Matrix Blog

Weather & Natural Disasters

Katrina Causes Surge In Demand For Rental Housing In Outlying Areas

September 4, 2005 | 9:54 pm |
Source: NCAR

On August 29th Hurricane Katrina brought devastation to the housing markets of New Orleans, Biloxi and the surrounding areas. Now the outlying areas are anticipating a housing boom. Mobile, Alabama is seeing a scarcity of rentals.

Housing developers are looking at what type of housing they can build quickly to meet demand.

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Lumbering Giant Wants [2] Help [x 4]

September 1, 2005 | 10:47 pm | |

There has been a heated debate between the US and Canada over the tariffs being assigned to softwood imports into the US. In 2002, the US implemented these tariffs, which are reportedly contrary to the NAFTA agreement. [Note: Sub.] A 3-person arbitration board ruled that the US must refund over $5B in tariffs collected from imported Canadian softwood. The US lost the appeal on the ruling but still has refused to refund tariffs already levied.


There has been a lot of controversy surrounding the softwood tariff debate. Canada exports more than 50% of the lumber they produce to the US and the US will need more lumber as a result of Hurricane Katrina and the on-going housing boom. Look for rising prices for construction supplies as a result.
[Casper Star Tribune]
[National Post]
[CBC]


The housing boom has placed a significant pressure on the availability of lumber for construction. Wood exports from Canada are a significant source of lumber for the US and a major export of Canada.

In light of Hurricane Katrina’s extensive damages to the gulf area housing stock of Lousiana, Mississippi and Alabama, demand for construction supplies are expected to increase significantly and at least one advocate for affordable housing wants the tariffs removed.

Lets hope these two allies and neighbors can resolve their differences and get this crises resolved soon.

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Disaster Relief Aid: Hurricane Katrina

September 1, 2005 | 5:58 pm |

This has turned out to be a larger disaster than anyone imagined. Here are some ideas on how you can help in the relief effort.

Relief Organizations

[American Red Cross through Apple iTunes]

I used Apple iTunes (100% goes to the Red Cross) but all are great organizations.



[American Red Cross]



[Salvation Army]



[North American Mission Board Disaster Relief Fund]



[FEMA]


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Disaster Relief Aid After Hurricane Katrina

September 1, 2005 | 5:19 pm |

This has turned out to be a larger disaster than anyone imagined. Here are some ideas on how you can help in the relief effort.

Relief Organizations

[American Red Cross through Apple iTunes]

I used Apple iTunes (100% goes to the Red Cross) but all are great organizations.



[American Red Cross]



[Salvation Army]



[North American Mission Board Disaster Relief Fund]



[FEMA]


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Katrina & Oil Prices: The Perfect Storm

August 29, 2005 | 7:23 pm |

katrina

Late last week, as the hurricane threat to the Gulf of Mexico increased, the oil futures market became concerned that production would be affected. Futures traders bid up the price of oil and gasoline due to the perceived future constraints on supply and now oil seems headed for $70 per barrel. The futures market seems hyper-sensitive to any threat to oil production these days.

refinery2



How can this impact housing prices?

Simple. Higher Mortgage Rates.

As this and other inflationary factors gain momentum (if they do), bond investors would likely become concerned about the inflation risk in the long term, which eventually translates into higher borrowing costs. Higher borrowing costs generally translate into lower home prices.

Then again, thats just one theory of many. Lets ride the storm out.


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Residential Mortgage Standards Hold; Non-Traditional Mortgage Use Increases

August 16, 2005 | 2:03 pm | |

There has been a lot written about how lending standards have eased which has help promote the rise in housing prices with non-traditional loans. The Federal Reserve released a report that said US banks eased terms for commercial and industrial loans while residential loans remain unchanged. [Note: Subscription] 20% of domestic banks saw increased demand for mortgages.

The good news is that restrained lending requirements, especial on investor properties, will help keep price growth in check. However, The Fed report seems to contradict the recently released report by the Mortgage Bankers Association [Note: Subscription] which said that lending standards continued to slide.

The Fed Report also said that use of non-traditional mortgages continues to rise.
[Matrix] piggyback loans

Nontraditional mortgage products include adjustable rate mortgages with multiple payment options and interest-only mortgages.

Interestingly, the lenders reported that less than 15% of the mortgages were non-traditional, which is less than the impression given in the media right now. Still, its of concern because highly leverage buyers are less able to weather a market downturn if one were to occur.

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