Homebuilder & Industry News

In the last several years real estate values have plummeted nationwide. The most recent Case-Shiller 20-city index noted the average home prices in America’s 20 largest metropolitan areas have now fallen double digits since peaking in 2006. Places like Phoenix, Las Vegas, Miami, San Francisco, San Diego and Tampa have fared the worst. Since 2006, average real estate prices have fallen 40 to 50 percent in these hardest hit markets.

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In recent decades the number of age-restricted communities around the country has skyrocketed. From an industry that didn’t exist in the 1960’s, the number of age-restricted communities across the U.S. morphed into an industry that now stretches into the thousands. Commonly referred to as active adult communities, 55+ communities or active retirement communities, the number of these communities is expected to increase as their popularity among older adults grows and as more Baby Boomers reach retirement age.

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Last week, Del Webb announced the cancellation of the proposed Carolina Ridge at Ingleside in Denver, NC. The recent downturn in the economy, the depressed real estate market and Del Webb’s inability to reach an agreement with Lincoln County officials on sewer tap fees all led to their decision to abandon the project.

The news was disappointing to a number of people who had expressed strong interest in Del Webb’s newest planned community. Despite the disappointment, the news does not come as a surprise based on the years of difficult negotiations between the builder and county officials about the increased sewer tap fees from $5,000 to $10,000. At the time Del Webb contracted the land, Lincoln County was charging $5,000 for sewer tap fees but has since raised their fee to $10,000. Del Webb argued that they should be allowed to tap the sewers at the lower amount that was in place at the time they contracted the property. County officials maintain that since Del Webb never prepaid for the lower fee, it would not grant their request.

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The Wall Street Journal recently reported that as a growing number of 55 years old and older age-restricted communities find their inventory of unsold homes increasing, a trend is emerging that was once considered unthinkable in age-restricted communities: lowering or even dropping the age limit. Active adult communities have seen a tremendous growth in recent years as the popularity of these communities continues to spread among the retiring Baby Boomer generation. In this depressed real estate market, a number of 55+ communities have sought new ways to sell their unsold properties and, for some, that means lowering or abandoning the age limit to attract a broader market

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The Las Vegas Review-Journal recently reported that declining home prices have some investors looking for bargains. As prices have dropped 25 percent in the last year and foreclosed properties have flooded the market, a growing, new breed of investors are hitting the streets trying to snatch up deals. Many of these new waves of investors are people from other countries looking to take advantage of the weak dollar. The mentality among these investors seems to be that there is a growing sense of urgency to buy while prices are low.

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In a surprising twist to the battered stock market of 2008, an unlikely star has risen. Through the middle of February, shares of the S&P Homebuilders Sector Spider (XHB)(the fund that tracks publicly traded companies in the residential construction business), have already risen 7 percent this year. The gain comes as a surprise to many given the state of the housing industry along with the 7 percent decline in the S&P 500 this year.

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