Building Permits Rise

Housing starts surge 22% on apartment building and Single-family building permits rise 11% in February.

Boosted by an 82% increase in construction of apartment buildings, U.S. housing starts surged 22% in February to a seasonally adjusted annual rate of 583,000, the Commerce Department estimated Tuesday. It was the largest percentage gain in 19 years and was the first increase in eight months in the sector that was at ground zero in the global economic recession. The housing data in winter months are especially volatile because of the weather. Construction of new housing units had plunged 38% in the previous three months before February's unexpected jump. Economists surveyed had forecast a further drop to 456,000, despite an expected surge in multifamily construction. February's annual rate of 583,000 was the highest since November. January's starts were revised higher to a 477,000 pace, a record low dating back to the 1940s.
Building permits, which are less volatile than the starts data, rose 3% in February to a 547,000 annual rate. Permits for single-family units rose 11% to a 373,000 rate, the largest percentage gain in 18 years.

But despite February's gain, housing starts are down 47% from a year ago, and are down 74% from the peak in early 2006. Permits are down 44% in the past year. Builders are trying to reduce their inventories of unsold homes as they face relentless competition from older homes thrown on the market by foreclosures or short-sales. The mood of home builders' has rarely been worse. The National Association of Home Builders reported Monday that its sentiment index was stuck at 9 on a scale of 1 to 100 in March.

Story by Rex Nutting, MarketWatch, Wall Street Journal

Mortgage Rates may be Headed Lower

U.S. industrial production dropped 1.4% in February. Production has now been down for four straight months, in five of the past six months and in 10 of the past 12 months.
Capacity utilization fell to 70.9% in February from 71.9% in the previous month. This matches the lowest level on record, set in December 1982. The drop in production was larger than expected. Economists had been anticipating that February's production would fall 0.9%.

Both of these drops should produce downward pressure on mortgage rates.

Charleston Market Stats

For the period of January and February 2009 compared to those same months last year, we have seen the number of sales drop by 45% and the sales price drop by 12%.

Only about 20% of the current market is priced correctly. Some of that 20% is priced very well. The other 80% can sometimes be very overpriced. While some of the sellers still haven't figured this economy out, about 20% of them seem to be ahead of the curve. My company has actually hired me to create a list for the company of the best 20% the market has to offer. Don't buy or sell without seeing this list first.

While the number of new foreclosures might peak this year (if everything goes right), we’re still going to be dealing with near-record numbers of foreclosures being processed and then with a massive inventory of bank-owned properties throughout 2010 and into 2011. Only 28% of the available listings sold in 2008. Soon, probably August of 2009, 20% of the available listings will be short sales and foreclosures. It will become extremely difficult to compete with their prices once this occurs. The ordinary home seller won't have a snowball's chance of getting his home sold.