You are going to learn more about how the industry is currently struggling with an overflow of inventory, which comes after years of supply shortages that led to a problem in regards to the sector’s affordability. Also, the alterations to the exterior appearance of the future Interstate 64 and a portion of the Interstate 265 corridor are now in the planning phases. In the meantime, as a further consequence of the findings of the most current analysis of the project, the joint venture between Iamgold and Sumitomo Metal Mining will be subject to greater costs and will have a lower net present value. In addition to this, Governor Jim Justice announced today that he has granted his consent to the awarding of the bid for the long-anticipated streetscape upgrade in the downtown area of Wheeling. This improvement has been expected for quite some time.
US buyers are retreating, leaving builders with too many houses.
Original Source: Builders Are Stuck With Too Many Houses as US Buyers Pull Back
In a property market plagued by low inventory for years, builders have a glut of unsold homes.
Mortgage rates rose this year, discouraging purchasers. New-home waitlists are gone. Kevin Brown, a new-home seller south of Houston, is at the forefront of a movement.
Instead of back-to-back appointments, customers now trickle into Brown’s sales office. 55 houses are under construction and 5 are finished, all without deals.
“There’s pressure,” Brown added. “Builders need to hit targets and produce money, so therefore they don’t want stuff lying around.”
Builders who began building months ago are scrambling to adjust to the housing bust. The supply of new homes relative to sales in June was the largest since the 2010 recession. According to a National Association of Home Builders poll, in early July, buyer traffic to home builder websites and sales offices was at its lowest level since 2012.
The new-home glut reflects a market change that’s inflicting havoc. A national housing shortage led to years of bidding wars and desperate purchasers who paid record amounts for fear of missing out. But this year’s rise in borrowing costs has pushed affordability to a breaking point and relieved the shortages.
As builders pull back, long-term supply limits are created. A decade of underbuilding and an aging young population threaten to prolong the affordability strain.
“Despite the fact that there aren’t enough housing units, builders aren’t ready to gamble,” said Jerry Howard, CEO of the homebuilders group. In a recession, they fear they won’t sell.
In June, 824,000 single-family homes were under construction in the US, the most since October 2006. Unsold inventory has risen due to supply-chain problems and staffing shortages that slowed manufacturing.
Due to the uncertain economy, builders are cutting back on starts to prevent having too many unoccupied homes. According to government data, single-family building permits fell to a two-year low in June.
Not all markets are cool. But in pandemic boomtowns, builders piled in to accommodate demand from out-of-state immigrants, who pushed up prices beyond the grasp of locals.
“Builders are seeking to sell any standing inventory,” says Ali Wolf, chief economist for Zonda, which analyses new-home development. Some of the most frenzied markets in the previous two years may see supply surpass demand for a spell.
Boise, Idaho, is a pandemic bubble burster. Remote employees from California wanted more room and fewer virus restrictions. But now COVID restlessness is giving way to concerns that the Fed’s panacea for inflation — higher rates — may send the US into a recession.
Idaho’s largest builder, CBH Homes, has had almost a third of purchasers cancel contracts in recent months, about twice the number at the start of the year, according to the company’s president. There are 200 unsold finished homes, compared to 75 at the end of last year. He claimed he’d probably surpass the 350 he had following the last crash 15 years ago.
In a way, the inventory was always there, he explains.
Builders held off on selling homes until they were a few months from completion. They couldn’t develop fast enough to meet demand. By waiting, they could charge market pricing as material costs rose.
Barton said there are too many listings now… Homes finish or are listed early in construction.
The CBH has slashed starters by half. Subcontractors digging basements or pouring foundations are feeling it, he said.
“Out-of-state buyers created a phony market,” said Barton. Accept the way things are. It will get hard.
BTIG homebuilding analyst Carl Reichardt said smaller builders that need sales to pay back construction loans or those who loaded up on land at today’s high prices are most likely to run into difficulties. He said large public corporations have low long-term financing, strong balance sheets, and geographic variety to balance out bad markets.
Still, PulteGroup Inc. and D.R. Horton Inc. have cautioned investors about declining orders and more cancellations. The S&P Supercomposite Homebuilding Index is down 27% this year through yesterday, more than double the S&P 500’s drop.
