Housing Starts and Permits Up Strongly In June

July 17, 2009 - Nationwide housing starts and permits posted substantial gains in June as home builders responded to improved market conditions and the impending expiration of the first-time buyer tax credit, according to data released by the U.S. Commerce Department today. Commerce reported a 3.6 percent gain in overall housing starts to a seasonally adjusted annual rate of 582,000 units and an 8.7 percent gain in permit issuance to 563,000 units.

“The upcoming expiration of the first-time home buyer tax credit on December 1st is encouraging some builders to get homes started now so that they can be completed in time for clients to take advantage of this attractive buying incentive,” said NAHB Chairman Joe Robson, a home builder from Tulsa, Okla. “However, there is still much concern about the difficulty of financing new-home production and continuing weakness in the job market.”

“Today’s report was in keeping with our forecasts for some glimmers of improvement on the single-family side in the second quarter, and also with the results of our latest builder surveys,” said NAHB Chief Economist David Crowe. “Many remain very cautious, however, in the face of the severe tightening of credit for acquisition, development and construction financing and increased instances of low appraisals tied to improper use of distressed properties as comps, both of which threaten to derail a housing and economic recovery going forward.”

Single-family housing starts rose for a fourth consecutive month in June, posting a 14.4 percent gain to a seasonally adjusted annual rate of 470,000 units, while single-family permits rose for a third consecutive month, posting a 5.9 percent gain to 430,000 units. Meanwhile, the multifamily side, which characteristically displays greater month-to-month volatility, posted a 25.8 percent decline in starts following an unsustainably large gain in the previous month, to 112,000 units. Multifamily permits rose 18.8 percent to 133,000 units from an abnormal low in May.

Regionally, housing starts were mixed, with the Northeast and Midwest posting big gains of 28.6 percent and 33.3 percent, respectively, and the South and West posting declines of 1.4 percent and 14.8 percent, respectively. However, the declines in both the South and West were entirely driven by dips in multifamily production.

Permit issuance was up across the board in June, with the Northeast posting a 5.4 percent gain, the Midwest a 3.4 percent gain, the South a nearly 14 percent gain and the West a nearly 2 percent gain.

Article published by National Association of Realtors at www.nahb.org

Greater Richmond Incentives Summary

• Infrastructure improvement incentives including road access, utility extensions and connection costs, and off-site improvements will be negotiated by individual localities.
  
• Enterprise Zones in Chesterfield, Henrico and the City of Richmond offer local tax and financing incentives in addition to the state’s Enterprise Zone incentives.
  
• Foreign Trade Zone #207 at Richmond International Airport provides space for storage, distribution, and light assembly operations. Imported goods held in the zone are not subject to U.S. Customs duties until they leave the zone and enter the U.S. for domestic consumption. Duties are not paid on broken or wasted product or on items that are exported.
  
• Financing for small businesses is available through the James River Development Corporation, the Crater Development Company, and REDC Community Capital Group Inc.
  
• Dominion Virginia Power offers a variety of rate options that may lower operating costs for commercial and industrial users.

Article from the July newsletter of The Greater Richmond Partnership, Inc.

Richmond Rates Sixth for Starting Over

The Richmond, Virginia, metro area is rated the nation’s "Sixth Best Place to Start Over”, based on a Manpower survey of companies’ hiring plans.

Companies planning to hire in next quarter: 22%
Best job prospects: Construction, Durable Goods Manufacturing, Nondurable Goods Manufacturing, Transportation & Utilities, Wholesale & Retail Trade, Information, Professional & Business Services, Education & Health Services, Leisure & Hospitality, Other Services
Population: 192,913
Average home price in January: $167,185
Unemployment rate: 7.8%

Richmond has a diverse economy, which includes chemical, food, and tobacco manufacturing, biotech, high-tech fibers, and semiconductors. For those who want to start over with a job in the arts, it has a symphony, ballet, art galleries, and theater companies.

Article from the July newsletter of The Greater Richmond Partnership, Inc.

Making Room For Soldiers At Fort Lee, VA

The Army has approved a 1,000 room lodging facility at Fort Lee, but even with approval, it may not open until early 2012. Construction funding may depend on approval from Congress.

The 1,000 room facility is to help support the student load at Army Logistics University. On July 2, the Army cut the ribbon on the school; with that, there will come a flood of new soldiers. “In July, the logistics university will be supporting 1,800 soldiers,” said Col. Michael Morrow, Fort Lee garrison commander; by July 2011, it will be supporting the full capacity of 2,300 soldiers.

The Army and Fort Lee began looking three years ago at the best ways to house soldiers. Morrow explained that the need is essentially broken down into soldiers staying less than six months, soldiers staying more than six months and Advanced Individual Training soldiers.

The young soldiers that are here for AIT will stay in barracks. New barracks are being built across post to support those soldier and some older barracks are being renovated. Soldiers staying more than six months are considered permanent party. “We’re building new housing on post to support those soldiers and their families.”

There is also a need for housing for soldiers staying less than six months. Currently, Fort Lee is able to provide 570 rooms on post to soldiers staying less than six months. “But right now, several hundred soldiers have to stay in hotels off post,” Morrow said. The Army came up with the solution of the hotel-like 1,000 room Army Lodging structure. The structure has been approved by the Army, but any non-appropriated funds from the Family, Morale, Welfare and Recreation—under which the lodging facility falls—would have to be approved by Congress. The facility may also house Department of the Army civilian employees who are sent to Fort Lee for training or other functions that may last less than six months.

Even after the Army Lodging opens sometime in 2012, they will need between 500 and 800 rooms off post. Despite the demand for rooms, some hotels are missing out in the Tri-City area. The reason for that is per diem. Hotels must accept the federal per diem rate in order to host soldiers. Some do, some don’t and that’s why there is the distribution of soldiers as far as Richmond. Morrow said that starting in August, soldiers will receive the full per diem, which varies by rank and by where the soldier is staying off post. “It’s more flexible and will really help to accommodate their needs.”

Article by F.M. Wiggins, The Progress-Index, June 23, 2009.