Construction costs, already making the lives of developers and builders difficult, are expected to rise this year and in 2009 and in 2010, according to a report by the Associated General Contractors of America.

Some, however, are expected to go up more than others. Here’s a look at how pricing on some of the materials should shake out in 2008, according to the group.

• Steel: An increase over 2007 of about 5 percent, characterized as a modest increase, given slowing demand for construction and the weak dollar.

• Concrete: A small 2 percent to 4 percent increase after a 3.3 percent increase in 2007.

• Copper: A jump of 10 percent or more. While copper prices were down 3.8 percent in 2007, copper was up in February by 40 percent from the same time a year ago.

And here are a couple of excerpts from the report, explaining why prices on construction materials are expected to continue to be up by 6 percent to 8 percent for the next several years:

“As long as demand is rising sharply in large developing countries such as China, India and other East Asian and Middle Eastern nations, there will be upward pressure on prices. Supplies of copper and oil are likely to remain tenuous, leading to frequent price spikes. Even products made from abundant raw materials, such as steel, are likely to experience price jolts when the exchange rate of the dollar makes U.S. scrap iron cheap for foreigners and foreign steel expensive for U.S. customers.”

Second, construction will always be dependent on physical delivery of heavy, bulky, relatively low-value materials for which transportation and fuel costs are a major part of the delivered price …Growing transportation bottlenecks and rising fuel prices will have a greater impact on construction than on most other industries or consumers.”

Wondering when the national housing market might stabilize? Freddie Mac's chief economist said Thursday you'll be waiting until 2010, according to a McClatchy story by Kevin G. Hall.

One piece of good news: New home construction is expected to dwindle to the point that supply will finally catch up with demand.

Here's the story:

U.S. home prices are unlikely to recover until at least 2010, one of the nation’s top housing economists said Thursday, adding that home building this year is likely to post its worst year in five decades.

Speaking to the National Economists Club, Frank Nothaft, the chief economist for government-sponsored mortgage buyer Freddie Mac, painted a grim picture of today’s housing market.

Through the final three months of 2007, he said, sales of existing homes were down 29 percent from the same period two years earlier. Forty-six states had falling home prices in the fourth quarter, and prices nationwide were down 9.3 percent. In the Pacific region, which saw the steepest drop, prices fell an average of 17.2 percent, followed by mountain states, whose home prices fell an average of 12.9 percent.

"I don’t think we’re going to see any improvement in the national house-price matrix until 2010," said Nothaft, a respected government economist who’s followed the national housing market for more than two decades.

=> Read more!

It’s getting ugly out there. Ray Pepper, one of the founders of $500 Realty, faxed over two nasty letters yesterday that are being sent out on his behalf but that he says he most certainly did not pen.

It is a bit difficult to quote from the letters, this being a blog for a family newspaper, because they are littered with profanity. But here goes: “If you get up to Tacoma you can check out our boiler room operation. It’s a dump but people go for this c--p in the real-estate business.” And: “Don’t you agree that only a f---ing idiot would pay five or seven percent to buy or sell a house or business?”

Pepper said he finds the letters funny and not a potential harm to the Tacoma business, which opened in August. $500 Realty, a discount brokerage, charges $500 for a listing and refunds 75 percent of the commission to buyers.

At least one of the two letters came to Pepper as “Return to Sender” – whoever mailed it used $500 Realty’s return address. Others have gone to another partner in the company. Pepper said he assumes if real estate companies are receiving the letters, they’re throwing them away.

Pepper said whoever’s writing the letters could have at least tried for a tad more cleverness and done a better job on the writing.

“Is this something we take seriously? I don’t know. He looks like an idiot.”

For home buyers scouring a neighborhood for the perfect house, new listings are like a small box with a big, pretty bow. A new listing, that glimmer of hope that this is The House, is typically thought to be one that’s no more than a week old. However, if you spend much time shopping online, you’ll find some new listings aren’t new at all.

When the price on a listing is changed by 5 percent or more, for example, the home shows up as a “new listing,” regardless of how long it’s been on the market, said Dick Beeson, a Windermere broker and MLS director. An agent making such a price change can cancel the listing and relist the house, generating a new MLS number, he said.

Web sites for Windermere and John L. Scott, the region's two largest real estate companies, catalog all listings regardless of which company is selling the property. The Northwest Multiple Listing Service supplies the listings. (Executives at the MLS were not available yesterday afternoon or this morning. I’ll update this post if I hear back later today.)

“Unfortunately it’s not something that can be controlled on our end," said John L. Scott spokeswoman Shelley Rossi. "If it’s in the MLS as a new listing, our system has no way of knowing that it’s not.”

