On June 30, 2011, Governor Kasich signed into law the Ohio Budget Bill, which drastically changed both prevailing wage requirements and project delivery methods available to public entities.  The changes to the prevailing wage laws took effect immediately. The bill raised many dollar value threshholds, which trigger prevailing wage requirements, and exempted many types of projects from those requirements entirely, including school and university projects.  Within a year, public entities will have the option of issuing multiple prime contracts, as before, or issuing a single prime contract to a general contractor, design-builder or an at-risk construction manager. Review my colleague Brent Shelley's client alert, which is also featured in Builders Exchange Magazine, for more details.

On June 30, 2011, I attended a Real Estate Forum hosted by CSU's Levin College and the Cohen & Company accounting firm.  The keynote speaker was Ivy Zelman of Zelman & Associates.  Among her central points was the idea that the foreclosure problem is not going away any time soon, and that it is passing through the system like a "pig in a python."  Most potential buyers still want to buy.  However, they are hindered by the lack of a down payment or an unacceptable credit score, not by the monthly payments. As you might imagine, times are therefore good for owners of rental properties, with growth seen in the market for single-family rentals.  That bright side has been a bit dimmer in the Cleveland region simply because homes are so affordable. If you'd like to review the slides from Ms. Zelman's presentation, just send me an e-mail.

Today's S&P/Case-Shiller data demonstrates how the foreclosure crisis continues to crush price averages.  In the Cleveland market, the seasonally adjusted Home Price Index figures show a 7 point drop from 2010 (but recall the tax incentives in place at the time), but just a 3.5 point drop from 2009 (no incentives in place).  Looking at the long-term figures, May prices increased steadily (3 or 4 points, 5 in a good year) from 1987 through 2005, were flat from 2005 to 2006, then lost 3.5, 9.5, and 6.75 points from 2007 to 2009.  The tax incentives created a 3.7 point boost from 2009 to 2010. Take out those tax incentives, and you have a market that is in a slowing price decline.  Perhaps next year will show flat prices, or even an increase, since Cleveland is ahead of the curve in passing the pig through its python.

Here are links to primary sources of industry and economic data so you can form your own opinions about market trends.

Growth in Green Energy

The Solar Energy Industries Association ("SEIA") publishes a quarterly update, with a free Executive Summary available here. The American Wind Energy Assocaiation ("AWEA") publishes its quarterly updates here.

Residential Construction and Sales 

Data from the Census Bureau on housing permits, starts, and completions is available here. The NAHB's web site provides a wealth of other data from its research here. The monthly S&P/Case Shiller Housing Price Indices are available here.  And, the National Association of Realtor's Pending Home Sales Index is here.

Industry-wide Construction Data

Data from the Census Bureau on construction spending is available here. It will cost you a few bucks, but McGraw Hill's forward-looking market research is available here. It will not cost you a penny to review the Associated Builders & Contractors' forward-looking Construction Backlog Indicator, here, which measures non-residential work under contract but not yet under construction.

The American Institute of Architects' Leading Indicator

Ask architects if their non-residential construction billings are improving, and you get a pretty good idea of where non-residential construction spending will go in nine to twelve months.  The AIA publishes frequent press releases summarizing its subscriber-based Architecture Billings Index here.