Youthful spirit and economic vitality go hand in hand. Communities with large concentrations of young adults are more likely to prosper, according to a new bizjournals study. The correlation is driven home by the study's comparison of metropolitan areas that skew young or old.
Group No. 1 consists of the 11 major markets where more than 25 percent of all residents are 18 to 34 years old. Group No. 2 contains 14 metros where fewer than 22 percent are young adults. Here's how they match up:
-- The young markets have been experiencing population growth of 2.1 percent per year since 2000. That's seven times the growth rate of 0.3 percent for the old markets.
-- The annual rate of job growth is 1.9 percent in the young metros compared to 0.4 percent in their older counterparts.
-- Personal income is climbing at a median pace of 3.4 percent per year in the young markets. The corresponding figure is 2.8 percent on the old side.
It's clear that having a high percentage of young adults can be an indicator of economic success. It tells marketers where to concentrate their efforts, entrepreneurs where to start businesses, and college graduates where to look for work.
But which markets offer the best prospects for people in the 18-34 age range these days? Bizjournals sought the answer by analyzing growth patterns, income levels and other key statistics to rank the nation's 67 largest metros as BEST PLACES FOR YOUNG ADULTS. These are the five places currently offering the best job opportunities for young adults:
-- 1. Raleigh: This is the only market to finish in the top 10 in three key categories: population growth, job growth, and the percentage of young adults with college degrees. Raleigh is also blessed with a relatively low cost of living.
-- 2. Austin: Twenty-nine percent of Austin's residents are between the ages of 18 and 34. That's the heaviest concentration of young adults in any major metro.
-- 3. Washington: The District of Columbia can be an expensive place to live, but paychecks for workers in their 20s and 30s are among the highest in the nation.
-- 4. Las Vegas: The economy has slowed in Las Vegas in recent months, yet it remains the national leader in job growth since 2002, averaging 4.9 percent per year.
-- 5. Phoenix: The unemployment rate for 18- to 34-year-olds in Phoenix is 5.4 percent. That's three full percentage points below the U.S. average for the same age group.
Rounding out the TOP TEN in bizjournals' rankings of employment prospects for young adults are Salt Lake City, Charlotte, Seattle, Orlando and Houston. Bizjournals analyzed 67 major metropolitan areas, searching for qualities that would appeal to workers in their 20s and early 30s. THE FORMULA gave the highest marks to places with strong growth rates, moderate costs of living, and substantial pools of young college-educated adults with jobs.
The Sunbelt dominates the upper echelon in the national rankings. Eight of the 20 best markets for young adults are in the South, and seven are in the West.
Four of the five remaining slots are occupied by Eastern communities, while Minneapolis-St. Paul is the only Midwestern metro to make the top 20. The competition to attract new and recent graduates to these labor markets is intensifying, partly because young adults are getter choosier. "College-educated young people are looking for greater control over where they live," concluded a 2006 study by The Segmentation Co., a national research firm that surveyed 1,000 adults between the ages of 25 and 34. All of these respondents held college degrees and had lived in at least two communities since leaving school.
Quality-of-life issues are of prime importance to these mobile young workers. They told The Segmentation Co. that they're looking for places that offer strong professional opportunities, have good schools, and are affordable and clean. The same factors were important components of bizjournals' 10-part formula, which analyzed each market's job-growth rate, education levels, and median rents, among other indicators.
The least desirable market for young adults, according to bizjournals, is New Orleans, sitting dead last in 67th place. New Orleans, which is still struggling to recover from the damage inflicted by Hurricanes Katrina and Rita in 2005, has the worst long-term rates of job and population growth in the study.
Wednesday, June 25, 2008
Friday, May 30, 2008
New Raleigh Condos at Palladium Plaza
Progress Energy's newest tower shot up from Davie Street with all the hoopla one might expect for a city that was starving for new life back in 2004. You couldn't miss it.
But its prominence obscures a building that quietly slipped in behind it: Palladium Plaza. The condominium project's little-noticed arrival at the southwest corner of Davie and Blount streets reflects how comfortably its design fits into the city's landscape.
