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Home Construction Projects At An All Time Low Since Pandemic Began

The US is currently facing a historic shortage of homes for sale, which is why it’s surprising that homebuilders aren’t working as frequently as they once were towards the beginning of the pandemic. With the pandemic itself coming to a close, many Americans are continuing to look for work, and real estate prices and service fees have only increased for the same reason. 

According to reports from NBC, single-family housing is priced 13% lower when compared to this time last year. This marks the sharpest decline since last April, when the pandemic initially shut down the economy.  

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“I have to blame the difficulty in procuring lumber and other products, along with labor issues for the miss, in addition to likely cancellations due to skyrocketing costs for single family starts,” said Peter Boockvar, chief investment officer at Bleakley Advisory Group.

According to a recent survey performed by the National Association of Home Builders, “prices of new and existing homes are at record levels, and the increases are accelerating at the fastest clip in over 15 years. Nearly half of all builders say they are adding escalation clauses to their sale prices because of rising material costs.”

“Escalation clauses specify that if building materials increase, by a certain percentage for example, the customer would be responsible for paying the higher cost. Including such a clause allows all parties to be on notice that the contract costs could change if materials prices change due to supply constraints outside the builder’s control,” according to the NAHB.

In a monthly sentiment survey, they also noted that “builders said they were slowing production in order to deal with higher costs for lumber, steel, gypsum and copper, some of which have hit record highs this year. A broad mix of residential construction materials is up in aggregate 12.4% over the previous 12 months.”

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The NAHB claimed in their statement that lumber alone increased in price tremendously throughout the past year; specifically the group claimed the increase has added an additional $36,000 charge to every single-family home building cost. 

The housing sector, like most of the industry, is also dealing with a major shortage in labor. Last April saw a major decrease in construction employment due to the fact that construction projects were some of the first to be halted when the pandemic began, leaving thousands of laborers unemployed or indefinitely furloughed. 

“Contractors are experiencing unprecedented intensity and range of cost increases, supply-chain disruptions, and worker shortages that have kept firms from increasing their workforces. These challenges will make it difficult for contractors to rebound as the pandemic appears to wane,” said Ken Simonson, chief economist with Associated General Contractors of America, an industry trade group. 

“Builders are also reporting difficulty obtaining other inputs like appliances. These supply-chain constraints are holding back a housing market that should otherwise be picking up speed, given the strong demand for buying fueled by an improving job market and low mortgage rates,” said Mike Fratantoni, chief economist for the Mortgage Bankers Association.

Immigrant Children Hugging

4 Dead And More Than 20 Injured After Suspected Smuggling Vessel Overturns In San Diego 

Four people are dead and about two dozen individuals were hospitalized after a suspected smuggling vessel was overturned off the coast of San Diego this past weekend. 

San Diego Fire-Rescue Department spokesperson Monica Munoz spoke with the local media about how they received reports of a vessel that overturned near the Cabrillo National Monument in Point Loma around 10:27 am on Sunday morning. 

James Gartland is the lifeguard chief for San Diego who told reporters that it appeared the vessel hit the reef which caused it to break up, and about 30 people came out of the vessel. 

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“This was a mass rescue operation that turned into a mass casualty incident. By the time first responders arrived, the 40 foot cabin cruiser was broken apart.” 

According to lifeguard lieutenant Rick Romero with San Diego Fire-Rescue, “there were 30 people on the boat, most made it to shore on their own but six people were rescued from the water after a rip current pulled them out to sea.” 

“Our goal was to just rescue everyone we could, we even had a Navy staff member who just happened to be out with his family come and try to save people from the water.” 

“Conditions were pretty rough — 5-6 feet of surf, windy, cold, the water’s around 60 degrees so you get hypothermic pretty quickly,” Romero said.

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The San Diego Fire-Rescue Department said on its incident page: “we responded along with Federal Fire, US Coast Guard and other local agencies. Every indication, from our perspective, is that this was a smuggling vessel used to smuggle migrants into the United States illegally.”

