November 2017 Newsletter

Andre_Nabors

What a fantastic conference in Wilmington, NC this month!  We had (12) states represented from as far as Washington State (AL, AR, FL, GA, MD, MS, NC, SC, TN, TX, VA, WA)!  Attendees were able to receive valuable information on “Why Tourism is Important to your Community;” “40 years of Homebuilding Evolution”; Best Practices for Today’s Club: Membership and Marketing; Social Media Marketing and Home Owner’s Association Sales and Marketing just to name a few!  We want to thank all our attendees, presenter, Board and sponsors for your support as AARC continues to be a resource in the retiree recruitment arena, and our fearless Executive Director Wade Adler for his leadership!  Conference photos, video’s and presentations are on the website (www.the-aarc.org/conference) for the next 30 days for all to see and will remain on the members only section.

New home sales rose by nearly 19% in September from the previous month according to the latest official data.  The seasonally-adjusted rate is now at its highest point in nearly 10 years, with last month seeing more than 100,000 additional homes sold in comparison to August.  The year-to-year increase was almost as significant (17%), and all four regions saw increased sales.  Source: Census Bureau (5-page PDF)

A major index of manufacturing activity fell slightly last month but still predicts growth in the sector.  All three component readings of the ISM index declined, but each remained above 50, the threshold for continued expansion.  Economic activity in the manufacturing sector expanded in October, with new orders, production, employment, order backlogs, and export orders all increasing.  Source: Institute for Supply Management

Home builder confidence has increased to an eight-month high in November.  The National Association of Home Builders reports that its housing market index rose to 70 this month for single-family homes, up from 68 in October.  This is the highest level the index has seen since March and the second highest since July 2005.  Two out of the three index components registered gains – current sales conditions and buyer traffic – while sales expectations in the next six months dropped by a single point.  Source: NAHB

Again, thanks to everyone for your continued support of The AARC and we look forward to serving you!

Sincerely,

Andre’ Nabors Chair, The AARC


The 2017 AARC Conference – Wilmington, NC

conference-banner1

With an outstanding lineup of speakers and attendees from 12 states the 2017 annual conference was a huge success.  We would like to thank our gracious sponsors and speakers that helped make the conference successful.

DSC_0023In addition to the informative sessions attendees had the pleasure of visiting Compass Pointe, a local master-planned amenity community and Seal of Approval recipient as well as the site of the 2017 Ideal Living Ideal Home.  While visiting Compass Pointe we toured their exciting amenities including their Grande Lanai before being entertained at the Ideal Living Home.

Members will have unlimited access to all the 2017 Conference Resources, including presentations, videos and photos and Non-Member Conference Attendees will have full access to the 2017 resources until year end.

If you are not a member and would like to learn more about access to these resources and many others don’t hesitate to visit the Membership page to learn more.

The Board of Directors was excited to announce that Orlando, Florida will be the site of our 2018 Annual Conference…stay tuned for more.


Why I Attend AARC Conferences

Jeff Fleming | November 17, 2017

We’ve all probably heard it or said it.

Government officials are bureaucrats that add unnecessary time and expense to the development process.

Developers are greedy capitalists trying to take advantage of the rest of us to line their own pockets, therefore they must be regulated.

Tourism isn’t real economic development and they use funny numbers to calculate its economic impact and justify their existence.

Economic Development means industrial parks and spec buildings.  Anything else is a distraction.

Marketing is ‘fluff’ and social media is just a time-stealing hobby, not a serious marketing tool.

Every year, there are countless opportunities where professionals in each of these fields can attend conferences exclusively with their peers.  But therein lies the dilemma – they only talk to others in their profession, which perpetuates these (unjustified) stereotypes.

Tourism professionals obviously understand the impact of tourism.  Developers understand that a development can only sustain so much expense before it’s upside down.  And so on.  How do we get others to understand what we know about our respective professions?  We can’t change the conversation if we’re only talking to people of like mind.  What if we all worked TOGETHER for the betterment of our respective communities?

I found my outlet in the most unlikely of places – The American Association of Retirement Communities.  I know it sounds crazy.  Let me explain.