Reichardt said builders are hesitant to add too many homes to their pipeline because they don’t know about interest rates or buyer demand. Ralph McLaughlin, a housing expert, says increased inventory in the existing-home market gives house seekers more options. Realtor.com said Tuesday that the number of active house listings rose 31% from a year ago, a record.
“Inventory was low, so purchasers looked to new homes to fill the gap,” said McLaughlin, chief economist for Haus, a co-investment platform for buyers. If inventory rises to normal levels, builders won’t have the edge they’ve had for years.
Traditional vendors can wait or postpone a transaction if conditions worsen. Builders must discount until they discover the market-clearing price, says Benjamin Keys, a Wharton real estate expert.
He is concerned that at the end of a recession, underbuilding will keep prices high.
“The homebuilders have an understandable motivation to pull back right now,” said Keys.
At Saratoga Homes’ Glendale Lakes sales office, marketing director Christina Nuon cold phones agents and hosts happy hours to drive sales. The company offers entry-level purchasers $12,000 toward closing costs and a subsidized 30-year mortgage rate of a little under 4%.
Nuon: “Buying down rates will be our incentive from now on.” It’s the only way we can help buyers. “We can’t drop the price.”
Brown, a sales expert, said incentives helped reduce inventory.
“I am trying to find one buyer at a time,” he stated.
Floyd County I-64 getting more lanes, I-265 getting work.
More lanes and altered exits are part of Interstate 64, a project unveiled Tuesday by the Indiana DOT.
As development in the area develops, there will be increased traffic along the corridor.
Even though building won’t begin until 2024, a public hearing is scheduled for Aug. 17 at Scribner Middle School in New Albany.
Doors open at 6 and a presentation is at 6:30.
The project team will give the latest project updates, an overview of the project, the current schedule, and maintenance of traffic (MOT) statistics, according to INDOT Strategic Communications Director Natalie Garrett. Display boards will be available and team members will answer inquiries. The presentation will also be uploaded online after the meeting.
Construction will take 2 years.
No long-term full closures are anticipated, and two lanes will be open in each direction. Occasionally, lanes or ramps may be closed.
Garrett: “The Interstate 64 project aims to relieve congestion and improve safety and mobility on I-64 Southern Indiana.” The project area covers I-64 between US 150 and Main Street in New Albany and I-64/I-265.
The I-64 work is between Route 150 and Main Street in New Albany. This work will add an eastbound and westbound lane on I-64 from US 150 to Cherry Street.
A new lane will be added from 1-64 to State Street on I-265 east.
At the I-64 and I-265 intersection, ramps will be modified to facilitate right-hand exits. New exit lane installed.
New lanes will connect I-64 westbound to US 150.
“INDOT wants to hear from locals and I-64 travelers,” Garrett added. As we build and perfect the project, we’ll consider all comments. Comments can be submitted at the meeting or by mail or email to KGillette@HNTB.com through Sept. 2. While comments are accepted throughout the development process, a second opportunity will be next fall’s formal public hearing.
Coté Gold costs increase
Original Source: Costs grow at Coté Gold
Iamgold updated its Côté Gold project economics and life-of-mine plan on Aug. 3. The project is planned to be more expensive and to begin production in early 2024, instead of late 2023, with an 18-year mine life. Iamgold and Sumitomo Metal Mining control 70% of Cote Gold.
Côté Gold’s costs, timetable, execution strategy, and risk assessment were updated this year after a project review and risk analysis. Iamgold’s share of outstanding project expenses is about $1.3 billion. The remaining costs were anticipated at $710 million to $760 million at the start of the year and between $1.2 and $1.3 billion in early May.
Côté Gold’s after-tax net present value at a 5% discount rate is presently US$1.1 billion on a 100% basis, with an IRR of 13.5% at a gold price of US$1,700 until 2025 and US$1,600 thereafter. The technical report for 2021 stated that the after-tax net present value had a 19% IRR and was $1.6 billion.
