“North Carolina is a great example where they’re focused on job creation and making changes”

The federal government should take a lesson from North Carolina. That’s the gist of some comments thatCisco (Nasdaq: CSCO) CEO John Chambers made to FOX Business on Thursday.

“I think the governors get it,” he says. “”I think that’s why our next president will probably be from the governor ranks on that if a Republican gets elected. And you are seeing them invest in our future.”

He points to North Carolina as a good example. “North Carolina is a great example where they’re focused on job creation and making changes,” he says.

But Chambers is less than impressed with February’s national job numbers that came out today (March 8, 2014). While many pundits are hailing the addition of a better-than-expected 175,000 jobs, Chambers says we should be doing better.

“I think our economy candidly should be growing faster than it currently is,” he tells FOX Business Network. “We should be creating more jobs, more than 250,000 a month to really get back on our feet and get unemployment numbers down over a long period of time.”

But there’s good news, he says, pointing to his own company’s growth as a sign that things may be looking up for the larger economy.

“Our business has been steadily increasing over the last year and a half in what we call our enterprise accounts, large businesses and medium businesses,” he says. “Both of them went into double digits this last quarter, in terms of year-over-year growth. That’s usually a good indication of economic growth later, and it’s usually a good indication of capital spending from business. Jobs will usually follow that. So I think the U.S. is slowly coming out of this.”

As to why the U.S. isn’t doing better? Chambers points to tax policy – an issue he’s been outspoken about before. “Every other major exporting country in the world brings back their foreign earnings at 0 to 2 percent,” he says. “Our country charges 35 percent, so companies cannot bring back their foreign earnings. If the government would change the tax policy to allow us to bring back those foreign earnings we have overseas in our cash, I’d bring it all back and invest in America – in jobs, in acquisitions, commitments to our shareholders, etc. And it’s something that’s got to change.”

Earlier this month, Chambers announced that he had selected Toronto for a $100 million facility investment – not the United States. He has repeatedly said it’s easier to do business in countries such as Canada than the United States.

Cisco employs more than 4,000 people at its campus in Research Triangle Park.

Lauren Ohnesorge covers technology, biotechnology and Durham County for the Triangle Business Journal.

New York Times travel blog featured the City of Oaks

Thursday’s New York Times travel blog featured the City of Oaks in its “36 hours in Raleigh” feature, noting a dozen places readers should consider visiting this weekend between Friday afternoon and Sunday morning.

Included in the proposed “itinerary” are stops at Clyde Cooper’s Barbecue, the North Carolina Museum of Natural Sciences, the North Carolina Museum of Art, and several restaurants and bars.

For the complete travelogue, click here.

Rebecca Troyer, Managing Editor, Triangle Business Journal, manages the day-to-day process of delivering the daily digital content and the weekly print edition. Troyer also handles inquiries on news coverage and newspaper deadlines.

North Carolina is within 10 percent of it’s peak home price appreciation at the height of the housing bubble in 2006 and 2007.

Home prices in the Raleigh-Cary and in the Durham-Chapel Hill metro areas increased more than 7 percent in January, according to a CoreLogic report, but the region trails the national average home price increase of 12 percent.

CoreLogic (NYSE: CLGX), a residential real estate data firm, noted also in its Home Price Index report for January that 22 states, including North Carolina, are within 10 percent of their peak home price appreciation at the height of the housing bubble in 2006 and 2007.

“Polar vortices and a string of snow storms did not manage to weaken house price appreciation in January,” stated Mark Fleming, chief economist for CoreLogic. “The last time January month-over-month and year-over-year price appreciation was this strong was at the height of the housing bubble in 2006.”

Home prices in Raleigh, including distressed sales, increased by 7.3 percent in January 2014 compared to January 2013. On a month-over-month basis, home prices increased by 1.4 percent in January 2014 compared to December 2013.

In Durham, home prices, including distressed sales, increased by 7.4 percent in January 2014 compared to January 2013. On a month-over-month basis, home prices increased by 1.4 percent in January.

