National and State Update From the
How Times Have Changed 450 430
New Home Sales in Recovery
410
According to the BEA, Gross Domestic Product (GDP) increased at a 2% annualized rate during the third quarter. This was an improvement, albeit a small one, from the 1.3% rate of growth during the second quarter and matches the 2% rate for the start of 2012. GDP growth has only exceeded 2.6% for one quarter (the final quarter of 2011) since the start of 2010. As the overall economy has slowed, housing has generated an outsized share of the expansion. Home building and remodeling (residential fixed investment, or RFI) added 0.33 percentage points to the final tally of GDP growth, or 17% of the total. In the second quarter, RFI yielded 15% of net growth and 22% in the first
From the
Did the Supreme Court just shut the door on lawsuits to recover damages from permitting agencies? We were reminded this week that policy is made in every branch of state government, including the courts. On October 30, the Washington Supreme Court announced that it would not review the case of Pierce County property owner
November/December 2012
quarter of 2011.
390 370
These numbers are impressive considering that RFI remains only 2.5% of GDP as of the third quarter and housing starts remain half the size of a normal, healthy market.
350 330 310 290 270 250
Of the three primary elements of the housing sector (new home construction, remodeling and existing home sales), new home sales continue to experience the largest gains, increasing in September 5.7% to an annual rate of 389,000, the highest level since the home buyer tax credit expired in early 2010. The three-month moving average of new home sales has increased steadily for more than a year as more housing markets begin to see rising home prices and improving consumer sentiment.
Jul-09 Aug-00 Sep-09 Oct-09 Nov-09 Dec-09 Jan-10 Feb-10 Mar-10 Apr-10 May-10 June-10 Jul-10 Aug-10 Sep-10 Oct-10 Nov-10 Dec-10 Jan-11 Feb-11 Mar-11 Apr-11 May-11 June-11 Jul-11 Aug-11 Sep-11 Oct-11 Nov-11 Dec-11 Jan-12 Feb-12 Mar-12 Apr-12 May-12 June-12 Jul-12 Aug-12 Sep-12
With data in from the Bureau of Economic Analysis (BEA), it is becoming clear that home building is a leading source of economic growth for 2012.
The number of completed homes for sale and ready for immediate movein remains at a record low of 38,000 as builders remain cautious about building ahead of the market and as credit access remains tight. With prices rising and new home construction increasing, housing is finally provided the boost to economic growth that the sector typically provided at the end of a recession. This did not occur at the end of the Great Recession due to historic price declines, excess
The supply of new homes for sale fell to a seven-year low of 4.5 months as the pace of sales picked up, but the inventory advanced by only 2,000.
inventories and pent-up housing demand associated with a weak labor market. Now that the virtuous circle of home building and economic growth is beginning to take hold, it is useful to keep in mind factors that could hold back the growth for housing. These negative factors include policy uncertainty (particularly relating to finance and taxes), lack of builder and land developer credit, and mortgage access for prospective home buyers.
Birnbaum Case Won’t Be Heard by WA State Supreme Court In practice, the Supreme Court’s decision not to hear Ms. Birnbaum’s case leaves in place a Court of Appeals ruling which essentially bars permit applicants from suing for damages they incur as a result of permitting delays.
Wendy Birnbaum. You might remember Ms. Birnbaum’s story from the September issue of Building Insight (page 12). Ms. Birnbaum sued the county for damages when it took more than five years to issue a decision on a permit application that should have taken only 120 days to review.
Madsen and Justices Charles Johnson, Susan Owens, James Johnson, and Charles Wiggins. Remember, we vote for Supreme Court Justices in Washington.
The decision to not take up the case was a unanimous decision of Department I of the Supreme Court, composed of Chief Justice Barbara 11
Olympia Master Builders / Chalk Line