The recent report by the NAHB and First American shows that 29 metro areas have been added to the list of improving real estate markets. The list now totals 98 that have shown appreciable improvement in the past 6 months. The index is based on local employment and housing price, housing growth trends.
Among the new additions are Miami, Tampa, Boston, Detroit, Omaha, Salt Lake City and Kansas City. Many mid-sized cities such as Syracuse NY and Youngstown OH have also joined the list for the first time.
A few markets dropped off the list, once more demonstrating that this recovery is likely to be uneven. San Jose, DC, New Orleans and Jackson MS were in retreat, at least for the moment. In the case of DC, the change is likely due mostly to the unusually robust market over the past year that may not be sustainable for at least a time.
Let me know if you want to learn how to access and use this information.
Tuesday, February 7, 2012
Wednesday, February 1, 2012
Housing Recovery Comments
There is a lot of discussion about reducing principal balances on underwater mortgages. The head of the FHFA recently estimated that even a small reduction on Fan and Fred loans could cast $100 Billion, which would have to be funded by taxpayers. That is not a very palatable option when over $150 billion has already been sunk into Fan & Fred.
Bailouts of homeowners (e.g, reducing their principal balance) are unpopular for other reasons. First, one third of Americans rent. Why should they help bailout homeowners that are underwater? Second, 30+% of homeowners don't have a mortgage. Why should they help bailout heavily indebted homeowners, when many over-extended unwisely? Third, The overwhleming majority (probably 85%) of homeowners with a mortgage are current in payments. Why should they help bailout other homeowners?
There would have to be a load of political air cover for these sorts of actions. Opposition to homeowner bailouts was, after all, one of the early motivating forces in the Tea Party movement, along with TARP. And, we already have a huge deficit and debt to manage: adding to it is problematic even in a non-election year.
Maybe people should look at their houses as homes, not assets, and just stay put until we settle into normalcy.
Wednesday, January 25, 2012
Emancipation
After Antietam, Lincoln proceeded with his plan to proclaim the Emancipation of three million slaves. It was a bold act that some of his closest advisers, and members of his cabinet, opposed. But he was determined to proceed and knew that his act would change the nature of the war. Instead of a war to preserve the Union, the war would now be seen as a crusade to end the national disgrace of slavery.
Of course, the end of slavery had only practical effect where Union forces were in control, and this was not the case in most of the 750,000 square mile Confederacy. The plantation economy was already severely strained with cotton markets cut off by military blockade. And, the loss of slave labor would change the economics of cotton, rice and tobacco production.
But, there was still a war to win, and Lincoln was determined to press aggressively to destroy Robert E. Lee's Army of Northern Virginia. Lincoln sacked McClellan after Antietam when the general refused to follow up on his repulse of Lee's invasion. Ambrose Burnside (he of the grandiose sideburns) replaced McClellan and in December marched south to the environs of Fredericksburg VA, on the Rappahannok River only 60 miles from the Confederate capitol at Richmond.
Lee was entrenched across the river in a nearly unassailable position. (It seemed at times that Union commanders forgot that Lee was a superb military engineer). Burnside hurled his army of 100,000 against Lee and was thrown back with heavy losses. The Army of the Potomac fell back, having been routed by the rebels, and retreated toward Washington.
Many thought this terrible defeat would cancel out the effect of Antietam and cause Lincoln to reconsider his decision. But on January 1, 1863 Lincoln signed and issued the Proclamation. It immediately freed 50,000 slaves and would apply as Union armies advanced. It did not make slavery illegal - that would be left to the passage of the 13th Amendment to the Constitution in 1865.
Of course, the end of slavery had only practical effect where Union forces were in control, and this was not the case in most of the 750,000 square mile Confederacy. The plantation economy was already severely strained with cotton markets cut off by military blockade. And, the loss of slave labor would change the economics of cotton, rice and tobacco production.
