Category: Construction + Economy

New Home Inventories Continue Shrinking in April

The number of newly built single-family homes on the market shrank to 297,000 units in April, thinning supplies to their lowest level since May 2001, according to government figures released…

The number of newly built single-family homes on the market shrank to 297,000 units in April, thinning supplies to their lowest level since May 2001, according to government figures released in late May. The report noted that the pace of new-home sales held virtually even with the previous month, at a seasonally adjusted annual rate of 352,000 units.

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“This continued reduction in the new-homes inventory helps bring supply in line with demand, which is an important step toward the market’s recovery. We can expect the pace of new home sales to bounce along the bottom a bit before picking back up towards the end of this quarter,” noted NAHB Chief Economist David Crowe.

Sales of newly built, single-family homes recorded a marginal 0.3% gain to 352,000 units in April from a downwardly revised pace in March. Meanwhile, the inventory of new homes for sale declined 4.2% to 297,000 units, which is a 10.1-month supply at the current sales pace.

Regionally, the pace of new home sales was mixed in April. No change was recorded in the Northeast or Midwest, while the South posted a nearly 2% increase and the West a 3.8% decline.

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April 2009 Construction at $968.7 Billion Annual Rate After Marginal Gain

The U.S. Census Bureau of the Department of Commerce recently announced that construction spending during April 2009 was estimated at a seasonally adjusted annual rate of $968.7 billion, 0.8% (±1.3%)…

The U.S. Census Bureau of the Department of Commerce recently announced that construction spending during April 2009 was estimated at a seasonally adjusted annual rate of $968.7 billion, 0.8% (±1.3%) above the revised March estimate of $961.3 billion and 10.7% (±1.8%) below the April 2008 estimate of $1,085.2 billion.

During the first 4 months of this year, construction spending amounted to $286.3 billion, 11.3% (±1.4%) below the $322.8 billion for the same period in 2008.

Nonresidential construction continues to show resilience. In April, total nonresidential spending was about $712.3 billion, about 1% higher than the revised March figure and 3% higher than the same period a year earlier. Public nonresidential construction was about $304.1 billion, about 0.5% less than March but 3% higher than a year earlier. And private nonresidential construction was about $408.2 billion, nearly 2% higher than March and 2% higher than the same period a year earlier.

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Builder Confidence Continues to Rise in May

Builder confidence in the market for newly built, single-family homes improved for a second consecutive month in May to the highest level since September of 2008, according to the National…

Builder confidence in the market for newly built, single-family homes improved for a second consecutive month in May to the highest level since September of 2008, according to the National Association of Home Builders/Wells Fargo Housing Market Index (HMI). The HMI rose two points to 16 for the month.

“The fact that the May HMI continued to tick up from April’s five-point increase provides confirming evidence that the improved confidence level was no fluke,” added NAHB Chief Economist David Crowe. “This continued increase indicates that home builders feel we’re at or near the bottom of the market and that positive signs lie ahead for builders and potential home buyers, provided that builder access to production credit significantly improves.”

Derived from a monthly survey that NAHB has been conducting for more than 20 years, the NAHB/Wells Fargo HMI 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.

Two out of three of the HMI’s component indexes rose in May. The index gauging current sales conditions rose two points to 14, while the index gauging sales expectations for the next six months rose three points to 27. The index gauging traffic of prospective buyers remained unchanged, at 13. Regionally, the Northeast posted a three-point gain in its HMI score, to 18, while the South posted a one-point gain to 18, the West rose four points to 12, and the Midwest held even at 14.

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Future Getting Brighter, According to Architecture Billings Index

After an eight-point jump in March, the American Institute of Architects (AIA) Architecture Billings Index (ABI) fell less than a full point in April. As a leading economic indicator of…

After an eight-point jump in March, the American Institute of Architects (AIA) Architecture Billings Index (ABI) fell less than a full point in April. As a leading economic indicator of construction activity, the ABI reflects the approximate 9- to 12-month lag time between architecture billings and construction spending.

AIA reported the April ABI rating was 42.8, down from the 43.7 mark in March. This was the first time since August and September 2008 that the index was above 40 for consecutive months, but the score still indicates an overall decline in demand for design services (any score above 50 indicates an increase in billings).