What is a community?  It’s basically a place.  How do we make it desirable?  With amenities like parks, pools, golf courses, walking trails, fitness facilities and community centers.  In my profession we call it planning, or ‘placemaking’.  All of these things require infrastructure – which is expensive.  If we get all of these things right, then we have a desirable or ‘amenitized’ community that attracts residents and visitors (aka tourists).  These residents and visitors are generally more health-conscious, educated, and have more disposable income.  All of this activity creates economic impact that churns in the local economy.  And, as Ben Franklin said, that makes us all more healthy, wealthy, and wise.

And then you realize, these professions have a lot more in common than you’d think.

We’re all just trying to figure out how to make ours the most desirable place it can possibly be.

I’ve been told I’m an “enlightened” city manager, or sometimes they’ll say I “get it”.  I think that’s funny.  It’s not rocket science.   Listen to others.  I did.  And you’ll realize that developers and HOA/POA managers are like micro-city managers.  Their boundary may be a little more finite.  It’s a math problem.  You can only get so much for a lot.  You can only assess property owners so much.  How far can you stretch that dollar to provide amenities and infrastructure?  How do you maintain it long term?  How do you market your community?  What happens when it gets a little age on it and enters the re-sell market?

CTW0042And I learned these perspectives by attending The American Association of Retirement Communities  – a multi-disciplinary organization made up of developers, builders, government officials, tourism professionals, economic developers, marketers, demographers and economists. 

Jeff Fleming

Kingsport, City Manager



These Real Estate Trends Will Be Game-Changers in 2018

Cicely Wedgeworty, Realtor.com | November 29, 2017

4b7e7a00f04c8effa1211c67dd9cc419w-c0xd-w685_h860_q80We’re almost there: the long-awaited home stretch of 2017. And quite a year it’s been! Already, we can’t help imagining what developments next year might bring to the wild world of U.S. real estate. So we asked our realtor.com® data team to give us the inside scoop. The team sifted through historical real-estate data and other major economic indicators to come up with a realistic forecast of just what might be in store next year.

And it looks like a sea change is brewing.

From housing inventory to price appreciation to generational and regional shifts, these are the top trends that will shape, and reshape, real estate markets in 2018. Buckle up! It’s going to be quite a ride.

Game-changer no. 1: Supply finally catching up with demand

After three years of a crushing shortage of homes for sale, the realtor.com economics team is predicting that the shortfall will finally ease up in the second half of 2018.

“The majority of the year should be challenging for most buyers, but we do expect growth in inventory starting in the fall,” says Danielle Hale, chief economist for realtor.com.

That’s a potentially transformative development for many would-be buyers who’ve been frustrated in their search for a home that meets their needs—and their budget.

“Once we start to see inventory turn around, there is plenty of demand in the market,” Hale says.

Although for-sale housing inventory is expected to stay tight in the first quarter of the year,  reaching a 4% year-over-year decline in March, if it increases as predicted by fall, that will be the first net inventory gain since 2015. Markets such as Boston, Detroit, and Nashville—all of which recently made it onto our monthly list of the nation’s hottest real estate markets—may see inventory recover first.

Bullish construction is the engine that’s turning this ship around, bringing new homes to the market and creating opportunity for people to trade up into new homes.

“It’s adding inventory instead of just shuffling people around in existing homes,” Hale says.

But those itching to buy a starter home may have to be patient for a while longer.

“We expect the relief to start in the upper tiers, and it will make its way down to the lower tiers,” Hale says. Specifically, most of the initial inventory growth will be in the mid- and upper-tier price ranges, $350,000 and up.

As the market eases, home prices are expected to slow to 3.2% growth year over year nationally. But again, it’s the higher-priced homes that will be appreciating less. And even slower appreciation still means that prices will continue to rise.

“Overall, prices are expected to increase, and we’re expecting to see more of that in lower-priced homes,” Hale says. “It will get a bit worse before it gets better for buyers of starter and midprice homes.”

