Smaller Homes, Generations Still Drive Storage

Big storage units like these are lesser sellers in the current market, a new report says

NEW YORK NY – The previously high-growth $7.4 billion market for home organization and storage has slowed down due to the housing collapse and enduring economic problems, according to “Home Organization in the U.S: General Purpose, Closet, Garages, and Storage Sheds,” a report released Monday (Nov. 14, 2011) from a market research firm called Packaged Facts.

The market has nonetheless performed relatively well due to several factors, the report claimed. Americans perennially have a lot of stuff that needs organizing and storing, it said, whether forming new households, downsizing into apartments or condos, remodeling rather attempting to sell or buy in uncertain economic times, or to seasonal factors such as spring cleaning, back-to-school events, winterizing wardrobes, and the holidays.

Until the financial and housing collapse in 2008, closet and garage organization products were the main drivers of growth, the report said. Consumers kept up demand for custom-installed closet and garage organization systems. As conditions worsened, however, demand for these discretionary purchases declined; consumers shifted to buying less expensive do-it-yourself products, or avoided buying altogether.

Consumers are also shifting to more compact housing, U.S. Census Bureau data shows, reversing a long-standing trend. From 1995 to 2007, the median size of new one-family homes grew from 1,920 to 2,277 square feet. In the wake of the Great Recession, however, the median size has scaled back to 2,169 square feet. Indications are that new homes (as well as garages) will continue this downsizing trend due to economic forces, tightened consumer credit, and sustainability concerns.

While people in all age groups want spaces and goods that reflect their personalities and lifestyles, specific demands typically vary according to lifestage.

• Millennials may be either moving back home with parents or wading deeper into the market for household furnishings.
• Gen X consumers are of home-buying age, further advanced in their careers, and have growing families. They may be looking for specific storage solutions in the kitchen or entertainment areas, and for kids’ bedroom and playroom storage products.
• Baby Boomers have been major drivers of the consumption boom over the last decade. Many are planning to stay in their current homes over the next five to 10 years, and are focusing on home retrenchment and re-organization for the longer term.
• Seniors often need user-friendly, easy-access storage solutions, especially in the wake of downsizing.

Time For Home Builders’ Re-Invention, Company CEO Says

BENSALEM PA – The downturn in the U.S. housing market has given home-builders an opportunity to reinvent themselves, a company president told those in attendance last week at the annual fall meeting of the Urban Land Institute, because “builders won’t make money doing things the way they used to,” Orleans Homes CEO George E. Casey Jr. said.

At the meeting, Casey chaired a panel titled “Not Standing Still: What Builders are Actually Changing to Meet the New Reality,” during which he said builders must accept the current level of new, for-sale home activity as the “new normal” for a while.

“At least there’s a business, even at current levels of activity,” Casey added. “Home-builders must figure out how to make money in this new environment. It is not impossible to do, but it will take a level of innovation and out-of-the-box thinking that is normally more associated with start-up tech companies than with home-builders of the past.”

“Those who do figure it out,” Casey said, “will be best positioned to prosper when a more robust market does return. And make no mistake, it will return.”

Casey claimed Orleans is focused on four concepts he says are crucial to being a successful builder in the 21st century:

• Market niche-focused. “Smart builders are using research, rather than guessing, to determine what their buyers want. With sound research, we can focus on the individual market niches for each neighborhood that make the most sense. One size does not fit all in this world.”
• Operational excellence. “We must be at the top of our game at all times. The quality and speed with which we build are critical to our success. Our sales staff has to know how to relate to customers in solving their home and neighborhood needs. If we create happy customers by making their experience with Orleans simple and personal, it will be the right business model for both of us.”
• Organizationally efficient. “In order to be more productive, we must be a flatter organization that uses technology more, both to communicate internally as well as with our core customers.”
• Excellent stewards of capital. “The days of cheap debt capital are gone. We have to be globally competitive in the returns on equity we generate for investors by doing our business in new ways that create high value for customers. We must build discipline into everything we do. If we do that, we create the highest probability of continuing as a business and showing how a new, 93-year-old company can grow.”

Casey joined Orleans in February 2011 after the company reorganized. It operates 66 communities in 10 markets, including several in Pennsylvania.

Logo from Orleans Homes

Home Builders Would Love To Have More Credit

WASHINGTON DC – Proposed legislation that would guide federal and state banking regulators on easing the flow of acquisition, development and construction credit, intended to benefit home builders who find it increasingly difficult to assemble funds for new projects, is just what the housing industry needs, according to the National Association of Home Builders.