Even six months after construction finished, Progress employees -- who work in the tower next door -- ask how long Palladium has been there, according to project managers working onsite. Other observers ask what the building was before it was condos, only to be surprised by the answer: a few small buildings, which were demolished. If you are considering a new home, condo, or townhome in the greater Raleigh market; it pays to work with an expert buyers agent and Raleigh realtor.
But behind the new building's quiet presence are several distinguishing characteristics that speak volumes about the direction of downtown.
WHAT IT IS: Palladium Plaza stands five stories on a narrow acre. It includes 66 loft-style condominiums, three street-level retail spaces and outdoor common areas. It has a small parking deck and shares additional parking with Progress Energy in another deck. Units range from 690 to 2,100 square feet in several layouts. Prices have ranged from $150,000 to the high $400,000s.
WHO LIVES THERE: There are many first-time homeowners. Single men and women and young couples make up the majority.
HOW IT FITS: White Oak President Roland Gammon calls the project "edgy," which is an apt description on a couple of levels: Palladium is on the southeastern edge of the center-city's renewal, and its interior -- with exposed pipes and concrete walls, high ceilings, big windows and stainless steel fixtures -- offers a fresh, urban feel.
The narrow tract upon which Palladium was built didn't allow for much definition in the face of the building. But hunter-green trim, concrete-and-iron balconies, exterior light fixtures and shadows cast from trees that line the walkway add visual depth.
The project is among several recent changes on a six-block cluster southeast of the intersection of Fayetteville and Martin streets.
Palladium is on the lot east of the new Progress Energy tower.
On the block across Davie Street, Cary developer Hamilton Merritt and Cherokee Investment Partners of Raleigh want to build a pair of towers including an eco-friendly mix of shops, offices, hotel rooms and residences. The project, called Edison, would surround a 1,250-space parking deck being built on the block.
To the northwest, Highwoods Properties is finishing RBC Plaza, the Triangle's tallest tower.
To the northeast, 96-year-old City Market is poised for upgrades.
WHAT IT ADDS: Palladium includes several live-work spaces on the street level. The building's homeowner agreement allows for such units that can double as public business space and residences.
HOW IT IS DOING: Despite slowing home sales across the region, Palladium has fared well. At least 16 units have yet to sell. And prices are holding up. The last 10 Raleigh Condo units sold went for $224 per square foot, up 2.3 percent from the first 10 units sold. Three townhome and condo units have been re-sold at an average increase of 9.5 percent. In other North Carolina markets, such as Charlotte, Willimington, and Wake Forest Condominiums have been moving at above market prices. Glenmore Garden Villas has Charlotte condos and new townhomes that are priced from the low 400's.
Palladium's closest new-condo rival, The Hudson at 319 Fayetteville St., started closing sales in early 2006. The last 10 units to sell there sold for an average of $223 per square foot, which is 7.9 percent less than the first 10 units. There are still at least 10 unsold Hudson units.
Palladium has benefited from timing: It was finished long enough after competitors such as the Dawson on Morgan were mostly sold out, but long before competitors such as 222 Glenwood, Hue and West on North are scheduled to be complete.
But sales have slowed since closings began a year ago. Only three Palladium condo units have sold this year, property records show. Condos in Raleigh typically move slower than homes. Home sales in the Triangle are hotter than nearly any other market in America. Raleigh is not being hit with foreclosures and home walk-aways as much as markets like Phoenix, Las Vegas, Orange County, Calif., Detroit, and most of America. Real estate and home sales across the state of North Carolina including Winston Salem homes and Cary homes, Apex homes, Clayton homes, and Durham homes are all pacing ahead of last year.
But its prominence obscures a building that quietly slipped in behind it: Palladium Plaza. The condominium project's little-noticed arrival at the southwest corner of Davie and Blount streets reflects how comfortably its design fits into the city's landscape.
Even six months after construction finished, Progress employees -- who work in the tower next door -- ask how long Palladium has been there, according to project managers working onsite. Other observers ask what the building was before it was condos, only to be surprised by the answer: a few small buildings, which were demolished. If you are considering a new home, condo, or townhome in the greater Raleigh market; it pays to work with an expert buyers agent and Raleigh realtor.