Game-changer no. 2: Millennials starting to come into their own

The housing market in 2018 will continue to present challenges for millennials—sorry, all of that student loan debt isn’t just going to disappear—but there are some bright spots on the horizon for these millions of Americans.

Millennials seem to be having more success at taking out mortgages on homes at varying prices, and not just starter homes, Hale says.

“They’re at that point where they’re seeing their incomes grow, and that will help them take on bigger mortgages,” she says. That’s because of both the overall strong economy and their own career development.

And as the largest generation in U.S. history reaches that sweet spot in their 20s to 30s when they’re settling down and starting families, they’re particularly motivated to buy. Millennials could make up 43% of home buyers taking out a mortgage by the end of 2018, up from an estimated 40% in 2017, based on mortgage originations. That 3% uptick could translate into hundreds of thousands of additional new homes. As inventory starts to rebound in late 2018 and in years to come, first-time home buyers will likely make up an even larger share of the market.

They probably shouldn’t wait too long to buy, either—mortgage rates are expected to reach 5% by the end of 2018 due to stronger economic growth, inflationary pressure, and monetary policy normalization.

Game-changer no. 3: Southern homes selling like crazy

When it comes to home sales growth, bet on Southern cities to beat the national average in 2018. We’re especially looking at you, Tulsa, OK; Little Rock, AR; Dallas; and Charlotte, NC. Those markets are expected to see 6% growth or more, compared with 2.5% nationally.

The South has been luring corporations and individuals to its balmy cities with its low costs of real estate, and living in general. The resulting strong economic growth and strong household growth, combined with an accommodating attitude toward builders, is setting the stage for an accelerating boom in homeownership, Hale says.

As soon as there are more homes to sell, these places will be selling strong.

Game-changer no. 4: Tax reform (maybe)

The Republican Party’s proposed changes to the tax system could change everything—but with both the House and Senate versions in limbo, the jury is still out on this one.

If a version of tax reform does pass with the current provisions affecting real estate, Hale says she would expect to see fewer home sales and declining home prices. However, it would be the upper price tiers that would likely be affected the most, in areas with expensive homes and high taxes, such as coastal cities, especially in California.

Cicely Wedgeworth is the deputy managing editor of realtor.com. She has worked as a writer and editor at Yahoo, the Los Angeles Times, and Newsday.

Housing Starts Up Sharply, Near Post-Recession High in October

Elizabeth Thompson, NAHB.com |
November 17, 2017

Screen Shot 2017-10-31 at 10.11.49 AM

Nationwide housing starts rose 13.7 percent in October to a seasonally adjusted annual rate of 1.29 million units after a slight upward revision to the September reading, according to newly released data from the U.S. Department of Housing and Urban Development and the Commerce Department. This is the highest housing production reading since October 2016, when total starts hit a post-recession high of 1.33 million.

Single-family production rose 5.3 percent in October to a seasonally adjusted annual rate of 877,000. Year-to-date, single-family starts are 8.4 percent above their level over the same period last year. Multifamily starts jumped 36.8 percent to 413,000 units after a weak September report.

“This uptick in housing production is aligned with our reports of strong builder confidence,” said Granger MacDonald, chairman of the National Association of Home Builders (NAHB) and a home builder and developer from Kerrville, Texas. “Our members are optimistic about the future of the housing market, even as uncertainties remain and they continue to face supply-side issues.”

“We are seeing solid, steady production growth that is consistent with NAHB’s forecast for continued strengthening of the single-family sector,” said NAHB Chief Economist Robert Dietz. “As the job market and overall economy continue to firm, we should see demand for housing increase as we head into 2018.”

Regionally in October, combined single- and multifamily housing production rose 42.2 percent in the Northeast, 18.4 percent in the Midwest and 17.2 percent in the South. Starts fell 3.7 percent in the West.

Overall permit issuance in October was up 5.9 percent to a seasonally adjusted annual rate of 1.297 million units. Single-family permits rose 1.9 percent to 839,000 units while multifamily permits fell 9.5 percent to 458,000.

Permits rose in all four regions. They increased 13.0 percent in the West, 4.1 percent in the Northeast, 3.8 percent in the Midwest and 3.0 percent in the South.