A listing’s days on market – information accessible only to MLS agents and brokers – will tell consumers how long a house has actually been listed, unless it’s been 90 days or more since a listing was last canceled, Beeson said.

Chris Nye, a member of the Northwest Multiple Listing Service's bylaws committee, said stopping agents from pushing new listings that aren't new is something the committee has been wrestling with for years.

Nye, president of MLS4owners.com in University Place, said agents, including himself, used to make a habit of canceling listings and relisting houses to get a new MLS number when the technology couldn't track a property's history. But with so much more information available so quickly, such changes are no longer effective.

Not to mention it can mislead consumers, he said. MLS rules, he said, say a listing can only be made new when a significant change is made to a home, such as a remodel.

But look out for homes for sale that change companies. Those, too, end up as new listings.

January home prices in the Seattle-Tacoma area fell year-over-year for the first time in an index that tracks values in 20 U.S. metro areas.

Prices fell by 1.3 percent, a far smaller drop than many other areas. The biggest declines were in Las Vegas and Miami, which last month saw drops of 19.3 percent compared to the same month in 2007, according to the S&P/Case-Shiller Home Price Index.

Nationally, prices were down 10.7 percent.

A closely followed means of measuring prices, this index stands out from others for showing the ups and downs over several years. The index ties today's values to where prices stood in January 2000, which gives the Seattle-Tacoma area an index level of 181.6, or home-price growth in the last eight years of 81 percent. That compares to 27.1 percent in Atlanta and 125.4 percent in Miami. (The index looks only at houses and excludes condos.)

Perhaps of concern locally, however, is the months-long trend of smaller and smaller gains and now a decrease in prices. (Northwest MLS numbers show year-over-year price declines in Pierce County five of the last six months.)

Here's a look at the S&P/Case-Shiller year-over-year changes in the last several months for Seattle-Tacoma prices:

January: - 1.3 percent
December: 0.5 percent
November: 1.8 percent
October: 3.3 percent
September: 4.7 percent
August: 5.7 percent
July: 6.9 percent

Real estate agents and brokers often make the case that real estate is local, particularly when talking about the need to differentiate sales activity and prices and other aspects of the local housing market from the national scene.

The topic came up when I did a Q&A with Virgil Wells, the president of the Tacoma-Pierce County Association of Realtors, in today’s paper. When I asked him whether there’s merit in concerns real estate consumers might have after seeing the collapse of Bear Stearns and a fluctuating stock market, here’s what he had to say:

“No, not at all. All real estate is local. We’re very fortunate in the Pacific Northwest, because we have a strong economy, and we have extremely affordable mortgage rates, and we have, in most areas of Pierce County, affordable housing. So our market will not change because of national stock market news.”

What do you think? Can the housing sector in one area be insulated from what happens outside it? Or, in an increasingly global economy, does Pierce County’s housing market share in the economic reverberations that can come from any number of sources, from Bear Stearns to Bank of America to Ben Bernanke.

The supply of homes continues to grow in communities across Pierce County, with all of them well into buyers-market territory. Several are deep into the double digits as measured by months of supply, according to Northwest Multiple Listing Service statistics supplied by Dick Beeson, a Windermere broker and MLS director.

As of mid-March, 16 areas around the county range from 8.1 months of homes listed for sale to more than double that in Gig Harbor, where there were 905 homes for sale, or a 16.7-month supply.

Below you'll find the months of supply as it stood on March 15. Months of supply is calculated by determining how long it would take to sell the number of homes listed for sale at the current pace of sales. Six months of supply is generally considered the point where a market moves from one favoring sellers to one favoring buyers.

Real estate agents, already feeling the brunt of a slowing market, are now facing the brunt of a Pierce County sign law.

Last month, county road crews began removing and throwing away signs found to be illegally installed on the county right of way. Among many of them: ones used to market homes for sale and open houses.

The sign roundup is part of a county-wide effort to enforce long-time sign laws that was tested last summer with a two-month pilot program intended to declutter roadways.

Since Feb. 15, county workers have collected and taken to the dump 1,320 signs, said Bruce Wagner, the county’s road operations division manger. Nearly half were real-estate related, he said.

Agents who’ve lost signs are lamenting the cost of replacement, inconsistently applied rules and the harm the removals are causing their business.

“The county’s never been this aggressive in doing it,” said Jo Jensen, an owner of the Re/Max Partners office in Gig Harbor. “It’s impacting our business, it’s damaging, it’s very costly. It’s not just the agents that are upset, it’s the sellers. In a market where there’s lots of inventory, signs are one of the things that make their phones ring.”