But behind the new building's quiet presence are several distinguishing characteristics that speak volumes about the direction of downtown.
WHAT IT IS: Palladium Plaza stands five stories on a narrow acre. It includes 66 loft-style condominiums, three street-level retail spaces and outdoor common areas. It has a small parking deck and shares additional parking with Progress Energy in another deck. Units range from 690 to 2,100 square feet in several layouts. Prices have ranged from $150,000 to the high $400,000s.
WHO LIVES THERE: There are many first-time homeowners. Single men and women and young couples make up the majority.
HOW IT FITS: White Oak President Roland Gammon calls the project "edgy," which is an apt description on a couple of levels: Palladium is on the southeastern edge of the center-city's renewal, and its interior -- with exposed pipes and concrete walls, high ceilings, big windows and stainless steel fixtures -- offers a fresh, urban feel.
The narrow tract upon which Palladium was built didn't allow for much definition in the face of the building. But hunter-green trim, concrete-and-iron balconies, exterior light fixtures and shadows cast from trees that line the walkway add visual depth.
The project is among several recent changes on a six-block cluster southeast of the intersection of Fayetteville and Martin streets.
Palladium is on the lot east of the new Progress Energy tower.
On the block across Davie Street, Cary developer Hamilton Merritt and Cherokee Investment Partners of Raleigh want to build a pair of towers including an eco-friendly mix of shops, offices, hotel rooms and residences. The project, called Edison, would surround a 1,250-space parking deck being built on the block.
To the northwest, Highwoods Properties is finishing RBC Plaza, the Triangle's tallest tower.
To the northeast, 96-year-old City Market is poised for upgrades.
WHAT IT ADDS: Palladium includes several live-work spaces on the street level. The building's homeowner agreement allows for such units that can double as public business space and residences.
HOW IT IS DOING: Despite slowing home sales across the region, Palladium has fared well. At least 16 units have yet to sell. And prices are holding up. The last 10 Raleigh Condo units sold went for $224 per square foot, up 2.3 percent from the first 10 units sold. Three townhome and condo units have been re-sold at an average increase of 9.5 percent. In other North Carolina markets, such as Charlotte, Willimington, and Wake Forest Condominiums have been moving at above market prices. Glenmore Garden Villas has Charlotte condos and new townhomes that are priced from the low 400's.
Palladium's closest new-condo rival, The Hudson at 319 Fayetteville St., started closing sales in early 2006. The last 10 units to sell there sold for an average of $223 per square foot, which is 7.9 percent less than the first 10 units. There are still at least 10 unsold Hudson units.
Palladium has benefited from timing: It was finished long enough after competitors such as the Dawson on Morgan were mostly sold out, but long before competitors such as 222 Glenwood, Hue and West on North are scheduled to be complete.
But sales have slowed since closings began a year ago. Only three Palladium condo units have sold this year, property records show. Condos in Raleigh typically move slower than homes. Home sales in the Triangle are hotter than nearly any other market in America. Raleigh is not being hit with foreclosures and home walk-aways as much as markets like Phoenix, Las Vegas, Orange County, Calif., Detroit, and most of America. Real estate and home sales across the state of North Carolina including Winston Salem homes and Cary homes, Apex homes, Clayton homes, and Durham homes are all pacing ahead of last year.
Tuesday, May 27, 2008
Local home prices rise 5%
Housing prices in the Raleigh area rose by nearly 5 percent in the last 12 months, according to new federal data.
The numbers come from the Office of Federal Housing Enterprise Oversight, the group that oversees the government-backed mortgage buyers Fannie Mae and Freddie Mac. Across the country, OFHEO says, prices were flat over the past 12 months.
OFHEO's numbers put Raleigh 30th among the hundreds of metropolitan statistical areas in the country for home price increases.
But the increases come at a time when sales themselves are flat, with buyers waiting for the market to hit bottom. Triangle home sales dropped by 24 percent in April, the Triangle Multiple Listing Service recently reported.