More than 20 people have been transported to local hospitals “including Sharp Memorial, Palomar Medical Center West, Alvarado, UCSD Medical Center (Hillcrest), Grossmont Hospital, Kaiser Clairemont Mesa, Kaiser Zion and Paradise Valley Hospital.” The fire department said it “will not get any updates on the status of patients because of privacy laws.”

The individual operating the boat is currently in custody, and CBP announced this week that it would be increasing patrol operations to deter smugglers. 

“We’ve seen a dramatic increase in the number of maritime smuggling attempts recently. All of these illegal crossings at sea are inherently dangerous, and we have seen too many turn from risky to tragic as smugglers sacrifice the safety of those on board for the sake of profits,” said Chief Patrol Agent Aaron Heitke with CBP’s San Diego sector.

According to Stephenson there has been a 92% increase in maritime apprehensions of smugglers this past year alone.

Kids using technology

Biden To Call For Universal Preschool As Part Of New Family Plan 

President Joe Biden is set to deliver his first joint address to Congress this week, where he is planning on calling for universal preschool as a part of his American Families Plan. According to his administration Biden is looking to make a major “investment in our kids,” and will be laying out how his proposal will help families with basic expenses. 

White House officials claim that the administration has held briefings with key senators to discuss the details of the proposal itself. The child care proposal comes after Biden began enforcing the American Relief stimulus packages to help aid Americans struggling to make ends meet with the Covid-19 pandemic. 

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According to the White House Biden will be calling for a national partnership among all the states to provide free, high quality, accessible preschool care to all 3 and 4-year-old children. Once fully implemented, the act will help more than 5 million children and save the average family $13,000. 

The $200 billion investment is set to prioritize more underprivileged areas first, as these have been the hardest within the past year. The main goal is to give every family the freedom to decide where they want their child to go to preschool without worrying about the cost. The plan will also work to ensure all publicly-funded preschools are high quality, meaning they have a low student-to-teacher ratio, offer a developmentally appropriate curriculum, and create an overall supportive environment that is inclusive for all students. 

According to reports from CBS news, “the president is seeking to leverage tuition-free community college and teacher scholarships to support those who wish to earn a bachelor’s degree or another credential that supports their work as an educator, or to become an early childhood educator. Educators will also receive job-embedded coaching, professional development, and wages that reflect the importance of their work.”

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All employees working in pre-k programs and Head Start will earn a wage of at least $15 an hour as a part of the American Families Plan. Additionally those with the proper qualifications will receive compensation commensurate with kindergarten educators. 

Currently the average child care worker earns $11.65 an hour, so the inclusion of these financial provisions for workers will hopefully work to bring back some of the thousands of child care workers who were forced to leave the labor force due to the pandemic. 

Studies have shown that kids who participate in pre-K are more likely to take honors classes and are less likely to repeat a grade while kids in lower-income areas do better once they reach middle school. This is due to a multitude of educational inequality issues within America, but a lot of it roots back to the access most children have to preschool programs. 

“Together, these plans reinvest in the future of the American economy and American workers, and will help us out-compete China and other countries around the world.”

This proposal, along with the proposals for the American Jobs Plan and American Families Plan, will include a tax increase for major corporations and the wealthiest 1% of Americans.

Weekly Jobless Claims In The US Much Higher Than Anticipated

The Department of Labor reported that last-week showed first-time claims for unemployment rose at levels much higher than initially anticipated, especially due to the fact that the economy has been showing signs of recovering after the last year.

According to reports from the Labor Department “first-time claims for the week ended April 3 totaled 744,000, well above the expectation for 694,000 from economists surveyed by Dow Jones. The total represented an increase of 16,000 from the previous week’s upwardly revised 728,000. The four-week moving average edged higher to 723,750.”

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The labor market within the last week, however, has shown signs of recovery after the past year of the pandemic. Nonfarm payrolls in march increased by nearly 916,000 while the unemployment rate fell down to 6%.

