Welcome to... Companion PowerPoint Presentation for the Introduction to Housing textbook.

Welcome to...Companion PowerPoint Presentation for the Introduction to Housing textbook

The Housing Industry

Housing and the Economy

20% – 25% of economic activity is linked to the housing industry

4 sequential phases:

-preparation

-production

-distribution

-service

Construction Industry

Over 5 million employed

Volatile Seasonal employment Regional Most jobs locally based

Housing Starts:

The number of housing units for which construction has started

Used as an economic barometer

Housing Market Economic Indicators

Sources: The State of the Nation’s Housing 2003, 2005, The Joint Center for Housing Studies of Harvard University

Homeownership Rates:

2001: 67.8%

2002: 67.9%

2003: 68.3%

2004: 69%

New Single Family Home Sales: 2001: 908,000

2002: 976,000

2003: 1.1 million

2004: 1.2 million

Existing Single Family Home Sales: 2001: 5.3 million

2002: 5.6 million

2003: 6.1 million

2004: 6.8 million

Single Family Home Prices: Existing home prices

2003: $170,895 2004: $184,100

New home prices 2003: $210,221 2004: $221,000

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

Home Improvements and Repairs:

2001: $160 billion

2002: $164 billion

2003: $181.6 billion

2004: $198.6 billion

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

Cities & counties (Chamber of Commerce)

Real Estate Information ColoProperty.com offers both residential

and commercial property searches in Colorado

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

Professions Involved in the Housing Industry

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)

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)

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)

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)

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)

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)

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)

Other Professions

Property & mortgage insurance companies Real estate attorneys Title insurance businesses Architects Interior designers Community development corporations