The association “is applauding” two congressmen who introduced the bill earlier this month, the International Business Times reported Monday (May 16, 2011). Its members are interested in building lower-priced new homes, which have been best sellers in the currently sluggish economy. Obtaining more credit more easily would allow them to move ahead, it said.

• Read a story by reporter Carla Hill, titled “Real Estate Outlook: Legislation and Interest Rates” and published Monday by the International Business Times, here.

Photo from Google Images

Commercial Investors Face More Years Of Trouble

WASHINGTON DC – Real estate agents and brokers who are helping clients manage their investments need to keep them abreast of developments in multi-family and commercial property markets by staying on top of economic, regulatory, and legislative issues that affect lending, tax policy, health care and energy, Inman News Service reported Monday (May 16, 2011).

Inman, covering an address by Charles Achilles, chief legislative and research officer for the Institute of Real Estate Management during the National Association of Realtors’ mid-year conference, said he predicted that a dizzying array of issues which face commercial property investors also will have an impact on residential housing markets.

Because more municipal governments must deal with budget deficits, Achilles said, tax increases may be inevitable for commercial brokers and their clients. That would only reduce the potential for economic growth, he noted.

• Read a story by reporter Matt Carter, titled “Real estate downturn’s impacts to linger for years” and published Monday (May 16, 2011) by the Inman News Service, here.

Photo from Google Images

Offer Contact Any Way Clients Prefer

PHILADELPHIA PA – How many ways can real estate clients and prospects contact you? Maybe more importantly, how many ways do they KNOW they can contact you?

I'm here! Can you hear me? Can you reach me?

There could be a huge difference between the two and, if so, you may be missing business opportunities. Worse yet, you may be opening the door to competitors.

In Polley Associates’ courses now scheduled regularly across Pennsylvania (“Generation Buy,” a new Accredited Buyer Representative elective, is one; Best Start, our bi-monthly seminar at Newtown Square for newly-minted licensees, is another), instructors emphasize the importance licensees must continually place on “points of contact.” Ten years ago, the only point of contact most agents or brokers needed to distribute to the world at large was their office telephone number. Then things began to change.

• The office phone wasn’t enough. To better serve clients, we also began publicizing our direct office numbers, fax numbers, home numbers, and cell numbers.

• After that, phone contact seemed antiquated. The Internet was The Next Big Thing, and e-mail was its killer application. We offered up our e-mail address, then multiple addresses (some agents have three or four for different purposes), then the subscription for our e-mail newsletter.

• We began supplying web addresses too (technically known as Universal Resource Locators, or URLs) for individual pages on our brokers’ websites, then the domain names for our personal websites, followed by web addresses for our sales teams, for our listings (a page for each property), and for our communities.

• Gripped by blogging fever, we ensured everyone also had URLs for the blogs we wrote individually, the blogs we published with others, and the blogs at real estate information portals in which we participated.

• Web-based messaging came along. To the mix we added IM addresses for Yahoo Messenger, Windows Live Messenger, Meebo, AOL Instant Messenger, and Google Chat. Cell phone text messaging took hold as well, extending the life of our cell phone numbers for a wholly different reason.

• And now, with Facebook, Twitter, Linked In, MySpace, Tumblr, YouTube, Flickr and a whole host of other social networking media sites, our potential points of contact have expanded once again.

Were you keeping count? At a minimum, 29 contact references were mentioned in the space of six short paragraphs, above.

One of the biggest problems plaguing licensees today is managing all these contact nodes. They’ll eat up a lot of valuable time among agents who lack discipline; who are enamored by technology rather than by what it should be doing for them; or who haven’t mastered the shortcuts to communicate quickly.

On the other hand, being inundated by client and prospect queries from multiple contact sources can be a success problem you’d be happy to have. A certain percentage of that contact traffic should be real business that makes you money!

It won’t earn you a dime, though, unless people know you’re available at points of contact of their choosing. The lesson here is simple: in all your marketing materials, on all your websites, and with anything distributed to the public, find ways to list as many of your pertinent points of contact as possible. It’s the way to tell the world, “I’m ready to do business with you, no matter how you get in touch.”

