On home price uncertainties, the letter mentions tightening land supply, financial innovations boosting housing demand, the user cost of housing vs. household income or cost of renting, the differences between investors and owner-occupiers, and persistently low mortgage rates, as factors affecting home prices. The Dallas Fed piece closes by citing the relatively short history of mortgage equity withdrawal ("MEW") and the inadequacy of "traditional yardsticks" as reasons for the Fed to continue closely monitoring housing's impact on the overall economy.Although homebuilding declines are steep, the direct effect on the economy is likely to be less dramatic because residential construction, including multifamily units, accounts for just 6 percent of GDP. Even so, homebuilding can significantly affect economic growth. Residential construction added about 0.5 percentage point to GDP growth in 2004 and 2005 but subtracted 1.1 percentage points in third quarter 2006. Many forecasters project further, but smaller, negative impacts on GDP growth through most of 2007.
The indirect effects of a housing slowdown could be larger than the direct effects if the deceleration in home prices leads to slower growth in consumption, the largest component of GDP. The risk of a consumption slowdown is one reason policymakers are monitoring housing prices and home-equity withdrawals.
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An AP article describes the recent trend of "opening up" traditional shopping malls in MD and diversifying their tenant bases.
Denver/Boulder have their own traditional malls - Cherry Creek and Park Meadows - but these typical two-story, enclosed malls with department store anchors are also surrounded by clusters of retail such as Cherry Creek North. Shopping malls don't last more than a few decades, as witnessed by Park Meadows putting the old Southglenn Mall out of business. It is being transformed now in the Streets At Southglenn by Alberta Development Partners, which has also built Northlands (130 AC, 1m+ sq. ft.) Southlands (with a "Main Street" similar to Belmar) and Wheatlands (part of 13,000 AC currently under residential development just east of Southlands). The Crossroads Mall in Boulder has already shed its skin and become Twenty Ninth Street. Residential development, however, is not yet in the offing, but Macerich, the developer, has put together a strong tenant base that is intended the ground it lost to surrounding retail clusters like Flatiron Crossing.
What does all this mean? We know that people love to shop, and it does not require a large leap of logic to grasp the attractiveness of integrating more residential development within a "lifestyle" retail development that also provides recreational and entertainment amenities.
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Light rail has fallen out of favor for RTD's Gold Line with two alternatives: heavy rail or streetcars.
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