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US home prices drop in January
BUT LOOK AT CHARLOTTE
Home prices in many cities continued to plunge by record levels in
January as sellers cut their asking bids and rising foreclosures took
their toll, new data showed Tuesday.
While the spring selling season usually gives the market a bounce,
some analysts say any notable improvement may not come until well into
the summer. U.S. home prices fell 10.7 percent in January, and the
Standard & Poor's/Case-Shiller home price index of 20 cities saw the
steepest decline in the index's two-decade history.
Worst-hit were Las
Vegas and Miami,
both reporting 19.3 percent drops, as the regions are still paying the
price for rampant speculation and overbuilding during the boom years.
Those cities and 14 others, including Phoenix, San
Diego, and Detroit,
posted record lows.
"I wouldn't be looking for a pattern of improvement until April,
May or June," said Brian Bethune, Global Insight's chief U.S.
economist.
Only Charlotte, N.C., squeaked by
as a gainer in the Case-Shiller index, with a 1.8 percent rise in
January compared to a year earlier.
"We are still selling here in Charlotte," said Dianne
McKnight, a broker associate at Re/Max Executive Realty in the city.
"If a property is priced right, it sells in a day and you have
multiple offers. There are plenty of buyers out there kicking
around."
But the overall downbeat figures come on the heels of data released
Monday showing that the median price of existing homes being sold in
February fell in the largest year-over-year drop since at least 1999.
"Home prices continue to fall, decelerate and reach record lows
across the nation," said David Blitzer, index committee chairman at
S&P. "No markets seem to be completely immune from the housing
crisis."
Blitzer said all 20 cities S&P tracks have seen falling prices
for five consecutive months when compared to the prior month. What's
more, the declines are growing in severity, with 13 of the 20 cities
reporting their biggest single monthly decline in January.
Pava Leyrer, president of Heritage National Mortgage in Detroit, said
the tightening of loan standards has compounded the problems of too much
inventory, foreclosures and worries over the economy.
"It's just a spiral that will end up taking this year to get out
of," Leyrer said.
She said it would take until the spring of 2009 before they started
to see the market in Michigan
improve.
While the vast majority of homes in the U.S. are not in danger of
foreclosure, the housing slump has raised concerns about a recession and
has had ripple effects across the economy as consumers spend less in
other areas and banks tighten lending requirements.
Consumer confidence sank to a five-year low in March as tight credit
markets, rising prices and worsening job prospects deepened worries that
the economy has fallen into recession. The Fed has aggressively slashed
interest rates to spur growth and free up the credit markets.
A narrower survey, released separately Tuesday by the Federal Housing
Enterprise Oversight said home prices fell 3 percent in January from the
same month last year, and dipped 1.1 percent from December. The declines
were sharpest in New
England.
The monthly OFHEO index is down 4.1 percent since its peak last
April. The index is calculated using mortgages of $417,000 or less that
are bought or backed by government-sponsored mortgage companies Fannie
Mae or Freddie
Mac. Legislation enacted in February temporarily raised the limit
to as much as $729,750 in high-cost areas.
Many sellers in some parts of the country seem to be cutting prices
more aggressively. While sales of existing homes notched a surprise
increase in February after falling for six straight months, the median
price fell, according to data Monday from the National
Association of Realtors.
The trade group said sales rose 2.9 percent last month to a
seasonally adjusted annual rate of 5.03 million units the biggest
increase in a year. But the median existing sales price in February fell
to $195,900, the largest year-over-year drop on records that go back to
1999.
Davidson project mixes
condos, offices, stores
Mixed-used can be draw in uncertain times
In an uncertain housing market, developers look for ways to attract
buyers while maintaining the confidence of their lenders.
Robert Tremblay of Fairhills/RLT Development believes he has the
ideal project in Davidson: townhome and brownstone-style condos within
the Harbour Place mixed-use project at Interstate 77 Exit 30.
Being inside a development that includes offices, stores and hotels
in one of Mecklenburg's most desirable small towns creates a niche
product with "insulation" from the housing market turmoil, he
believes.
Green space, a school, a grocery store and other amenities are within
walking distance, and brownstone owners will have views of Lake Davidson
from rooftop decks.
Residents can save on gasoline costs by parking the car and walking
to most of their daily needs within the village.
The $13 million project, which is under construction, includes 29
brownstones priced from $220,000 to $385,000 and 15 townhomes from the
mid-$400,000s.