Related:

• Offer Contact Any Way Clients Prefer
• Put Your Real Self Into Real Estate Messages
• New To Social Media? See This Webinar
• Selling With Social Networks

Market Looks Better For Multi-Family Housing Units

WASHINGTON DC – Things are looking up nationwide for growth in new and existing apartments, condominium buildings, and other forms of multi-family housing, the Washington-based National Association of Home Builders said Thursday (March 10, 2011).

Apartments in St. Louis MO

The association announced that two key measurements it tracks to determine multi-family trends – the Multifamily Production Index, which gauges how builders feel about new construction; and the Multifamily Vacancy Index, which follows what renters are doing – both showed significant improvement during the fourth quarter of 2010. The production number was up, a sign builders were confident about their future. The vacancy number was down, an equally good indicator.

The production index, which tracks developer sentiment about new construction on a scale of 1 (worst) to 100 (best), currently stands at 40.8. That’s the highest number since the fourth quarter of 2006, the association said.

With the vacancy index, smaller numbers indicate fewer vacancies. It’s now at 33.3, the lowest it’s been since the third quarter of 2006, and half of what it was just 18 months ago.

Historically, production and vacancy have performed well as leading indicators of U.S. Census figures for multifamily starts and vacancy rates. Together, they often telegraph movement in Census figures one to three quarters in advance.

Consequently, builders want – but may be unable to – put up more units, according to association Chief Economist David Crowe. Their problem? There’s too little construction financing available to let them meet market demand. That, in turn, will force rental costs up for consumers, said Charles Brindell, chairman of the association’s Multifamily Leadership Board.

Polley has scheduled these related courses you may find helpful:

• Real Estate Investment starts March 24 (2011) in Newtown Square PA;
• Investment also starts May 3 in Southampton PA; and
• Residential Property Management starts April 18 in Newtown Square.

Photo from Webster University

Simon Property Tops 2011 RE Most Admired List

The King of Prussia Mall

PHILADELPHIA PA – Simon Property Group Inc., the co-owner of the King of Prussia and Granite Run malls in the greater Philadelphia area,, was named the most admired company in the real estate industry, the Philadelphia Business Journal newspaper reported Tuesday (March 8, 2011).

The designation comes from Fortune magazine, which since 1997 has conducted a survey of companies with the best reputations.

• Read the story by reporter Natalie Kostelni, and published Tuesday by The Journal, here.

Photo from Simon Property Group

PA Home Builders Applaud Sprinkler Repeal Vote

HARRISBURG PA – Home builders are applauding passage of a bill Monday (March 7, 2011) by the Pennsylvania House to repeal the state’s home sprinkler mandate, and called for quick action by the state Senate, according to The Pittsburgh Tribune-Review newspaper.

“We are pleased by the large and bipartisan support to remove this costly and unnecessary mandate,” said Jim Eichenlaub, executive director of the Builders Association of Metropolitan Pittsburgh, told reporter Sam Spatter.

The House voted 154-39 for HB 377, which calls for the repeal of the law that covers only one- and two-unit houses. The mandate remains in effect for multi-family houses containing three or more units, he said. If the Legislature approves removal of the sprinkler mandate, that doesn’t stop home buyers from including sprinklers in a new home if they wish, Eichenlaub said.

The sprinkler requirement went into effect Jan. 1.

Photo from Google Images

Mortgage Interest Deductions Help Homeowners, NAR Replies

WASHINGTON DC – Federal income tax deductions for home mortgage interest took a hit Saturday (Jan. 1, 2011) in The Washington Post newspaper, which published an editorial titled “Trim the Excessive Tax Subsidy for Real Estate.” Lawrence Yun, chief economist for the National Association of REALTORS, responded by describing how mortgage interest deductions benefit primarily middle- and low-income home owners, rather than the rich.

Mortgage interest deductions help “many families become home owners by reducing the carrying costs of owning a home,” Yun contended in his response. “The ability to deduct the interest paid on a mortgage can mean significant savings at tax time,” he wrote.

• Read Yun’s entire response, titled “NAR Letter to the Editor: Who Really Benefits from the MID,” here.

Photo from Google Images

Mortgage Probe Results Expected In 2011

ALLENTOWN PA – As homeowners around the country continue to struggle to fend off foreclosure proceedings, a working group of attorneys general and banking officials from all 50 states has been gathering evidence in a probe of potentially improper or illegal lending and servicing practices, according to an article written by reporter Tim Darragh and published Monday (Dec. 27, 2010) by The (Allentown PA) Morning Call newspaper.

• Read the article, titled “Results of mortgage probe expected in 2011,” here.