We started the night talking about how DFW has been growing a great deal, but since the recession has begun, it has slowed down. It's probably going to be a year before the market picks back up. Though there is still a lot of construction going on in the area. In our class we discussed why this could be possible and concluded that it's because material costs have decreased and therefore developers want to take advantage while it's cheap to build. Multi-family residents will be more popular in these bad times because some can't secure financing for a home mortgage or their house has already been foreclosed on. Slowing single family resident construction has been caused by many things, but one reason is that banks aren't lending as much for housing developers to start housing developments. The bank is doing this because they are wondering where the demand is going to be coming from. Home building construction is a big section of the economy. When it drags, it slows many other things down with it. On the public side, construction has increased because the stimulus money is finally hitting the land and letting public construction start. We read an article about the ipad and how it is being used a lot on construction sites. The contractors are using them to look at all the specs. for the building and the process is becoming more efficient. It is also helping to save on printing costs; the company mentioned in Tennessee saved $179,000 just on printing costs. D. R. Horton, a major home builder, had a 50.5 million dollar profit in June, 2010. This is good considering the major loss they had this time last year. D. R. Horton believes they did well this June because of the tax credits. They believe the months to come will be very slow because the tax credits have stopped. Even more bad news is that construction contracts in Dallas have fallen 51% from last year. An interesting article talked about how a decommissioned fire station and a decommissioned police station both sold for $1; one was valued at 1.4 million and the other was worth $250,000. We had a conversation in class wondering what we as students thought about MFR being furnished. The question was asked whether more people would live there and like it. An interesting fact that Dr. Forgey told us is that right before the housing collapsed, builders were furnishing houses and adding the furniture to the mortgage.
Switching subjects to appraisal, an interesting article talked about how the governor of Florida wants properties to be reappraised to see what losses the oil spill brought and making BP pay for the losses. Valuation for tax purposes is now hitting properties all across the country. It will take a while for the local governments to get better.
The Obama administration and HUD are pushing money at the sustainability materials for Multi Family and Single Family Residents. Sustainability is a big thing coming up into the market. The niche has tremendous opportunity to grow in the future. Lenders need to get serious about sustainability and realize that upfront costs may be beneficial in the future.
If people are employed they move out of their parents house and if they are unemployed they find people to stay with to be able to save money. The economy is so messed up and experts keep changing their opinions and predictions about what is going to happen in the future. There is currently a shrinking demand for housing because of unemployment and lending being tight.
There is a new reform bill that will result in more accurate appraisal but will make valuations costs more. Appraisal regulations are changing for the first time in 20 years. The bill is trying to increase personal protection and transparency.
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