Nationally, home prices increased 12 percent in January 2014 compared to the year prior, which represents 23 months of consecutive year-over-year increases in home prices nationally, according to Corelogic. On a month-to-month basis, home prices nationwide increased by 0.9 percent in January.

The CoreLogic Pending HPI indicates that February 2014 home prices, including distressed sales, are expected to increase 12.5 percent over the year prior and increase 0.7 percent over the previous month.

Amanda Jones Hoyle covers commercial and residential real estate for the Triangle Business Journal.

Heritage, a golf community, in Wake Forest, NC is beginning sales on it’s final lots.
All good things must eventually come to an end, and after more than 13 years of near-constant new home construction at the 2,500-acre Heritage community in Wake Forest, developer Andy Ammons is getting ready to sell his last home lots.

Ammons Development has announced it will begin public pre-sales of the 61 private, wooded lots at the Heritage Enclave neighborhood, the final neighborhood out of 38 planned for Heritage.

Construction by the Heritage Custom Builder Team is scheduled to begin this spring, and all of the homes at Heritage Enclave are expected to be priced at more than $500,000.

“Releasing lots in the Enclave is an important day for our team,” says Andy Ammons, president of Ammons Development Group. “The neighborhood will consist mainly of cul-de-sacs with some of the most private, wooded and peaceful lots available in the community. It’s a price point and product offering that will nicely round out the landscape of our current new home options. ”

Within its 37 existing neighborhoods, Ammons Development Group has sold about 2,300 lots to select home builder groups and currently has fewer than 300 lots left to build. Home prices in Heritage have ranged from the $160,000s to the $600,000s.

Heritage also has its own golf course, three public schools, a private school and charter school, and multiple retail and office building facilities.

To read more about Andy Ammons and Heritage, here’s a link to our Q&A session with him last year

Nationally, housing starts in January fell 16 percent

The January cold weather didn’t seem to slow much the pace of new home construction in the Triangle, based on the number of building permits issued in Wake County throughout the month.

Wake County and its municipalities issued 488 new residential permits in January, according to a county report, which was down from a pace of 516 permits per month in 2013 but up 14 percent compared to the same month the year prior.

The number of building permits issued for new housing, a harbinger of future building activity, was nearly double in Apex, Garner and in unincorporated areas of the county, but permits were down in Wake Forest, Rolesville and Morrisville compared to the year prior.
On a dollar level, the value of the new homes permitted increased 13 percent to $104.8 million in January.

For year-end 2013, Wake County building permits increased 28 percent in the new residential category and declined 17 percent in the new commercial building category. Building permit values grew 34 percent to $1.3 billion of new residential construction and increased 5 percent to $621 million in new commercial construction in 2013.

Nationally, housing starts in January fell 16 percent to a seasonally adjusted annual rate of 880,000 units in January, according to the figures from the U.S. Department of Housing and Urban Development and the U.S. Census Bureau.

“Cold weather clearly put a chill on new home construction last month and this is also reflected in our latest builder confidence survey,” stated Kevin Kelly, chairman of the National Association of Home Builders and a builder from Wilmington, Del., in a news release following the HUD report. “Further, builders continue to face other obstacles, including rising materials prices and a lack of buildable lots and labor.”

NAHB Chief Economist David Crowe noted also, however, that single-family permits have held relatively steady the last few months. “The less-weather-sensitive permits data suggests that our forecast for solid growth in single-family housing production in 2014 remains on track, as pent-up housing demand is unleashed.

Amanda Jones Hoyle covers commercial and residential real estate for Triangle Business Journal.

Nationally, housing starts in January fell 16 percent

The January cold weather didn’t seem to slow much the pace of new home construction in the Triangle, based on the number of building permits issued in Wake County throughout the month.

Wake County and its municipalities issued 488 new residential permits in January, according to a county report, which was down from a pace of 516 permits per month in 2013 but up 14 percent compared to the same month the year prior.

The number of building permits issued for new housing, a harbinger of future building activity, was nearly double in Apex, Garner and in unincorporated areas of the county, but permits were down in Wake Forest, Rolesville and Morrisville compared to the year prior.

