Transcript Housing and Society

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
Debt

2001: $7.3 trillion

$5.5 trillion

2002: $7.6 trillion

$6.1 trillion

2003: $8.7 trillion

$6.5 trillion

2004: $9.6 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 Clocks
U.S. 299,767,153
World 6,544,892,373
16:39 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