Developments
Tax credits boosting traffic at sales offices
Homebuilders across the state have reported a significant increase in both traffic and sales since the start of March when a homebuyer tax credit took effect.
And the increase has been statewide. A variety of media reports from San Diego, the Inland Empire, Fresno, Stockton and the Bay Area all show increases in traffic at new-home sales offices.
The tax credit was part of a budget package approved by the Legislature and signed by Gov. Arnold Schwarzenegger in February. The state tax credit is for $10,000, or 5 percent of the purchase price of a newly built home, whichever is less. The home must be the principal residence of the buyer for at least two years following the purchase.
“This is something our industry has been desiring for quite some time,” said Layne Marceau, president of Shea Homes’ Northern California division and a former CBIA Chairman.
The intent is to stimulate sales activity and get the state economy moving again, Marceau said.
“It’s a terrific opportunity to jump-start our economy and to help more families experience the American dream,” Schwarzenegger said in a radio address promoting the tax credit.
The tax credit will be paid out over three years in equal amounts. There is no income limitations that must be met by homebuyers, but the purchase must be a newly constructed, previously unoccupied home.
The state’s Franchise Tax Board has allocated $100 million for the program, which will run until March 1, 2010, or until the funding runs out. At the current pace, that could be well before the deadline.
In the first nine weeks of the program, applications for the credit had almost reached $50 million.
The state tax credit comes on the heels of a federal tax credit of $8,000; buyers can combine the two for an $18,000 benefit.
There are differences between the two programs, however. The federal credit is only for first-time homebuyers, defined by the government as someone who has not owned a principal residence for three years prior to purchase. The federal program is a one-time $8,000 credit, or 10 percent of the purchase price, and expires Dec. 1.
The federal program also applies to new or resale homes.
Florida builder Dan Levitan said getting the word out on the tax credit is key to stimulating sales.
“When everyone is working together, we ought to be able to sell tens of thousands of houses this year using the tax credit,” Levitan said.
Details of both programs can be found at www.cbia.org. More information on the federal credit can be found at www.federalhousingtaxcredit.com, and details on the California program are available at www.ftb.ca.gov.
Home sales tumble in 2008 among top builders
Only two companies among the top 25 builders in California showed an increase in sales during 2008.
Statistics compiled by Hanley Wood Market Intelligence show the top 25 companies combined to sell 36,445 homes in 2008, down more than 41 percent from 2007.
Topping the list was Lennar Homes, which sold 2,379 homes during 2008. The company maintained its status at the top of the list despite sales dropping almost 50 percent from 2007, which Lennar sold 4,698 homes.
KB Home and Centex Homes were second and third for the second consecutive year, while D.R. Horton and Standard Pacific each moved up a spot to fourth and fifth for 2008. Rounding out the top 10 were Pulte Homes, Shea Homes, K. Hovanian Homes, Beazer Homes, and William Lyon Homes.
The two companies to sell more homes in 2008 than the previous year were No. 11 Taylor Morrison (809 homes vs. 781 in 2007) and No. 21 Van Daele Development (315 homes vs. 307 in 2007).
KB Home teams up with Moen
KB Home has announced a new partnership with Moen to provide water-saving faucets in all new homes. The environmentally friendly products will be offered in both standard and upgraded KB Home kitchens and baths.
“We are pleased to announce this new partnership with Moen as part of our ongoing effort to provide our homebuyers with the highest quality products in their new homes, while also lessening the impact on the environment,” said Jeffrey Mezger, KB Home president and CEO. “Building all of our new homes with water-saving faucets allows our homebuyers to save our planet’s precious resources while also saving on their monthly utility bills.”
Moen was equally pleased to partner with KB Home.
“We’re working hard to ensure that consumers don’t have to choose between superior and sustainable products,” said David Lingafelter, president of Moen Inc.
Pardee developments added to CGB program
Two of Pardee Homes’ new-home developments have qualified for the California Green Builder (CGB) designation. Both are located in the builder’s master-planned community of Fair Oaks Ranch in Santa Clarita.
“With California Green Builder, we are building greener and more cost-effective homes for our homebuyers in the communities in which we build,” said Mike McGee, president and CEO of Pardee Homes.
California Green Builder-compliant homes exceed by at least 15 percent California’s energy requirements, already the toughest in the nation. CGB standards also include diverting at least 50 percent of construction and jobsite waste; reducing water use by at least 20,000 gallons annually compared to contemporary non-green homes; and using lumber and wood efficiently.
“Pardee Homes was one of the first California homebuilders to recognize the benefits of the California Green Builder program,” said Justin Dunning, CGB program manager. “We applaud their steadfast commitment to CGB and to the homebuyers and communities that benefit from that commitment.”
This and that …
• Prices of construction materials fell in February for the fifth consecutive month, according to the Producer Price Index report from the U.S. Labor Department. Prices fell 0.6 percent in February, but still remain up 0.5 percent over the same period last year. The report includes fabricated structural metal products, plumbing fixtures, wire products, softwood lumber, and asphalt felts and coatings, among other items.
• More than 90 percent of respondents to a green building survey believe the practice is worth the time and effort. The Third Annual Green Building Survey by Allen Matkins, Constructive Technologies Group and Green Building Insider shows that while 93.4 percent of respondents support the practice, just 66.2 percent agree it is worth obtaining official LEED certification from the U.S. Green Building Council.
• Owners of construction and contracting businesses across the nation have an improved outlook for the economy over the next 12 months. The Small Business Research Board said 40 percent of respondents to its survey expect an improved economy over the next year, an increase of 12 points from a similar survey taken six months earlier.
• Job losses continue to rise in the residential construction business, according to NAHB. Some 911,000 jobs have been shed since a peak in employment in February 2006, including 226,000 losses in a four-month period starting in November.