Hawaii is first state to require new homes to have solar water heaters, the Associated Press reports …

Gov. Linda Lingle signed a bill into law Thursday requiring the energy-saving systems in homes starting in 2010. “This solar power legislation is another important step in our long-term plan for energy independence in Hawaii,” she said.

Hawaii relies on imported fossil fuels more than any other state, with about 90 percent of its energy sources coming from foreign countries, according to state data. The new law prohibits issuing building permits for single-family homes that do not have solar water heaters. Some exceptions will be allowed, such as forested areas where there are low amounts of sunshine.

State Sen. Gary Hooser, vice chairman of the Energy and Environment Committee, first introduced the measure five years ago when he said a barrel of oil cost just $40. Since then, the cost of oil has more than tripled.

“It’s abundantly clear that we need to take some serious action to protect Hawaii because we’re so dependent on oil,” Hooser said. “I’m very pleased the governor is recognizing the importance of this bill and the huge public benefits that come out of it.” To read more, CLICK HERE!

Interesting idea, no?

The Conference Board’s latest Consumer Confidence Index results don’t bode well for home buying this year. “Plans to buy homes fell to their lowest level since October 1982,” notes Scott Hoyt, director of consumer economics at Moody’s Economy.com. Overall consumer confidence was the fourth lowest since the survey began in 1969. Hoyt thinks the dour confidence outlook will put a damper on all consumer buying this year.

“At no point since 1978 have consumers been this concerned about the outlook. They are particularly worried about the outlook for their incomes, which does not bode well for spending. The share of consumers expecting their incomes to increase over the next year dropped to another record low in the three-decade history of that question; the share expecting a decline in their income hit another record high in June. Consumer finances remain a major drag on confidence. Debt burdens are high and saving is low, and cash flow is becoming hindered by the increased difficulty in obtaining credit and declining home equity. There also is the burden from energy prices, as oil continues to track over $130 and gasoline prices remain above $4.00 per gallon.”

This sound reasonable?

Related stories

• Chapman sees O.C. home price -16% in ‘08, -9% ‘09
• Real estate booster Watts apologizes for misreading crystal ball
• Century 21 boss sees ‘tremendous’ opportunities
• Prudential boss sees housing ‘healthy’ by ’09’s end
• SoCal home woes could mean 50% price drop

What does the Fed’s inaction on rates mean? Good or bad for housing? Here’s some local instant analysis …

Quick reactions …

• Paul McCulley, Fed watcher at Pimco in Newport Beach: “The back-up in market rates over last month has already dealt a bat to the knee cap of housing, which already had a broke knee cap.”
• UC Irvine biz school deal Andy Policano: “The Fed is still hoping that earlier cuts will stimulate spending. Any further cuts right now would have little impact for 6 to 9 months at which time inflation may very well be the major challenge. My guess is that the next change the Fed will make will occur at the first sign of a recovery and then the Fed will raise rates.”
• Broker Dick Lobin from Huntington Beach: “They were trapped into making this decision.”
• Mark Boud, an Irvine real estate consultant: “They may be seeing the end of the recession in sight. It will have an indirect affect on rentals. With prices in Orange County dropping due to short sales and foreclosures, it’s almost less costly to buy than rent now so apartment vacancies are going up.”
• Delores Conway, head of USC’s Casden Real Estate Economics Forecast: “It may start to change the psychology of the home buyer. People sitting on the fence may be more willing to buy now if they think interest rates are going to rise.”
• Robert Kleinhenz, deputy chief economist of the California Association of Realtors: “I think the main impact of the Fed’s decision will be on the general economy rather than anything else right now. … They don’t want to reduce the cost of consumer credit. They want to shore it up.”

Now it’s time for your input!

Jack Irvin of Coldwell Banker Coast Alliance was quoted in a Long Beach Press-Telegram story about that city’s multi-million-buck, beach-close homes as saying: “Long Beach is the best value for beach living in Southern California. For homes like this in Orange County, you’d probably pay double, and I don’t know if there’s any place better to live. If anyone saw the views here, they’d understand.” (To read more of the story, CLICK HERE)

… I’m guessing somebody’s got an opinion on this!

