NEW HOME SALES SOFTEN
Sales of new homes fell in April from a March peak, CNBC reported (see: “April new home sales fall from near 9-1/2-year high”). “The Commerce Department said on Tuesday new home sales declined 11.4 percent to a seasonally adjusted annual rate of 569,00 units last month,” the network reported. “March’s sales pace was revised up to 642,000 units, which was the highest level since October 2007.”
“”The seasonally adjusted price of new homes nationwide fell, which is encouraging to budget-conscious buyers, but most of that drop was most likely driven by weakness in the West, where homes tend to skew toward the higher price points,” Svenja Gudell, Zillow’s chief economist, commented to Business Insider (see: “New-home sales plunge by a lot more than expected,” by Akin Oyedele). “Inventory of new homes was also up, which is great news, but the price must be right to cater to large numbers of millennial buyers entering the market to buy their first home.”
CNBC‘s Diana Olick took a closer look at the issue of millennials as home buyers (see: “Homebuilders are targeting millennials — but it will hit their margins,” by Diana Olick). Olick explains the shortage of affordable starter-home options with a look at recent history: “In the wake of the Great Recession, investors both small and institutional swooped in and bought hundreds of thousands of foreclosed properties. The vast majority of those were originally lower-priced so-called starter homes. Some of them were barely a few years old, thanks to the massive boom in construction. Rather than sell them when home prices recovered, investors held onto them, turning them into still lucrative single-family rentals. As a result, there are very few existing starter homes for sale today.”
At the same time, observed Olick, builders have been slow to target the starter-home segment of the market, even as demand there starts to show some strength. “Big builders are slowly starting to introduce new product lines at lower price points, but they’re by no means starter homes,” Olick wrote. “Only D.R. Horton, which introduced its Express Homes line in 2014 to much criticism, and LGI Homes have substantial entry-level product.”
TORNADOES HAMMER FIRE STATIONS
If any building should be built tough enough to stand up to heavy weather, you might think, it would be a critical piece of civil safety infrastructure like a fire station. But this week, by coincidence, fire stations in two small towns were hit by relatively weak tornadoes — and they were both knocked out.
In Forest, Indiana, a tornado rated F-1 on the Enhanced Fujita Scale took out a wall of the local fire station, even as two local citizens were sheltering there. Local station RTV-6 (The Indy Channel) posted its report on YouTube (“Forest fire dept. heavily damaged by tornado,” below). The station is a total loss, station WTTV (CBS 4) reported (see: “Rebuilding tornado-damaged firehouse could take months,” by Deanna Allbrittin). “Looking at the building, it’s easy to see why it has to be demolished,” WTTV reported. “The wall on one side is almost completely gone. There’s hardly any support left for the roof and it visibly sags on one end, where the insulation and framing, along with the cement blocks, were blown out.”
And in Autryville, North Carolina, a very similar tornado strike wiped out a fire station as volunteer firefighters sheltered under their trucks. The report on that incident by CBS North Carolina is also posted on YouTube (“Group hid under fire engines as tornado destroyed Autryville fire station,” below). The Fayetteville Observer posted aerial video of the damage (“Tornado damage to Autryville FD 05-23-17,” below).
DRYWALL AND SAND: A BIGGER PICTURE
This week, a little background on some common materials you probably seldom think twice about: drywall and sand.
Something you may have missed on Monday: the anniversary of Augustine Sackett’s original patent on gypsum wallboard, issued on May 22, 1894. IPwatchdog.com observes the event with a look at the history of drywall since Sackett’s innovative brainstorm (see: “Evolution of drywall,” by Steve Brachmann). The US Gypsum company took over the production of “Sackett Board” in 1909, but it took the adoption of drywall by the U.S. military for barracks construction (prompted by a deadly fire) to make the product a major hit—boosted to big numbers by the mobilization for World War II. Drywall consolidated its dominance of the market in the building boom of the 1950s, and now accounts for around 97% of all wall construction nationwide.
Speaking of basic materials, have you ever thought about sand? I mean, really thought about sand? There’s more to it than you might think, The New Yorker’s David Owen (see: “The World is Running Out of Sand,” by David Owen). There’s sand and then there’s sand: what seems like a simple material turns out to have all kinds of fine points. The sand for a beach volleyball court or an indoor horse show can’t be found on any old beach. The sand for sand traps on golf courses in the desert country of Dubai has to be imported from other regions: “Deserts make lousy sand traps,” wrote Owen. And sand and gravel mining turns out to be the biggest mining industry on the planet. That’s mostly because of the enormous quantities of aggregate required for construction, reported The New Yorker: “A report published in 2004 by the American Geological Institute said that a typical American house requires more than a hundred tons of sand, gravel, and crushed stone for the foundation, basement, garage, and driveway, and more than two hundred tons if you include its share of the street that runs in front of it.”
The New Yorker did not discover this story; if you want to learn more about the worldwide scarcity of one of our most common materials, just google the phrase, “the world is running out of sand.” You’ll get dozens of hits.
STATE BY STATE
Missouri: Asphalt-shingle maker Tamko says it may consider moving its corporate headquarters out of Missouri after the U.S. Supreme Court denied Tamko’s petition to block a class-action lawsuit against it that was filed in Jasper County three years ago. The Joplin Globe has a report (see: “Supreme Court denies TAMKO petition, allowing lawsuit to proceed,” by Jordan Larimore). The ruling allows the lawsuit to proceed despite a provision in the Tamko shingle warranty that stipulates binding arbitration in any dispute between Tamko and a shingle buyer.
Oklahoma: A contractor convicted of scamming tornado victims has been sentenced to 10 years in prison, according to a report from TV station KOKH Fox 25 (see: “Oklahoma contractor accused of scamming tornado victims, sentenced to prison,” by Brieon Sumlin). The Norman Transcript also had a report (see: “Norman contractor gets 10 years for embezzlement,” by Adam Troxtell).
California: A subcontractor’s employee can’t sue the general contractor on the job for injuries sustained in a fall, a state appeals court has ruled. The Society for Human Resource Management (www.shrm.org) has a website report (see: “Subcontractor’s Employee Can’t Sue General Contractor for On-the-Job Injuries,” by Joanne Deschenaux, J.D.). Generally speaking, general contractors in California aren’t responsible for injuries to a subcontractor’s employee, unless they retain control of the jobsite and exercise that control in a negligent manner—tests that were not met in this case. The court’s decision is published on www.leagle.com, here: (“ORTEGA v. CRABB CONSTRUCTION COMPANY, INC.”).
Florida: It’s wildfire season in the Sunshine State, and smoke drifted into Orlando this week from nearby wildfires, the Orlando Sentinel reported (see: “Firefighters battling Orange County wildfires as smoke billows into Orlando,” by Caitlin Doornbos). Tampa public television station WUSF reported that Florida authorities expect an elevated fire hazard to continue into summer because of hot, dry weather (see: “Warmer Weather Could Bring Even More Wildfire Risk,” by Regan McCarthy).
