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Welcome to... Companion PowerPoint Presentation for the Introduction to Housing textbook.

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1 Welcome to... Companion PowerPoint Presentation for the Introduction to Housing textbook

2 The Housing Industry

3 Housing and the Economy 20% – 25% of economic activity is linked to the housing industry 4 sequential phases: -preparation -production -distribution -service

4 Construction Industry Over 5 million employed Volatile Seasonal employment Regional Most jobs locally based

5 Housing Starts: The number of housing units for which construction has started Used as an economic barometer

6 Housing Market Economic Indicators Sources: The State of the Nation’s Housing 2003, 2005, The Joint Center for Housing Studies of Harvard University

7 Homeownership Rates: 2001: 67.8% 2002: 67.9% 2003: 68.3% 2004: 69%

8 New Single Family Home Sales: 2001: 908,000 2002: 976,000 2003: 1.1 million 2004: 1.2 million

9 Existing Single Family Home Sales: 2001: 5.3 million 2002: 5.6 million 2003: 6.1 million 2004: 6.8 million

10 Single Family Home Prices: Existing home prices 2003: $170,895 2004: $184,100 New home prices 2003: $210,221 2004: $221,000

11 Home Equity; Mortgage Debt: Equity 2001: $7.3 trillion 2002: $7.6 trillion 2003: $8.7 trillion 2004: $9.6 trillion Debt $5.5 trillion $6.1 trillion $6.5 trillion $7.2 trillion

12 Home Improvements and Repairs: 2001: $160 billion 2002: $164 billion 2003: $181.6 billion 2004: $198.6 billion

13 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

14 Cities & counties (Chamber of Commerce) Real Estate Information offers both residential and commercial property searches in Colorado

15 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

16 Professions Involved in the Housing Industry

17 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 (

18 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 (

19 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 (

20 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 (

21 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 (

22 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 (

23 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 (

24 Other Professions Property & mortgage insurance companies Real estate attorneys Title insurance businesses Architects Interior designers Community development corporations

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