New Housing Startsby Carla Hill
April 26, 2011

Housing starts rose last month. They were up 7.2 percent from February figures. The National Association of Home Builders (NAHB) reports that builders are remaining cautious. “While the overall rate of new-home production remains quite low and is still being weighed down by significant uncertainties among both home builders and buyers, this latest report is encouraging,” said Bob Nielsen, chairman of the National Association of Home Builders (NAHB) and a home builder from Reno, Nev. “It means that some builders are cautiously beginning to re-stock their extremely thin inventories of new homes in anticipation of gradual improvement in consumer demand as the economy slowly inches toward recovery.”

Regionally, the Midwest saw the most impressive gains, rising 32.3 percent. The West also saw double-digits gains of 27.6 percent. The Northeast experienced a more modest 5.4 percent gain, while the South saw housing starts decline by 3.3 percent.

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Seattle Real Estate Tyler Freed

by Associated Press

via the KING5.com website
Posted on April 1, 2011 at 6:50 AM

WASHINGTON, D.C. – The unemployment rate fell to a two-year low of 8.8 percent in March and companies added workers at the fastest two-month pace since before the recession began.

The Labor Department reported Friday that the economy added 216,000 new jobs last month, offsetting layoffs by local governments. Factories, retailers, education, health care and an array of professional and financial services expanded payrolls.

The second straight month of brisk hiring is the latest sign that the economy is strengthening nearly two years after the recession ended.

Private employers, the backbone of the economy, drove nearly all of the gains. They added 230,000 jobs last month, on top of 240,000 in February. It was the first time private-sector hiring topped 200,000 in back-to-back months since 2006 – more than a year before the recession started.

The unemployment rate dipped from 8.9 percent in February to 8.8 percent in March. The rate has fallen a full percentage point over the last four months, the sharpest drop since 1983.

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Seattle Real Estate Tyler Freed

Figures confirm dismal year at Port of Tacoma

Share Kelly Kearsley; The News Tribune

The Port of Tacoma will end this year $17.9 million in the red – the first time the agency’s bottom line has been negative in recent memory.

The agency’s loss of profit is largely the result of a $38.8 million write down – or accounting for the lessened value – of investments the port made in projects that have since been canceled.

Because it’s more of an accounting measure than a reflection of the port’s available cash, the negative bottom line won’t affect the port’s ability to pay its bills or require additional expense cuts.

“It’s going to be tight and because of throwing everything in this year as far as writing everything off, if there were new things coming up we wouldn’t be able to do them,” said Commissioner Dick Marzano.

FEELING THE RECESSION

The global recession has hurt the shipping industry and had a direct effect on port revenue, which was down 5 percent this year from last to $92.9 million. The port expects revenue growth to remain weak over the next few years due to the weakened economy.

The commission is scheduled to approve the 2010 budget Thursday. They plan to keep the tax rate the same – at 18.3 cents per $1,000 of assessed valuation.

The budget discussions come after the port last month canceled its plans to develop the Blair-Hylebos Waterway for shipping and build new customer NYK Line a terminal. Missteps in the project’s planning caused its cost estimations to balloon, though NYK eventually pulled the plug due to the economy.

Some commissioners have said they didn’t have all the information they needed when making decisions about the development. The commission and Port Executive Director Tim Farrell announced Farrell’s pending departure from the organization last month.

Last week, the commissioners peppered staff with questions and asked for additional information during a three-hour study session on the port’s business forecast and budget.

“I think one of things we’re very cognizant of is that the commission needs to be apprised of what’s going on,” said Commissioner Connie Bacon.

Port cargo volumes have been falling since 2007. The shipping industry is largely consumer driven, and as spending has dropped so has their business. To save money, container shipping lines have laid up ships, scrapped others and consolidated with other companies.

One consolidation resulted in long-time customer Maersk leaving the Port of Tacoma for Seattle.

Meanwhile, the West Coast has seen its market share of Asian imports shrink.

According to a report presented to the commission by port business and economic analyst Josh Adams last week, in 2006 the coast had 75 percent of Asian imports, and in the first quarter of this year, it was down to 70 percent.

