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Want more housing market stories from Lance Lamberts ResiClub in your inbox? Subscribe to the ResiClub newsletter. This week, the U.S. is set to impose new tariffs as part of President Donald Trumps trade policy. Imports from Canada and Mexico are facing an additional 25% tariffwith the only exception being energy resources from Canada, which will have a 10% tariff addedwhile imports from China will be subject to a new 10% tariff. Although there were signs on Monday that at least some of these tariffs may be delayed, builders have already been feeling anxious. Indeed, on Friday the National Association of Home Builders (NAHB) published a public letter asking Trump to exempt building materials from the increased tariffs on Canada and Mexico, citing their harmful effect on housing affordability. The reason for the unease: Even before the tariff announcement, homebuilders were feeling pinched by spiked construction and labor costsjust look at the National Association of Home Builders latest national averages for itemized costs in each stage of construction for a new single-family home. In 2022, the average sales price of new single-family homes sampled by NAHB was $644,750 and includes costs for construction, the finished lot, financing, overhead and general expenses, marketing, sales commission, and profit. Total construction costs for the average new single-family home included in the survey was $392,241. In 2024, the average sales price of new single-family homes sampled by NAHB was $665,298 and total construction costs for the average new single-family home included in the survey was $428,215. Among new builds included in the survey, thats a 3.2% jump for average sales price and a 9.2% jump for total construction costs. Since mortgage rates spiked in late spring 2022, lower housing demandalong with builders in many markets offering more incentives and affordability adjustments to attract buyershas squeezed margins off the historic highs achieved during the pandemic housing boom. For some homebuilders, rising input and construction costs have further compressed margins over the past two years. See the chart below. (Note: Each category below includes all the costs paid by a builder that go into a particular item, including labor costs paid directly by the general contractor, the cost of hiring subcontractors, and the cost of materials, however they are purchased.) Homebuilders have seen one major area of relief: framing. During the pandemic housing boom, a surge in housing demand and remodeling demand collided with supply chain disruptions, sending lumber prices to historic highs. Sawmills, which had cut production early in the pandemic expecting a slowdown, struggled to keep up as demand soared, causing lumber prices to skyrocket. Lumber prices came back down as supply chains improved and demand for remodeling softened, thus lowering costs for framing. Indeed, the price per thousand board feet of lumber, currently at $592, is 58.3% below its peak of $1,419 in May 2021. Some lumber futures contracts at the time in spring 2021 were trading for over $1,700 per thousand board feet. The problem for homebuilders: The one area of price relieflumberalso happens to be one of the most vulnerable to a price squeeze if the new U.S. tariffs on Canadian goods remain in place. Around 30% of the softwood lumber used in the U.S. is imported from Canada. This softwood lumber already faces an average duty of 15%, which could rise to 40% if Trump’s additional tariffs take effect.
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E-Commerce
Nine months ahead of this year’s annual U.N. climate summit, known as COP30, lodging prices in the Brazilian host city of Belem are turning headsand may soon turn off would-be attendees from the first such meeting in the Amazon rainforest. With a shortage of housing and high interest, property owners and rental companies are feeling emboldened to charge five-digit rates, even for cramped rooms with shared bathrooms. On Booking.com, one of the last available hotel rooms listed, a flat apartment, is going $15,266 for one person, up from $158 for the same category currentlya 9,562% increase. A 15-day stay during the conference in November would total $228,992, enough to buy a four-bedroom apartment in one of Belems top neighborhoods. On Airbnb, a room with a shared bathroom in Ananindeua, a poor city near Belem, is listed at $9,320 per day. A comparable room today could be rented for as little as $11 per day. In more upscale neighborhoods, renting an apartment that accommodates eight people costs up to $446,595 for a two-week stay. This one scared me,” joked local architect and digital influencer Renato Balaguer about a dilapidated apartment listed at $10,000 for an 11-day stay. “This is like putting gringos in captivity. False imprisonment is a crime! said Balaguer in a post that went viral. President Luiz Inacio Lula da Silva, who champions himself as a protector of the environment, has boasted about hosting the event in the Amazon, which helps regulate the climate by storing large quantities of carbon dioxide, a gas that causes climate change. This is also a landmark year in the annual process because countries must come forward with updated commitments to cut greenhouse gas emissions. Whats more, civic groups are particularly interested in attending because Brazil allows for protests and free expression, which are sharply restricted in the previous three host countries: Azerbaijan, the United Arab Emirates, and Egypt. Brazil, Latin America’s largest and most populous nation, has hosted other world events, such as the 2016 Olympics in Rio de Janeiro and the 2014 World Cup, with games played in Rio de Janeiro, Sao Paulo, Manaus, Belo Horizonte, and several other cities. Belem, an Atlantic port city that is on the edge of the Amazon rainforest, doesn’t have the same infrastructure as other big cities, which has led to many questions about its ability to host COP30. Officials estimate that about 50,000 people will attend the summit, scheduled to take place Nov. 1021. Last year in Baku, Azerbaijan, the