Posted at 8:47 p.m. PST
Habitat
for Humanity homes in the valley redefine who is `needy'
BY JOHN BOUDREAU
Mercury News Staff Writer
The San jose Mercury News,Thursday,
March 23, 2000
The split-level house is so
new you can still
smell the paint. It has four
bedrooms, two
bathrooms and views of the
Santa Cruz mountains.
The house on Grant Street in
Campbell and an
identical one next door sold
before the
first nails were struck. Sale
price for each:
$110,000. Seriously.
It is a small act of kindness
in this mean
Bay Area housing market, where
such homes
can easily go for at least
a half million
dollars -- in cash, no less.
``I keep pinching myself,''
says Teresa
Jackson, a 30-year-old accountant
who on
Saturday will move into one
of the homes,
constructed by volunteers with
Silicon Valley
Habitat for Humanity. ``At
first, my friends
were excited for me. Now, they're
all, `I
hate you! I hate you!' ''
Her future neighbor, Manuel
Viveros, is an
assistant manager at Safeway.
Both are
solidly in the working class.
Both are single
parents. And like thousands
of others
similarly situated, both were
locked out of
the overheated Silicon Valley
housing market
and vulnerable to ever-rising
rents.
That they have good jobs and
still need the
near-miraculous intervention
of Habitat for
Humanity is testimony to the
difficulty of
purchasing a roof over one's
head in Silicon
Valley.
According to the California
Association of
Realtors, only 24 percent of
Santa Clara
County households could afford
a
median-priced single-family
home in January, when
the figure stood at $439,570.
In February the median price jumped to $489,000.
Habitat for Humanity, an international
Christian organization founded
in 1976, is in the
minds of many closely associated
with former
President Carter, its most
famous
volunteer. The organization,
which has built
more than 70,000 homes around
the world,
is also widely perceived as
being the home
builder of last resort for
America's rural
poor. The majority of Habitat
homeowners in
the United States are unskilled
workers or
service-industry workers, says
Michael Crook,
a spokesman for Habitat for
Humanity
International in Americus,
Georgia.
It's a different story in the
Bay Area. Here,
local staffers find themselves
turning away
scores of people because they
make too much
money. It is not unusual to
hear of folks
who pull in $90,000 a year
-- and sometimes
more -- designating themselves
as
desperately seeking shelter.
Getting calls every day
Every day, the staff at Habitat
for Humanity
offices in San Jose and Redwood
City get
calls from those looking for
a place to call
home. To qualify for help,
families must have
incomes that are 30 percent
to 50 percent of
the median household income
for the area.
That, according to the group's
calculations,
translates to $87,000 a year
for a family of
four in Santa Clara County,
the highest among
metropolitan areas in the nation,
and
$74,900 annually for the same-sized
family in
Marin, San Francisco and San
Mateo
counties.
``They are in pain,'' says Mark
Moulton,
executive director of Peninsula
Habitat for
Humanity, the affiliate serving
San Mateo
County. ``People are feeling
the squeeze
horrendously. We have hundreds
of people more
than we can serve.''
Today's caller is apt to be
better educated
than those in the past, observes
Bill Arnopp,
who heads the Silicon Valley
Habitat for
Humanity affiliate. ``We get
calls from young
people who are teachers. They
cannot find a
place to rent, let alone buy.''
Habitat for Humanity faces the
same daunting
challenge Bay Area home hunters
face
every day. The organization,
which can
instantly muster a small army
of volunteers to
build homes, can't afford to
buy a small plot
of land. Soaring land values
give potential
donors pause.
``The prices are escalating
rapidly due to
high demand and no inventory,''
says Georgie
Huff, president of Capital
Properties in
downtown San Jose. As of March
17, there
were only 53 single-family
homes in the city
of San Jose offered at $330,000
or less.
``It's very emotional. It's
very
distressing,'' Huff says. ``They
have good jobs. They
have good income. They have
good credit --
all the things you need to
purchase
property. But in this market,
that's not
enough.''
Hordes of potential South Bay
buyers trudge
through open houses for hyper-priced
two-bedroom bungalows every
weekend. Viveros
and Jackson, both of whom were
turned away by mortgage brokers,
knew better
than to bother with that gantlet
of grief.
'`I went to a mortgage company
and they
laughed at me,'' says Jackson,
a mother of
three daughters. At one point,
she went into
debt to send her children to
a private school
in Campbell, where she works.