But Adams said the region’s clinch on that business has been slipping as shippers choose slower, and sometimes less expensive routes inland, via the Gulf Coast and East Coast. Efficiency at ports and rail rates may also play into the shift.

CONTAINER VOLUME OFF

This year, the port’s container volume – the bulk of the organization’s business – is down 16 percent to 1.2 million TEUs or twenty-foot-equivalent units, the standard measure of a container. The number of imported cars and cargo that doesn’t fit into a container is also significantly down.

The port earns revenue from leasing its property – terminals – to shipping lines and marine terminal operators and from fees it charges related to cargo. Revenue from the first is typically pretty static, but the port took a hit in revenue from its cargo-related fees including fees it charges to move containers from ships onto trains.

Total operating revenue slipped this year to $92.9 million from $98.2 million last year. To compensate, the port began cutting expenses in the spring including reducing its staff. About 220 people work there now.

The port’s canceled plans to build a new terminal for NYK Line saved the port an additional $64.6 million in capital expenditures for 2009.

But accounting for the completed design work on the NYK Terminal and Blair-Hylebos development project, as well as money invested in Maytown, was still a big hit to this year’s budget. That design work and investment in the South Thurston County property accounted for $26 million of the $38.8 million write down, said David Morrison, the port’s finance director.

The port is in negotiations with an unidentified buyer for its Maytown land. Tara Mattina, port spokeswoman, said the agency expects to take a loss on the $27 million it’s invested in the property.

Profit before the write down, and not counting money collected by the tax levy, was $13.9 million.

TIGHT TIMES AHEAD

The cargo picture remains bleak – at least for the next few years. In his presentation to the commission, Adams projected that container cargo would dip again next year and may not even come back to 2009 levels in the next five years.

The projections are conservative. In fact, though NYK Line has said it plans to use an existing container terminal at the port, the cargo forecasts don’t yet account for that business.

“I think we’ve seen the worst,” Marzano said. “The staff gave us an ultra-conservative report and that gives me optimism in the sense that I don’t foresee it being as bad.” Without the NYK project, capital spending over the next five years has been scaled back.

Two years ago the budget included a nearly $1 billion, five-year capital improvement program. Next year’s budget put five-year capital spending at closer to $208 million, mostly to improve existing terminals and for environmental projects and road and rail infrastructure.

The port has a new financial focus – pushed by Commissioner Don Johnson – of squeezing better returns out of its existing assets, including exploring ways to generate revenue from property it purchased for the NYK Terminal and related infrastructure on the Blair Waterway.

“We purchased an asset with a plan for development – and that will happen in the long term,” said port deputy director John Wolfe. “The opportunity now is to use it in a way that generates revenue.”

LOOKING AHEAD

The new goals are high – the port is aiming for a nearly 5 percent return on assets over the next five years. That is a long way from the -1.4 percent return on assets the port posted this year and the barely single digit percentage returns forecasted for the next five years. Next year’s revenue is forecasted at $100.3 million, and the port expects to post a profit of $14.3 million not counting money collected by the tax levy.

Wolfe said last week that next year will likely be financially challenging – many of the expense cuts made last year will remain in place, including a hold on merit-based pay increases and limits on training and travel.

The commission lowered the tax levy rate last year and plans to keep it the same this year – though the port will collect less because of declining property values. The port collected $16.9 million in taxes this year and expects to collect $16.3 million next year. Commissioners said that it’s important that the tax not subsidize the port – even in hard times.

“One of the main missions is to create a sustainable entity,” Johnson said.

Kelly Kearsley: 253-597-8573

Kelly.kearsley@thenewstribune.com

Seattle Real Estate Tyler Freed

“Americans are still delusional about the long-term trajectory for house prices” http://is.gd/4fMeE # Peter Schiff on the Dori Monson show right now on 97.3FM # “Washington has lost almost 1 out of every 20 jobs since the state’s economy began slumping early last year.” http://is.gd/4joCS # Seattle P-I takes on the new NWMLS rules that target Zillow http://is.gd/4jsJa (only 2 weeks after everyone else http://is.gd/4jsKF ) # I smell a new theme for plucky lawyer vs. evil m

Seattle Real Estate Tyler Freed