The new projects inquiry score was 56.8, suggesting that while unfavorable business conditions remain, inquiries by potential clients continue to grow, pointing to possible economic improvement.

“The most encouraging part of this news is that this is the second month with very strong inquiries for new projects,” said AIA Chief Economist Kermit Baker, PhD, Hon. AIA. “A growing number of architecture firms report potential projects arising from federal stimulus funds. Still, too many architects are continuing to report difficult conditions to feel confident that the economic landscape for the construction industry will improve very quickly. What these figures mean is that we could be seeing things turn around over a period of several months.”

Key April ABI highlights:

Regional averages: Northeast (47.1), South (45.0), Midwest (40.1), West (39.2)
Sector index breakdown: mixed practice (44.2), institutional (43.2), multi-family residential (43.2), commercial / industrial (41.7)
Project inquiries index: 56.8

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New Draft of ASHRAE 189.1 Green Building Standard Available for Public Comment

ASHRAE is taking another crack at producing BSR/ASHRAE/IESNA/USGBC Standard 189.1P, Standard for the Design of High-Performance Green Buildings Except Low-Rise Residential Buildings. This is the third public review draft. You…

ASHRAE is taking another crack at producing BSR/ASHRAE/IESNA/USGBC Standard 189.1P, Standard for the Design of High-Performance Green Buildings Except Low-Rise Residential Buildings. This is the third public review draft. You may recall this standard had difficulties and the committee creating it was reconstituted last year.

Green Business

The public review period is 45 days, from May 1 through June 15, 2009.

There are a few provisions related to lighting, as shown below in the section that I excerpted:

7.4.6 Lighting. The lighting shall comply with Section 9 of ASHRAE/IESNA Standard 90.1 with the following modifications and additions:

7.4.6.1 Lighting Power Allowance. The lighting power allowance shall be a maximum of 0.9 multiplied by the values determined in accordance with Sections 9.5 and 9.6. These requirements supersede the requirements in Sections 9.5 and 9.6 of ASHRAE/IESNA Standard 90.1.

7.4.6.2 Occupancy Sensor Controls. Offices 250 ft2 (25 m2) or smaller, classrooms of any size, lecture, training, or vocational rooms of less than 1000 ft2 (100 m2), multipurpose rooms of less than 1000 ft2 (100 m2), and conference rooms and meeting rooms less than 1000 ft2 (100 m2) in hotels, convention, conference, multipurpose and meeting centers shall be equipped with occupant sensor(s) to shut off the lighting. In addition, controls shall be provided that allow manual shutoff of all lights. Occupancy sensors shall be either “manual ON” occupancy sensor or a bi-level “automatic ON” programmed to a low light level combined with multi-level circuitry and “manual ON” switching for higher light levels. Where such spaces are within a daylit area, occupancy sensors shall work in conjunction with daylighting controls complying with 7.4.6.5.

7.4.6.3 Occupancy Sensor Controls with Multi-Level Switching or Dimming. The lighting in the following areas shall be controlled by an occupant sensor with multilevel switching or dimming system that reduces lighting power a minimum of 50% when no persons are present:

a. Multi-family, dormitory, hotel and motel hallways.
b. Commercial and industrial storage stack areas.
c. Library stack areas.

7.4.6.4 Automatic Controls for Egress and Security Lighting. Lighting in any area within a building that is required to be continuously illuminated for reasons of building security or emergency egress shall not exceed 0.5 W/ft2 (5 W/m2). Additional egress and security lighting shall be provided as long as it is controlled by a time switch control device that turns off these additional lights.

7.4.6.5 Automatic Controls for Lighting in Daylight Zones. Lighting in all daylight zones, including daylight zones under skylights and daylight zones adjacent to vertical fenestration, where the combined daylight zone per enclosed space is greater than 250 ft2 (25 m2), shall be provided with controls that automatically reduce lighting power in response to available daylight by either:

a. Continuous daylight dimming, or
b. A combination of stepped switching and daylight-sensing automatic controls, which are capable of incrementally reducing the light level in steps automatically and turning the lights off automatically.

Exceptions to 7.4.6.5:

1. Display and exhibition lighting.
2. Conference rooms greater than 250 ft2 (25 m2) that have a lighting control system with at least four scene options.

