Should the Treasury impose a moratorium on home building? In today’s Heard on the Street column in the Journal, David Reilly writes:

Associated Press

Housing demand in New York City has fallen to earth with the rest of the U.S., according to Toll Brothers’ CEO. (AP Photo)

Toll Brothers Inc. CEO Robert Toll said Tuesday the financial turmoil has sparked a wave of home cancellations, in announcing the company’s October sales numbers. Fears of jobs losses and the plummeting stock market drove “home buyers’ confidence and our traffic and demand down to record lows.” Mr. Toll said. He also said that New York is joining the slump the rest of the country has been experiencing.

According to the transcript of the company’s conference call, provided by Thomson Street Events, Mr. Toll is asked if there were there any areas that stood out as stronger than others. Mr. Toll responded: “I wouldn’t say so. … No, I reviewed that just this Monday night with all of the regionals, and unfortunately, I don’t see any areas of strength. We used to be able to claim New York City. We don’t claim that any more. We used to claim Connecticut, and that slowed down a little bit. I don’t see any standouts.

Later, he added: “Been a tremendous change in the last six weeks. Up to the financial debacle crisis that we’ve entered, New York City was a nice stand-alone, and a beacon, but it has now joined the ranks of the rest of the country. … I would expect the financial business in New York to probably lose 100,000 people. You don’t think it will be that high, guys? Well, I hope I’m wrong, but that’s got to have a serious impact on the price of real estate, and I would think that the foreign market, which supported in large measure the pricier condos in New York City, is not there in force as it was. What with the euro going down in comparison to the dollar lately, and with their own economic crisis. So I would think you are in for a more challenged time in New York. How long that will last? As long as it takes for the financial market to come back. If the financial market comes back pretty quickly, we have found in the past. And when it does, we would expect the New York market to return again.”

Dawn Wotapka reports:

Ailing home builders have tried it all in this downturn: throwing in tropical vacations or gourmet kitchens, paying closing costs, offering price-protection guarantees and even helping repair tattered credit reports.

And now that creative financing — including no-money down deals — is history, and a down payment is essential for a loan, builders are going retro, offering to help buyers (gasp!) save their money. The latest variation mimics department stores’ layaway plans or the Christmas clubs of long ago.

Hovnanian Enterprises’ mortgage operation is preparing a national rollout later this month of the “PASSBOOK to the American Dream” campaign, which puts contracted buyers on a plan to save up the down payment in time for closing. Beazer Homes USA, meanwhile, is touting its “Buy & Save” plan, keeping buyers on a “steady savings track.” Centex Corp. is considering something similar.

“We’re saving for a house the old-fashioned way, the way that it was always supposed to be,” said Dan Klinger, president of K. Hovnanian American Mortgage. Hovnanian knows it’s pretty simple to open up a savings account — it can even be done at home in your pajamas. So it plans to reward participants with goodies ranging from price discounts to landscaping.

If savings just isn’t your thing, Beazer’s other money-raising suggestions include employer assistance plans, gift funds from a labor union and selling personal property, including recreational vehicles, stamps, coins or baseball card collections.

You read it right: Beazer pitches parting with that beloved Babe Ruth rookie for a set of keys.

Readers, will a savings plan be enough to get you into a new house?

Hurricane Andrew left piles of debris in front of a line of damaged storefronts in Homestead, Fla. (Photo: Thomas S. England/Time Life Pictures/Getty Images)

The city of Homestead, Fla., located about 20 miles south of Miami, was hard hit by Hurricane Andrew in 1992. After the hurricane killed 26 people and left behind more than $25 billion in damages, many residents left and the local economy collapsed.

But 16 years later, Homestead is thriving, Paulo Prada writes in today’s Journal. The city is an example of how a city can bounce back after a hurricane leaves it essentially devastated. That’s good news for cities like Houston and Galveston in Texas, both hit by Hurricane Ike this month.

Since 2000, Prada writes, the population has soared nearly to its pre-Andrew level, and homes have popped up on farmland as developers sough to build up the rural areas around Miami. About 1.5 million square feet of retail space opened, accompanying the new flock of residents. Big-box stores like the home-improvement store Lowe’s have popped up, along with a multiplex cinema and restaurant chains. Though still a bedroom community from which many residents to places like Miami, Homestead officials hope to expand employment opportunities within the city, Prada reports.

Click here to read Prada’s full story and to see a photo slideshow about Homestead’s recovery.

Eighty-six shipping containers make up the new Travelodge Hotel in Uxbridge, England. (Photo: Courtesy of Travelodge)

Sushil Cheema reports:

Most people would not consider a shipping container to be a comfortable place to spend the night, but a new Travelodge hotel in England thinks it has found a way to make it appealing.