Jackson wants
to be within a short driving
distance of
her girls at all times.
For a decade, Viveros planned
to buy a home.
Meanwhile, the 42-year-old
watched his
rent jump 20 percent or more
every year. Now,
Viveros, who has five daughters,
pays
monthly rent of $1,200 for
a two-bedroom
Campbell apartment.
``We were desperate,'' says
the supermarket
supervisor, who wants to leave
his children
more than a box full of rent
receipts.
``My dad has worked very, very
hard to
support us and pay rent and
supply food and
clothing,'' says 19-year-old
Michelle
Viveros. She tears up when
talking about her new
home. ``I've been wanting my
own room
forever. I've never had my
own room.''
Last summer, both families were
chosen from
about 60 applicants. The land,
across the
street from Campbell's police
headquarters,
was left over from the city's
civic center
development of the late 1960s
and early '70s.
Campbell's redevelopment agency
bought
both lots for $275,000 and
donated them to
Habitat for Humanity. Ground-breaking
occurred in July, with construction
going
full-tilt in September. Hundreds
of volunteers
helped put up the homes, built
with
high-quality material provided
by local companies.
Price is high
The $110,000 selling price,
which comes with
a zero-interest loan, is high
by Habitat
standards: The average cost
of its homes in
the United States is $41,500.
(For
comparison, three other four-bedroom
houses
currently on the market in
Campbell carry
asking prices of $449,000 or
more.) Viveros
and Jackson have agreed not
to sell their
homes for profit for 30 years.
They will be presented keys
during a Saturday
morning ceremony. Called a
``house
blessing,'' the dedication
is part revival,
part housewarming. Each family
will also
receive a Bible.
The 1,400-square-foot
Habitat houses rose up
on a street lined with magnolia
trees. The
Victorian-modern homes blend
nicely with the
neighborhood mix of apartments,
condos
and older Victorians. They
are just across
the street from the town's
historic Ainsley
House and a short walk from
the library and
downtown.
As part of the program, the
new homeowners
joined with volunteers in the
construction.
They know about the sweat it
takes to frame a
house, how pipe joints come
together and
what's between the walls.
``It's awesome,'' Jackson says.
``It did my
heart a lot of good.''
Contact John Boudreau at boudreau@sjmercury.com
or (408) 278-3496.
Housing prices surge. Median: Santa Clara County price rises 45% from April '99 to $577,820.
BY SUE MCALLISTER
The San Jose Mercury News,
Friday, May 26, 2000
After crossing the half-million
dollar mark
in March, the median price
of a single-family
home in Santa Clara County
hit a jaw-dropping
$577,820 in April, a real estate
trade
group reported Thursday.
That figure is 7 percent more
than the March
2000 median, and 45.2 percent
more than
last year's median of $397,850,
according to
data released by the California
Association
of Realtors.
``I don't know what to say.
It's clearly a
lot of high-end properties,''
that have
contributed to the jump in
local prices, said
Leslie Appleton-Young, the
association's
chief economist.
The median price marks the midpoint,
meaning
half the homes sold for more
and half
sold for less than the median
figure.
And while the total Bay Area's
median price
climbed 30 percent in April
compared to a
year ago, the number of homes
sold slipped 17
percent from April 1999. The
association
measures home sales on an annualized
basis
and does not release the monthly
number of
homes sold in individual counties.
The Bay
Area comprises the counties
of Santa Clara,
San Mateo, San Francisco, Alameda,
Contra
Costa, Marin and Solano in
the
association's report.
The data measures escrows that
closed in
April, meaning that many of
the homes
counted were sold and went
into contract in
March and early April.
Real estate experts say the
slide in the
tech-heavy Nasdaq is one of
numerous factors that
contributed to a decrease in
home sales
year-over-year. The recent
bout of volatility in
the stock market began in mid-March,
when the
Nasdaq index rose above 5,000,
then
fell 7 percent in less than
a week. The index
has since fallen 37 percent
from its peak.
In recent months, many Silicon
Valley realty
agents have said that more
homebuyers
have been deterred from purchasing
homes by
their worries about the stock
market than
by rising mortgage interest
rates. Two weeks
ago, the average rate for 30-year
fixed-rate
mortgage went above 8.5 percent
for the first
time in five years, according
to secondary
mortgage market giant Freddie
Mac.
