California Home Construction Trends

 

Why do they say, "The Dog Days of Summer"? While we may find it difficult to relate, most places suffer from intense heat and humidity, particularly evident from July 3rd through about August 11th. During this time summer weather can be cause for lethargy by dogs and humans. Additionally, and more likely, the phrase is based on the prominant star, Sirius. Know as the Dog Star, it is the brightest in the constellation Canis Major, evident this time of year. This star was part of folklore and enjoyed by stargazers, thus the likely instigation of the phrase. So revel in the Dog Days of Summer, historical precedent is on your side!

 

 

 

DID YOU KNOW?

• The Wall Street Journal’s latest quarterly survey of business and academic economists shows forecasters remain firmly optimistic about the economic outlook, despite some hints of weakness in recent data. 64% of people in a survey thought the FED will cut rates at its mid-September meeting as inflation keeps cooling....YAY!!

• The U.S.’s hottest job market in 2023 was Utah’s tech sector, nicknamed Silicon Slopes for its proximity to the Wasatch Mountain Range. Heavily concentrated in the state’s north region, startup and established tech companies run about 80 miles from Ogden to Provo, with Salt Lake City in the middle. Roughly halfway between Salt Lake City and Provo is Draper, a city that 30 years ago had a population around 8,500, according to census data. Today, with a population closer to 50,000(WSJ)

• During the month of November, in years when the Presidential election takes place, there’s typically a slight slowdown in home sales. This is mostly because some people feel uncertain and hesitant about making big decisions during such a pivotal time. However, it’s important to know this slowdown is temporary. Historically, home sales bounce back in December and continue to rise the following year.

• As of the midpoint of 2024 apartment developers have built more units so far this year than they did in any year between 2001-2013, with 284k units completed. By the end of 2024, apartment completions could approach 600k units for the first time since 1974. Will single-family home buyers opt for condos instead? Or are most of these rental units? (Benzinga)
• Insurers are demanding that homes in parts of the US must now be constructed with wildfires in mind, or they most likely will not be insured, which would mean they can’t be bought with a mortgage. After Hurricane Andrew devastated part of South Florida in 1992, pressure from the insurance industry compelled homeowners and builders in the state to switch to stronger windows and roof ties. The industry is applying a similar kind of pressure now in response to growing wildfire risk. A recent wildfire-resistant building test had a 5-foot “moat” of pavement around it. On one side was a fence made of a noncombustible metal made to resemble wood, and the house had protective coverings to stop burning embers from getting into roof vents and eaves. 10ft away, the other building was ringed by shrubs and mulch, resembling a home typical of any number of suburbs across the country. It had a wooden fence to one side. The new standards worked as advertised: After a blaze started by local firefighters, all that remained of the conventionally built structure was a single, smoldering plank. The fire-resistant building stood untouched.
• Only 45% of San Francisco homes and 53% of Seattle homes have air-conditioning: milder temperatures allow this. When it gets hot, you can cool a home simply by closing blinds and curtains during the day, especially east- and west-facing windows. A fan does not lower the temperature but can evaporate sweat making you feel up to 4 degrees cooler.
• Is your neighborhood ADU-friendly? An ADU - or Accessory Dwelling Unit - allows homeowners to add a small structure on their property with the hopes that these add to more affordable housing options and increase density, especially in expensive single-family zoned areas. An ADU can also produce rental income that can offset the cost of a mortgage and/or operating costs. Some use them as mini-retirement-funds. California homeowners applied for over 31,000 ADU permits last year, up over 340% from about 7,000 in 2018, according to the California Department of Housing and Community Development. A 2023 analysis by John Burns Research found that the trend is spreading eastward in cities such as Denver and Miami. (WSJ)

 image from CalHFA

 

 

 

 

 

 

 

Around the World

 

• The London-based Institute for Quality of Life recently released its 2024 Happy City Index, a ranking of the world's happiest places. It found that Minneapolis, Minnesota, is the happiest city in the US, and the only U.S. city to earn a coveted "Gold" ranking, alongside cities in Europe, Asia, New Zealand, and Canada. Cities were analyzed on the basis of five key categories of happiness-citizens, governance, environment, economy, and mobility, as well as 24 areas of activity, touching on everything from social inclusivity and access to cultural resources to smart public transportation and the planning and expansion of greenspaces with 180 parks that are home to 22 lakes, 12 gardens, and 55 miles of bike trails and walking paths.

• Italy a tax-haven?  Yup!  Italy offers one of the most attractive tax incentives in the world with a fixed €100,000 tax on any foreign income for anyone who moves to the country. It also offers a tax-free allowance of up to 50% on income capped at $650k for anyone, Italians or foreigners, who move to Italy from abroad. The wealthy population in Italy is soaring. The owners of Sant Ambroeus are now opening a club - The Wilde - in Milan to compete with Soho House. Other outposts are coming to New York, London and Los Angeles soon.  (FT)

 

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Market Recap june 2024

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