By Dan Eaton
Business First of Columbus
Updated: 7:00 p.m. ET Feb. 5, 2006

Central Ohio’s housing market is going through the equivalent of a closeout sale as builders slice prices in hopes of luring back buyers.

But whether a builder is cutting prices immediately or holding out until later, many observers agree the cost of a house will be dropping, discount or no discount.

M/I Homes Inc. is one of the builders cutting prices now.

Taking a page from the struggling U.S. automakers’ sales pitch last summer, the Columbus-based builder is offering an 8 percent discount on its houses in the area. M/I is marketing the discount as a special for the company’s 30th anniversary, but Chief Financial Officer Philip Creek acknowledged the motivator is the slumping Central Ohio market.

“This is one of the higher discount programs we’ve ever run,” he said, “but this is the slowest market in a few years.”

Construction permits for area houses plunged 25 percent in 2005 and are expected to drop again this year. Creek ticked off a well-known list of factors for the slowdown – higher mortgage rates, sluggish job growth and consumers’ declining confidence in the regional economy.

Dallas-based Centex Corp. is also cutting prices. During one hours-long selling campaign, it offered to take up to $70,000 off the price of a house, either one that could be ordered or from the 160 houses sitting in its area inventory.

Wayne Zill, Columbus division president for Centex, said in an e-mail the sale was intended to increase traffic and sales in the Columbus market, which are in a decline.

Executives at Dominion Homes Inc. didn’t respond to interview requests, but the Dublin company’s advertising on its Web site offers up to $40,000 off inventory houses and certain new builds in Central Ohio, and up to $17,500 off spec houses in its Louisville and Lexington, Ky., subdivisions.
Regional problem

Builders had anticipated a tightening market and are beginning to show their strategies for dealing with it in 2006.

Howard Schottenstein, president of the Building Industry Association of Central Ohio and owner of Markpoint Development in Bexley, said all builders are trying to come up with ways to combat the slump.

Some, he said, might be waiting to better gauge the depth of the downturn before taking steps to get through it.

“We’re seeing that the world is changing in regards to the housing market,” said Anthony Chan, economist with JPMorgan Chase & Co. “Discounting is the first sign of cooling prices.”

And as prices fall for the large builders, so will they drop for smaller builders, he said. The signs were evident last year: Chan said the mean price of a new house fell 4 percent to $272,900 in December 2005.

Still, builders view the problem as regional.

Creek said M/I Homes began offering its discounts in Central Ohio in early January, before adding it in its Indianapolis and Cincinnati markets. The company isn’t offering price cuts where sales have been healthy, including Florida, North Carolina, Maryland and Virginia.

Zill said Centex’s 12-hour sale produced the Columbus division’s best week of sales ever, though he declined to provide details.

He said the company has used the technique in other cities to build its brand, including St. Louis, Detroit, Washington, D.C. , and parts of California.
Waiting game

Bob Webb, chief executive of Bob Webb Group, a Lewis Center-based custom builder, said his company hasn’t seen an effect on prices yet, but it isn’t instituting discounts.

“There is too much inventory out there,” he said. “Some companies have a six- or seven-month backlog. Any builder with inventory is making concessions. We just don’t have much inventory.”

With the low interest rates that drove the area’s building boom gone, builders have little choice than to combat the cool-down by lowering prices, Chan said.

“We’re going to see more of this,” he said.

A drop in prices will mean a drop in profit for those who sell houses, but the head of the Columbus Board of Realtors thinks anything helps.

“Any incentive that can be provided to buyers is a great opportunity,” said Chris Reese, the group’s president.

She conceded lower prices on new houses likely will depress the market, but that might be what the industry needs to move many of the houses built on speculation or in deals that collapsed and now sitting empty.

“The bottom line,” she said, “is about getting people into houses.”
© 2006 Business First of Columbus

© 2006 MSNBC.com

Business First of Columbus – 10:22 AM EST Thursday

Brian R. Ball
Business First

The number of single-family houses sold in Central Ohio set another record in 2005, but the pace of the increase slowed from the previous four years amid a general cooling in the housing business.

Still, the president of the Columbus Board of Realtors expects sales to approach another record this year in Central Ohio as moderate mortgage rates combine with a growing inventory of houses for sale to give buyers an upper hand.

The Board of Realtors said that its members sold 27,493 houses and condominiums in the Columbus area last year, a 3.1 percent increase from 26,660 residences sold in 2004.

That increase paled, however, compared to the 7 percent to nearly 10 percent annual increases registered over in the last several years.

“I guess we can’t just keep up the pace,” said Chris Reese, a Metro II Realty agent who is the 2006 Columbus Board of Realtors president. “At some point that has to break.”

