On December 16th, the Marines arrived as promised to our Devon Model. The Toys for Tots box was totally filled! Just as they arrived one of our Lifestyle customers happened to be there and with a little encouragement, Matthew and Ben Royer agreed to join Barbara in our official photo op! 

Special thanks to all of our residents that helped make this Christmas a better time for those less fortunate than ourselves.

 

Nice going Parkside!

 Sales of existing homes held steady with a modest gain last month, another indicator that the housing market is transitioning into a more normal market in contrast with unsustainable activity last year, according to the National Association of Realtors®.

Total existing-home sales – including single-family, townhomes, condominiums and co-ops –  rose 0.5 percent to a seasonally adjusted annual rate1 of 6.24 million units in October from an upwardly revised pace of 6.21 million in September, but were 11.5 percent below the 7.05 million-unit level in October 2005.

David Lereah, NAR’s chief economist, said market fundamentals are improving.  “The present level of home sales demonstrates some confidence in the market, but sales are lower than sustainable due to psychological factors,” he said.  “The demographics of our growing population, historically low and declining mortgage interest rates, and healthy job creation mean the wherewithal is there to buy homes in most of the country, but many buyers remain on the sidelines.  After a period of price adjustment, we’ll see more confidence in the market and a lift to home sales should be apparent in the first quarter of 2007.”

According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage was 6.36 percent in October, down from 6.40 percent in September; the rate was 6.07 percent in October 2005.  Last week, Freddie Mac reported the 30-year rate dropped to 6.18 percent – the lowest since January of this year.

NAR President Pat Vredevoogd Combs, from Grand Rapids, Mich., and vice president of Coldwell Banker-AJS-Schmidt, said sellers in most of the country are doing what it takes to attract buyers.  “With the exception of parts of the West, sellers are cutting their price enough to encourage sales,” said Combs.  “It’s an especially good market for sellers in areas with rising jobs and a growing population where prices remain moderate – those are the areas now with the strongest price growth.  On the opposite extremes, about 10 percent of the country is experiencing economic weakness, and a fourth of the nation – areas that had the biggest boom – is in a correction that will take longer to balance.  All of that is working to the advantage of buyers in today’s market.”

The national median existing-home price2 for all housing types was $221,000 in October, which is 3.5 percent below October 2005 when the median price spiked above adjacent months to $229,000.  The median is a typical market price where half of the homes sold for more and half sold for less.

“The annual decline in the October median home price is skewed because there was an uncharacteristic spike in October 2005, but the trend for the fourth quarter will be prices remaining slightly below a year ago.  Overall prices are projected to see modest appreciation around early spring,” Lereah said.

Total housing inventory levels increased 1.9 percent at the end of October to 3.85 million existing homes available for sale, which represents a 7.4-month supply at the current sales pace.

Single-family home sales rose 1.3 percent to a seasonally adjusted annual rate of 5.50 million in October from a level of 5.43 million September, but were 11.0 percent below the 6.18 million-unit pace in October 2005.  The median existing single-family home price was $221,300 in October, which is 3.4 percent below a year ago.

Existing condominium and cooperative housing sales fell 4.8 percent to a seasonally adjusted annual rate of 741,000 units in October from an upwardly revised 778,000 in September, and were 14.5 percent lower than the 867,000-unit level in October 2005.  The median existing condo price3 was $214,300 in October, which is 5.3 percent lower than a year earlier.

Regionally, existing-home sales in the West rose 6.4 percent to an annual pace of 1.33 million in October but were 18.9 percent lower than a year earlier.  The median price in the West was $340,000, down 0.6 percent from October 2005.

Existing-home sales in the Midwest were unchanged in October, holding at a level of 1.41 million, and were 10.2 percent lower than a year ago.  The median price in the Midwest was $170,000, which is 1.2 percent below October 2005.

Existing-home sales in the South slipped 1.2 percent to an annual sales rate of 2.49 million in October, and were 8.8 percent below a year ago.  The median price in the South was $185,000, down 7.0 percent from a spike in October 2005.

Existing-home sales in the Northeast declined 2.9 percent to a level of 1.01 million in October, and were 9.8 percent below October 2005.  The median existing-home price in the Northeast was $254,000, down 5.2 percent from a year earlier.

The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing more than 1.3 million members involved in all aspects of the residential and commercial real estate industries.