official tally was 54,148. Before that, in Dubai, attendance reached a record 83,884. Neither the federal government nor the Para state government responded to questions about the number of rooms currently available in Belem, a bustling and impoverished metropolis of 2.5 million people and the median income is $920 per month. Those who booked more than a year in advance secured lower prices, but many of those reservations have already been canceled without explanationa common practice in the hospitality business ahead of major events. Another issue is the increasing prices of accommodations already booked. One European nonprofit reserved a room for $2,000 in December, only to see the price rise to $7,200 two weeks later. Various groups that often attend the annual summit, including environmental nonprofits, activists, scientists, journalists, and businesses, are having to rethink whether they go as the prices rocket up. Planning for COP30 in Belem has been challenging due to limited and expensive accommodations, creating barriers for our participation,” said Roberta Alves, deputy director of communications at Mercy Corps. The international humanitarian nonprofit has participated in several COPs, focusing its advocacy on financing a transition to green energy, adapting to climate change impacts, and how climate change exacerbates conflict. We are awaiting alternative options from the COP30 organizerscritical to ensuring that all voices, especially those from the frontlines of the climate crisis, are included in global conversations, Alves added. Owners and property managers offering rentals say the prices are a question of supply and demand, and besides, they also have high costs. Just the electricity and water for my house cost 5,000 Brazilian real ($860) per month, said Gisleno da Silva, who posted the ad for the Ananindeua room for $9,320 per day. At this price, I already have someone interested, he said, while adding he was open to negotiate. In the face of mounting criticism, the Brazilian government has said it will provide an additional 26,000 bed spaces. Those will include accommodations in docked cruise ships, public schools, new hotels, and military facilities. In a social media post published Friday, COP30 organizers said accredited participants would soon be able to book accommodations on an online platform. We have observed a disproportionate increase in rental prices, which we attribute to real estate speculation. This should stabilize as the government increases the availability of accommodations, Valter Correia, the special secretary for the event, said in the statement. Plenty of advocates are defending Belem, saying its challenges are minor compared to the significance of hosting the most important annual climate meeting in the worlds largest rainforest. In an article published in Valor Economico newspaper in December, environmentalist Priscilla Santos, cofounder of the Amazonians for Climate Network, said criticism of Belem not only reveals colonialist biases but also undermines an event that could be transformative for the region. Everyone wants to save the Amazon, but no one wants to discuss it in the territory? Meanwhile, worried about their reputation, some property managers are distancing themselves from the speculation. In an Instagram video that went viral, Fabrício de Menezes compared the daily rental price of an apartment in Belem, charging $21,800 during COP, to the much lower rates of the iconic Jumeirah Burj Al Arab in Dubai, which markets itself as the worlds only seven-star hotel. I hope this is a joke by the owner, he said. Another local property manager, Carlos Netto, said he would never advise a property owner to charge such high prices. Do you think that gringos are clueless? Where in the world is a 20-day rental more expensive than the property? he posted. ___ The Associated Press climate and environmental coverage receives financial support from multiple private foundations. AP is solely responsible for all content. Find APs standards for working with philanthropies, a list of supporters and funded coverage areas at AP.org. Fabiano Maisonnave, Associated Press
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E-Commerce
Japanese technology giant SoftBank Group and OpenAI stepped up their AI partnership Monday, setting up a 50-50 held company called SB OpenAI Japan.SoftBank Chief Masayoshi Son and OpenAI Chief Sam Altman appeared at an event in Tokyo, talking up their collaboration and inviting Japanese companies to join.Son, holding a shiny blue crystal ball as a symbolic prop, said its AI service Cristal could be used by companies for planning, marketing, emails, and figuring out old source codes.Cristal will first roll out in Son’s own SoftBank Group companies, which include Arm, a semiconductor and software company, and PayPay, an electronic payment service. SoftBank said it plans to spend $3 billion a year to integrate Cristal across its companies.“This will be superintelligence for the company. I’m so excited,” Son told reporters and other participants at the Transforming Business through AI event.Altman talked about the just announced “deep research,” which allows ChatGPT to carry out more complicated tasks, including preparing reports by browsing the web and finding thousands of sources far more quickly than a human worker.Deep research will be available in Japan in the Japanese language, he said.“This partnership with SoftBank will accelerate our vision for bringing transformative AI to some of the world’s most influential companies, starting with Japan,” said Altman.SoftBank and OpenAI, along with Oracle, are part of the Stargate project supported by President Donald Trump, investing up to $500 billion in artificial intelligence infrastructure in the United States.Son said Stargate will expand into Japan, as well as other nations.The technology sector has been shaken by the recent announcement from Chinese newcomer DeepSeek that it has come up with very smart but low-cost AI. Yuri Kageyama is on Threads: https://www.threads.net/@yurikageyama Yuri Kageyama, AP Business Writer
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