Located in a suburb of London called Uxbridge, the new hotel contains 120 rooms and was constructed in about four months on site, said Greg Dawson, a spokesman for Travelodge. That time included laying the foundations for the building. If constructed using traditional methods, the entire project would have taken about 15 months to two years to complete, he said. The hotel opened on August 15.

The modified steel shipping containers were fitted with hotel fixtures in Shenzen, China and then transported to England by boat, Travelodge said in a statement. The 86 individual containers then were stacked together “like giant Lego blocks” on the actual site in about 20 days.

The shipping containers were fitted with fixtures in China before being sent to England. (Photo: Courtesy of Travelodge)

The building method is very efficient and makes it possible to build in tricky locations, Dawson said. He noted that the location of the Uxbridge hotel at a former bus station in a busy shopping district probably could not have supported traditional building methods because of limited access.

The building style is also cheaper than traditional methods, Dawson said. The rates at the hotel currently match those at conventionally-built ones. But Dawson said the savings from the lower building costs get passed on to the consumer because they will allow the company to keep prices at the same rate even as utility prices and other costs continue to rise. The rooms at the hotel are about £20 (about $37) if booked online and £40-50 (about $73-$92) for walk-in guests, Dawson said.

Verbus Systems, a U.K. contractor, approached Travelodge with the idea, Dawson said. The hotel company currently has plans to open a new hotel in the U.K. every week for the next ten years, Dawson said, and the shipping container building method that Verbus proposed would help the company keep up with its target rate of growth. Travelodge has opened about 100 hotels in the last four years.

Travelodge is exploring the idea of building more shipping container hotels in the U.K. A similar project of 310 rooms is already under construction near Heathrow airport and will likely open in December, Dawson said.

Readers, what do you think of this building method?

(Courtesy of Property Shark)

Dawn Wotapka reports:

Sales volume and prices of New York, Los Angeles and San Francisco’s rental apartment buildings suffered a “major setback” in the second quarter, compared with a year earlier. But there were also glimmers of hope, particularly on the West Coast, according to a quarterly report released by real estate Web site PropertyShark.com.

Acquisitions of such multifamily investment properties are a good barometer of the residential real estate market because purchase and sale decisions are made by real estate professionals looking at the bottom line, noted Bill Staniford, PropertyShark’s chief executive. Buyers and owners of single-family homes tend to be governed more by emotions when they make buying or selling decisions, he said.

For the period that ended June 30, Manhattan saw the steepest decline in the number of closed transactions, plunging 51% between the second quarter of 2007 and the same period in 2008. The sales volume dropped about 16% each in Los Angeles and San Francisco, according to the report, which tracks multifamily dwellings and mixed-use properties, but excludes condominium and co-op buildings.

Though median prices fell to 2006 levels overall in the city’s five boroughs, Manhattan’s median price passed $600 per square foot for the first time, Mr. Staniford said.

On the West coast, the number of sales climbed when compared with the first quarter – up 32% in Los Angeles and 27% in San Francisco – potentially signaling a bottom. For the period that ended June 30, nearly half of Los Angeles’ transactions were foreclosures or pre-foreclosures, up from 11% in 2007.

Those buyers are getting deals: the median price per square foot fell 22.1% during the year, compared with a 12% drop in San Francisco, according to the report.

“That’s a good sign,” Mr. Staniford said. “When you see the prices coming down that significantly in any given area, it’s certainly interesting. It’s going to make people think that the bottom is getting closer, and that’s going to bring people in.”

The John Laing Homes’ Belle Cliff neighborhood overlooks the Pacific Ocean in San Juan Capistrano, California. (Photo: Courtesy of John Laing Homes)

Sushil Cheema reports:

Builders are competing with the glut of foreclosed homes to attract buyers. Now, one builder, Irvine, California-based John Laing Homes has taken the unusual step of pointing out the pitfalls associated with buying a foreclosed home in order to keep customers interested in new homes.

“A foreclosure may appear to offer the best deal on a home, but there are numerous hidden costs,” said Linda Mamet, the company’s vice president of sales and marketing for the Southern California Region, in a statement. “A foreclosed house is sold ‘as-is.’ At times there will be a lot of time and skill involved to undertake a major renovation as well as financial costs, which should be considered if you value your leisure time.”

The company was hearing stories from prospective buyers about the problems they had when considering foreclosed homes, Mamet said in an interview. “People were looking at homes for three or four months and would get frustrated because they didn’t understand the process” of foreclosures, Mamet said. “We think people should be informed.”

