September existing-home sales show another strong gain
According to the National Association of Realtors, the 10% increase in existing-home sales for September affirms that “a sales recovery has begun,” although it may choppy.
Existing-home sales jumped 10.0% to a seasonally adjusted annual rate of 4.53 million in September from a downwardly revised 4.12 million in August. The September figure is well below last year’s rate of 5.60 million, but last year’s figure was inflated by the approaching deadline of the home buyer tax credit.
“A housing recovery is taking place but will be choppy at times depending on the duration and impact of a foreclosure moratorium,” said Lawrence Yun, NAR chief economist. “But the overall direction should be a gradual rising trend in home sales, with buyers responding to historically low mortgage interest rates and very favorable affordability conditions.”
NAR president Vicki Cox Golder, owner of Vicki L. Cox & Associates in Tucson, Ariz., said opportunities abound in the current market. “A decade ago, mortgage rates were lmost double what they are today, and they’re about one-and-a-half percentage points lower than the peak of the housing boom in 2005,” she said. “In addition, home prices are running about 22% less than five years ago when they were bid up by the biggest housing rush on record.”
To illustrate the jump in housing affordability, the median monthly mortgage payment for a recently purchased home is several hundred dollars less than it was five years ago. “In fact, the median monthly mortgage payment in many areas is less than people are paying for rent,” Golder said.
Housing affordability conditions today are 60 percentage points higher than during the housing boom, so it has become a very strong buyers’ market, especially for families with long-term plans. “The savings today’s buyers are receiving are not a one-time benefit. Buyers with fixed-rate mortgages will save money every year they are living in their home — this is truly an example of how homeownership builds wealth over the long term,” Golder added.
Total housing inventory at the end of September fell 1.9% to 4.04 million existing homes available for sale, which represents a 10.7-month supply at the current sales pace, down from a 12.0-month supply in August. Raw unsold inventory is 11.7% below the record of 4.58 million in July 2008.
Briggs & Stratton narrows loss in Q1
Milwaukee-based Briggs & Stratton Corp. reported net sales for the first quarter, 2011, at 334.1 million, up 2.9% from $324.6 million reported for the first quarter of fiscal 2010.
For the three-month period ended Sept. 30, the company reported a net loss of $8.1 million, compared with a net loss of $8.7 million for the same period last year.
For the engines segment, the company reported sales of $205.0 million for the quarter, up 0.4% from last year, with a net loss of $5.5 million, compared with a loss of $4.9 million for the same period last year.
For the power products segment, sales were $168.2 million, up 1.4% from the prior year, with a loss of $5.0 million compared with a net income of $2.5 million for the period last year.
“We are pleased with our fiscal 2011 first quarter results as we move forward executing our strategy despite continued economic uncertainty,” commented Todd Teske, chairman, president and CEO of Briggs & Stratton. “We improved sales and operating results through a period of continued slow growth in consumer spending. Along with these improved operating results, our balance sheet remains strong as we continue to focus on efficiently managing our capital.”
Looking forward, the company projects a 2011 net income in the range of $60 million to $70 million with a sales increase of 2% to 4%.
Cicero becomes COO at 84 Lumber
84 Lumber has announced several executive appointments, including the promotion of executive VP Frank Cicero as its new chief operating officer. Cicero, who started with the company as a management trainee 27 years ago, will retain his responsibility for store operations and assume additional corporate duties.
The company has also named Dan Wallach, its current CFO, to executive VP strategic initiatives. A 20-year veteran of 84 Lumber, Wallach will oversee a newly created department, which will be responsible for analyzing and bringing to market new products and service initiatives.
Paul Lentz, the company controller, has been promoted to CFO. Lentz has 24 years of experience in the company’s accounting department.
Headquartered in Eighty Four, Pa., 84 Lumber is the industry’s largest independent LBM chain, with 282 stores and component manufacturing plants in 35 states. It ranked 5th on the HCN Top 350 Pro Dealer Scoreboard this year, with $1.35 billion in annual sales.