Even adjustable rate mortgages,
known as
ARMs, have risen quickly as
the Federal
Reserve policymakers have been
increasing
short-term interest rates,
narrowing the gap
between ARMs and 30-year fixed
rate loans.
Mortgage finance firm Freddie
Mac,
reported Thursday that the
average rate for a
one-year adjustable-rate mortgage
shot up to
7.25 percent this week, the
highest level in
nine years and up from 7.15
percent a week
earlier.
Appleton-Young attributed the
marked decrease
in sales activity statewide
to a variety of
factors, among them a relatively
limited
number of homes for sale, stock
market woes,
and steadily rising interest
rates.
``All of those things together
are pushing
kind of a transition in the
marketplace,'' she
said. Another reason last month's
sales
activity looks a bit anemic,
she said, is that April
1999 ``was a very, very strong
month.''
The association's forecast for
2000 predicted
sales would slow by 8 percent
from 1999,
when a record 538,000 homes
changed hands
statewide.
Realtor Richard Calhoun, a board
member of
REInfolink, the local Multiple
Listing
Service, also said he believes
the red-hot
Silicon Valley real estate
market has cooled
slightly. Since the end of
March, the
county's inventory of for-sale
single-family homes
has risen from just under 900
to more than
1,700, he said, but homes are
selling more
slowly than in the first quarter
of the year.
It's hard to pinpoint exactly
why homes are
staying on the market longer,
Calhoun said,
but anecdotal evidence suggests
buyers are
feeling more finicky.
``The desirable homes in desirable
locations
are still going to get multiple
offers,'' he
said. However, ``buyers will
no longer do
anything the seller tells them
to do to get the
house.''
Statewide, the median price
of a
single-family home rose 11.6
percent compared to April
last year, to $241,600. Sales
activity dipped
7.5 percent, to an annualized
rate 493,110
homes. The seasonally adjusted
annualized
rate measures how many homes
would sell
in California if the April
pace were
maintained all year.
For the state as a whole, Appleton-Young
said, ``I think we'll continue
to see very, very
strong price appreciation over
the next
quarter. . .the demand-supply
imbalance coming
to a head, if you will.''
The National Association of
Realtors also
released April figures Thursday,
which
showed sales activity slowing
6.9 percent
nationally over last year.
The national median
price for a single-family home
in April was
$136,700, up 4.6 from the same
month a
year ago.
Housing warning tempers boom in East Bay jobs
BY DENNIS AKIZUKI
The San Jose Mercury News
With cheaper land for homes
and offices, the
East Bay is leaping ahead as
Silicon
Valley's new boom region, according
to an
economic study released Friday.
But the second annual report
by the Economic
Development Alliance for Business
warns
that chronic housing shortages
in Alameda and
Contra Costa counties could
undermine
the projected economic expansion.
Last year, the number of new
jobs outstripped
new home construction by a
5-1 ratio, it
said.
East Bay Indicators 2000 --
written by former
PG&E chief economist Tapan
Munroe --
concludes that Alameda and
Contra Costa
counties have a ``strong and
resilient
economy'' that is feeding off
the growth of
high-tech firms and emerging
industries. The
East Bay possesses 31 percent
of the Bay
Area's developable land, and
the study
predicts the two-county sub-region
could
account for 43 percent of the
potential new
housing.
``We're creating more jobs than
(Santa Clara
County is) right now, we have
a larger
workforce, more land and more
housing,'' said
Keith Sutton, the alliance's
business
development director. ``(The
East Bay) is the
major growth area of Silicon
Valley and
has been for a number of years
and expect it
to continue to be so.''
The Economic Development Alliance
is no
disinterested bystander. It
is a public-private
partnership that focuses on
encouraging
corporate investment in the
East Bay. Members
of its board include city council
members,
developers, school administrators
and
transportation officials.
Seeking a good balance
The region has wrestled for
the past several
years with how to balance growth
and a
desire to maintain a healthy
environment. For
example, construction is expected
to begin
this summer on Pacific Commons,
an 822-acre
business park south of Auto
Mall
Parkway in Fremont's southern
industrial
area. It is expected to one
day draw more than
20,000 workers.
Carl Guardino, president and
CEO of the
Silicon Valley Manufacturing
Group, agrees
that Alameda and Contra Costa
counties will
serve as a major Silicon Valley
growth area.
``The East Bay will be a destination,
not
only for the bedrooms of Silicon
Valley, but the
boardrooms as well,'' Guardino
said.