MLS also said that the sale price of an existing home fell 1.5 percent in April from a year earlier. MLS' data include nearly all home sales in the region, however, while OFHEO's figures only include mortgages that qualify to get bought by Fannie or Freddie. That excludes most "subprime" mortgages to borrowers with poor credit - by far the worst part of the market.
OFHEO's numbers also include refinancings and home appraisals.
Home prices in the Durham area rose by 3.92 percent in the past 12 months, OFHEO says.
Across the state, prices in Charlotte increased by 6.16 percent. Asheville's home prices were up by 4.52 percent, Durham's by 3.92 percent, Winston-Salem's by 3.82 percent, Greensboro's by 2.76 percent and Wilmington's by 1.30 percent.
Triangle Business Journal; May 22, 2008
The numbers come from the Office of Federal Housing Enterprise Oversight, the group that oversees the government-backed mortgage buyers Fannie Mae and Freddie Mac. Across the country, OFHEO says, prices were flat over the past 12 months.
OFHEO's numbers put Raleigh 30th among the hundreds of metropolitan statistical areas in the country for home price increases.
But the increases come at a time when sales themselves are flat, with buyers waiting for the market to hit bottom. Triangle home sales dropped by 24 percent in April, the Triangle Multiple Listing Service recently reported.
MLS also said that the sale price of an existing home fell 1.5 percent in April from a year earlier. MLS' data include nearly all home sales in the region, however, while OFHEO's figures only include mortgages that qualify to get bought by Fannie or Freddie. That excludes most "subprime" mortgages to borrowers with poor credit - by far the worst part of the market.
OFHEO's numbers also include refinancings and home appraisals.
Home prices in the Durham area rose by 3.92 percent in the past 12 months, OFHEO says.
Across the state, prices in Charlotte increased by 6.16 percent. Asheville's home prices were up by 4.52 percent, Durham's by 3.92 percent, Winston-Salem's by 3.82 percent, Greensboro's by 2.76 percent and Wilmington's by 1.30 percent.
Triangle Business Journal; May 22, 2008
Thursday, May 22, 2008
Newsweek Names Local High Schools Among The Best
Raleigh Charter School and Enloe High School again rank among the top 75 on Newsweek magazine's list of the top public high schools in the country.
Raleigh Charter School ranks No. 27 and Enloe is at No. 72 on the list, which appears online at newsweek.com and features in the May 26 issue of the news magazine. A year ago, Raleigh Charter was No. 20, while Enloe was No. 56.
Newsweek's list ranks schools based on the number of college-level exams taken at a school in a given year. Specifically, the magazine looks at the number of Advanced Placement, International Baccalaureate and Cambridge exams taken by all students and divides that figure by the number of graduating seniors.
There were 5.238 college-level exams taken for every graduating student at Raleigh Charter in 2007, the list says. The figure was 3.979 at Enloe.
Newsweek's list is controversial. Parents and school administrations who don't like the list say that measuring college-level exams gives an incomplete picture of school quality.
Jay Mathews, the Washington Post staff writer who puts together the report, agrees that it's not perfect. But, he said in a recent Post article, the list "captures, in a way other school statistics do not, a different attitude about students in the schools that make the list. Those schools turn out to have principals and teachers who are trying hardest to raise the achievement of each child, with college as a useful goal for all until students are old enough to decide what they want to do."
This year's Newsweek list, which features data from 2007, ranks the more than 1,300 public high schools across the country with an exam-to-student ratio of more than 1.
Other Triangle schools to make the list were:
* East Chapel Hill High, No. 145;
* Chapel Hill High, No. 237;
* Pinecrest High in Southern Pines, No. 292;
* Jordan High in Durham, No. 299;
* Durham School of the Arts, No. 305;
* Needham Broughton High in Raleigh, No. 443;
* Green Hope High in Morrisville, No. 594;
* and Wakefield High in Raleigh, No. 1163.
