Pappas Realty Co... "Commercial Real Estate...Exclusively" in Northeast Ohio since 1957

Wednesday, November 26, 2008

New-Home Sales Decline 5.3%

New-Home Sales Decline 5.3%


New-home sales tumbled to the lowest level in 17 years during October, while prices kept retreating.

Sales of single-family homes decreased by 5.3% to a seasonally adjusted annual rate of 433,000, the Commerce Department said Wednesday. September new-home sales rose 0.7% to an annual rate to 457,000; originally, the government said September sales climbed 2.7% to 464,000.

Economists surveyed by Dow Jones Newswires had called for a 3.0% drop in sales to a 450,000 annual rate. The level of 433,000 was the lowest since 401,000 in January 1991.

Developments: Home Builders' Stocks Rise
A weak job market, with non-farm payrolls receding 10 straight months, and tighter mortgage financing are hurting home-buying. Year over year, new-home sales were 40.1% lower than the level in October 2007.

Falling sales and prices have sent builders hiding. Housing starts decreased a fourth month in a row during October, the government reported a week ago. Starts fell 4.5% to a seasonally adjusted 791,000 annual rate.

The National Association of Home Builders latest monthly survey of builders' thoughts on market prospects sank to an all-time low; the November index for sales of new, single-family homes tumbled to nine from the previous record 14 in October, the NAHB reported last week.

The Commerce Department report Wednesday showed there were an estimated 381,000 homes for sale at the end of October, representing a 11.1 months' supply at the current sales rate. In September, an estimated 414,000 were for sale, a 10.9 months' inventory.The median price of a new home fell 7.0% to $218,000 in October, down from $234,300 in October 2007. The average price decreased 12.2% to $272,300 from $310,100 a year earlier. In September this year, the median price was $221,700 and the average was $283,700.

Regionally last month, new-home sales fell 18.0% in the West and 6.0% in the South. Sales rose 22.6% in the Northeast and 6.0% in the Midwest.

An estimated 34,000 homes were actually sold in October, down from 36,000 in September, based on figures not seasonally adjusted.

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Monday, November 24, 2008

No Frozen Pipes

This winter, No Frozen Pipes!! A single water pipe can easily create thousands of dollars in property damage. The easiest way to prevent this is to have a property that is fully occupied with responsible tenants, all of which have utilities in the tenant's name and heat set above 50 degrees in every unit.

Preventative Maintenance helps!

Heat wrap insulated tape on exposed water pipes can help.

Also, make sure to use insulated expanding foam to fill any building leaks that allow air or moisture into building or near piping.

Avoid Frozen Pipes!

According to our property manager standard operating procedures, "A new tenant must have his/her utility setup/proof of utlities prior to receiving keys. Verification can be provided by means of a receipt from the utility company or a verifying phone call to the same.

Enough with Frozen Pipes!

It is your job as owner/manager to make sure your property has no frozen pipes. You must verify that each tenant has the heat turned on. If a unit is vacant, you need to make arrangements with the utility company to have the utlities turned on in the property name and you should personally verify that the heat is working and set above 50 degrees. The all-around best solution is to have your property 100% occupied.

HINT: Another trick I have learned, is for example, let's say the forecast calls for an evening of below zero temps (wind chill, etc), then leave a pencil lead thin line of water running from the sink and, believe me, the cost of that water will be dramatically less then frozen pipes!

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Monday, November 17, 2008

The Benefits of Sub-Metering

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The Benefits of Submetering
Submetering Saves Money and The Environment

There have been numerous studies by the National Multi-Housing Council and the National Apartment Association about Submetering.

These studies have clearly documented the connection between utility conservation and separate billing for utility usage.

For example, these studies demonstrate that individually metered apartments often experience an 18 to 39 percent reduction in water consumption when compared with master-metered properties that include water expenses in the rent. Rental properties that employed a RUBS allocation formula enjoyed a water savings that ranged from 6 to 27 percent.

Both the resident and the property owner benefit from utility submetering. Residents benefit because submetering provides them with more control over their total monthly housing costs. By reducing their utility usage, they clearly save money.