But he added that, in the information
age,
any area with a strong labor
pool, excellent
educational institutions and
a good business
climate is capable of becoming
a major
Silicon Valley growth area.
The report includes a caveat
to an otherwise
rosy outlook for the East Bay.
``There is a cloud on the horizon
and that
cloud is the shortage of housing
and the linked
problem that has with transportation
congestion,'' Sutton said.
Like the rest of the Bay Area,
the housing
crunch in the East Bay has
been squeezing
residents at all levels. The
number of new
housing units declined 21 percent
between
1997 and 1999. The lack of
housing supply has
contributed to a 44 percent
increase in
Alameda County apartment rents
and a 36
percent rise in Contra Costa
County from
1993 to 1999.
Driving farther for homes
``The lack of affordable housing
and housing,
period, is going to be the
critical issue,''
said Catherine Merschel, executive
director
of Eden Housing Inc., a non-profit
firm that
has developed 4,000 affordable
housing units
in the Bay Area.
``I think employers are going
to be pushed to
come up with more and more
creative ideas
on how to house their employees,''
Merschel
said, or else the housing shortage
will
begin to strangle the economic
growth.
Housing shortages in Santa Clara
and San
Mateo counties already have
created traffic
congestion problems as employees
move out to
the Central Valley and commute
through
Alameda County to their jobs
to the south and
west.
Some experts who spoke
Friday at an Economic
Development Alliance for Business
meeting in Berkeley expressed
concern that
employees will continue to
move farther and
farther away from the job centers
to find
affordable housing. That will
worsen traffic
congestion and air pollution
-- creating a
Los Angeles-like situation.
Despite the housing shortage,
the East Bay
has been the fastest growing
region in the
Bay Area since the mid-1980s.
In many ways, southern Alameda
County is the
leader. Of the 50 largest East
Bay
companies (based on 1999 revenue),
more than
half are in Fremont, Newark,
Pleasanton, Dublin and Livermore.
High-tech clusters are emerging
in Fremont,
Pleasanton, San Ramon, Walnut
Creek and
Oakland.
According to the study, the
East Bay is home
to 3,300 high-tech firms, with
129,000
employees. That includes:
Software -- 2,260 firms, with
54,000 employees.
Biotechnology -- 76 firms,
12,000 employees.
Telecommunications -- 304 firms,
18,300 employees.
Internet -- 70 firms, 11,200
employees.
Multimedia -- 280 firms, 1,150
employees.
Hardware, 318 firms, 32,200
employees.
The report predicts the East
Bay will
continue at the ``forefront
of the economy of the
new millennium.''
Sutton said ``the projections
are still very
positive and we don't look
for any economic
downturn in the near future.''
Contact Dennis Akizuki at dakizuki@sjmercury.com or (510) 790-7306.
A
Tale of Two Cities: Housing in Silicon Valley
BY SUE MCALLISTER
Mercury News Staff Writer
Wednesday, April 26, 2000,
The San Jose Mercury News
The median price of a single-family
home in
Santa Clara County rocketed
through the
half-million dollar mark in
March, rising
nearly 39 percent from the
same period a year
ago.
The $60,000 jump over February's
level is yet
another leap in Silicon Valley's
unrelenting housing market
as cash chases a
dwindling supply of houses
for sale. The
traditionally most active house-buying
months
of the year are still ahead.
Still, local real estate experts
say the pace
may be slowing.
Countywide, the median price
rose to $539,870
last month -- $151,050 higher
than the
March 1999 figure of $388,820,
according to a
report released Tuesday by
the California
Association of Realtors. Although
prices in
the county leaped forward,
significantly
fewer homes -- 14 percent --
changed hands
last month than in March 1999.
Real estate industry experts
blamed the
drop-off in sales activity
on the dearth of homes
for sale in the county, and
attributed the
steep rise in prices to high
demand from new
residents and the proliferation
of wealth in
Silicon Valley.
``The fact of the matter is,
there is just
not a lot of developable, buildable
land (in Silicon
Valley),'' said CAR's chief
economist, Leslie
Appleton-Young. ``Couple that
with
strong demand driven by the
wealth-creation
of the IPO economy there, and
the result is
a median home price of over
$500,000 for the
county as a whole.''
The median price marks a midpoint,
meaning
half the homes sold for more
than the
median figure and half sold
for less. The
figure is based on closed-escrow
sales of
existing single-family detached
homes. Sales
that closed in March opened
in January and
February.
