Scott Wall

Think it's hard affording a home here? Pity the poor renter.

Last year a Northern Virginia worker needed to make $24.73 an hour ($51,438.40 a year) to afford the average $1,286 fair market rent for a two-bedroom apartment, says the non-profit Center for Housing Policy in Washington, D.C. That is out of reach for most of the service industry workers - the burger flippers, hotel workers and sales clerks - that keep the DC/VA/MD economy humming. Even an entry-level worker in a white collar job might have trouble making that much.

To be fair, paychecks of sales clerks and service workers fell short of rents in all 210 metropolitan areas studied.

DC/MD/VA tenants didn't even get the advantage of falling home prices last year. Local workers needed to earn an additional $2,433.60 last year to cover the increase in rent from 2006.

Want a real deal on rents? Move to Brownsville, Texas, where you only need to may $9.87 an hour ($20,529.60/year) to afford the $513 rent for a two-bedroom.

Here's a PDF version of the full report on rental affordability: CLICK HERE

Wonder why those contractors are knocking on your door and even returning phone calls? One hint lies in the January national jobs report (COPY HERE) ...

Last month's unemployment rate for U.S. construction workers is 11%, up from 8.9% a year ago and 9% in January 2006. Now, to be fair, construction's a seasonal business, so comparing these workers' plight to the overall jobless rate (4.9% "seasonally adjusted") at this time of year is silly. But it's an honest trend to note that the 1.1 million construction workers who told government pollsters that were out of work last month is 177,000 more than January 2007, a 19% jump, and is the highest January total since 2003.

Look at the real estate slowdown's stature this way: In the year ended in January, 572,000 more U.S. worker joined the ranks of the unemployed. And 31% of the increase was tied to construction. Add in the unemployment pop in "financial activities" of 52,000 people in the past year, and real estate's hit to the jobless line is then 40%!

As a follow-up to my letter, The Graphics of a Sub-Prime Mortgage, let's take a look at why the sub-prime mortgage process is filled with "opportunities" of failure. Following is an annotated version of the BBC graphic.

Anyone wondering why there was so much fraud happening need only look at the above chart. When the Seller's market was around, poor buyers walked in the lion-loans lair were an accepted practice were veritable breeding ground for fraud.

Black & Decker has this to say ...

"Sales in the Hardware and Home Improvement segment decreased 4% for the quarter. The lockset business, which posted a sales increase in the third quarter, passed the anniversary of its 2006 price increases and could not overcome the effects of lower U.S. housing construction. The Price Pfister faucet business grew sales modestly, achieving its fifth straight quarterly increase in a difficult environment.

"For the full year, sales in the Hardware and Home Improvement segment decreased 1%. The U.S. lockset business, which is particularly strong in the residential construction market, reported a high single-digit rate of sales decline. Price Pfister grew sales at a high single-digit rate, reflecting listing gains and a remodeling market that was more stable than new construction. Price increases and international sales increases also helped mitigate the effect of the housing decline during the year.

"For the fourth quarter and full year, operating margin in the Hardware and Home Improvement segment decreased to 9.6% and 11.3%, respectively. The business was able to offset commodity inflation with price increases and productivity. However, the lockset business felt the impact of lower sales and production volumes, as well as unfavorable mix, resulting in lower margins for the segment.

... and B&D added ...

"Looking ahead, we recognize that the U.S. economy is slowing, and we do not expect a housing recovery in 2008."

To read more, CLICK HERE

I wish foreclosure watcher from Irvine, RealtyTrac, stopped publishing its misleading "foreclosure filings" number that's a mishmash of default notices, auction sale notices and bank repossessions. It already has a better mousetrap, its count of the number of unique homes that were hit with some sort of mortgage delinquency. This multiple-count matter is no minor quibble.

In 2007, RealtyTrac found 2,203,295 "foreclosure filings" but that legal bureaucracy happened on just 1,285,873 residences. That's a 71% variance!

Look, I'm not saying there's no foreclosure problem, I'm just saying that a nation with 1.2 million families in financial trouble is ugly enough. That's 1.03% of all U.S. households. Who cares how many legal pieces of paper they've received! For Virginia, the overstatement equals 24,199 foreclosure filings on 16,307 properties - a 48% variance!

To spin the good news, Virginia ranked 24^th on the foreclosure rate ranking. However, Virginia foreclosure filings were up 17.3 percent from the third quarter to the fourth quarter with a 53.4 percent spike in December. To read the release, CLICK HERE