Plus, residents also benefit because they are now directly responsible for their own usage and no longer have to pay for the misuse of utilities by other residents. And when utility expenses are reduced, property owners enjoy higher operating margins and property values. Submetering also protects property owners from unbudgeted utility expenses.

Perhaps the biggest winner is the environment that we all share. Since submetering and utility allocation both reduce water and utility usage, benefits abound. There is more fresh water to go around, and less carbon in the atmosphere. Just imagine the effect if every rental property were to institute submetering!

Monday, November 10, 2008

Circuit City files for bankruptcy protection


NEW YORK – Circuit City Stores Inc., the nation's second-biggest electronics retailer, filed for bankruptcy protection on Monday but plans to stay open for business as the busy holiday shopping season approaches.

It filed under Chapter 11 of the bankruptcy code, which will allow it to hold off creditors and continue operations while it develops a reorganization plan.

The Richmond, Va.-based company has been struggling as nervous consumers spend less and credit has become tighter, and the retail industry overall is facing what's expected to be the weakest holiday season in decades.

Circuit City also said it would cut 700 more jobs, after announcing a week ago that it would close 20 percent of its stores and lay off thousands of workers.

"This isn't a surprise," JPMorgan analyst Christopher Horvers said, adding that the reorganization could help the company get out of leases for certain bad store locations.


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Monday, November 03, 2008

The Beer Episode - as first written by Gerri Weits, PA on activerain ~ Click here for Gerri's page

The Beer Episodes

Everyday, ten men go out for beer and the bill for all ten comes to $100. If they paid their bill the way we pay our taxes, it would go something like this:

The first four men (the poorest) would pay nothing.
The fifth would pay $1.
The sixth would pay $3.
The seventh would pay $7.
The eighth would pay $12.
The ninth would pay $18.
The tenth man (the richest) would pay $59.

So, that's what they decided to do.

The ten men drank in the bar every day and seemed quite happy with the arrangement, until one day, the owner threw them a curve.

'Since you are all such good customers,' he said, 'I'm going to reduce the cost of your daily beer by $20.' Drinks for the ten now cost just $80.

The group still wanted to pay their bill the way we pay our taxes so the first four men were unaffected. They would still drink for free. But what about the other six men - the paying customers? How could they divide the $20 windfall so that everyone would get his 'fair share?'

They realized that $20 divided by six is $3.33. But if they subtracted that from everybody's share, then the fifth man and the sixth man would each end up being paid to drink his beer. So, the bar owner suggested that it would be fair to reduce each man's bill by roughly the same amount, and he proceeded to work out the amounts each should pay.

And so:

The fifth man, like the first four, now paid nothing (100% savings).
The sixth now paid $2 instead of $3 (33% savings).
The seventh now pay $5 instead of $7 (28% savings).
The eighth now paid $9 instead of $12 (25% savings).
The ninth now paid $14 instead of $18 (22% savings).
The tenth now paid $49 instead of $59 (16% savings).

Each of the six was better off than before. And the first four continued to drink for free. But once outside the restaurant, the men began to compare their savings.

'I only got a dollar out of the $20 declared the sixth man. He pointed to the tenth man, 'but he got $10!'

'Yeah, that's right,' exclaimed the fifth man. 'I only saved a dollar, too. It's unfair that he got ten times more than I!'

'That's true!!' shouted the seventh man. 'Why should he get $10 back when I got only two? The wealthy get all the breaks!'

'Wait a minute,' yelled the first four men in unison. 'We didn't get anything at all. The system exploits the poor!'

The nine men surrounded the tenth and beat him up. The next night the tenth man didn't show up for drinks, so the nine sat down and had beers without him. But when it came time to pay the bill, they discovered something important. They didn't have enough money between all of them for even half of the bill!

And that, ladies and gentlemen, journalists and college professors, is how our tax system works. The people who pay the highest taxes get the most benefit from a tax reduction. Tax them too much, attack them for being wealthy, and they just may not show up anymore. In fact, they might start drinking overseas where the atmosphere is somewhat friendlier.

For those who understand, no explanation is needed. For those who do not understand, no explanation is possible.

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