Using a real estate rule of
thumb that buyers
can afford a house 2 1/2 to
three times their
annual income, a $500,000 median
means a
buyer would need income of
$180,000 to
$216,000. The general rule
doesn't take into
account large down payments
funded from
cashed-in stock options.
Locally, realty agents expressed
little
surprise at the median reaching
the hefty price of
$500,000.
``We've been so close to the
half-million
(median) for the last two months,
I'm a little
numb,'' Carl San Miguel, president
of the
Santa Clara County Association
of Realtors,
said Tuesday. ``We've been
anticipating it,
so here it is and it's kind
of status quo.''
Despite the astronomical numbers,
some
changes may be on the horizon.
More houses
coming on the market, higher
interest rates
and stock market volatility
that could spook
some buyers may mean a cooling
of the
cutthroat competitiveness that
has prompted
skyrocketing sale prices.
San Miguel said buyers who are
not cowed by
hearing a big number like $500,000
will
find more properties on the
market than in
months past, and will be less
likely to jump
into bidding wars with fellow
house-hunters.
``There are still multiple offers,
but not
quite as bad as it was in the
dead of winter,'' he
said. ``I've found buyers are
not willing to
participate in the buying frenzy
if they hear
there's numerous offers on
the properties.''
Price inflation isn't limited
to Silicon
Valley. Surrounding counties
are seeing sale prices
climb, too.
The March median price in the
Bay Area rose
27.9 percent to $446,920 compared
with a
year ago, the state association
said. CAR
includes homes in Alameda,
Contra Costa,
Marin, San Francisco, San Mateo,
Santa Clara
and Solano counties in the
regional
figure.
Statewide, the median
price of a
single-family home rose to
$238,870 in March, a 12.5
percent increase from March
1999, when it was
$212,330.
California homes sold at a seasonally
adjusted annualized rate of
562,090 in March, up
6.8 percent from the sales
pace recorded for
the same month a year ago.
The number
measures how many homes would
sell in 2000 if
the March sales pace lasted
throughout
the year.
The National Association of
Realtors said
Tuesday that the national median
price for a
single family home rose to
$134,400 -- less
than a quarter of the local
median. The
national number is up 3.7 percent
from the
March 1999 median of $129,600.
Nationally, sales fell year
to year, though
prices rose. Existing homes
sold in March at a
seasonally adjusted annualized
rate of 4.83
million units, down 9.2 percent
from March
1999, but up 1.5 percent from
the February
2000 pace.
A
Tale of Two Cities: Housing in Minneapolis/St. Paul
Neal Gendler
Star Tribune
Wednesday, April 19, 2000.
The Minneapolis Star-Tribune
Spring home sales again reach near-frenzied pace
Welcome to this spring's real-estate
market: too many buyers for
too few houses, multiple offers driving up
prices and houses selling in
just hours.
"We're selling houses as soon
as they
are listed," said Fran Davis,
president of the Minneapolis Area Association
of Realtors.
The 2000 real estate market
is
starting to mirror the torrid
market of 1999. Davis said, "The outlook is
great for sellers . . .Buyers
should be prepared to react
quickly when they find their
almost-perfect house."
House sales got off to a fast
start
this year. Closed sales for
the first quarter of 2000 are up 9.9 percent
over the same period
last year.
It's an early indicator that
the Twin
Cities may experience its fifth
consecutive year of exceedingly strong
sales. Home sales records were
broken in 1996, 1997 and
1998, and 1999's closed sale
total of 49,800 homes was slightly below the
all-time high of 50,594 sales
in 1998.
Demand remains fueled by a very
strong
economy, high consumer confidence,
single-digit interest rates and an
apartment-vacancy rate below
2 percent.
Interest on the benchmark 30-year,
fixed-rate loan averaged 8.12
percent nationally last week,
compared with 6.87 percent
a year earlier.
"Demand is so high that anything
that
is well-priced and in good
condition is selling extremely well," Davis said.
Buyers reacted in Minneapolis'
Longfellow neighborhood when
Frank Susko put his three-bedroom pre-World
War I house on the market for
$129,900 on a recent Friday.
It was
shown on Sunday. That evening,
he got four offers and sold for $140,000.
"We thought we'd get a couple
thousand
under list," Susko said Tuesday.