Middletown Delaware Neighborhood Is Toys For Tots Drop-Off Location

Middletown, DE – insert date, 2006 – Parkside, the neo-traditional community currently under construction at Cedar and Marl Pit Roads in Middletown has officially kicked off a toy drive in conjunction with the U.S. Marine Corps Reserve (USMCR) Toys for Tots Foundation to benefit needy children in the Middletown community.The toy drive will run through Saturday, December 16^th when USMCR Sergeants from an area Reserves office will be at Parkside to collect the donations.

“At this time of year, we especially want to remember those in our community with a message of hope,” said Keith Adams Parkside’s developer.“The Marine Corps reserve’s Toys for Tots program appealed to the builders at Parkside because all of the toys collected will be given to children in our local community.This is about local people helping local families and we think it’s an ideal way to give back,” concluded Adams.

Although this is the first year that Parkside has sponsored Toys for Tots, the builders of Parkside—Anderson Homes, Craftmark Homes and Lifestyle Homes—are long-established companies that are well connected to Delaware and the Middletown community, often participating in or sponsoring charitable events.

Parkside is distinguished as one of/the first (?) traditional neighborhood developments (TND’s) to be built in the state of Delaware.Successfully beginning the second Phase of construction with well over ___ homes sold, a large number of families currently reside in the community and the Resident’s Club facility will commence construction in early 2007.

Parkside and its builders invite everyone to their community where new and unwrapped toys can be dropped off in any of their six model homes every day from 11 – 5 pm.The Marine Corp Reserve will pick up all donated toys on Saturday December 16^th from noon to 3 pm.

More

Parkside and Toys for Tots, add one

To get to the community, take I-95 to Route 1 South (Exit 4).Follow to Route 299 West (Middletown/Odessa) headed toward Middletown.At first traffic light turn right on Brick Mill Road.Follow to dead end and turn left onto Marl Pit Road to Parkside on the left.Follow the signs to the models throughout the community.

Rising affordability, low mortgage rates and other suggesting stabilizing conditions in the nation’s single-family housing market boosted home builder confidence in November as it edged up for the second consecutive month, according to the National Association of Home Builders/Wells Fargo Housing Market Index (HMI), released today. The HMI gained two points from the previous month to stand at 33.

“More and more builders are seeing light at the end of the tunnel,” said NAHB President David Pressly. “Our members are telling us that the market is steadying after a significant downward correction. On the demand side, we look for sales to stabilize and gradually move up in the coming months.”

“With home prices leveling off, mortgage interest rates remaining near historic lows, energy prices declining and the economy continuing to generate solid growth in employment and household income, affordability is now on the mend and many consumers recognize that home buying conditions have improved,” said NAHB Chief Economist David Seiders. “Builders are picking up on this change in market momentum.”

Derived from a monthly survey that NAHB has conducted for almost 20 years, the index gauges builders’ perceptions of current single-family home sales, sales expectations for the next six months and traffic from prospective buyers. The scores for each component are then used to calculate a seasonally adjusted index where any number over 50 indicates that more builders view sales conditions as good than poor.

All three component indexes moved higher in November. Current single-family homes sales registered a 33 on this month’s index, one point higher than the September reading; expected sales rose four points for the second consecutive month to 46; and traffic was up three points to 26.

“Looking ahead, builder outlook is perking up,” said Pressly. “With builders continuing to offer significant sales incentives and affordability on the rise, home shoppers have greater opportunities today than they have had for several years, making this an opportune time to buy.”

Regionally, the HMI rose two points to 37 in the Northeast and two points to 40 in the South. Builder confidence edged down two points to 16 in the Midwest and one point to 34 in the West.

Eye on the Economy: Long-Term Interest Rates to Remain Favorable

Growth of U.S. economic output (real Gross Domestic Product) slowed down further in the third quarter as the housing production component (Residential Fixed Investment) subtracted more than a percentage point from the overall GDP growth rate.

Further below-trend GDP growth is in the cards for the fourth quarter of the year, due largely to another sizeable negative contribution from RFI. But the drag from housing should ease off early next year and the economy should easily avoid recession in 2007.

The Job Market Is Doing Remarkably Well

Despite preliminary indications of relatively weak payroll job growth for last month, including further slippage of the residential construction component, the October employment report was fundamentally strong.

The report included large upward revisions to payroll employment growth in both August and September, maintenance of strong growth in average hourly earnings, and strong growth in both the labor force and household employment — along with a decline in the unemployment rate to a new cyclical low in October (4.4%).

The Mix of GDP Growth and Labor Conditions Has Inflationary Implications

The combination of slowing GDP growth, solid job growth, shrinking slack in labor markets and upward momentum in average hourly earnings has sobering implications for both labor productivity (output per hour) and unit labor costs (labor cost per unit of output). Indeed, slowing productivity growth and rising unit labor costs are already in evidence, and continuation of those patterns would have downside implications for business profit margins and upside risks for inflation in the U.S. economy.