On a dollar level, the value of the new homes permitted increased 13 percent to $104.8 million in January.

For year-end 2013, Wake County building permits increased 28 percent in the new residential category and declined 17 percent in the new commercial building category. Building permit values grew 34 percent to $1.3 billion of new residential construction and increased 5 percent to $621 million in new commercial construction in 2013.

Nationally, housing starts in January fell 16 percent to a seasonally adjusted annual rate of 880,000 units in January, according to the figures from the U.S. Department of Housing and Urban Development and the U.S. Census Bureau.

“Cold weather clearly put a chill on new home construction last month and this is also reflected in our latest builder confidence survey,” stated Kevin Kelly, chairman of theNational Association of Home Builders and a builder from Wilmington, Del., in a news release following the HUD report. “Further, builders continue to face other obstacles, including rising materials prices and a lack of buildable lots and labor.”

NAHB Chief Economist David Crowe noted also, however, that single-family permits have held relatively steady the last few months. “The less-weather-sensitive permits data suggests that our forecast for solid growth in single-family housing production in 2014 remains on track, as pent-up housing demand is unleashed.

Amanda Jones Hoyle covers commercial and residential real estate for Triangle Business Journal.

Raleigh is the only U.S. city on the list prepared by TransferWise

Raleigh has been named one of eight “emerging tech hubs you should pay attention to” by the international money transfer service TransferWise – and it’s the only U.S. city on the list.

Affordable housing, short commutes and being a good place for young families are cited as reasons tech companies and university graduates are flocking to the Triangle.

“The region … is anchored by cutting-edge research institutions from surrounding universities, growing high-tech companies like Bandwith and Yealink as well as Fortune 100 companies IBM, Cisco … and many more,” according to the TransferWise blog post.

The eight global cities named are as follows:

1. Eindhoven, Netherlands
2. Pune, India
3. Nicosia, Cyprus
4. Dublin, Ireland,
5. Raleigh
6. Hong Kong
7. Malmo, Sweden
8. Tel Aviv, Israel

Rebecca Troyer manages the day-to-day process of delivering the daily digital content and the weekly print edition of the Triangle Business Journal. Troyer also handles inquiries on news coverage and newspaper deadlines.

Over the past year, there has been a revival of single-family home production. What does this mean for 2014?

Housing will continue its climb toward higher ground this year, but builders are still confronting several challenges, according to economists speaking at the National Association of Home Builders (NAHB) International Builders’ Show (IBS).

NAHB Chief Economist David Crowe explains that consumer confidence has returned to pre-recession levels and household balance sheets are on the mend.  Year-over-year household formations are on the rise and now averaging 620,000 compared to just 500,000 during the housing downturn.

At the height of the housing boom, the U.S. was producing 1.4 million additional households each year. Meanwhile, new-home sales are averaging just 8.7 percent of total home sales—barely half the historical average of 16.1 percent.  However, builders still face several headwinds, including rising building material prices, persistently tight mortgage credit conditions, difficulties in obtaining accurate appraisals and limited availability in labor and developed lots.

NAHB forecast for 2014:

• 1.15 million total housing starts in 2014, up 24.5 percent from 2013’s 928,000 units.
• Single-family production projected to rise 32 percent to 822,000 units and surge an additional 41 percent to 1.16 million units in 2015.
• 333,000 multifamily starts, up 9 percent from 306,000 in 2013.
• Single-family home sales are projected to hit 584,000 this year, a 35.9 percent increase above last year’s 430,000 sales.
• Residential remodeling activity is expected to register a modest gain this year over 2013.
• A slow and steady housing recovery will bring nationwide housing starts to 71 percent of normal by fourth quarter 2014 and 93 percent of normal by the end of 2015, says Crowe.
• On a state level, the top 20 percent of states will be back to normal production levels by the end of 2015, compared to the bottom 20 percent, which will still be below 84 percent.

