Find out about the latest news in Madisonville, Louisiana as well as St. Tammany Parish. We will keep you “tuned in” to all of the information about Southeast Louisiana as well as the real estate industry in general. Many new home buyers are concerned about the market, mortgage information, and builder trends. We plan on keeping you as up to date as possible on these and many more topics. There is a lot going on in the Greater New Orleans area, so you will have plenty to read!

Conventional Loan Shares Are On The Rise

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In 2008 conventional loans made up three-quarters of new home sales and steadily fell to only 57.3% in 2010.  Fortunately reports show a steady increase since 2010 and shares in conventional mortgages have been above 71% over the past two years.

In the first quarter of 2018 they accounted for 74.2% of new home sales and the highest share in ten years according to the U.S. Census Bureau’s Quarterly Sales by Price and Financing. There was a 0.4%-point increase during the first quarter of 2018.

The chart illustrating the New Home Sale by Financing Source shows FHA loans financed 11% of new homes (down from 13.5% in 2017), cash purchases were 5.2% (13,000 new home purchases with a decline of 1.6%) and VA fell 1.8 percentage points to 7.1%. VA loans market share has fallen 40% since the 2008 Great Recession and on average during the housing boom accounted for only 2.4% of new home purchases. Most of the cash purchases were on existing homes as seen in the reported 22% of all cash on existing-home transactions in June 2018.

The decline in sales that were financed by FHA loans and cash is due to the rise in  the conventional mortgage market share. Conventional loans seem to be the route most new home buyers are taking with it comes to financing a home.

 

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July 2018 Member Spotlight: David Waltemath

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ULI Louisiana News

July 2018 Member Spotlight: David Waltemath

 

ULI member David L. Waltemath ranks among the top residential developers in the New Orleans metro area. ULI recently sat down with David, Scott and Kelly Waltemath to profile their real estate development operation.

ULI: How did you get started in real estate development?

DW: I’ve always been involved. Two generations of my family were successful real estate developers before me. My father, Henry “Hank” Waltemath, carved out many of the major neighborhoods in Algiers on the Westbank of New Orleans.

Today, I’m proud to say, we have a fourth generation involved in our developments. My son, Scott Waltemath, has a passion for development. He serves as Director of Builders and Lot Sales on our projects. My daughter, Kelly Waltemath, is a recent LSU graduate and is already a multi-million dollar producing Realtor® with Keller Williams New Orleans. She is Director of New Construction and Resales for our group and also lists private homes on both sides of Lake Pontchartrain.

I shouldn’t omit my wife, Kathy, either. She has made way too many civic contributions to cover, including past president and board member of the Louisiana Children’s Museum, which she helped found. Community involvement should not be under estimated.

ULI: When did you realize you’d become a successful developer yourself?

DW: There’s always a defining moment in every career, I suppose. Mine occurred in 1986 when I assembled a partnership to develop English Turn on the Westbank. USF&G Chairman Jack Moseley helped us create the PGA’s New Orleans tour stop, the USF&G Golf Classic. Golf legend Jack Nicklaus, Bob Sierra, and their team pulled the golf course together. Cap Caplinger designed a beautiful land plan for the community.

Ironically, I’d never picked up a golf club until I started working on English Turn.

ULI: Scott, tell us about some other projects your team has been involved with.

SW: Right now, we have a successful master-planned community, The Parks of Plaquemines, on Woodland Highway in Plaquemines Parish and another new one in the same area, Cypress Park, under development for 2018.

Bedico Creek Preserve in Madisonville has been a landmark project for us. It was originally a failed golf community. Our team re-envisioned the initial plan and bought the failed operation. We replaced the course with more than 500 acres of permanent nature preserves, paved walking/hiking trails, parks, lakes and green space. The past three years, we’ve been smashing home sales records on the Northshore. At year-end 2018, we were selling 129% more homes than our nearest competitor! We have more than 400 homes completed or under construction. Bedico is undoubtedly St. Tammany’s most successful real estate turnaround ever.

We’ve had other successful developments post English Turn like The Estates of Northpark in Covington, The Highlands of Santa Maria and Green Trails in Baton Rouge, plus Punta Gorda Harbor in Charlotte County, Florida. The company has done some commercial projects, as well (Chevron, Entergy, Conoco buildings at The Timbers office park on the Westbank).

ULI: Kelly, what do you believe has made Waltemath Interests so strong?

KW: We have generations of experience. Falling back on that is simply priceless.

Dad has a genuine, innate sense of what will sell and what makes a viable project. He always gives buyers the long-term investment potential they’re looking for. He watches the market stats and stays on track fiscally, not over-building or under-building. I’d say he has an amazing talent for staying on budget, while still creating a community where people truly enjoy living. He wants our work to make the entire area a better place than before we built it.

I also think it’s important to note that Dad knows how to build a team. Our projects encompass the cooperation of local Realtors and the construction pros building the homes. A standout community must ultimately be lucrative for everyone involved. He has also assembled a talented team of experienced marketing, communications and online specialists who unfailingly make us look terrific in the media and online.