Indeed, the nation set a record in housing sales in 2005, with nearly 7.1 million sold — a record for the fifth straight year, even as sales dropped in December, said the National Association of Realtors. But experts said they saw inventories of houses for sale in some cities with troubled economies — such as Columbus — rising, which would put a drag on the market’s overall performance this year.

Statistics from the Columbus realty board showed the 2005 average sales price increased 4.4 percent to $177,978 from $170,522 in 2004 in the region.

The national median sales price in December was $211,000, the national association reported.

The Columbus agency compiled its report from sales in Franklin, Delaware, Fayette, Morrow, Madison and Union counties and parts of Fairfield, Licking, Marion, Pickaway, Knox, Clark, Champaign and Logan counties.

The combined 2005 sales volume came in just under $4.9 billion, a 7.6 percent increase from $4.6 billion in 2004.

Reese said the board’s Multiple Listing Service has 14,000 listings — another record. That supply of houses for sale should make it a buyers’ market this year.

“In order to have a faster sale, you have to price your home … comparable to the rest of the competition,” she said. “With that many homes on the market, buyers will shop … to get the best price.”

Houses on the sales block in 2005 took an average of 86 days to sell, or three days longer than in 2004. The 1,829 residences sold in December took 93 days to sell, or two days more than a year earlier, said board statistics.

JEANNINE AVERSA
Associated Press

WASHINGTON – People may feel less inclined to be big spenders this year as the housing market slips from its lofty perch, developments seen as producing slower, though still respectable, economic growth this year.

That is the picture emerging from economists, most of whom are projecting growth to top 3 percent in 2006.

Many analysts are hopeful the high-flying housing market will scale back at a moderate pace, boding well for a safe landing. A crash of a sector that has reliably supported consumer spending and economic activity for five years running could imperil the entire economy.

Rising interest rates and the toll of high energy bills also will play a role in the expected belt-tightening by consumers this year, economists say.

Consumer spending probably will increase by about 2.9 percent in 2006, compared with a projected 3.5 percent rise for 2005, according to the National Association for Business Economics.

The association and other analysts are forecasting economic growth this year of 3.3 percent, compared with a projected 3.6 percent increase for 2005.

Some experts believe the economy will grow at roughly the same pace as it did last year. A few think economic activity in 2006 will not reach 3 percent, a subpar performance.

The government’s tally of 2005′s economic performance, including consumer and business spending, will be known later this month with a report on the gross domestic product. It measures the value of all goods and services produced in the United States and is the most important economic gauge.

Consumer spending accounts for a big chunk of economic activity. Economists are confident that if people’s appetite for new purchases should wane, business investment and other parts of the economy will pick up and temper the decline.

“The mood in the executive suites I visit is generally optimistic,” said Thomas Donohue, president of the U.S. Chamber of Commerce.

Economists believe business spending should firm up as companies boost investment in response to global competition.

It’s that competition that should help keep inflation in check in the U.S. in 2006, economists say. Most foresee consumer prices moderating this year. Yet a big jump in energy costs could undermine the positive outlook.

“The potential for even higher energy prices is a risk to the economic outlook. The economy has digested the higher prices gracefully so far. But it can get a bit of indigestion if prices move higher,” said Mark Zandi, chief economist at Moody’s Economy.com.

The jobs climate is expected to improve slightly this year. The average unemployment rate should drop to 4.9 percent or 5 percent from last year’s 5.1 percent, economists said. The economy is expected to add around 2 million jobs this year – about the same as last year.

Home prices, after double-digit gains over the past several years, have helped power consumer spending. Borrowing against homes added $600 billion to consumers’ spending power in 2004, according to research by Federal Reserve Chairman Alan Greenspan.

Prices are not expected to go up as much this year and, according to analysts, could fall in some markets. That would make some homeowners feel less wealthy and more cautious in their spending, economists say.

“2006 is going to be a wake-up year for many homeowners,” said Greg McBride, senior financial analyst at Bankrate.com.

“Consumers have been using their house as an ATM. That is going to diminish considerably over the next several years” as the housing market slows, he said.

The Federal Reserve is expected to continue bump up interest rates this year. But central bank officials have suggested that the end of a nearly two-year rate-raising campaign may not be far off.

The Fed in December lifted a key short-term interest rate, known as the federal funds rate, to 4.25 percent; that’s the highest rate in 4 1/2 years.

The funds rate, the interest that banks charge each other on overnight loans, affects other interest rates.

The Fed’s action last month meant that the prime lending rate – for certain credit cards, home equity lines of credit and other loans – rose to 7.25 percent. That also was the highest rate in 4 1/2 years.