John Laing Homes sells about two to four homes in each of its neighborhoods per month, Mamet said. The company operates in South California, Northern California, Colorado, Phoenix and Houston.

About 40 to 100 prospective buyers visit John Laing’s showrooms every month, Mamet said. About 10 percent of them also were considering buying foreclosed homes, she said. “Most foreclosure sales in Southern California are in the lower price ranges,” Mamet said. A new John Lang home ranges from $300,000 to about $8 million, with an average three-bedroom home selling for about $500,000, she said.

Michael Corkery reports:

A Centex home in Chino, Calif. (photo via Centexhomes.com)

Never underestimate the creativity of the nation’s largest home builders in finding ways to put buyers into houses.

The latest project: “monetizing” the first time home-buyer tax credit that’s part of the recently enacted housing legislation, says Centex Corp.’s chief executive Tim Eller.

The problem with the $7,500 credit is that it can only be claimed after a home buyer files his or her taxes, which may not coincide when they are buying a house and need the cash. “We don’t have a solution yet, but we’re looking at ways to monetize that tax credit early,” Mr. Eller told analysts and investors during a conference call Wednesday.

Perhaps the builders could mimic tax preparers that offer to front people their tax return. But that puts builders in an awkward and risky position of floating buyers until they can claim their credit from the government.

There are other issues that make the tax credit seem pretty limited in its ability to provide a needed shot in the arm to the housing market. Buyers, for example, have to pay back the credit over 15 years or sooner if they sell their house and pocket a profit.

In the end, the credit “saves the buyer at most just a few hundred dollars a year,” M.I.T economics professor William Wheaton said in a recent research note. “This seems like a very small amount to influence the decision of anxious new buyers waiting on the market’s sideline.”

Honda Civic (Courtesy of Honda)

Home builders have long offered incentives and discounts for home buyers. They’ve also thrown in material perks like a Mercedes, a trip to Maui or even another house. Now a home builder wants to help ease the burden of a long commute and soaring gas prices by giving buyers a free 2008 Honda Civic, according to an article in today’s WSJ.

William Grant, the owner of Brodheadsville, Pa.-based Grant Homes Inc., is using the Hondas to lure prospective buyers to a new 75-home development in rural Pennsylvania. Allentown, the largest center of employment near the development, is about 25 miles away.

The Hondas are worth about $20,000, and that value is not included in the price of the house. Buyers can choose to accept the free car or have the company pay the closing cost and buy down their interest.

Of four home sales last weekend, two buyers chose to take the car, Mr. Grant says. “The buying public is certainly waiting to do something,” he says. “If you entice them with something of value they are ready to move forward.”

Readers, would the lure of a Honda Civic entice you?-Sushil Cheema

The WSJ’s Wendy Bounds reports:

Reporting today’s column about solar energy for the home, I asked why sun technology disappeared from the horizon after its 1970s surge. Some solar experts blamed Reagan for not renewing lucrative tax credits. They mentioned how he took solar panels off the White House for roof repair and never put them back.

Photo by mysza831 @ flickr.com

But mostly they said, “Oil prices dropped and consumers didn’t care anymore.”

Could that happen again? Is America’s newfound obsession with solar, geothermal, and wind power just a flirtation until the energy bills lighten again? Make that if they lighten again. Or have we, as one hopeful green real-estate developer put it, “fundamentally turned a corner” in our attitudes about renewable energy alternatives — and more specifically, our willingness to spend our own money on them.

No doubt we want a reprieve. The average homeowner will shell out 33% more to warm their home this year. If you use oil like I do in the Northeast, expect an average heating bill of just over $2900. Already some polls say public sentiment is moving toward favoring more domestic drilling. And oil companies are scrambling to squeeze oil from anywhere, like shale rock buried beneath federal lands.

On the other side is Al Gore calling for the U.S. to move toward “zero-carbon” electricity as well as other non-fossil fuel dependent technologies. To him and other renewable energy champions, simply drilling for more oil is like plugging a gaping wound with loose Band-Aid. Invest more now in alternatives, they say, reap the benefits later.

Who will prevail? I’m looking at a roughly $23,000 price tag to get my home’s power and hot water partly juiced from the sun. The payback for the various systems is anywhere from 5 to 15 years. Feels longish, but one solar expert put it this way: “Did you ask about the payback of your new granite countertops?” (It’s a hypothetical; I used concrete, but OK, point taken.)

Meantime, here are 10 other ways to improve your home’s energy efficiency. (There are more resources in my story.) Let us know if you’ve got other tips: