State's Jobless Rate Won't Improve Until Homebuilding Does

The L.A. Times' Money and Company blog gives us the bad news on California's unemployment numbers today, along with an indirect quote to note from economist Sung Won Sohn at Cal State Channel Islands in Camarillo.

Sohn says that California's dependence on the real estate industry is going to continue to cause pain until home-building starts again.

So again , we'd remind policy-makers at the local, state, and national level that actions should be taken to incentivize homebuilding, not cause even more difficulties. Reducing and deferring fees is a good first step, and we'd again suggest to Congress that now is not the time to eliminate Freddie Mac  and Fannie Mae - or to limit or get rid of altogether the mortgage interest deduction.

Grand Openings All Over the Place!

There's nothing we here at the BIA like to see more than our members launching new developments. So a look through the L.A. Times' real estate ad section last Saturday definitely warmed our collective hearts.

Advertised were a nice blend of three new new-home projects in the L.A./Ventura Chapter area:

• MarketPlace, a high-density townhome community in the middle of Simi Valley by Standard Pacific.
• Stonehaven Estates II, a collection of single-family homes in Chatsworth by Warmington Residential.
• And a new model by Toll Brothers in its The Pinnacle at Moorpark Highlands development in the hills north of Moorpark.

For information about new homes being sold throughout Southern California, visit newhomesmatch.com.

Banks Ramp Up Foreclosure Actions - Good Sign for Housing Sector?

The AP's Alex Veiga reports today that banks are apparently ramping up actions against homeowners who have fallen behind on their mortgage payments, meaning the lull in foreclosures may be over. The story cites a report from RealtyTrac that said the number of homes that received an initial default notice -- the first step in the foreclosure process -- jumped 33 percent in August from July.

While not good news for homeowners behind on their mortgages, the upturn in default notices could signal better times ahead for the beleaguered housing industry, the article points out.

A pickup in foreclosure activity also means a potentially faster turnaround for the U.S. housing market. Experts say a revival isn't likely to occur as long as there remains a glut of potential foreclosures hovering over the market.

Foreclosures weigh down home values and create uncertainty among would-be homebuyers who fret over prospects that prices may further decline as more foreclosures hit the market. There are about 3.7 million more homes in some stage of foreclosure now than there would be in a normal housing market, according to Citi analyst Josh Levin.

"This bloated foreclosure pipeline now presents the greatest obstacle to a housing market recovery," Levin said in a client note this week.

As we've reported in the past (here and here), the overall economy is not likely to improve significantly until the housing market does.

You can read the full AP report here.

StanPac Names New CEO

Standard Pacific announced this week that Scott Stowell, a veteran with the company and currently its president, will take over as CEO at the beginning of 2012 from Ken Campbell.

Campbell joined Standard Pacific's board in July 2008 and became its president and CEO the following December. He issued the following statement:

I have served as Standard Pacific Homes' CEO for almost three years, which is about as long as a restructuring guy like me should stick around. I'm extremely proud of the tremendous progress our entire team has made during my tenure here and believe, with Scott at the helm, Standard Pacific Homes is well positioned for the future.

You can read more in the Orange County Register.

Census Data Points to Upturn in Housing Demand

The Census Bureau has confirmed what we suspected all along: a lot of people are doubling up with family members because of the economy. And as Phil Izzo writes in the Wall Street Journal's Real Time Economics blog today, that means we're likely to see a big jump in household formation and thus demand for housing once the economy finally does start to grow.

The blog states that as part of its wider report on income, poverty and health insurance, the Census Bureau noted a big jump in the number of individuals and families doubling up. The report says 69.2 million, or 30%, were doubled-up in 2011, up from 61.7 million adults, or 27.7%, in 2007. “Doubled-up” households include at least one person 18 or older who isn’t enrolled in school and isn’t the householder, spouse or cohabiting partner of the householder.

Furthermore, much of the increase comes from young people, ages 25-34, living with their parents. Some 5.9 million, or 14.2% of 25-to-34 year olds, lived with their parents in 2011, up from 4.7 million before the recession.

Izzo concludes that it's likely most of this doubling-up is not permanent, and that when economic conditions improve that many of the people living with mom and dad will hit the road.

Necessity is likely the primary driver of the increase in doubling-up. Many of these families and children living at home may want to make the jump out on their own as soon as their economic standing improves. That could represent a strong shadow demand for housing, as well as a potential jump in household formation with a resultant boost in consumption.

You can read the blog post here.