7.4.6.6 “Manual ON” Occupancy Sensors. Occupancy sensors shall have“manual ON”, “automatic OFF” controls.

7.4.6.7 Controls for Outdoor Lighting. For lighting of building facades, parking lots, garages, sales and non-sales canopies, and all outdoor sales areas, where two or more luminaires are used, an automatic time switch shall be installed that has the capability to turn off the lighting when not needed and reduce the lighting power (in Watts) of the combined lighting functions indicated by a minimum of 50% or provide continuous dimming through a range that includes 50% through 80% reduction or, where continuously dimming HID sources are used, provide continuous dimming through a
range that includes 25% though 50% reduction.

Exceptions to 7.4.6.7:

1. Lighting required by a health or life safety statute, ordinance, or regulation, including but not limited to, emergency lighting.
2. Lighting that is controlled by a motion sensor and photocontrol.
3. Lighting for facilities that have equal lighting requirements at all hours and are designed to operate continuously.
4. Temporary outdoor lighting.
5. Externally illuminated signs and signs that are internally illuminated or have integral lamps.

UPDATE: Also note there are significant provisions related to light pollution in Section 5.3.3.

For more information, click here.

To download the latest draft of the standard as a PDF file, click here.

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Construction Spending Remains Flat in March

March 2009 construction spending was estimated at a seasonally adjusted annual rate of $969.7 billion, 0.3% above the revised February estimate of $967.1 billion and 11.1% below the same period…

March 2009 construction spending was estimated at a seasonally adjusted annual rate of $969.7 billion, 0.3% above the revised February estimate of $967.1 billion and 11.1% below the same period a year ago, when spending stood at $1,090.5 billion. During the first quarter of 2009, spending amounted to $209.5 billion, 10.9% below $235.2 billion for the same period in 2008.

Private construction stood at $661 billion, 0.1% below the February estimate of $661.6 billion. Private residential construction was a seasonally adjusted annual rate of $258.4 billion in March, 4.2% below the February estimate of $269.6 billion. Private nonresidential was at $402.6 billion in March, 2.7% above the February figure of $392 billion. Meanwhile, public construction stood at a seasonally adjusted annual rate of $308.7 billion, 1.1% above the February estimate of $305.4 billion.

While residential construction has seen major losses, however, nonresidential construction overall still remains strong compared to 2008, up 2% compared to the same period last year, with public construction up 3% and private construction up 1%.

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Kunstler on the “Tragedy of Suburbia”

In James Howard Kunstler’s view, public spaces should be inspired centers of civic life and the physical manifestation of the common good. Instead, he argues in this Technology, Entertainment and…

In James Howard Kunstler’s view, public spaces should be inspired centers of civic life and the physical manifestation of the common good. Instead, he argues in this Technology, Entertainment and Design (TED) Talk, what we have in America is a nation of places not worth caring about.


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Single-Family Housing Starts Hold Steady in March

More evidence that the housing market may be bottoming out, although the continuing credit crunch and a decline in permits are worrisome for future growth. Characteristic volatility in the multifamily…

More evidence that the housing market may be bottoming out, although the continuing credit crunch and a decline in permits are worrisome for future growth.

Characteristic volatility in the multifamily sector pushed nationwide housing starts down 10.8% in March as production of single-family homes remained unchanged, according to the Department of Commerce. Overall starts fell to a seasonally adjusted annual rate of 510,000 units, due entirely to a 29% reduction on the multifamily side that largely offset a big gain in apartment and condo building in the previous month.

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“While improving interest among potential home buyers has builders more optimistic these days, we don’t want to ramp up production until sales of new homes pick up,” notes NAHB Chairman Joe Robson. “A cautious attitude about new building is definitely what’s called for here, and that’s what most builders have wisely adopted for the time being.”

“Today’s numbers are right on target with NAHB’s forecast, which anticipates that housing starts will bottom out in the second quarter, after new-home sales have stabilized,” says NAHB Chief Economist David Crowe. “Single-family starts remained virtually unchanged over the past three months, indicating that we are closing in on a bottom. Multifamily starts–which tend to bounce around from month to month–were responsible for the decline in total starts as they readjusted following a substantial gain in February.”

Crowe notes that while builders have been seeing more sales office traffic and fielding more calls in recent weeks as consumers respond to historically affordable home buying conditions, many continue to grapple with a severe credit crunch, which could impair market recovery.

