The National Association of Home Builders/Wells Fargo builder sentiment index released Thursday reached its highest point in 11 years. The index climbed seven points for December to a reading of 70. Any figure above 50 indicates that builders view sales conditions as positive. The index last reached 70 in July 2005, when the housing boom was still in full-force before a wave of subprime mortgage defaults helped trigger the Great Recession.

On the expectation of tax cuts, regulatory changes and higher budget deficits under President-elect Donald Trump, the yield on the 10-year U.S. Treasury note has risen. This has increased borrowing costs for consumers.

In the week ending Friday, the average rate on the 30-year fixed-rate mortgage rose to 4.16 per cent from 4.13 per cent the previous week, mortgage company Freddie Mac reported. A year ago, the benchmark loan rate averaged 3.97 per cent.

US home construction fell in November after October surge

Although builders pulled back on constructing homes in November, after ground breakings surged in October to the strongest pace in more than nine years.

Housing starts fell 18.7 per cent last month to a seasonally adjusted 1.09 million, The U.S. Census Bureau and the Department of Housing and Urban Development jointly announced Friday. The decline likely reflected a natural regression after home construction soared 27 per cent to 1.34 million homes in October, the highest level since July 2007. Homebuilders appear to be entering 2017 with renewed confidence, despite the potential setback of rising mortgage rates. Ground breakings have risen 4.8 per cent so far this year. Most of the gains came from single-family houses, as apartment construction slipped.

Residential building figures can be volatile on a monthly basis. November housing starts plunged in the Northeast and West, while falling at less dramatic rate in the Midwest and South.

Building permits fell 4.7 per cent last month to an annual rate of 1.20 million. This is 15.4 percent above the revised October estimate of 1,054,000 and is 25.0 percent above the November 2015 rate of 973,000.

Single-family housing completions in November were at a rate of 774,000; this is 3.3 percent above the revised October rate of 749,000.  The November rate for units in buildings with five units or more was 432,000. During the past 11 months, permits have edged up just 1.1 per cent as construction firms appear to be moving away from apartment complexes

A healthy bout of hiring has increased demand for homes. Through the first 10 months of this year, sales of new homes are 12.7 per cent higher than in the same stretch last year. The strong demand has helped lift prices, pushing the median sales price of new U.S. homes to $304,500 as of October.

To read the full report: https://www.census.gov/starts

Neighborhood with all-new floor plans scheduled to open in late 2017

GOODYEAR, Ariz. –  Maracay Homes, a wholly owned company of the TRI Pointe Group (NYSE: TPH), closed on a $3.8 million purchase of 93 homesites for courtyard cluster single-family detached homes in the Rio Paseo Cottages community on West Encanto Boulevard, north of Interstate 10, in Goodyear, Arizona.

David Cornwall, Chris Barr and Joseph Schram of Quantum Holdings, LLC, were the sellers’ representive, WQC Rio Paseo Investors IV, LLC. Phil Clark was the broker who brought the opportunity to Maracay.

Rio Paseo Cottages was orignially developed prior to the recession and already has 75 completed homes within the community. Although Maracay took an assignment of the original floor plans, the Arizona homebuilder is designing a completely new floor plan series to appeal to the unique preferences of today’s Millennials, Gen-Xers and Baby Boomers, who prefer open concept, indoor-outdoor living and trendy finishes.

Ranging from 1,650 to 1,950-square-feet and priced from the mid $200,000s, the fresh and current floor plans will provide affordable, single-family detached homes below the FHA loan limits while at the same time, featuring spacious great rooms, walk-in kitchen pantries and front courtyards. Maracay’s Rio Paseo Cottages will also offer FlexDesign® options tailored to meet each family’s individual needs. All homes are Energy Star® certified and include Maracay Homes’ Living Smart® program for high performance and energy efficiency. The community is scheduled to open for sales in the fall of 2017.

TUCSON, Arizona — Ventana Medical Systems, Inc., a member of the Roche Group, closed on 53.6 acres at Innovation Park in Oro Valley for $18 million ($336,000 per acre) according to public records. The land is adjacent to the company’s current facility at 1910 E Innovation Park Drive and also in an Economic Expansion Zone (EEZ) in Oro Valley.

The purchase occurred within days of the Company’s announcement of laying off 84 employees, across multiple departments, at its Oro Valley facility, reportedly due to a “challenging business environment”. It does seem uncommon for a company to expand and retract at the same time, and we regret everyone involved in the transactions were unavailable for comment.

The Town of Oro Valley was able to confirm that Ventana had submitted plans for expansion to its existing 147,000-square-foot facility earlier this year, but later withdrew these expansion plans.

Ventana Medical Systems was launched in 1987 by University of Arizona professor and practicing pathologist, Dr. Thomas Grogan. It is one of the region’s largest employers, with 1,286 full-time employees reported at the start of 2016.

As the leading supplier of cancer diagnostic systems to the pathology market, Ventana manufactures over 220 cancer tests with related instruments right here in southern Arizona for 80 countries, and most importantly, for 4 million people afflicted with cancer yearly around the world. Ventana products provide healthcare professionals with a total solution for all critical steps involved in the analysis of tissue biopsies. This pioneering company also offers premier workflow solutions to improve laboratory efficiency and preserve patient safety.

Parent-company Roche, based in Basel, Switzerland, has expanded its facilities and workforce at Ventana since it acquired the University of Arizona technology spinoff for $3.4 billion in 2008 when it had about 800 workers. Roche reported strong sales growth for Q3, with sales from its diagnostics division rising 7 percent to $8.3 million.

In October, Ventana Medical took possession of a new 60,000-squre-foot distribution building in Marana see RED News article Oct. 2015 “Ventana Distribution at Tangerine Commerce Park Sells for $8.6 Million”.

The seller of the property was Venture West (Neil Simon, manager) the developer of Innovation Park. This master planned business park is situated on a 535-acre campus in the heart of the Tucson bioscience region, Innovation Park is genuinely unique. Located at the corner of Tangerine Road and Oracle Road, the park has easy access to Interstate 10 and to regions within Southern Arizona. 194 acres are available for development with land parcels up to 35 acres for sale. Total capacity will eventually accommodate 2.5 million square feet of commercial space.

Tim Healy and Bob Delaney with CBRE in Tucson represent Venture West at Innovation Park and were also unable to comment on the transaction, but it would appear to possibly be good news although a temporary setback for immediate growth for Ventana Medical.

To learn more, see RED Comp #4343.