This increase in jobs marks the biggest increase in employment in the US since August 2020. Before the pandemic the unemployment rate was at 3.5%, however, so there’s still plenty of work to be done, especially after last week’s unexpected reports.

“Continuing claims provided some good news on the labor front, with the total dropping 16,000 to 3.73 million. That’s the lowest level for continuing claims since March 21, 2020, just after the Covid-19 pandemic hit and companies instituted wholesale layoffs in conjunction with the economic shutdown. Continuing claims run a week behind the headline weekly number,” according to NBC.

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California and New York account for a majority of the increase in employment; California saw a rise of 38,963 last week while New York saw a 15,714 increase. However, those increases were cancelled out by a 13,944 decline in Alabama as well as a 10,502 decline in Ohio.

Economists have reported that filing backlogs could be one of the larger factors that drive claims up throughout the nation, while spikes in Covid-19 cases are also keeping the filings elevated due to a lack of individuals able to work.

Federal Reserve officials claim that despite the recent progress America has experienced, “much more progress is needed on the jobs front before we can consider changing economic policy.” The most recent Federal Open Market Committee meeting cited a better outlook for the US economy in the coming year based on a continued need for an easy policy.

Federal Governor Lael Brainard told the media this week that “the economic outlook has brightened considerably but there are still about 9 million fewer workers than there were before the pandemic. Central bank officials have said they want to see not only full employment but also inclusive gains across income, racial and gender lines. In that sense, we’ve got some distance to go before the outcomes are achieved.”

Texas Update: Recovery Projected To Take Months For Some Residents 

Texas officials are continuing to work on turning the power back on for the remaining households still left in the dark while they also navigate widespread water shortages and disruptions. It’s currently expected that some residents could take weeks or months to recover from the excessive damage done by this deadly winter storm. 

“For many people in our city with means, with insurance, this week has been a significant inconvenience, but they have the means and ability to quickly transition and move forward. For many people in our city who are already on the margins … and were fighting every day just to keep a roof over their head and food in their refrigerator, this past week has been a major, major event and has really disrupted their lives. For many of these individuals, many of these families, they will be in crisis mode for weeks and months to come,” Houston Mayor Sylvester Turner stated. 

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As of Monday this week more than 15,000 individuals are still left without power. Texas Governor Greg Abott said that he expects power to be fully restored to every house by the end of the day. Meanwhile, over 8.8 million Texans are still experiencing water disruptions. These disruptions have impacted more than 1,200 water systems in 199 counties in the state. 

According to Gary Rasp, a media specialist for the Texas Commission on Environmental Quality, “147 public water systems serving around 120,000 people are non operational. About 258 boil water notices have been rescinded as of this weekend.”

“Customers should flush their water system by running cold-water faucets for at least one minute, cleaning automatic ice makers by making and discarding several batches of ice, and running water softeners through a regeneration cycle,” Houston officials said in a news release.

For residents experiencing excessive property damage, Abbott claims that more plumbers and electrical workers will be deployed to help meet the high demand of customers with broken pipes or faulty wirings. He also recommends documenting all damage before moving to recover. 

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“If you do not have insurance, you may qualify for a FEMA reimbursement. We have had FEMA assistance granted by the federal government and part of that is individual assistance that will assist individuals whose homes or apartments have been harmed because of the winter storm. If so, you’ll need to document any type of loss that you have. Residents should also connect with their local emergency response coordinator to provide that information to be able to receive a reimbursement,” the governor said. 

Turner also spoke to her cities residents and claimed that the government is “Recognizing that there are many families who are in situations where they don’t have insurance, they don’t have the financial means to make the repairs … their ceilings have fallen in, and furniture and other things have been damaged, and they’re really stressing out in terms of how do we move forward … we’re working to put together a relief fund to help assist people.”

