Bloomberg reports that Governor Chris Christie New Jersey’s $12.5 billion school- construction program plans to continue the state’s $12.5 billion school- construction program .
The program, one of the largest in the nation, has reportedly cost the city 7.9 7.9 billion in borrowed funds since 2007. The New Jersey economic development authority plans to issue $900 million of school bonds next month, with $600 million to refinance existing debt and as much as $300 million for capital project.
Read full article here

On Wednesday’s Commerce Department reported that housing starts in January rose 2.8 percent to a seasonally adjusted annual rate of 591,000.
NEW RESIDENTIAL CONSTRUCTION IN JANUARY 2010
The U.S. Census Bureau and the Department of Housing and Urban Development jointly announced the following new residential
construction statistics for January 2010:
BUILDING PERMITS
Privately-owned housing units authorized by building permits in January were at a seasonally adjusted annual rate of 621,000. This is
4.9 percent (±2.2%) below the revised December rate of 653,000, but is 16.9 percent (±4.0%) above the January 2009 estimate of
531,000.
Single-family authorizations in January were at a rate of 507,000; this is 0.4 percent (±1.2%)* above the revised December figure of
505,000. Authorizations of units in building with five units or more were at a rate of 96,000 in January.
HOUSING STARTS
Privately-owned housing starts in January were at a seasonally adjusted annual rate of 591,000. This is 2.8 percent (±11.5%)* above
the revised December estimate of 575,000 and is 21.1 percent (±12.3%) above the January 2009 rate of 488,000.
Single-family housing starts in January were at a rate of 484,000; this is 1.5 percent (±11.3%)* above the revised December figure of
477,000. The January rate for units in buildings with five units or more was 100,000.
HOUSING COMPLETIONS
Privately-owned housing completions in January were at a seasonally adjusted annual rate of 659,000. This is 12.4 percent (±7.8%)
below the revised December estimate of 752,000 and is 15.3 percent (±10.5%) below the January 2009 rate of 778,000.
Single-family housing completions in January were at a rate of 427,000; this is 12.9 percent (±7.1%) below the revised December rate
of 490,000. The January rate for units in buildings with five units or more was 215,000.
New Residential Construction data for February 2010 will be released on Tuesday, March 16, 2010,

Go ahead and do a double take but its all true.  Lennar, one of the top five  home builders in the nation , actually reported the first quarterly profit since 2007.

The company reported earnings of $35.6 million, or 19 cents per share, for the fourth quarter ended November 30, compared with a year-earlier loss of $811 million, or $5.12 per share.

Sure the earnings were helped along by a $1.34 per share gain resulting from an extension of federal tax law allowing companies to apply losses to prior income but none the less the company beat expectations.  Wall street was looking for a 48 cents per share loss.

Lenar also said that it’s gross margins increased to 17.8 percent  (excluding charges) as the company cut down on incentives and also  benefited form lower construction costs.

Here is the Lennar press release

2009 Fourth Quarter

• Revenues of $913.7 million – down 29%
• Earnings per share of $0.19 (includes $1.34 earnings per share related to the reduction of the deferred tax asset valuation allowance primarily due to a NOL carryback, offset by a $0.58 per share charge related to valuation adjustments and other write-offs and a $0.31 per share charge related to valuation adjustments to land the Company intends to sell or has sold to third parties)
• Gross margin on home sales of 17.8% (excluding valuation adjustments of $55.5 million)
  • Improved 80 basis points from Q4 2008
  • Improved 220 basis points from Q3 2009
• Gross margin on home sales of 11.1% (including valuation adjustments)
  • Decreased 50 basis points from Q4 2008
  • Improved 330 basis points from Q3 2009
• S,G&A expenses decreased $32.2 million, or 19%
• S,G&A expenses as a % of revenues from home sales of 16.2% – up 210 basis points
• Homebuilding cash of $1.3 billion and no outstanding borrowings under the Company’s credit facility
• Homebuilding debt to total capital, net of homebuilding cash, of 36.9%
• Maximum recourse indebtedness related to the Company’s unconsolidated entities of $287.7 million – reduced $92.6 million since Q3 2009
• Deliveries of 3,496 homes – down 23% from Q4 2008; up 30% from Q3 2009
• New orders of 2,652 homes – up 3%
• Cancellation rate of 20% – compared to 32%
• Backlog dollar value of $479.6 million – improved 5%

2009 Fiscal Year

• Revenues of $3.1 billion – down 32%
• Loss per share of $2.45 (includes a $1.73 per share charge related to valuation adjustments and other write-offs and a $0.35 per share charge related to valuation adjustments to land the Company intends to sell or has sold to third parties, offset by $0.48 earnings per share related to the reduction of the deferred tax asset valuation allowance primarily due to a NOL carryback)
• Deliveries of 11,478 homes – down 27%
• New orders of 11,510 homes – down 14%
• Cancellation rate of 18% – compared to 26%

Lennar Corporation (NYSE: LEN and LEN.B), one of the nation’s largest homebuilders, today reported results for its fourth quarter and fiscal year ended November 30, 2009. Fourth quarter net earnings in 2009 were $35.6 million, or $0.19 per diluted share, compared to a net loss of $811.0 million, or $5.12 per diluted share, in 2008. The net loss for the year ended November 30, 2009 was $417.1 million, or $2.45 per diluted share, compared to a net loss of $1,109.1 million, or $7.00 per diluted share, in 2008.

Stuart Miller, President and Chief Executive Officer of Lennar Corporation, said, “During the fourth quarter, the overall housing market continued to move towards stabilization as more confident homebuyers took advantage of increased affordability and the $8,000 federal tax credit. While we continue to adapt our business in light of the current economic landscape and its challenges, we are optimistic that homebuyers have recognized that the residential housing market is improving and will continue to take advantage of the extended housing stimulus.”