County staff and real estate agents are meeting today to discuss the sign removal efforts.

=> Read more!

IKEA, the popular Swedish furniture retailer, is bringing its prefab housing product to England, where folks can enter a lottery to buy the apartments and town homes.

According to a story at Portfolio.com, which I found at The Real Estate Bloggers, the apartments and town homes will range in price from £99,500 to £149,500, which translates to about $200,000 to $300,000.

You can find the story here, where there's also a slide show of renderings illustrating the inside and outside of the homes. They don't exactly look like an IKEA show room, but if you know your way around the company's brushed metal finishes and blonde-wood cabinets, the resemblance is not a stretch.

Any room in Pierce County for something like this? Maybe IKEA could be the company that brings more of the hard-to-find, median-priced condos to downtown Tacoma.

Some home sellers are getting extra creative in their attempts to find a buyer. I wrote about buyer incentives in October that included a free Honda Civic, furniture allowances and gift cards.

But what about an essay contest? Or a rebate of what you pay for a house when the sellers die? Both tactics cropped up in a recent Associated Press story highlighting the extremes some sellers find themselves going to.

Here are some excerpts from the story:

Frustrated as her house languished on the market for three straight summers, J.J. Rodgers is trying a new sales tactic: giving the two-story home away in an essay contest.

Already, she’s received more than 500 entries — each essay requires a $100 entry fee — for her four-bedroom home in Red Feather Lakes, Colo. She’s hoping for a minimum of 2,000 entries, or $200,000 in fees, by the May 25 deadline to pay off the mortgage, cover closing costs and have a little left over. Rodgers last listed the property at $169,000 after cutting the price three times.

“We don’t have anything to lose,” Rodgers, 45, said. “If we’re unsuccessful, at least we did something different from what we’ve already tried.”

And the Pennsylvania couple who floated the unusual money-back-upon-death deal:

Buzz was all Bob and Ricki Husick needed to sell their Wexford, Pa., home using a unique incentive. In October, the couple advertised that the buyer would get the purchase price back upon the pair’s passing. The heirless Husicks added a bonus offer: The buyers could inherit the couple’s retirement home in Arizona, worth about $500,000, too, if they agree to care for the Husicks in old age.

After vetting more than 100 offers following a flood of media attention, the couple found a buyer 80 miles from their two-story colonial and plans to close before the end of April. They will receive their $399,999 listing price. The buyers haven’t counted out the offer to look after the Husicks during their twilight years, but both parties realize circumstances could change in the interim.

“The house is sold. They’ll get the money back. That part’s a done deal,” Husick, 55, said.

Seen any comparable marketing come-ons lately? Any thoughts on how well such tactics work?

Washington remains middle of the pack in U.S. foreclosure filing rankings, according to February numbers released today by research firm RealtyTrac.

The state came in No. 28 last month with a 37 percent year-over-year increase in auction notices, default notices and bank repossessions, the company said. Put another way, Washington had one filing for every 1,194 households compared to one filing for every 165 households in Nevada and one for every 76,836 households in Vermont.

When it comes to cities feeling the worst foreclosure pain, nine of the top 10 were in Florida or California, according to RealtyTrac. The other was Las Vegas.

I’m working on a story about the $1 million condo club in downtown Tacoma. It is so far a rarefied collection, with only a handful of units for sale. Here’s what they all have in common: Big views, lots of square footage, their location in an emerging market. And the promise of urban living.

Is downtown Tacoma the kind of place where buyers will drop $1 million for a condominium? So far, a developer for 505 Broadway says deposits have been put down on two of the building’s five $1 million-plus units, with sales expected to close in the summer when construction wraps up.

If you had $1 million to spend on a home, is this where you’d put it? Here’s a sampling of what you’ll find: Elevator entrances, massive balconies, two-story windows, private wine rooms and multiple master bedrooms.

I ran across a recent Associated Press story that said despite a national housing slowdown, TV shows showcasing home buying and home décor are as popular as ever.

Here’s an excerpt from the AP story:

A&E has several new programs in development. At least six new ones are beginning on TLC in the next year, starting with "Date My House," where former "Bachelor" Bob Guiney hosts a program where potential buyers spend a night in a home on the market.

HGTV had its highest prime-time ratings ever in January. Nine of its top 10 series deal with the housing market, including "House Hunters," ''My First Place," ''Hidden Potential," ''Buy Me" and "Design to Sell." The network did a special Feb. 29 theme day of "taking the big leap," or investing in that first house.

"What's driving interest right now is that people are worried about it — 'what's the value of my home? How can I increase interest in my home?'" said Jim Samples, HGTV president. "And then there's the 'life goes on' factor. People are still changing jobs, families are still getting bigger. If anything, they tend to nest in this environment."