Triangle Business Journal; May 19, 2008
Raleigh Charter School ranks No. 27 and Enloe is at No. 72 on the list, which appears online at newsweek.com and features in the May 26 issue of the news magazine. A year ago, Raleigh Charter was No. 20, while Enloe was No. 56.
Newsweek's list ranks schools based on the number of college-level exams taken at a school in a given year. Specifically, the magazine looks at the number of Advanced Placement, International Baccalaureate and Cambridge exams taken by all students and divides that figure by the number of graduating seniors.
There were 5.238 college-level exams taken for every graduating student at Raleigh Charter in 2007, the list says. The figure was 3.979 at Enloe.
Newsweek's list is controversial. Parents and school administrations who don't like the list say that measuring college-level exams gives an incomplete picture of school quality.
Jay Mathews, the Washington Post staff writer who puts together the report, agrees that it's not perfect. But, he said in a recent Post article, the list "captures, in a way other school statistics do not, a different attitude about students in the schools that make the list. Those schools turn out to have principals and teachers who are trying hardest to raise the achievement of each child, with college as a useful goal for all until students are old enough to decide what they want to do."
This year's Newsweek list, which features data from 2007, ranks the more than 1,300 public high schools across the country with an exam-to-student ratio of more than 1.
Other Triangle schools to make the list were:
* East Chapel Hill High, No. 145;
* Chapel Hill High, No. 237;
* Pinecrest High in Southern Pines, No. 292;
* Jordan High in Durham, No. 299;
* Durham School of the Arts, No. 305;
* Needham Broughton High in Raleigh, No. 443;
* Green Hope High in Morrisville, No. 594;
* and Wakefield High in Raleigh, No. 1163.
Triangle Business Journal; May 19, 2008
SAS forming subsidiary to help with homeland security
SAS is launching a subsidiary that will focus on providing data analysis tools to the federal government, especially the homeland security and intelligence agencies, the Cary software maker announced Monday.
The subsidiary, which is yet to be named, will be based in Cary and will be organized over the next several months, says SAS spokesman Trent Smith. More than 50 SAS employees will be allocated to the subsidiary, which will hire an -as-yet-to-be-determined number of additional employees with the security requirements needed to assist intelligence and homeland security efforts.
Tom Mazich, SAS' vice president of government operations, will head the new subsidiary, which will look to supply federal agencies involved in homeland defense with software that allows them to share information in real time, to analyze that information and to make better-informed decisions. Improved information sharing and analysis could have helped to prevent the terrorist attacks of Sept. 11, 2001.
"The events of 9/11 were a wake-up call: We need to do a better job of understanding potential threats to our country. There is so much data from so many different sources - human intelligence, 'open source', and even that gathered by technology - that is significant to safeguarding the United States," Mazich said in a news release. "The intelligence and homeland security communities must be able to make sense of all this data in a timely manner so they can make critical decisions. SAS technology will be a major contributor to helping the government fully understand its information."
While all 15 federal departments use SAS software, but the company believes a dedicated subsidiary will serve the market better.
SAS, which posted 2007 revenue of $2.15 billion, has 10,619 employees worldwide, 4,244 of them in Cary.
By: Jeff Drew
Triangle Business Journal; May 19, 2008
The subsidiary, which is yet to be named, will be based in Cary and will be organized over the next several months, says SAS spokesman Trent Smith. More than 50 SAS employees will be allocated to the subsidiary, which will hire an -as-yet-to-be-determined number of additional employees with the security requirements needed to assist intelligence and homeland security efforts.
Tom Mazich, SAS' vice president of government operations, will head the new subsidiary, which will look to supply federal agencies involved in homeland defense with software that allows them to share information in real time, to analyze that information and to make better-informed decisions. Improved information sharing and analysis could have helped to prevent the terrorist attacks of Sept. 11, 2001.
"The events of 9/11 were a wake-up call: We need to do a better job of understanding potential threats to our country. There is so much data from so many different sources - human intelligence, 'open source', and even that gathered by technology - that is significant to safeguarding the United States," Mazich said in a news release. "The intelligence and homeland security communities must be able to make sense of all this data in a timely manner so they can make critical decisions. SAS technology will be a major contributor to helping the government fully understand its information."