Core consumer price inflation (excluding food and energy prices) still is running above the upper bounds of the Federal Reserve’s implicit tolerance ranges, largely because of the influence of the government’s imputation for “homeowners’ equivalent rent.”

It’s still reasonable to expect core inflation to recede as the below-trend economic expansion proceeds and upward pressures on market rents abate, although that picture has been clouded by the recent slowdown in productivity growth and the renewed upward pressure on unit labor costs.

The Fed Remains Friendly Despite Current Inflation Issues

The Federal Reserve held monetary policy steady at the Oct. 24-25 meeting of the Federal Open Market Committee (FOMC), stressing the importance of a “cooling” housing market in the current slowdown of economic growth and projecting moderation of core inflation from recent “elevated” levels.

The Fed is likely to hold policy steady into 2007 despite the recent troubling news on productivity growth and unit labor costs, and we’re still expecting a bit of monetary easing around the middle of next year.

Long-Term Interest Rates Figure to Remain Quite Favorable

The employment report for October (released Nov. 3) provoked immediate increases in long-term interest rates as inflation expectations in financial markets were marked up and prospects for near-term Fed easing were marked down.

Even so, long rates remain well below their midyear highs, and the outlook for Treasury bond and long-term mortgage rates remains quite favorable in the context of our projections for real economic growth, core inflation and Fed policy.

Our forecast currently shows less than a quarter-point increase in long-term rates over the coming year.

Stabilization of Home Buyer Demand Should Occur Soon

Home sales still appear to be slowing from the unsustainable levels recorded in 2005, and sales cancellations still are a major issue. However, affordability conditions have improved a bit in recent months and forward-looking indicators — including NAHB’s monthly surveys of single-family builders and the Mortgage Bankers Association’s weekly surveys of home mortgage lenders — suggest that home buyer demand is likely to stabilize in the near future.

Indeed, a number of key economic and housing market developments now are underpinning housing demand, and many home sellers (particularly home builders) are trimming prices and offering a plethora of non-price sales incentives to bolster sales and limit cancellations.

Inventory Overhangs Should Delay Turnarounds in Housing Production

The inventories of unsold single-family homes and condo units have edged down a bit from recent records, but inventory levels and inventory-to-sales ratios still are quite high. Furthermore, inventory overhangs undoubtedly are larger than shown by published data, and vacant units now account for an unusually large share of homes for sale — accentuating the seriousness of the inventory situation.

The weight of the inventory situation is likely to exert downward pressure on housing production and home price appreciation for at least a few more quarters.

NAHB’s housing forecast shows a trough in home sales in the first quarter of 2007, a trough in housing starts in the second quarter and a bottoming-out of home price appreciation in the second half of 2007.

The projected recovery process lifts sales and production back up toward trend by the end of 2008, and national house price appreciation will be comfortably in the positive zone by then.

The Current Housing ‘Correction’ Is Not a Classic Cyclical Downswing

The recent and projected housing “correction” is roughly half as long and deep as the housing downswing that accompanied the 1990-1991 economic recession ― largely because the overall economic and financial market environment is likely to remain relatively positive as this housing downswing plays out.

This housing correction has been a relatively isolated sectoral event provoked by earlier excesses within the housing and housing finance sectors — including a wave of “exotic” ARM lending and a massive influx of investors/speculators that drove home sales and home prices to unsustainable heights and decimated affordability conditions in many areas.

The November Elections Have Limited Implications for Housing and the Economy

The outcome of the Nov. 7 Congressional elections should not have major implications for the economy or the housing market in 2007-2008.

The independent Federal Reserve will hold the major economic policy lever during that period, Democratic majorities are razor thin in both houses of Congress, and the White House will be able to effectively exercise veto power.

Major decisions on things like Social Security and tax reform certainly will not occur prior to the 2008 elections, and the Democratic Congress is likely to devote much of 2007-2008 to positioning the party for the 2008 campaign.

This presumably will include bringing popular bills that Republicans traditionally have opposed to the House floor and daring the Republicans to vote against them. Comprehensive immigration reform could fall into this category.

NAHB Chief Economist David Seiders analyzes the economy from the point of view of the housing market every other week in the free e-newsletter, “Eye on the Economy.” The preceding is a reissue of his Nov. 15 edition. To subscribe to “Eye on the Economy,” click here.