welcome to... companion powerpoint presentation for the introduction to housing textbook
TRANSCRIPT
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Welcome to...Companion PowerPoint Presentation for the Introduction to Housing textbook
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The Housing Industry
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Housing and the Economy
20% – 25% of economic activity is linked to the housing industry
4 sequential phases:
-preparation
-production
-distribution
-service
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Construction Industry
Over 5 million employed
Volatile Seasonal employment Regional Most jobs locally based
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Housing Starts:
The number of housing units for which construction has started
Used as an economic barometer
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Housing Market Economic Indicators
Sources: The State of the Nation’s Housing 2003, 2005, The Joint Center for Housing Studies of Harvard University
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Homeownership Rates:
2001: 67.8%
2002: 67.9%
2003: 68.3%
2004: 69%
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New Single Family Home Sales: 2001: 908,000
2002: 976,000
2003: 1.1 million
2004: 1.2 million
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Existing Single Family Home Sales: 2001: 5.3 million
2002: 5.6 million
2003: 6.1 million
2004: 6.8 million
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Single Family Home Prices: Existing home prices
2003: $170,895 2004: $184,100
New home prices 2003: $210,221 2004: $221,000
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Home Equity; Mortgage Debt:
Equity
2001: $7.3 trillion
2002: $7.6 trillion
2003: $8.7 trillion
2004: $9.6 trillion
Debt
$5.5 trillion
$6.1 trillion
$6.5 trillion
$7.2 trillion
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Home Improvements and Repairs:
2001: $160 billion
2002: $164 billion
2003: $181.6 billion
2004: $198.6 billion
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Sources of Information
U.S. Census
10 years; all households
Long-form & Short-form
American Housing Survey
2 years; sample
Population ClocksU.S. 299,767,153
World 6,544,892,37316:39 GMT (EST+5)
Sep 18, 2006
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Cities & counties (Chamber of Commerce)
Real Estate Information ColoProperty.com offers both residential
and commercial property searches in Colorado
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Housing-related associations: HERA, National Association of Home Builders (NAHB), National Kitchen & Bath Association (NKBA), & American Society of Interior Designers (ASID)
Publicly-funded & private studies—
published in journals & Web sites
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Professions Involved in the Housing Industry
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Real Estate Development
Identify land that can be profitable when resold as housing lots; correctly forecast the market
Fill a market niche Gain site control Obtain investors Negotiate contracts with lenders, local
governments & general contactors Advertise the property
Urban Land Institute (www.uli.org)
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Home Building Profession
Apply for a building permit May pay an impact fee Construct housing units on the prepared land,
adhering to codes & regulations Draws to cover various stages of building
National Association of Home Builders
(www.nahb.org)
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Realtors
Match the prospective buyer with the right house Commission: typically 6 – 7% of the house sales
price Real estate agent & broker—depends on training
& experience
National Association of Realtors (www.realtor.org)
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Mortgage Lending Profession Provide financing for builders & developers Mortgages to homebuyers—a mortgage is a
secured loan in which the new homeowner’s real property serves as collateral for the loan in the event of default
Secondary mortgage market Importance of interest rates
Mortgage Bankers Association of America(www.mbaa.org)
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Appraisal Profession
Perform an appraisal—an estimate of the property’s value
Typically use a sales comparison approach—base the value of the subject property against at least three comparable properties
Appraisal Institute (www.appraisalinstitute.org)
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Remodelors
Increase living space or add or modify rooms
More significant as houses get older Greater amount of dollars being spent Many are in small firms
National Association of the Remodeling Industry (www.nari.org)
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Residential Property Management Focus on multifamily properties serving as
income-producing properties for investors Maintain the multifamily structure & preserve the
investment’s value
National Association of Residential Property Managers (www.narpm.org)
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Other Professions
Property & mortgage insurance companies Real estate attorneys Title insurance businesses Architects Interior designers Community development corporations