While total housing starts declined 10.8% to a seasonally adjusted annual rate of 510,000 units in March, single-family housing starts remained exactly on par with the previous month, at a 358,000-unit rate. Multifamily starts declined 29% in the month to a 152,000-unit rate, erasing a large portion of the gain posted by that sector in the previous month.

Housing starts were down in three out of four regions in March. The only region posting a gain was the Midwest, which was up nearly 16%. Meanwhile, the Northeast posted a 25.4% decline, the South a 16.8% decline and the West a 26.3% decline.

Building permits, which can be an indicator of future building activity, also fell in March. Total permit issuance declined 9% to a seasonally adjusted annual rate of 513,000 units, with single-family permits down 7.4% to 361,000 units and multifamily permits down 12.6 % to 152,000 units.

Permit issuance declined across every region except the West in March. While that region posted no change from February, the Northeast posted a 24.3% decline, the Midwest a 2.3% decline and the South a 10.3% decline.

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Inventory of New Homes Continues Shrinking in March

The number of newly built, single-family homes on the market declined for a 23rd consecutive month in March as builders focused on winnowing down their inventories of unsold units, according…

The number of newly built, single-family homes on the market declined for a 23rd consecutive month in March as builders focused on winnowing down their inventories of unsold units, according to the Department of Commerce. Inventory shrank to 311,000 units, which is a 10.7-month supply at the current sales pace.

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Further, new home sales in March remained virtually on-pace with a relatively strong, upwardly revised number from the previous month. Sales were reported at a seasonally adjusted, annual rate of 356,000 units, which was off just 0.6% from February.

NAHB Chief Economist David Crowe says the new home sales market is bottoming out as historically low mortgage rates, attractive prices and incentives like the newly created $8,000 first-time home buyer tax credit feed demand.

Regionally, new-home sales activity was somewhat mixed in March, with the two largest markets posting the best results. The West registered a 15.1% gain, while the South held even with the previous month’s improved sales pace, the Midwest posted a 7.8% decline and the Northeast posted a 32% decline.

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Home Builder Confidence Posts Biggest Gain in Five Years

Is the market at or near bottom? Good news is always welcome these days. While still deep in negative territory, builder confidence in the market for newly built, single-family homes…

Is the market at or near bottom?

Good news is always welcome these days. While still deep in negative territory, builder confidence in the market for newly built, single-family homes rose five points in April to the highest level since October 2008, according to the latest National Association of Home Builders/Wells Fargo Housing Market Index (HMI). This gain was the largest one-month increase recorded since May of 2003, and brings the HMI out of single-digit territory for the first time in six months–to 14. Every component of the HMI reflected the boost, with the biggest gain recorded for sales expectations in the next six months.

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“Some of the most favorable buying conditions in a lifetime are now in place, and they are drawing more consumers back to the market,” says NAHB Chairman Joe Robson, a home builder from Tulsa, OK.

“This is a very encouraging sign that we are at or near the bottom of the current housing depression,” says NAHB Chief Economist David Crowe. “With the prime home buying season now underway, builders report that more buyers are responding to the pull of much-improved affordability measures, including low home prices, extremely favorable mortgage rates and the introduction of the $8,000 first-time home buyer tax credit.”

Crowe cautioned, however, that a key issue that still must be addressed is the ongoing lockdown on builder acquisition, development and construction (AD&C) financing. “Restoring health to our nation’s economy will require a substantial housing recovery, and that recovery is contingent on breaking the logjam in AD&C lending that presents an ever-increasing obstacle for home builders,” he adds.

Derived from a monthly survey that NAHB has been conducting for more than 20 years, the NAHB/Wells Fargo HMI gauges builder perceptions of current single-family home sales and sales expectations in 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 substantial gains in April. The largest of these gains was a 10-point surge in the component gauging builder sales expectations for the next six months, which brought that index to 25. The component gauging current sales conditions and the component gauging traffic of prospective buyers each rose five points, to 13 and 14, respectively.

The HMI also rose in every region in April, with an eight-point gain to 16 in the Northeast, a six-point gain to 14 in the Midwest, a five-point gain to 17 in the South and a 4-point gain to 9 in the West.

nahb-housing-market-index-april

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