Tremblay said eight townhomes and 15 brownstones have been sold.
Half the townhomes, from 1,819 to 2,494 square feet, should be
occupied on Jetton Street by the end of this month, he said. Model units
are open.
Tremblay said the townhomes, were inspired by Fairfield Development's
spacious Bradbury Hall units in the SouthPark area.
With master bedrooms downstairs in 12 of the 15 units, Tremblay
anticipates strong interest from empty nesters, who look to reduce step
climbing when they downsize.
Brownstones, featuring distinctive stoops leading up to the first
level, range mainly from 1,156 to 2,041 square feet. They are expected
to be ready for occupancy on Harbour Place Drive by July.
In compliance with Davidson's requirements for affordable housing in
new projects, Harbour Place Brownstones will include four units going
for as low as $100,000 -- a price the developers say police officers,
teachers and firefighters should be able to afford.
Tremblay said those units will be slightly smaller but won't be
distinguishable on the outside from the others.
The brownstones are near a 60,000-office building Childress Klein
Properties is developing in 450,000-square-foot Harbour Place, a
mixed-use project.
The 50-acre development includes a hotel, which is under
construction, and eventually will have four more office buildings.
The Town of Davidson is encouraging development at Exit 30, where
planners envision pockets of green space amid a 125-acre urban hub
including about 200 homes.
Other residential projects have been completed and are occupied at
the interchange.
Development
Harbour Place residences
Location: Interstate 77 Exit 30
in Davidson.
Size: 15 townhomes, 1,819 to
2,494 square feet; 29 brownstones, mainly 1,156 to 2,041 square feet.
Prices: mid-$400,000s for
townhomes; $220,000 to $385,000 for brownstones.
Features: Townhomes will have
two- and three-story floor plans and private rear courtyards. Exteriors
will be brick. Brownstones will have six floor plans, many with a
rooftop deck.
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WHERE FUN BEGINS
Manufacturing still matters
Key sector has shed tons of jobs in N.C., but the industry is
transforming into a lean, skilled force
One industry contributes more to the N.C. economy than any other and
pays higher wages than the state average.
But it has an image problem: People think it's dead.
North Carolina's manufacturing sector has taken a beating in the past
decade as cheaper competition forced restructuring that threw thousands
out of work. Many still struggle to rebuild their lives. Vacant
factories scar communities.
But they also mask a transformation. Furniture builders, cigarette
makers and textile mills have survived and prospered through automation
and innovation. And drug, airplane and other advanced manufacturers have
redefined what it means to produce in North Carolina.
In 2005, the most recent figures available, manufacturers accounted
for 19.4 percent of the state's gross domestic product. While that was
down from 30 percent in 1990, it was still more than any other single
sector, according to data from the U.S. Bureau of Economic Analysis.
"It has certainly changed," said Jim Fain, secretary of the
N.C. Department of Commerce. "But it remains a very important part
of our economy."
This year, five of the top 10 companies on the Carolinas 100 are in
manufacturing.
They make steel, clothes, smokes, rocks and pumps and, for the most
part, look far different than they did 10 years ago. They're leaner and
their workers are more skilled. They've given up operations to maximize
profit. Top-down structures have flattened to allow more bottom-up
direction.
The companies represent a small fraction of the state's
manufacturers, most of which are small and privately held, but they
symbolize an overhaul that's reshaping the industry.
At R.J. Reynolds Tobacco's plant in Tobaccoville, just north of
Winston-Salem, a mechanical arm stretches 10 floors to collect cartons,
paper and other materials needed for production. It hands them to
driverless forklifts that deliver the goods to workstations.
There, employees feed and monitor machines that spit out as many as
16,000 Camel, Kool or Winston cigarettes a minute, double the rate a
decade ago.
"There's an awful lot of pressure to be more efficient,"
said Dan Snyder, executive vice president for operations at R.J.
Reynolds Tobacco.
That means fewer people. The tobacco company has roughly 2,500
workers in domestic production, about half as many as it did five years
ago.
Productivity per employee has jumped, though, because of the
automation. And that's benefiting Reynolds American, the parent of R.J.
Reynolds. The Winston-Salem company squeezed more from each sale last
year as profit rose five times faster than revenue.
The most successful manufacturers in the state have moved low-skill
jobs offshore or, like RJR, replaced them with machines to save on
labor. In 1990, one in four people employed in North Carolina worked in
manufacturing. Today, it's about one in eight.