I can’t claim a favorite, because I’ve seen so few. But I will admit to being instantly hooked on a recent weeknight by “My First Home” on TLC. It had all the vicarious pleasure of following along as two very different buyers navigated the ups and downs of buying. A sweet, young couple shopping mobile homes in North Carolina contrasted nicely off a Chicago bachelor who views dozens of condos in under a week and wants, among other amenities, a doorman. The one I saw also portrayed the real estate agents as friendly, available and hard working, which has got to feel good to an industry feeling the weight of sales activity declines, stubborn sellers and hesitant buyers.

Which shows are your favorites?

Here’s one last look at a piece of the statistical picture from last week's release on the February housing market in Pierce County. While closed sales declined countywide from the year before, as they have for months, sales also dropped in every one of the 17 areas tracked by the Northwest Multiple Listing Service.

Three areas, in fact, saw sales drop by more than half: Fife, Gig Harbor and Parkland. Right behind them were South Tacoma and the Lake Tapps-Bonney Lake area. (Anderson Island isn't included, because only one home sold there last month.)

Keep in mind this is a one-month snapshot offering a look at sales last month compared to what was going on in February 2007. This chart shows the number of houses and condos that sold in each area and by what percentage sales dropped year-over-year.

The size of mortgage you can get on a conforming loan, along with conforming-loan pricing, in Pierce County has grown by $150,500 through the end of the year. Such loans tend to be cheaper than loans above the limit, often referred to as jumbo loans.

Pierce County’s conforming loan limit has grown from $417,000 to $567,500, according to the Department of Housing and Urban Development. Along with Seattle, Bellevue and Everett, it’s the highest of the new loan limits in the state.

No word yet, however, on just when these new limits will be accessible, because lenders and brokers are waiting to find out the fees and/or interest rates on these loans.

According to the Northwest Multiple Listing Service, the change opens up an additional 858 homes in Pierce County to the increased limits, meaning 83 percent of homes listed in the county would qualify for the new loan limits.

The shift is temporary, however, and tied to the federal economic stimulus package passed earlier this year, according to a release from Fannie Mae, the country's largest home lending source. The company, along with Freddie Mac, says it will buy conforming mortgages at the higher limits through Dec. 31.

Along with a 7.8 percent year-over-year decrease in Pierce County's median home price in February came declines in several of the 16 areas as broken down by the Northwest Multiple Listing Service.

In fact, six of the areas saw depreciation in the double digits. The largest decline, by percentage? Lakewood, followed closely by Gig Harbor. Median price increases were seen in Fife and North Tacoma, among others. (I’m leaving out Anderson Island again, because so few houses were sold there. I’ll start including it when I do more year-to-date numbers when we get further into 2008.)

Here’s how the February median home prices shook out with the year-over-year increases or decreases. Keep in mind, it’s a one-month look but one that compares this February to last February.

While not the biggest drop in the Puget Sound region, Pierce County February home prices sunk to an attention-grabbing degree, down 7.8 percent from the same month in 2007, according to the Northwest Multiple Listing Service. Recent year-over-year decreases in the low single digits seemed to support the take that the market is merely in the midst of a moderate correction and will be on its way back any day now. But declines nearing 10 percent could point to a different kind of market shift.

Here's where price increases/decreases ended up around the region, according to the MLS:
King: +.45%
Thurston: +4%
Kitsap: -11.2%
Snohomish: -1.4%
Pierce: -7.8%

So what do you think? Is the February price drop a winter-time anomaly? Or will we continue to see prices move downward to this larger degree?

Take a look at the MLS press release accompanying yesterday's numbers and you'll find predictions of a regional rebound. Three paragraphs into the two-page release J. Lennox Scott, CEO of John L. Scott, is quoted talking up the big activity he's already seeing in March. Hey, what about February?

Look for a breakdown tomorrow of areas and prices within Pierce County.

It's always fun to dream a little when it comes to what you might put in your house, or find in your next home purchase, if you had the time or money.

I ran across this Washington Post story recently that provides some fodder -- a shower with music and colored lights, a remote-control front door lock, a "super-premium" oven that comes in more than 200 colors and cooks far faster than its conventional cousin.

Here's how the oven, just $5,995 for a single wall unit, works, according to the story: "The TurboChef, which cooks up to 15 times as fast as conventional ovens, mixes high-speed heated air that circulates at up to 60 miles per hour with precise microwave blasts. Unlike a regular microwave oven, it can brown, sear and caramelize."

Find the whole story here.