But, there was still a war to win, and Lincoln was determined to press aggressively to destroy Robert E. Lee's Army of Northern Virginia. Lincoln sacked McClellan after Antietam when the general refused to follow up on his repulse of Lee's invasion. Ambrose Burnside (he of the grandiose sideburns) replaced McClellan and in December marched south to the environs of Fredericksburg VA, on the Rappahannok River only 60 miles from the Confederate capitol at Richmond.
Lee was entrenched across the river in a nearly unassailable position. (It seemed at times that Union commanders forgot that Lee was a superb military engineer). Burnside hurled his army of 100,000 against Lee and was thrown back with heavy losses. The Army of the Potomac fell back, having been routed by the rebels, and retreated toward Washington.
Many thought this terrible defeat would cancel out the effect of Antietam and cause Lincoln to reconsider his decision. But on January 1, 1863 Lincoln signed and issued the Proclamation. It immediately freed 50,000 slaves and would apply as Union armies advanced. It did not make slavery illegal - that would be left to the passage of the 13th Amendment to the Constitution in 1865.
Thursday, January 12, 2012
Longer shadows
Freddie and Fannie just announced payment relief for unemployed borrowers. It appears these folks can have an up to 12 month moratorium on payments. The effect for the real estate market is to make the already persistent inventory shadow even longer.
Recent data on home values is mixed as usual. Only local data is worth taking into account in business decisions - the national numbers are just guesses, and the market will be troubled in most places for years. So plan accordingly. Don't react to these frequent spots of good news in a national context.
Rental prices are increasing as the young folks who used to buy in the 25-35 years are renting, and commercial construction of rental units is improving.
Altos, FHFA, Case/Shiller, AVMs, are still good sources for local trends but treat each home as a risk management assignment and enlist the real estate pros with realistic outlooks and demonstrable success valuing and selling home in our long winter of discontent.
When a complex assignment comes in, tag-team the deal; put your best people on it. These times are not for those short on experience or for the faint of heart.
Recent data on home values is mixed as usual. Only local data is worth taking into account in business decisions - the national numbers are just guesses, and the market will be troubled in most places for years. So plan accordingly. Don't react to these frequent spots of good news in a national context.
Rental prices are increasing as the young folks who used to buy in the 25-35 years are renting, and commercial construction of rental units is improving.
Altos, FHFA, Case/Shiller, AVMs, are still good sources for local trends but treat each home as a risk management assignment and enlist the real estate pros with realistic outlooks and demonstrable success valuing and selling home in our long winter of discontent.
When a complex assignment comes in, tag-team the deal; put your best people on it. These times are not for those short on experience or for the faint of heart.
Saturday, December 31, 2011
Leadership Resolutions for 2012
As we continue with the no normal, new normal or whereever we land once we are out of these economic doldrums, it will take leadership - more even than technical skills and management - to succeed. So here are a few leadership tips I have used with mid-level and senior executives:
Maintain a positive demeanor, even during heavy squalls. Move with confidence and authority; the attitude and morale of your colleagues will be favorably influenced.
Establish clear priorities, complemented by clarity in direction you give to people. Avoid vagueness and generality; change is hard enough on folks.
Emphasize short-term objectives when a few solid wins will elevate morale. Ask people to stretch but make goals achievable, then shoot off fireworks when they are surpassed.
Go looking for bad news; get resistance to change out in the open. Make it easy for people to let you know about what requires attention. Don't be the last to know!
Pay close attention to transitions - people, clients, systems, economic. Careful monitoring (but not micro-management) may be needed to keep everyone on track.
Re-recruit your best people. Uncertainty brought about by change often makes them receptive to outside enticements.
Encourage risk-taking and initiative. Make it clear that you will tolerate mistakes as long as there is thoughtful effort, and action-orientation toward improvement.
Protect your service quality, and reaffirm your supplier partnerships. Stay close to customers (someone else wants their business!). Client satisfaction is your top priority even as change might be occurring internally.