Mr. Miller continued, “We continued to focus on the basics of our homebuilding operations, as we strategically position our company to return to profitability in 2010. We experienced the first year-over-year increase in new orders since our first quarter of 2006. Additionally, our fourth quarter results reflected a sequential improvement of 190 basis points in pre-impairment operating margin. This improvement was primarily driven by reduced sales incentives, lower construction costs and the successful rollout of our new value-engineered products.”

Mr. Miller concluded, “We ended the year with $1.3 billion in cash and a responsible homebuilding debt-to-total capital ratio, net of homebuilding cash, of 36.9%. Additionally, as a result of tax legislation that was enacted in our fourth quarter, we will receive a tax refund of approximately $320 million in early 2010. Our improved balance sheet enables us to continue to capitalize on distressed land-buying opportunities, which will improve our operating results in 2010 and beyond.” Source

The bright spot in November housing starts figures were the very volatile multifamily segment which  skyrocketed 67.3 percent to reach and annual pace of  92,000 . marking a drastic reversal of October’s decline.

According to the  Commerce Department s housing starts increased 8.9 percent to a seasonally adjusted annual rate of 574,000 units. That number, though below consensus expectations of 580,000 units, is none the less an improvement over the downwardly revised October number of 529,000 units.

November new building permits climbed 6  percent over October’s numbers  to 584,000 beating analyst’s expectations of 584000 units.

Here is the link to the Commerce Department Press Release

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New home construction  in the United States fell sharply last month,  idicating possible  potential weakness in the economy’s recovery.

Accorsing to a  Commerce Department report issued on Wednesday housing starts dropped 10.6 percent to a seasonally adjusted annual rate of 529,000 units. This marks the steepest drop since April and the percentage drop was the biggest since January.

The markets had expected housing  starts to rise to 600,000 units. September’s housing starts were revised upwards to a 592,000 unit rate from the previously reported 590,000 units.

Experts are expressing concern that the trickle down effect of construction crew layoffs will impact suppliers and other associated industries taking a toll on the recovery

My own oppinion is that even though the numbers should be taken very seriously the low construction starts  have to be considered in the the context of the confusion created by sloppy handling of the credit extenssion. The coming two or three weeks will gives us a clearer  picture of the impact that the credit extension has on housing starts. That it was handled this poorly is inexcusable as is the fact that the it was not made more comprehensive. I hope that this will drive home how crucial tax breaks are to the housing industry and by extension the the entire economy and that congress will act accordingly.

N.J. Transit breaks ground for ‘missing link’
By Paul Nussbaum

INQUIRER STAFF WRITER

“Work began today in Pennsauken to close the “missing link” of South Jersey passenger rail transportation.
With a politician-studded groundbreaking ceremony, New Jersey Transit started construction of a $40 million train station to connect the east-west Atlantic City Line and the north-south River Line. The station will open in three years.”
Read Mr Nussabaum’s article here
Contact staff writer Paul Nussbaum at 215-854-4587 or pnussbaum@phillynews.com.

As inventory supply and demand  slowly approaches  normal levels  or as close to that as we have had in some time, builders are cutting back on some of the more extravagant  freebies.

While free cars and free pools might be a thing of the past builders continue to offer more “organic” incentives such as paying points on mortgages or offering incentives on upgrades.

Source, Builders Cut Back on Incentives Source: The Wall Street Journal, Dawn Wotapka (10/05/2009)

For the fifth month in a row public construction scored  gains. July’s increase of 1.0 percent to $321.75 billion, marks the highest on record. State and local construction also rose 1.0 percent to a record $295.79 billion, and federal building was up 1.9 percent.

While public construction which makes up a third of total U.S. construction spending, made gains , private construction dropped for the second month in a row, by 0.1 percent.

Private residential building, which makes up a quarter of construction spending, rose 0.5 percent to $246.07 billion.

As if the Chinese-fire-drill, locally known as the negotiations between Silverstein Properties and the Port Authority of New York and New Jersey ( don’t get me started on that unholy agency), is not enough of a mess, in comes Governor Paterson to ensure that the smelly stuff will really hit the fan and nothing will get done at light speed. To wit, both sides have agreed to postpone  turning  to the  court appointed arbitrators.  If anyone wants to give you even money that that’s exactly where this will end up anyway take it and run.  I am not sure what to call Paterson, lame -duck is too optimistic, but whatever it is it won’t be the the man who facilitated the construction of the WTC.

Here is a great article on this  from  Matt Dunning at The Tribeca Trib

““The [Port Authority’s] proposal would make the project unfinanceable and would make it highly unlikely that office towers, retail and other important components of the World Trade Center would be built any time soon,” Silverstein said in a June 16 letter to the Authority. Earlier in the month, Silverstein announced he wanted arbitrators to step in to the stalled negotiations if a solution couldn’t be reached by July 20. The deadline arrived, but after a two-and-a-half-hour meeting with Gov. David Paterson, Silverstein agreed to postpone the hearings and continue negotiatiating.”

Read article here

Despite high unemployment and general concerns of too much existing inventory, new-home construction appears to be rising.

According to Friday’s report from the U.S. Commerce Department, construction of new homes rose 3.6 percent in June compared to May. Building permits climbed 8.7 percent, and single-family home starts jumped 14.4 percent to 470,000, after rising 5.9 percent in May.

In real numbers, ground was broken for an estimated 58,300 houses nationwide in June, and an estimated 58,400 building permits were issued.

Here’s a look at housing starts in different U.S. regions:

• Midwest: up 33.3 percent
• Northeast: up 28.6 percent
• South: down 1.4 percent
• West: down 14.8 percent