• Homebuilder Confidence Rises, Court Clears Way for Albertsons Dividend, Office Attendance Heads Back

    Homebuilder Confidence Rises

    Homebuilder sentiment rose this month for the first time in a year, even as the industry grapples with historically high construction costs and curbed consumer demand.

    The National Association of Home Builders, a Washington, D.C.-based trade group, reported Wednesday that its January sentiment index, compiled with Wells Fargo researchers based on national surveys, registered at 35, up four points from December’s number. While any number below 50 indicates most builders view overall current conditions unfavorably, the trade group said the monthly jump in sentiment, the first increase since December 2021, indicates a turning point has been reached.

    “It appears the low point for builder sentiment in this cycle was registered in December, even as many builders continue to use a variety of incentives, including price reductions, to bolster sales,” trade group Chairman Jerry Konter said in a statement. “The rise in builder sentiment also means that cycle lows for permits and starts are likely near, and a rebound for home building could be underway later in 2023.”

    Home-building conditions affect multifamily development and demand, and the building industry is among several dealing with rising expenses for raw materials, supplies, labor and other costs for the past two years. There was some relief in Wednesday’s Labor Department report that producer prices declined 0.5% from the prior month in December, spurred partly by a decline in consumer demand and a 13% drop in gasoline prices.

    On an annual basis, producer prices rose 6.2% from December 2021, marking the slowest pace of annual price growth since March 2021, according to Labor Department data.

    Court OKs Albertsons Dividend

    The state Supreme Court in Washington this week declined to overturn a lower court’s earlier refusal to block a planned $4 billion dividend payout by supermarket giant Albertsons ahead of a proposed acquisition of the grocer by rival Kroger.

    The court’s decision followed a suit filed late last year by the Washington state attorney general that sought to block the dividend on grounds that a payout of that size could hobble the finances of Boise-based Albertsons in the event regulators do not approve the proposed $25 billion acquisition and merger of the supermarket companies. Another court in Washington, D.C., earlier rejected a similar suit filed jointly by attorneys general from D.C., California and Illinois.

    Albertsons officials rebutted claims in both lawsuits, and the company issued a statement late Tuesday saying it “will immediately begin the process of paying the special dividend and amounts will be distributed as soon as practicable.” Prior to the lawsuits, Albertsons had planned to issue the dividend in November to stockholders of record as of Oct. 24.

    The Federal Trade Commission is reviewing the proposed Kroger-Albertsons deal based primarily on competition-related matters and could order both companies to divest some stores as a condition for approval. A decision is expected by late 2023 or early 2024.

    Office Attendance Heads Back Up

    Big-city office use continued a post-holiday recovery, with attendance averaging 46.9% of pre-pandemic levels for the week ended Jan. 11, according to the latest tracking by security technology firm Kastle Systems. That’s not far from the peak 49% reached in mid-October.

    The latest gauge marked a significant gain from the average 32.8% in the prior week and 21.4% in the week that fell between Christmas and New Year’s Day. Kastle’s “Back to Work Barometer” tracks office attendance in 10 large cities based on anonymous keycard data from property clients, and most cities have yet to reach 50% of pre-pandemic attendance.

    The exceptions include the three Texas cities topping the latest numbers, with Austin at 65.1%, Houston at 60% and Dallas at 53.1%. They were followed by Chicago at 48.1%, New York at 45.6% and Washington, D.C., at 44.7%.

    Source: www.CoStar.com