While all 15 federal departments use SAS software, but the company believes a dedicated subsidiary will serve the market better.
SAS, which posted 2007 revenue of $2.15 billion, has 10,619 employees worldwide, 4,244 of them in Cary.
By: Jeff Drew
Triangle Business Journal; May 19, 2008
Tuesday, May 20, 2008
Home-Price Decline Spreads
Number of Metro Areas Hit Reaches Three-Decade High; Toll Brothers Feels the Pinch
In the latest sign that the housing market is deflating at a record pace, the National Association of Realtors said prices declined in more metropolitan areas in the first quarter than at any time in the past three decades.
The trade group said median prices fell in about 100 metro areas -- the most since the trade group began keeping such records in 1979. It also said Tuesday that median home prices rose in 48 metro areas -- the lowest number on record. Nationally, the median home price fell to $196,300, down 7.7% from a year ago.
Lawrence Yun, the group's economist, said the sales-price data are being distorted by foreclosed homes and other distressed sales, which are fueling price drops in certain neighborhoods, while the lack of available so-called jumbo mortgages for high-priced homes has resulted in fewer sales in upscale neighborhoods. The upshot is that the median price for a metro area may be falling, but the prices may very sharply "neighborhood by neighborhood," Mr. Yun said.
Still, high-end homes are clearly under some price pressure. Luxury builder Toll Brothers Inc., which reported preliminary second-quarter results on Tuesday, said its average home price dropped 17% to $590,000 from a year earlier and was down 7% from the previous quarter, partly because of increased incentives. Toll says it is offering most incentives on homes that were built for buyers who ultimately backed out of their contracts. The builder also said its average price was lower because it sold fewer homes in high-price markets such as California and Manhattan.
Toll says one of the biggest problems is that many buyers are putting down deposits but end up canceling because they fear they won't be able to sell their existing home. "They go to their friends and neighbors and say, 'We just bought a new home,' and everybody says 'What? Are you crazy? Prices are dropping,'" Chief Executive Robert Toll told analysts during a conference call.
There were some glimpses of improvement. The median price of existing single-family homes rose 3.2% to $280,000 in the Northeast in the first quarter, the NAR said. Mr. Toll reported a mixed bag in the Northeast, calling Putnam and Duchess counties in New York state and the state of Connecticut "B-plus" markets, while Massachusetts was a "D-minus" market.
Home prices fell 12.3% to $296,300 in the West and dropped 7.5% to $164,200 in the South. Yet Toll recently raised prices in a development in Naples, Fla., which had been one of the worst housing markets in the nation. "It gave us some happy times, especially considering that Naples was one of the worse markets," Mr. Toll said during the conference call.
Across most markets, however, Toll described the spring selling season as "quite weak," as buyers remained on the sidelines, despite improving housing affordability.
Toll's home-building revenue in the quarter ended April 30 fell 30% from the year-earlier period to $817.9 million. Net contracts for new homes fell 44% to 929 homes.
Analyst Ivy Zelman says even if Toll dropped its prices as much as other builders have, that might not generate many more sales in this high- end sector.
"Price is not the issue," Ms. Zelman said. "The problem is that many of Toll's buyers can't sell their existing homes. People are in a situation where they think 'I need to sell my house for $1 million and the best bid is $800,000.' They have negative equity, and they can't afford a down payment on a Toll Brother's home."
As home prices and sales decline, home builders have been writing down billions of dollars of land and inventory values on their books. Joel Rassman, the builder's chief financial officer, estimated second-quarter impairments would be in the range of $225 million to $375 million.
On the bright side, Toll reported about $1.2 billion in cash, which is expected to help the builder weather the downturn while credit tightens to buy land and pay for construction. Toll will release final second-quarter results June 3.
By: Michael Corkery
Wall Street Journal; May 14, 2008
In the latest sign that the housing market is deflating at a record pace, the National Association of Realtors said prices declined in more metropolitan areas in the first quarter than at any time in the past three decades.