Abbott also announced that the Supplemental Nutrition Assistance Program benefits can be used to buy hot food and ready-to-eat meals at all retailers that accept SNAP payments. The government is also working nonstop to combat an increase in energy costs that have come as a result of this storm. However, the lack of preparedness for a disaster of this magnitude has actually exposed just how faulty the energy systems in this country are to handle the drastic effects of climate change. Only time will tell how much longer our government prolonged making the necessary changes to our nation’s infrastructure to better protect from and prevent climate damage.

Travel Industry Is Bracing For A Slower Recovery Than Expected In 2021

The tourism industry has been one of the most heavily impacted sectors of the US economy, and while 2021 was initially looking hopeful in terms of recovery, experts aren’t as convinced now. 

Real Estate

What Will The Real Estate Industry Look Like After The Covid-19 Pandemic

One of the largest concerns relating to the coronavirus pandemic has to do with how the many industries, businesses, and economic systems in the world will recover once it’s all over. The real estate industry in America is one of the largest and most lucrative industries in general, so the fact that it’s barely functioning right now is concerning. Real estate agents and experts everywhere have been offering their opinions and advice regarding their predictions for what the housing market will look like in a post-Covid-19 world. 

One prediction claims that buyers will likely up-size from their current property once this pandemic is over and the economy begins to recover. Things like “tiny homes” and “micro apartments” may have been a fun trend for millennial buyers moving to suburbia from the city before all of this, however, after being trapped in small studio apartments for several weeks, those who are in a financial position to upgrade and up-size their space, likely will. 

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Relocation in general will likely be a major real estate trend in the fall of 2020/beginning of 2021, and while some agents believe that many will want to up-size their properties, as mentioned above, others aren’t as convinced. Some predict that after this entire ordeal, the real estate market in larger metropolitan areas will actually increase exponentially. 

“While suburbs are less dense than cities thereby reducing contact, they have fewer hospitals and resources for treatment. Singapore and Hong Kong are denser than New York, yet they were able to contain the pandemic more effectively. Nevertheless, the pandemic may result in those previously planning to relocate making the change sooner. In addition, the related job losses are expected to decrease rents, along with stricter home buying standards from lenders, as city housing stock tends more toward rental than ownership,” says David Stern, president of real estate due diligence firm Townhouse Partners.

Amid the Covid-19 pandemic, many have been utilizing their outdoor spaces a lot more, especially considering many of us aren’t able to leave our homes unless it’s absolutely necessary. This is also causing many prospective buyers to realize that they don’t like their outdoor spaces at all. Things like balconies, terraces, private roof decks, backyards, and porches will be in high demand from buyers post-pandemic. 

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Just like outdoor living spaces, many buyers are also realizing through working remotely that a home office has become a necessity in the 21st century. It’s likely that developers will begin designing properties with edited layouts that accommodate remote working conditions.

Unfortunately, before this pandemic even began, the US was experiencing a shortage of skilled workers in the construction industry. When builders/construction workers are given the clear to begin working on larger projects again, it’s expected that there will be delays in acquiring permits from the city, and supplies will also likely increase in pricing to help the economy recover. More than 30% of the construction materials used in the US are shipped here from overseas, so it’ll also be interesting to see how the trading industry recovers post-pandemic and how long it takes. 

“Will construction workers remain distancing? Will there have to be someone on site to take people’s temperatures if someone gets sick? Even when the moratorium on construction ends and there’s a desire to go back to work, that doesn’t mean it’s going to happen with a degree of promptness. Many of those suppliers are going to build it up in the U.S., but it’s going to take years,” Barry LePatner, the Founder of New York City-based construction law firm LePatner & Associates.

What the world will look like post-coronavirus is unknown, and while we can’t predict how the hundreds of industries on Earth will recover, we do know that we have to get their first to find out. So it’s imperative to continue listening to your country’s healthcare workers so we have the best chance at seeing what comes next.

Real Estate

Allie Beth Allman Is Confident The Real Estate Industry Will Survive The Coronavirus Pandemic

Allie Beth Allman is known as the grand dame of Dallas real estate and now, she’s using her platform to keep the public informed about the state of the nation’s real estate industry amid the coronavirus pandemic.