Clark's e-news: Trends

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Samantha Clark, Associate Broker                                     Real Estate Services

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Looking for something different to do? New Mexico State Parks offer “Park Stories” around the state in designated “Heritage Parks.” Other events at New Mexico state parks in November include night sky viewing, kids fishing clinic, an ancient beach hike and birding. Most events are free or low cost.

Luxury Homebuilding Returning?

Reports Portfolio.com, in a sign that the luxury homebuilding market, at least, is on its way back, Toll Brothers Inc. received a rush of new business in its latest quarter. Horsham, Pennsylvania-based Toll Brothers said in a preliminary announcement of its fiscal 2009 fourth-quarter results that net signed contracts jumped 42 percent to approximately 765 units compared to fiscal 2008’s fourth quarter. Toll Brothers said the dollar value of contracts was 62 percent higher in the quarter ended October 31, than the prior year's quarter, and that the latest quarter’s totals exceeded fiscal year 2007's fourth-quarter results. Of course, comparing results to last year is comparing them to the deepest portion of the finan­cial crisis, when the entire economy seemed to seize. But the improvement over 2007 is a heart­ening sign. “The surprise was more on the upside,” David Goldberg, an analyst with UBS Securities LLC in New York told Bloomberg. “They did better than we thought.” "We have definitely progressed from one year ago,” said Toll Brothers CEO Robert Toll. “The shock to the financial system in mid-September 2008 that shut down the capital markets appears to be mostly behind us. The improvement in consumer confidence over the past year, the in­creasing stabilization of home prices, the decline in unsold home inventories, and the reduction in buyer cancellation rates suggest that the new-home market should be improving; we sense that it is, though slowly and through choppy waters." Across the broader U.S. housing market, the picture remains grim, though somewhat less grim than in previous months, according to a Zillow.com report released earlier this month. Home values declined for the 11th straight quarter, the Internet real estate company said. Values fell 6.9 percent to $190,400. But the extension of the home tax credit recently could bolster sales in the next few months, said Zillow chief economist Stan Humphries. "The next several months will be critical to the housing market. Previously, we'd been expecting to see increasing foreclosure rates during the real estate market's slow winter season, a conflu­ence of events that would likely drive inventory up and prices down. But now, with the extension of the $8,000 first-time homebuyer tax credit and a new $6,500 credit for some repeat homebuy­ers, we could see a bump in demand that could partially offset the increased supply of foreclosed homes on the market," he said.

Commercial

Asks the NY Times—Is the pending commercial real estate crisis everyone seems to be afraid of nothing but a myth? Sam Zell thinks so. Mr. Zell, the billionaire real estate investor who has been maligned for his bad bet on the Trib­une Company, told a roomful of investors this week that fear of defaults in the commercial real estate market has been “greatly exaggerated,” according Crain’s Chicago Business. “Everyone is waiting for the grave dancer to come and exercise his magic potion,” Mr. Zell said at the Invest For Kids charity event in downtown Chicago, according to Crain’s. “But you need two to tango.” Owners of commercial and residential buildings have no incentive to sell and will likely be able to fill their vacancies by 2011 or 2012, albeit at rates 30 percent below their peaks, he said. While less optimistic, the CoStar Group remarks that if landlords across the country can make it through the coming layoff season, (November - January), they may begin to see some stabiliza­tion in demand from commercial tenants for space. Looking out 12 to 24 months, business own­ers say they expect their companies to emerge from the recession well positioned for growth over the next two years, according to a crop of employment outlook reports issued this week Comments Daily Finance, what's most striking about the commercial real estate market is how quiet it is. "It's like a storm is brewing and it has everyone standing on the sidelines," says Bob Spratt, president of commercial real estate firm Hill Partners Inc. And that near silence is expected to continue until 2010, when the market will likely reach its bottom, with values declining 40% to 50% off 2007 market peaks, according to the Emerging Trends in Real Estate 2010 Report recently released by PricewaterhouseCoopers LLP and the Urban Land Institute.

Contact Samantha Clark at samantha.clark@coldwellbankerlegacy.com  or 505.401.1561

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