The trade group said median prices fell in about 100 metro areas -- the most since the trade group began keeping such records in 1979. It also said Tuesday that median home prices rose in 48 metro areas -- the lowest number on record. Nationally, the median home price fell to $196,300, down 7.7% from a year ago.
Lawrence Yun, the group's economist, said the sales-price data are being distorted by foreclosed homes and other distressed sales, which are fueling price drops in certain neighborhoods, while the lack of available so-called jumbo mortgages for high-priced homes has resulted in fewer sales in upscale neighborhoods. The upshot is that the median price for a metro area may be falling, but the prices may very sharply "neighborhood by neighborhood," Mr. Yun said.
Still, high-end homes are clearly under some price pressure. Luxury builder Toll Brothers Inc., which reported preliminary second-quarter results on Tuesday, said its average home price dropped 17% to $590,000 from a year earlier and was down 7% from the previous quarter, partly because of increased incentives. Toll says it is offering most incentives on homes that were built for buyers who ultimately backed out of their contracts. The builder also said its average price was lower because it sold fewer homes in high-price markets such as California and Manhattan.
Toll says one of the biggest problems is that many buyers are putting down deposits but end up canceling because they fear they won't be able to sell their existing home. "They go to their friends and neighbors and say, 'We just bought a new home,' and everybody says 'What? Are you crazy? Prices are dropping,'" Chief Executive Robert Toll told analysts during a conference call.
There were some glimpses of improvement. The median price of existing single-family homes rose 3.2% to $280,000 in the Northeast in the first quarter, the NAR said. Mr. Toll reported a mixed bag in the Northeast, calling Putnam and Duchess counties in New York state and the state of Connecticut "B-plus" markets, while Massachusetts was a "D-minus" market.
Home prices fell 12.3% to $296,300 in the West and dropped 7.5% to $164,200 in the South. Yet Toll recently raised prices in a development in Naples, Fla., which had been one of the worst housing markets in the nation. "It gave us some happy times, especially considering that Naples was one of the worse markets," Mr. Toll said during the conference call.
Across most markets, however, Toll described the spring selling season as "quite weak," as buyers remained on the sidelines, despite improving housing affordability.
Toll's home-building revenue in the quarter ended April 30 fell 30% from the year-earlier period to $817.9 million. Net contracts for new homes fell 44% to 929 homes.
Analyst Ivy Zelman says even if Toll dropped its prices as much as other builders have, that might not generate many more sales in this high- end sector.
"Price is not the issue," Ms. Zelman said. "The problem is that many of Toll's buyers can't sell their existing homes. People are in a situation where they think 'I need to sell my house for $1 million and the best bid is $800,000.' They have negative equity, and they can't afford a down payment on a Toll Brother's home."
As home prices and sales decline, home builders have been writing down billions of dollars of land and inventory values on their books. Joel Rassman, the builder's chief financial officer, estimated second-quarter impairments would be in the range of $225 million to $375 million.
On the bright side, Toll reported about $1.2 billion in cash, which is expected to help the builder weather the downturn while credit tightens to buy land and pay for construction. Toll will release final second-quarter results June 3.
By: Michael Corkery
Wall Street Journal; May 14, 2008
Monday, April 28, 2008
Second-Home Buyers Go Condo
Vacation Houses Lose Out In a Weak Market; Coping With Pool Rules
The second-home market is in a slump. But one type of vacation property is still showing signs of life: condos (see Ballantyne Condos & Matthews Condos)
A new National Association of Realtors study estimates that sales of vacation homes in 2007 fell 31%, to 740,000, from 2006. But sales of condos dipped only slightly -- down 2.8% -- while sales of detached homes dropped 38%. The upshot is that condos cornered a substantially larger share of the vacation-home market last year: 29%, up from 21% in 2006.
Condos, including South Charlotte Condos, are selling better than single-family vacation houses for a number of reasons. They don't require their owners to maintain lawns, trim shrubs, paint the exteriors or replace roofs -- increasingly important concerns to an aging population. Condo communities also tend to offer amenities such as pools and clubhouses. And condos usually are cheaper to buy, and easier to resell, than houses.