Gold Fields to buy YAmana Gold for $6.7 billion
Côté Gold will produce 495,000 ounces of gold a year for the first six years and 365,000 ounces over the mine’s life. Previous estimates put yearly production at 489,000 ounces for the first five years and 367,000 ounces for mine life. All-in sustaining costs will be $854 per ounce of gold sold.
Measurable and indicated resources for the Côté deposit are 365.5 million tonnes containing 10.2 million ounces of gold grading 0.87 grams per tonne.
Maryse Bélanger, board chair and interim president and CEO, says the company’s rising costs are partly attributable to situations outside its control.
“The project is over 57% complete, and the updated price and timetable provide us with better visibility,” Bélanger added. Coté Gold faces major headwinds, including COVID-19, inflation, and other global events, which affect global supply chains, labor availability, and company expenses.
Bélanger also emphasized the project’s potential for future expansion, starting with the neighboring Gosselin deposit, which has 3.4 million indicated gold ounces and 1.7 million inferred. She said Coté Gold’s construction is key to the company’s goals.
“Given the importance of Coté Gold to achieving our goal of being a premier high-margin gold producer, we are actively evaluating various solutions to improve liquidity,” Bélanger said. We expect to address these near-term obstacles to advance Coté and make [Iamgold] more resilient and agile.
Wheeling Streetscape project awarded by Gov. Justice
Original Source: Gov. Justice announces award of Wheeling Streetscape project
Triton Construction Inc. won the offer with a price of $31,900,000. The project will provide ADA-compliant curb cuts, expanded sidewalks, and decorative brickwork between 10th and 16th streets downtown. The project will also incorporate plants and trees.
The City of Wheeling contributes $1.9 million for construction and $100,000 for design and engineering. The West Virginia Department of Transportation (WVDOT) also received a $16.25 million federal RAISE grant.
Gov. Justice supported the proposal in June 2020 when he met with WVDOT officials, State Sen. Ryan Weld, and Wheeling Mayor Glenn F. Elliot Jr.
“I couldn’t be more eager to start this project,” Gov. Justice said. “It’s vital to Wheeling and the Northern Panhandle.” “Not only will we change the look and feel of downtown Wheeling, but the project will also encourage more people to visit, strengthening the local economy and opening the door to additional expansion.” This is a win for all West Virginians, and I appreciate everyone who helped us get here.
Gov. Justice: “This project has been a long time coming.” During the process, the city modified the project’s scope, delaying our start date. ” But I promised we’d finish, and we’re doing it.”
Wheeling Streetscape was one of six projects in a WVDOT special bid on July 26, 2022. WVDOT wants to approve the contract swiftly to start work.
Streets and sidewalks in downtown Wheeling have needed this work for years, said District 6 Engineer Tony Clark, P.E. This construction will renovate and revitalize downtown Wheeling, giving residents and visitors a good first impression.
Construction will begin this fall and end in 2024.
Summary of today’s construction news
In today’s news, surely you have gained additional knowledge regarding the builders who are sitting on a surplus of unsold homes as a result of a real estate market that has been suffering for years from low inventory. This year, mortgage rates increased, which discouraged buyers from making purchases. No more waiting lists for newly constructed homes. Kevin Brown, a real estate agent who sells new construction homes south of Houston, is at the vanguard of a trend.
According to Garrett, on the other hand, “The goal of the Interstate 64 project is to reduce congestion while also improving safety and mobility on I-64 in Southern Indiana.” I-64 between US 150 and Main Street in New Albany, as well as I-64/I-265, are included in the project’s geographic scope.
Bélanger made the following statement in regards to the increase in costs associated with Coté Gold: “Given the significance of Coté Gold to the accomplishment of our mission to become a premier high-margin gold producer, we are actively investigating alternative solutions to improve liquidity.” We anticipate resolving these short-term challenges in order to promote the Coté initiative and make [Iamgold] more resilient and adaptable.
On top of that, according to District 6 Engineer Tony Clark, P.E., the streets and sidewalks in the downtown area of Wheeling have needed significant maintenance for a number of years. Because of this construction, downtown Wheeling will be renovated and revitalized, which will provide a positive first impression to both locals and visitors. The construction will get underway in the fall of the current year and continue until 2024.