Register Real Estate Advisors

WASHINGTON (Associated Press) – Construction of new homes and apartments in January rose 2.8 percent to 591,000 units at a seasonally adjusted annual rate, surpassing economists’ expectations of 580,000 units, according to the Commerce Department.

Construction of single-family homes increased 1.5 percent to a seasonally adjusted rate of 484,000 units. Multi-family construction reported a 9.2 percent increase to an annual rate of 107,000 units.

 Construction rose 1 percent in the South and 3.2 percent in the Midwest. The majority of last month’s improved construction rates were due to the 10 percent jump in activity in the Northeast and the 8.9 percent increase in the West.

 January’s numbers represented a 21.1 percent increase from January 2009 and the fastest building rate since July.

 Additionally, December’s construction rates were revised by the Commerce Department from 557,000 units to 575,000 units. However, even with the revision, activity fell 0.7 percent in the last month of 2009. This dip was attributed to severe weather in many parts of the country.

 Applications for building permits, considered a good measure of future activity, fell 4.9 percent last month to a rate of 621,000 after two months of significant increases.

HOUSTON (Houston Chronicle) – Area apartment occupancies have fallen to 84.2 percent, their lowest level in 15 years, according to locally based Apartment Data Services.

 The real estate research firm says last year’s rental rates fell to $709 per month from $726 in 2008. An industry report by Marcus & Millichap says asking rents are expected to finish this year at $737 per month, down 1.2 percent from the end of 2009.

 Effective rents — after discounts and concessions — are expected to fall 2.7 percent from $656 per month. 

With occupancy and rents down, builders are turning out fewer new apartments. This year, about 5,000 units will be added in the Houston area, the smallest number since the mid-to-late 1990s and lower than the market peak of 21,000 new units in 2008.

NEW YORK (McGraw-Hill) – The value of Texas construction starts will advance 16 percent to $52.5 billion this year, according to the 2010 Texas Construction Outlook from McGraw-Hill Construction.

Growth is expected for each of Texas’ major metropolitan areas: Austin is expected to climb 30 percent, Houston 17 percent, Dallas 16 percent, El Paso 8 percent, and San Antonio 6 percent.

Other highlights from the report:

• Housing starts in Texas are expected to advance 31 percent to $21.8 billion in 2010, with single-family housing growing 31 percent and multifamily housing gaining 34 percent.
• Nonresidential construction starts will slip 1 percent to $17.6 billion, suffering from declines in commercial and industrial starts.
• Federal stimulus funding will assist public works and utilities construction as starts rebound 21 percent to $13.1 billion in 2010.

HOUSTON (Houston Chronicle) – Housing starts increased 6 percent between fourth quarter 2008 and the same in 2009, according to a Metrostudy report released Wednesday.

 Builders started 4,576 homes last quarter and closed on 6,323. There were 12,164 inventory homes either finished or under construction in the Houston area in December.

 However, there were still 65,925 vacant lots ready for development at the end of 2009. That translates to a 42.3-month supply, well above Metrostudy’s idea of a healthy market equilibrium range of 20 to 24 months.

 Builders are expected to develop and sell between 18,000 and 20,000 homes in 2010. Starts and closings in 2009 totaled 18,687 and 22,902, respectively.

HOUSTON (Houston Chronicle) – The Architecture Building Index remained negative in December as developers continued to struggle to attain financing.  The national index, an economic indicator of construction activity, rose slightly from 42.8 in November to 43.4 in December.  The index reflects the approximate nine- to 12-month time between architecture billings and construction spending.  Any score above 50 signifies an increase in billings.

All week I was busy showing houses morning, day, and evenings.  The majority of what I showed was new construction and foreclosures.  They are both HOT!  If you are looking for a house this time of year remember to wear cool clothing and comfortable shoes.  It’s hot and there’s no air conditioning in the new construction homes unless they are completely finished.  In most of the foreclosures the air conditioning has been turned off.  Be prepared when house hunting in Texas in the heat of the summer.  Drink lots of water!

WASHINGTON (International Code Council) – Residential builders and other professionals now have a set framework for green construction that stipulates the necessities a home must have to be considered environmentally friendly.

The International Code Council (ICC) approved the National Green Building Standard, known as ICC-700, Jan. 29. The new standard provides guidance for safe and sustainable building practices for residential construction, including both new and renovated single-family to high-rise residential buildings.

This is the first and only green standard that is consistent and coordinated with the Code Council’s family of I-Codes and standards.

The International Code Council and National Association of Home Builders developed the standard with input from the green building community.

To learn about the standard’s rating system and criteria, as well as ICC-700 training and the Code Council’s Green Building Technologies Certification program, see ICC’s press release.