Yet the prices of vacation condos haven't held up. Median prices fell almost 10% to $180,000 last year from the year before, while prices of single-family second homes remained flat, says the Realtor group. Part of that decline reflects the general downturn in the housing market, but the price pressure on condos also comes from investors who bought units in resort markets during the real-estate boom and now are trying to get rid of them. While the price-cutting is bad news for existing condo owners, it can make the units seem like relative bargains to buyers compared to houses.
Tod Phelps and his wife, Shelly, are among the second-home buyers attracted to condos. The couple since 2001 have owned a three-bedroom house on Beech Mountain, N.C., a 2½-hour drive from their primary home in Greensboro, N.C. But Mr. Phelps, an information-technology executive, says he is tired of spending weekends cleaning gutters and painting doors, and paying at least $3,000 a year to have people mow the lawn, weed flowerbeds and plow the drive in winter. "I didn't expect it to be as much trouble as it was," he says. Now the couple plan to sell the house and replace it with a "ski-in, ski-out" condo in the same community.
Condos are also making inroads in vacation spots where they've rarely been seen before, including beach villages along Lake Michigan. Some of these are attracting a new type of buyer used to an urban environment. Mary Morrissey, a government policy consultant in Chicago, and her husband recently bought a $350,000, two-bedroom loft at the Vineyards, a converted winery in Harbert, Mich. It features such downtown design elements as concrete fireplaces and window seats, exposed ductwork and soaring ceilings. The unit is much more open, light and fun than the usual cramped cottages found in the area, Ms. Morrissey says, and the contemporary style was the main reason they were attracted to it. "We never even thought about buying a single-family home," she says.
And in some places, such as Hawaii, prices have risen so high in recent years that condos are the only viable choice for many buyers. Maui broker Georgina Hunter says $1 million buys a two-bedroom condo in a resort with golf, pool and fitness center, but isn't enough for a single-family home. Since acquisition costs are so high, many buyers look to rent out their places when they're not vacationing there. Here condos also have the edge: Local zoning allows most condos to be rented for a short period, while most houses must be rented for at least 180 days. "You just get more bang for your buck," Ms. Hunter says.
But condos aren't popular in every second-home area. In New York's Hamptons, people prefer detached houses because they offer a yard, extra rooms and privacy -- "exactly what New Yorkers often lack in their primary residences," says Rick Hoffman, East End Regional vice president for the Corcoran Group brokers.
Condo living also can require an attitude adjustment as owners contend with close-by neighbors and live under a condo association's rules. Wayne Zawila, an Orlando, Fla., futures trader, paid $619,000 a little over a year ago for a three-bedroom weekend getaway in Daytona Beach, Fla. He thought the fourth-floor condo would be more secure and easier to manage than the Galena, Ill., lakefront house he used to own, which he once drove to at 3 a.m. because he was worried the pipes had frozen. But though condo life can be more carefree, at least when it comes to security and exterior maintenance, it's not rules-free. Mr. Zawila sometimes chafes under communal regulations he's never had to deal with before, like the one that bans him from smoking cigars while lounging in the pool. "It drives me nuts," he says.
Because many affluent second-home buyers like the common ownership and upkeep of exterior elements but still want a detached house, some builders are combining them in "condo homes." That setup attracted Sue Anne Davidson-Kalkus, a retired antiques dealer in Rome, Ga., and her husband, Tony, a retired Army colonel, who were married last year. A few months ago they listed her four-bedroom vacation retreat on 10 acres on Lookout Mountain, Ga., for $1 million and started searching for an easy-care vacation condo in the $600,000 range in New England, nearer to Mr. Kalkus's grown children. But after owning a custom-built place, Mrs. Davidson-Kalkus found the apartment-style condos she looked at to be "very ordinary." So the couple has just inked a deal to buy a detached, two-bedroom condo home at Winnapaug Cottages, a 35-acre development in Westerly, R.I. Their $300-a-month homeowner's fee covers landscaping, garbage collection, snow removal and exterior maintenance. "This is the best of both worlds," she says.
By: June Fletcher
April 18, 2008; WSJ
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