means that in July–a k a now–2 more builders per 100 in the NAHB sample are optimistic about prospects for selling homes than were at the same time this past June. This puts us roughly even with the figure for last September, before the financial system imploded and then-Treasury Secretary Henry Paulson started going on TV on Sunday evenings to ruin what was left of the weekend.
Headwinds everyone still talks about are these: foreclosures keep crashing against the shoreline, bringing down home prices; companies and governments keep on reducing the count of who they’re paying and how much they’re paying them; banks don’t want to lend money to make money because they know it’ll lead to losing money. The government, meanwhile, has a mimimum of one and often as many as four programs designed to mitigate each of these issues, but the programs aren’t working exactly as designed. Some say they’re too big, some too small; some say they shouldn’t be there at all.
Meanwhile, we’ve got mini firestorms over who should “appraise” the value of a house so that buyers, sellers, and lenders each have the right collateral for their money, and the right money for their collateral. Many builders are flummoxed that appraisers are counting too many compromised foreclosure properties and their price in the comp mix to fix a fair value on a new home in the market. To the plaint, “we can’t cover our hard costs with the amount the appraiser’s putting on the property,” the unsympathetic–and dammit, correct–response is, “Then don’t build there.”
A wide perception is that the appraisal firestorm is Realtors and home builders against, well, you and me, if we’re not Realtors or home builders. Why is that the case? Well, many people look at the NAR and the NAHB as villains who were part of perpetrating a conspiratorial run-up in home prices that got them rich to the detriment of society.
This is hogwash. But, hey, we’re prone to believing hogwash. (Look at what we believed during the past 10 years).
Point is, yes, you’re going to have to change to survive. The question is how much the change will be of your design and choice, and how much of it will naturally select, or worse, deselect you.
Think of issues–beyond making the bills that will keep you open or shut you down–that are bigger than Stimulus, bigger than Capitol Hill, bigger than appraisals, bigger even–although its proponents will object the most–than green.
The issues are where and for how much. Too much of home building’s business — right now especially, and for all of the time it will take volume sales to stabilize — involves guessing at where and not controlling how much. It’s inherently speculative, and it’s expensive, and it’s subject to people in droves waiting for you to expire just so that prices can come down a few more dollars. They’ll do it that way even at the risk of eventually losing their job because the economy can’t support enough activity to make their company profitable.
There are not one but two essential Vs for value that are in question. One is the dollars paid for workers, and one is dollars paid for property. They’re like unidentical twins, connected but different.
For home builders, reinvention most likely needs to be more than streamlining sourcing, flattening organizations, sucking out inefficiencies, improving up-and-down-and-across communication, introducing trust, and sharpening best practices.
That’s the reinvention home builders would design for themselves. But even that means waiting for the market to come around and for the pulse of demand to reemerge.
But we think it might be more profound. Reinvention may mean dramatic differences in “where” and for “how much.” Where people want to live as opposed to where they have to go because that’s where you can get land for less may reinvent you. How much it costs to be there, to own there, to build there, to permit there, and to make a community there may reinvent you.
There is a place where appraisers won’t appear to make arbitrary subtractions from the Value of a home, because there will be a volume of comps.
- There might be scattered urban
- There might be adaptive reuse
- There might be brownfield
- There might be public-private partnership with longtime faith-based landholders
It might be less grandiose, more painstaking, less autonomous, more political. It may change your DNA, which might be the reinvention we’re talking about.
Liz Warren to Banks: Stop Not Making Sense
Calculated Risk’s blog posted this five minute clip of MSNBC’s Rachel Maddow interviewing Elizabeth Warren, Chair of the Congressional Oversight Panel for TARP.
Warren’s command of the sound bite impresses; especially her evocative reference to the stampede of the Gucci leather shoed bankers in the corridors of Capitol Hill power, all up in arms against her suggestion that consumers need a protection agency. Why? To ward off scammer financial services companies looking to trick and trap us into fees and penalties amid 30-page contracts and small-print numblish none of us understands.
The banks doth protest too much, and say the problem with financial services scams comes not from them but from the ranks of the great “unregulated” lenders and credit card companies.
HousingWire reports on CFPA hearings in the Senate:
Many voices applauded the need for the new agency, including Edward Yingling, the American Banking Association’s (ABA) president and CEO, who noted an estimate that 94% of the high cost mortgages occurred outside the regulated banking sector.
“The most pressing need is to close the regulatory gaps outside of the banking industry through better supervision and regulation,” Yingling said in his testimony. “The need is for the same bank-like structure, supervision and examination to be applied to non-bank financial service providers.”
Michael Barr, the assistant secretary for financial institutions at the US Department of Treasury, testified in a written statement that the new agency should establish a clear mission focus for a market-wide jurisdiction, which would prevent financial institutions from choosing a less restrictive regulator. Barr also suggested that that the new agency should consolidate regulation, supervision and enforcement.