No government agency, nor esteemed collection of economists, will officially decree when the O.C. housing market’s turnabout begins. As a public service, though, we’ve dug up certain bits of fresh evidence (click the blue links below for more details on each trend) that hints that a bottom might be close. That’s “bottom,” as in end of relentless declines, not any kind of return to the easy-money, easier-profits days of not-so-long-ago.

So, with that in mind, let’s go bottom fishin’ by grading the chances that the market’s tumble is over. Review our recent catch of trend-hinting news …

• Demand for O.C. homes highest since Sept. ‘05
• Sellers want more money for O.C.’s pricier homes. Again!
• Fed sees ’scattered’ pickup in West’s home sales
• Brokerage CEO says housing to be ‘healthy’ by ’09’s end
• O.C. homes seen as undervalued for first time in 5 years

Compelling evidence, or mere blips?

National Association of Realtors says today that its Pending Home Sales Index for Western states rose 8.3% in April from March and is 4% percent higher than April 2007.

NAR’s chief economist, Lawrence Yun says: “Bargain hunters have entered the market en masse, especially in areas that have experienced double-digit price declines, but it’s unclear if they are investors or owner-occupants … Sharp price reductions are leading to a quicker discovery of price equilibrium points. The West is already seeing year-over-year gains in pending contracts.” (Need to know more? CLICK HERE!)

That’s much like trends we’ve seen in O.C. Like …

Deals to buy homes are running at their highest level in two years.

So, what do you think.

Three years ago today — June 9, 2005 — then-Fed czar Alan Greenspan gave real estate watchers a new word: “froth.” He told Congress:

Although a “bubble” in home prices for the nation as a whole does not appear likely, there do appear to be, at a minimum, signs of froth in some local markets where home prices seem to have risen to unsustainable levels.

… plus, he said …

The apparent froth in housing markets may have spilled over into mortgage markets. The dramatic increase in the prevalence of interest-only loans, as well as the introduction of other relatively exotic forms of adjustable-rate mortgages, are developments of particular concern. To be sure, these financing vehicles have their appropriate uses. But to the extent that some households may be employing these instruments to purchase a home that would otherwise be unaffordable, their use is beginning to add to the pressures in the marketplace.

If you can stomach more, full text of the speech IS HERE!

And here’s your shot at analysis …

Are anti-day-labor-solicitation laws working in Orange? Here’s a slice of a recent report from The Register …

ORANGE – Day-labor solicitation in six areas of the city notorious for drawing large numbers of workers has drastically diminished, city officials reported.
“It seems to be diminishing here in Orange,” said City Manager John Sibley at Tuesday’s council meeting.
The areas, which used to average 49 to 206 day laborers daily near hardware stores, doughnut shops and conveniences stores, now see about 10 to 93 laborers per day – a 55 percent to 80 percent reduction, according to the City Attorney’s Office.
Solicitation has only increased near the city-run Resource Center, which is open for day laborers to look for work.
Officials attribute the decrease in numbers to a set of ordinances enacted in January, including banning solicitation from sidewalks next to streets without parking lanes and by people while driving on a city street. (Read the rest HERE!)

But ponder the fact that O.C. construction jobs are down by 4,200 (4%) in a year. Or that the construction slump nationwide has hurt Latino workers. Perhaps, Orange officials are overstating their clout.

Moody’s Economy.com has taken some of the guess work out of the eternal question, “Should I rent or buy?”

Their answer is the rent/buy ratio which is determined by dividing the median price of a house by the cost of renting that house for a year. David Leonhardt at the New York Times — a longtime advocate of renting — became a convert to buying based on the ratio when he was reassigned to Washington, D.C. this year. The good news for Orange County is that the rent ratio in the first quarter was 22.2, down from a peak of 29.7.

“Rent ratios going down mean houses are becoming more affordable to buy,” says Arnold Slesers, the Economy.com economist who crunched the numbers.

The bad news is that Orange County is tied for sixth highest rent ratio among the top 46 metropolitan areas, which means things are still expensive here. For instance, the ratio in Leonhardt’s new metropolitan Washington, D.C. area is an even more affordable 16.8.

Most affordable home U.S. buying areas? Columbus, Ohio, at 11.4, New Orleans at 11.5 and Indianapolis at 11.9. The 10 most expensive …

Source: Moody’s Economy.com, PPR and National Association of Realtors

CLICK HERE for the full Economy.com first quarter rent ratio list.