But workers now are more likely to have advanced degrees and can
command higher salaries. In 2005, the most recent data available, the
average annual manufacturing wage in North Carolina was 19 percent
higher than the state average, according to the U.S. Bureau of Labor
Statistics.
Martin Marietta Materials, the ninth company on the Carolinas 100,
has shed about 20 percent of its work force in the past five years.
During that time, average salaries have increased about 5 percent per
year.
"The qualifications overall in the company have gone up pretty
markedly," said chief executive Stephen Zelnak. The nation's
second-largest producer of gravel and other construction aggregates, for
instance, has created the position of "automation technician"
to maintain technology it has implemented.
Automation gives plant managers almost daily profit and loss
statements, information that allows quick tweaks to improve operations.
Ideas bubble up
Sometimes, though, a microscope is better than a telescope for
navigating business. And the best ideas come from the factory floor, not
the corner office.Executives increasingly are asking line-level
employees to weigh in on ways to boost the bottom line, conceding that
they could have the best answers.
"The employee is the asset," Jay Reardon, chief executive
of Hickory Chair, told 350 attendees of a manufacturing summit in
Greensboro last month. Managers need to "let go and let the
employees contribute."
The private company last year received 700 ideas from workers and
implemented almost 600. Unlike many furniture makers in the state,
Hickory Chair not only is surviving, "I would say we're
prospering," Reardon said.
Timco Aviation Services in Greensboro, a private company that
services jetliners, urges employees to e-mail suggestions straight to
the top. Chief executive John Cawthron got a message from a longtime
employee who suggested a change that saved a client $900,000.
The employee in March got ercent of the savings -- $90,000 for
eliminating waste.
"We call it the fanatical pursuit of common sense,"
Cawthron said.
Such efforts sustain companies, which must fight harder every day to
survive.
To thrive, some take bold steps.
VF Corp., the No. 2 company on our list, has largely re-engineered
itself into a manager and marketer of brands such as Wrangler, Nautica
and The North Face. It no longer manufactures in North Carolina and has
handed some production over to contractors.
Glen Raven Mills near Burlington, another private company, abandoned
the product that made it famous. It invented panty hose but hasn't made
them in more than a decade. Today, it focuses on advanced textiles such
as its fade-proof, stain-resistant Sunbrella fabric.
"We have walked away from those markets" that have become
commodities, said Allen Gant Jr., the president. "In a commodity
business, the cheapest guy wins every time. ... We're dedicated to
innovation, innovation, innovation."
Future looks promising
While nobody expects manufacturing to regain the prominence it once
held, economic developers want it to remain a strong part of the state's
economy. In recent years, they've won a Novartis vaccine plant for Holly
Springs, a Honda jet plant for Greensboro and a Chris-Craft factory for
Kings Mountain.
About 70 percent of active recruiting projects the N.C. Department of
Commerce is working on have a manufacturing component.
Cheap labor isn't the selling point it once was. Officials now tout
the state's central location, universities and other qualities to
attract companies with jobs that demand higher skills.
Strip mall to open in summer
A
new upscale strip-mall on N.C. 16 is expected to open this summer as
builders add the final touches to the first half of the more than $2
million project.
We
are about 45 days out before the shell is complete, said Chris Canipe,
owner and broker for Carolina Commercial Builders. We could have the
first tenants in there in possibly the next 90 days.
Dubbed
16 Marketplace, the 35,000 square-foot mall will be built in two parts,
Canipe said. The first is nearly complete, while the second half, yet to
begin construction, could be built by spring of next year.
They
will be mirror images, Canipe said.
The
mall is located about a mile north of
Campground Road
.
Canipe
declined to say specifically what stores will move in. Likely tenants,
though, include a coffee shop, deli or restaurant. It could also house
medical, insurance, mortgage or real-estate companies, he said.
They
will be stores and services that are unique to the area, he said.
The
largest tenant, or anchor store, is also planned at the site, but
developers are still in negotiations with potential businesses.
It
will be more of your general goods store, Canipe said.
Canipe
said developers chose the location because of growth in the area and the
new N.C. 16 planned nearby.
We
see the new highway as being a big influence on that section of
Denver
, he said.
Nearly
148 parking spaces are planned at the site, Canipe said, and no further
street improvements will be required by the North Carolina Department of
Transportation.
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