I believe our projects are special because David Waltemath knows how to build more than just a development. He knows how to build a team.

Rest assured, at Waltemath Interests, there’s a carefully-considered plan behind the magic.

 

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More Places for Residents to Live in Covington

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Covington, a charming southern community surrounded by three rivers, is a growing area with a wonderful mix of shops, galleries, boutiques and restaurants.  Covington offers everything from water outdoor adventures to cultural events.  With an influx of new residents, Covington has been slated for a 272-unit luxury apartment development.

The new development, located at U.S. 190 and I-12 intersection, is already under construction and will open in late 2019. The 20-acre project, costing $43 million, will be across from the Versailles Business center. Versailles has been chosen to be the new headquarters to California’s Silicon Valley’s big corporation, Globalstar which will bring more residents to the area.

The development is being built by Dobbins Group LLC a real estate development, finance, property acquisition and construction management company based out of Birmingham, Alabama. The company was formed to seek out and build multifamily real estate investments throughout the southeast. Currently they have over $100 million in new developments in progress around the southeast.

Bill Dobbins who is the managing principal and founder of Dobbins Group sees the demand for a development like this saying, “there’s a lot going in that general area and jobs are being created as the office buildings go up. We look forward to bringing a new design to luxury apartment living in Covington. This community will provide our residents with upscale apartment homes in one of the metro area’s premier destinations for living, working, and shopping.”

The development will be patterned after the “Big House” design.  This design features walk out patios and balconies, enclosed private stairs for upper units and direct access garages. “The overall design makes it look more like a big house than an apartment,” Dobbins said.

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Another Corporate Headquarters Makes Covington Its Home

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If you live on the Northshore, then you are most likely familiar with Rapid Urgent Care. This 5-year-old company currently has walk- medical clinics in Slidell, Mandeville, Baton Rouge, Metairie and Covington. Dr. Edward Dease who owns Rapid Urgent Care and Correct Care (a company that provides physician staffing and management services) chose Covington to house the new headquarters for both his companies.

Dr. Dease, who has worked as an emergency medicine physician and as an anesthesiologist, purchased the 6,000 square-foot building at 229 Saint John Lane for the corporate office which will house both medical company’s administrative staff. With the two companies growing and doubling in the number of walk-in clinics, the Covington headquarters employees will double in size.

The new corporate office will not offer medical services but has a clinic a few blocks away which will treat patients. Dr. Dease, a longtime Covington resident agrees with Covington Mayor Mike Cooper who said, “It’s great for Covington to be able to get this building back into commerce and to know that the employees will be able to enjoy what we have to offer in the downtown area.”

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Home Equity on the Rise

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In data published by the Board of Governors of the Federal Reserve System the first quarter of 2018 saw a high in the value of owner’s equity in real estate.  The Financial Accounts of the United States concluded that real estate equity hit a new high on nominal and not seasonally adjusted basis.

Households’ owner-occupied real estate rose to $25.1 trillion in the first quarter of 2018 which was $544 billion more than the first quarter in 2017.

The value of owner’s equity in real estate is defined as the difference between the value of owner-occupied real estate and home mortgage debt. The value of owners’ equity rose to $15 trillion in the first quarter of 2018 which is a $1.4 trillion gain over the past four quarters and a 59.7% increase in value.

On a not seasonally adjusted basis the total home mortgage debt increased to $10.1 trillion which was more than $280 billion than the same period in 2017. Home mortgages are the largest share of total household loans.

The first quarter National Delinquency Report (NDS) reports that the delinquency rate for mortgage loans had decreased for loans. In the first quarter of 2018 the percentage of loans that were 90 or more days past due dropped to 1.47%.

The economy’s recovery from the Great Recession has helped homeowner’s loan-to-value ratio which has fallen as the home value grows faster than the debt.

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Construction Industry Annual Salary More Than the US Median Wage

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The median wage in the U.S. is below $37,000.00 a year.  The Occupational Employment Statistics (OES), a study done by the Bureau of Labor Statistics (BLS), reports that half of the construction workers in the country make more than $45,820.

The construction trade’s tops income producers are elevator installers.  According to the OES half earn over $79,000 a year with the top 25% pulling in $98,890.  The second top paying jobs are rotary drill operators making close to $70,000 and third highest paid are the boilermakers making over $65,380.

Most of the top paying crafts in construction require formal education, specialized training or licensing. Building inspectors (median wages $58,300), electricians and plumbers (both earning over $52,000) make up these craftsmen. Carpenters require less formal education and make up most of the jobs in the industry. As mentioned earlier, the median wage earned was over $45,370 with the highest paid 25% making $60,470 per year.

Within the construction industry OES publishes wages for approximately 380 occupations in construction that include not only the construction trade but workers in finance, sales, administration, and other off-site activities. The highest paid occupation is the Chief Executive Officers (CEO) who pull in an average of over $167,000 a year, after that the Petroleum engineers make a median wage of $159,330, lawyers at $134,010, flight engineers come in with $127,130, and architectural and engineering managers earn an average of over $124,030.

 

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