He and partner Daniel Eakins expected one
or two offers the following
week. "We didn't expect four
in eight
hours . . . which was fabulous,"
Susko said.
Another frenzy?
Many agents used the word "frenzy"
to
label last spring's real estate
activity and Davis said the word applies
again this year. She's the
sales manager at
Coldwell Banker Burnet's Minneapolis
Lakes office.
But some say this year's buyers
seem
less panicky. "A year ago,
people would buy something with a half-moon on
the door," joked Coldwell Banker
Burnet agent Jimmy Fogel. "Now,
it's
not quite as much of a frenzy
if it's not priced right."
Apparently, Susko priced right.
When
Fogel, his agent, held the
Sunday open house, he had 60 to 70 parties look
at the house. Fogel said he
arrived
about 10 minutes before the
starting
time, and could not figure
out why there was no parking anywhere on the
street. "It was like a Mafia
movie: When
I opened my car door, all the
other
car doors opened; there must
have been 20 people ready to come in," he said.
Earlier that day, Fogel held
an open
house in St. Louis Park at
a $169,900 listing that by night brought three
offers and a sale above $180,000.
"I've been at this 23 years
and I've
never seen this kind of inventory
shortage for this length of time," he
said. "This has been going
on for a year and a
half." One reason is a shortage
of
homes for move-up buyers. Another
is that younger people are doing so well.
"I'm selling houses to people
in their
late 20s and early 30s at prices
their
parents never could afford.
There's just a lot of money."
Lynn Mathis, president of the
Southern
Twin Cities Association of
Realtors, called the market fast. Mathis, with
Edina Realty, said Realtors
must
monitor listings and rush buyers
over
for showings. "My personal
opinion is we're not selling that much more real
estate, because we're spending
so
much time trying to get that
buyer to
that house before somebody
else does."
Dwight Denyes, co-owner of Re/Max
Associates Plus, prominent
in Anoka County, said he hopes last spring's
frenzy won't be repeated. "That
market
was very, very trying for the
public
and for the Realtors," he said.
"You had people writing [offers on] four or
five homes before they could
land one."
Inventory shortage
"We still have a shortage of
inventory," Denyes said. "That
just seems persistent."
Last month ended with 12,730
listings
on the market, off 2 percent
from 13,014 in March 1999, according to data
from the Regional Multiple
Listing
Service. New listings processed
in
March totaled 6,282, down 2.2
percent from 6,426 in March 1999 -- and last
spring's inventory was down
sharply from 1998.
Davis said prospective sellers,
aware
of the tight market, are reluctant
to list until they have something to
buy. This causes a chicken-and-egg
problem.
Last month's 5,286 signed purchase
agreements were down 1.9 percent
from 5,389 a year earlier. For the
quarter, such "sales pending"
were up only 1 percent.
One way to encourage
sellers is the
growing use of offers with
the closing date left open or subject to the
sellers finding a suitable
home by some
agreed upon date, agents said.
Denyes said he expects the year
to end
with sales slightly short of
last year. Activity began taking off in mid
March, he said, and "we feel
the market is
hitting its stride now."
Rising prices
When demand exceeds supply,
prices
rise. Last year, the median
price -- the midpoint -- set a record of
$138,000 in July. As the market
cooled toward
fall, the median fell. Last
month it
was $133,000, down from $137,500
in February. However, it was up 3.3
percent from $128,700 in March
1999.
For the first quarter of 2000,
the
median was $135,000, up 7 percent
from $126,200 in the 1999 period.
The 4,082 residential sales
closed
last month were 21.2 percent
more than 3,367 sales in March 1999. Davis
said that increase probably
contributed to
a 23.7 percent rise in sales
value:
$624.1 million, compared with
$504.7 million a year earlier.
The future
Mathis said Edina Realty executives
expect another year and a half
of great demand.
Denyes said some demand is soaked
up
by new construction, which
is "flourishing in our end of town."
Through March, home building
in the
Twin Cities was roaring at
a record-setting pace, with residential
construction permits up from
the first quarter of
1999. Builders are concerned
about
diminishing availability of
land, causing lot prices to soar. Higher
new-home costs affect existing-home
sales, but
it's not simple to correlate,
Mathis said.
"The tighter it gets for the
new-construction buyer, the
more they tend to come back to existing"
housing, Mathis said. But some
people want to build,
and location, style or builder
outweigh price. Denyes said
construction helps "to even
out the supply and
demand equation" by creating
inventory.