Mortgage rates up, but housing still affordable
As the economy strengthens and the Federal Reserve tapers its buy-back of mortgage-backed securities, there will be upward pressure on mortgage rates, but not enough to harm housing affordability, according to Frank Nothaft, vice president and chief economist at Freddie Mac.

Nationally, Nothaft expects that home sales and prices will each rise about 5 percent in 2014, and that housing starts will post a 20 percent gain.

“As we move into the 2014 home buying season, it will be a market dominated by home buying originations rather than refinance originations,” says Nothaft. “This will be the first time since 2000 that purchase originations will dominate the market.”

He says the reason for the change is because so many households looking to refinance have already done so, and as mortgage rates gradually rise, fewer homeowners will look to refinance. Further, purchase originations are expected to increase as the overall housing market strengthens.
Pent-up demand will fuel growth
In the aftermath of the Great Recession, there is a significant pent-up demand to form households and even to build homes.

At least 3 million fewer households formed over the past five years than would normally have been expected.  During this period, many college graduates were forced to double-up or move in with their parents. Stronger job growth and a strengthening economy in 2014 should lead to a rise in household formations, which will be important to supplement housing demand.

“I think this will be a pretty good year for home construction,” says Real Estate Expert and Economist David Berson. “There will be a big increase in single-family construction, but not as much for multifamily.”

For more information, visit www.nahb.org.

Forbes credits Research Triangle Park and the major universities nearby as two main reasons for that growth.

Jason deBruyn, Staff Writer-Triangle Business Journal

When financial research firm Ipreo chose Raleigh for an expansion, it was enough to turn some heads nationally.  “The primary goal was access to talent, and the (Research) Triangle was our top choice in the U.S.,” O’Hara Macken, Ipreo executive vice president and managing director told Forbes.

As drivers in the Triangle likely already know, this area is growing rapidly. In fact, Raleigh is growing fast enough to land at the No. 2 spot on Forbes‘ annual list of “America’s Fastest-Growing Cities”, and the magazine credits Research Triangle Park and the major universities nearby as two main reasons for that growth.

The fastest-growing ranking accounts for more than simple population increase. It includes job growth, unemployment, median salaries and gross metro product as well. Raleigh’s jobs grew at a rate of 2.44 percent year-over-year while the population jumped an estimated 2.15 percent in 2013, according to Forbes, which noted that even faster population growth is expected in 2014.

“We’ve got great quality of life. You’ve got the university system, great health care, a decent climate year-round, and affordable cost-of-living,” Harvey Schmitt, chief executive of the Greater Raleigh Chamber of Commerce, told Forbes.

As with many of these lists, Austin, Texas, edged out Raleigh for the No. 1 spot. In fact, Texas had three cities in the top 10 with Dallas at No. 4 and Houston at No. 10.

An 11 percent increase in both the number of sales and in the average home sale price, January home sales in the Triangle kicked off the new year with an 11 percent increase in both the number of sales and in the average home sale price, according to Triangle Multiple Listing Service.

In January, 1,723 homes were sold in the 16 counties tracked by Triangle MLS, which was 11.2 percent more than the number of homes sold in January the year prior.

The average sales price was up 11.2 percent to $239,699, and the median sales price was up 10.8 percent to $198,000.

Pending sales, which is often used as an indicator of future closings, were also up 7.6 percent to 1,904 units in January.

“The same factors that catalyzed widespread market recovery in 2012 and 2013 are likely to continue in 2014, though perhaps at a more moderate pace,” says Tessa Hultz, CEO of Raleigh Regional Association of Realtors, which manages Triangle MLS. “That’s not a bad thing, since the market is returning to a stable, healthy state.”

Trends to watch for in 2014 include increased seller activity, more new construction and fewer foreclosures on the market, she says. Home sales in the Triangle rose 24 percent in 2013, and average home prices rose 4.5 percent.

The Housing Affordability Index for January dropped to 154, according to the report, a 17.8 percent drop from last year. The index measures housing affordability for the region, meaning that the median household income is 154 percent of what is necessary to qualify for the median-priced home under prevailing interest rates.