A leader's job is to make others succeed, and to feel that their contribution means something.
Happy New Year, and here's to a prosperous 2012!
Maintain a positive demeanor, even during heavy squalls. Move with confidence and authority; the attitude and morale of your colleagues will be favorably influenced.
Establish clear priorities, complemented by clarity in direction you give to people. Avoid vagueness and generality; change is hard enough on folks.
Emphasize short-term objectives when a few solid wins will elevate morale. Ask people to stretch but make goals achievable, then shoot off fireworks when they are surpassed.
Go looking for bad news; get resistance to change out in the open. Make it easy for people to let you know about what requires attention. Don't be the last to know!
Pay close attention to transitions - people, clients, systems, economic. Careful monitoring (but not micro-management) may be needed to keep everyone on track.
Re-recruit your best people. Uncertainty brought about by change often makes them receptive to outside enticements.
Encourage risk-taking and initiative. Make it clear that you will tolerate mistakes as long as there is thoughtful effort, and action-orientation toward improvement.
Protect your service quality, and reaffirm your supplier partnerships. Stay close to customers (someone else wants their business!). Client satisfaction is your top priority even as change might be occurring internally.
A leader's job is to make others succeed, and to feel that their contribution means something.
Happy New Year, and here's to a prosperous 2012!
Monday, December 5, 2011
Antietam
By September 1862, the Union position was grave. Lee had manhandled Union armies, Maryland's support for Lincoln's cause was cooling and Great Britain was threatening to recongnize the Confederacy - perhaps even use the powerful British navy to break the Union blockade of the South. Lincoln needed a victory badly.
Knowing the stakes were high, and that another victory might tip the balance heavily in favor of the Confederacy, Lee decided to invade Maryland. He crossed the Potomac and camped near Frederick. There he issued orders to divide his force and gave instructions to his commanders to concentrate near Sharpsburg, along the Antietam creek. McClellan, in command again, kept his much larger army between Lee and Washington, and moved slowly west toward the rebels.
Then a stroke of luck - a Union officer found Lee's orders in a field near Frederick wrapped around cigars. A rebel officer had carelessly dropped them while in camp. McClellan now had the key to defeating Lee, since the orders revealed that the rebel forces were divided, and gave details on the routes to be taken by each of the Confederate corps.
Lee's army was arrayed along the Antietam Creek east of Sharpsburg MD and McClellan moved into position to attack. Lee urgently called all of his forces to oppose the Union army. On the morning of September 17, 1862, the 75th anniversiary of the Constitution, the battle opened. The two armies battered each other all day, with the rebels falling back then holding all along the line. By day's end, the positions were nearly the same as morning, except for the carnage.
Antietam is the bloodiest day in American history. More than 23,000 casualties were suffered by both armies, more than the US on D-Day. Both sides had suffered equally, but McClellan still had large fresh forces to attack, and Lincoln urged him to destroy Lee's army. Next morning, the attack Lee expected never came, McClellan being an inordinately cautious field commander. Lee escaped across the Potomac.
Lincoln had a victory at last against Lee, and decided to issue the Emancipation Proclamation. The British backed away from supporting the Confederacy. And Maryland confirmed Union support.
Yet, by failing to destroy Lee's battered army the next day, McClellan missed a chance to end the war, and avoid the killing of another 400,000 Americans in the next 30 months of war.
Knowing the stakes were high, and that another victory might tip the balance heavily in favor of the Confederacy, Lee decided to invade Maryland. He crossed the Potomac and camped near Frederick. There he issued orders to divide his force and gave instructions to his commanders to concentrate near Sharpsburg, along the Antietam creek. McClellan, in command again, kept his much larger army between Lee and Washington, and moved slowly west toward the rebels.
Then a stroke of luck - a Union officer found Lee's orders in a field near Frederick wrapped around cigars. A rebel officer had carelessly dropped them while in camp. McClellan now had the key to defeating Lee, since the orders revealed that the rebel forces were divided, and gave details on the routes to be taken by each of the Confederate corps.
Lee's army was arrayed along the Antietam Creek east of Sharpsburg MD and McClellan moved into position to attack. Lee urgently called all of his forces to oppose the Union army. On the morning of September 17, 1862, the 75th anniversiary of the Constitution, the battle opened. The two armies battered each other all day, with the rebels falling back then holding all along the line. By day's end, the positions were nearly the same as morning, except for the carnage.
Antietam is the bloodiest day in American history. More than 23,000 casualties were suffered by both armies, more than the US on D-Day. Both sides had suffered equally, but McClellan still had large fresh forces to attack, and Lincoln urged him to destroy Lee's army. Next morning, the attack Lee expected never came, McClellan being an inordinately cautious field commander. Lee escaped across the Potomac.
Lincoln had a victory at last against Lee, and decided to issue the Emancipation Proclamation. The British backed away from supporting the Confederacy. And Maryland confirmed Union support.
Yet, by failing to destroy Lee's battered army the next day, McClellan missed a chance to end the war, and avoid the killing of another 400,000 Americans in the next 30 months of war.
Monday, November 28, 2011
Informal Survey
Over the holidays, I had a chance to talk with 6 senior executives, most in social settings, about their relocation and recruiting challenges. While they each had concerns particular to their industry, all agreed on at least three issues about how relocation service providers can improve.
First, there is simply not enough data and analysis supporting home sale management. All of these execs depend greatly on industry and market data in their businesses. Further, the analysis of this information is the key element to applying it to useful - tactical and strategic purposes. They feel that, in spite of the wealth of data, and the gravity of the real estate situation, relo companies simply do not provide clear insights that are shared - communicated in a clear and convincing manner - with client companies. Transferees constantly worry out loud about both departure and destination market value and time on market issues.
Second, while the relo industry has done a good job of adopting ISO certifications and Six Sigma practices, they all say this is merely a minimum expectation on the part of client senior executives. They see little evidence of creative, value-added processes that expand beyond these qualifiers. After all, as one said, "these have been around a long time and apply to all industries. I would like to see something innovative that is specific to relocation".
Third, as everyone knows, international relocations are ever more common and expected to increase. These senior execs do not see strong language ability, or a real understanding by US personnel of the important details of international culture and destinations, or any attempt to provide support on political risk. After all, doing business in China means doing business in a communist country with no freedom of the press or individual freedoms. Also, the upheaval in the Middle East should elicit action by relocation providers on risk and programs to manage it.
Please comment on any of these items, and share what you are doing, or support you need, to meet these stated needs.
I hope you all enjoyed your Thanksgiving holiday.
First, there is simply not enough data and analysis supporting home sale management. All of these execs depend greatly on industry and market data in their businesses. Further, the analysis of this information is the key element to applying it to useful - tactical and strategic purposes. They feel that, in spite of the wealth of data, and the gravity of the real estate situation, relo companies simply do not provide clear insights that are shared - communicated in a clear and convincing manner - with client companies. Transferees constantly worry out loud about both departure and destination market value and time on market issues.
Second, while the relo industry has done a good job of adopting ISO certifications and Six Sigma practices, they all say this is merely a minimum expectation on the part of client senior executives. They see little evidence of creative, value-added processes that expand beyond these qualifiers. After all, as one said, "these have been around a long time and apply to all industries. I would like to see something innovative that is specific to relocation".
Third, as everyone knows, international relocations are ever more common and expected to increase. These senior execs do not see strong language ability, or a real understanding by US personnel of the important details of international culture and destinations, or any attempt to provide support on political risk. After all, doing business in China means doing business in a communist country with no freedom of the press or individual freedoms. Also, the upheaval in the Middle East should elicit action by relocation providers on risk and programs to manage it.
Please comment on any of these items, and share what you are doing, or support you need, to meet these stated needs.
I hope you all enjoyed your Thanksgiving holiday.
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