Many economists believe the funds rate will climb to 4.75 percent this year, which would push up the prime rate to 7.75 percent. Others predict the funds rate will go to 5.50 percent this year, leaving the prime rate at 8.50 percent.

Against a backdrop of rising interest rates, analysts suggest that would-be home buyers and other borrowers lock in loans with a fixed rates, versus a variable rate, sooner rather than later.

Rates on 30-year, fixed rate mortgages, now at 6.21 percent, could top 7 percent by year’s end, according to some economists’ projections.

Ohio home sales rose 1.1 percent in November, keeping the state on pace for a record-setting year, the Ohio Association of Realtors said Thursday.

Ohio real estate agents sold 10,861 single-family homes and condominiums in November, compared with 10,738 in November 2004. The average price of homes around the state rose 3.5 percent to $154,671, from $149,412 last November.

For the year so far, Ohio real estate agents sold 134,768 homes, up 4.9 percent from 128,415 in the first 11 months of 2004. The average price of homes hit $157,056, up 3.3 percent from $151,998 in the first 11 months of 2004.

Interest rates have risen but still remain relatively low, said association President Jim West. Home buyers continue to find options in all price ranges.

“Ohio’s housing market continues to surpass even our most optimistic expectations,” West said in a press release.

Central Ohio home sales tracked statewide home sales in November. Home sales in Central Ohio rose 1.3 percent in November and are up 3 percent for the year, the Columbus Board of Realtors said last week.

The association gathers data from multiple listing services around the state. Its data include the sales of new and existing houses and condos. The tally includes only transactions reported to the listing services and often doesn’t include residences sold by their owners and homes sold by builders.

The public interest
Thursday, December 15, 2005

Joe Testa

A woman, once homeless, told the story recently of how she had been helped by local agencies that work to ensure low-income residents have affordable housing opportunities in our community.

Today, this Franklin County resident is now working toward a college degree, quickly moving down the road to a better life.

It’s stories like this that help illustrate the need to provide additional affordable housing options in Franklin County.

I recently testified at a public hearing to express my support for increased funding for affordable housing and the agencies and programs that provide these services. The Franklin County commissioners have been conducting public hearings on their plan to double the real estate conveyance fee, collecting an additional $6.8-million per year to fund this initiative.

During my testimony, I presented a plan to the commissioners that would provide the requested increase in funding to $6.8-million for these important initiatives, but without any additional taxes and without jeopardizing the county’s strong financial position.

In fact, even with the increase in funding for affordable housing from the county general fund, Franklin County would fare better than most other counties of similar size that have secured the coveted “double, Triple A” bond rating from the nation’s leading credit rating agencies.

Some have said that because Franklin County’s real estate conveyance fee is at the lowest possible amount — the state-required $1 per $1,000 of sales price — the tax should be raised to bring it in line with surrounding counties. This, in my opinion, is wrong.

I am a firm believer that government should never impose more taxes than are really needed. Just because we are lower in that particular tax than surrounding counties is not a sufficient reason to raise ours.

Other counties aren’t like Franklin County. Some of the smaller, more rural counties likely need the additional general fund dollars brought in by the increased transfer tax because they don’t have sales tax or real estate tax receipts anywhere near Franklin County’s.

We have benefited from a strong real estate market with stable property values and the addition of more than $1-billion in new construction activity each year. That’s private investment, which adds to the tax base.

The county commissioners raised the county sales tax earlier this year, which is expected to bring in an additional $88-million per year. When that increase was adopted, it was believed that a conveyance tax increase was off the table. At the Dec. 8 hearing, one of the commissioners stated that my position was raised at the 11th hour.

This is not true. I made it clear last summer that I would oppose an increase in the conveyance tax when commissioners were considering several tax increases, a fact acknowledged by a member of their staff after the hearing.

My office’s analysis clearly shows that Franklin County government’s cash reserves are very large and building rapidly. While it is certainly prudent to hold some funds in reserve for a rainy day, governments should never impose new taxes in order to run up the reserves when they are already higher than nearly every other top-rated county in the U.S. of comparable size. The public can put those dollars to better use itself.

Several speakers at the recent public hearing expressed a desire for a dedicated fund for affordable housing. If commissioners wish to earmark $6.8-million each year for affordable housing, they can do that right now without raising taxes. That decision, however, would not be legally binding on future commissioners, regardless of whether they impose this new tax.

There is no question that affordable housing is an issue that must be addressed in our community. As county auditor, I administer the state’s Homestead Exemption program that provides real estate tax relief for qualifying seniors and disabled property owners, and I have led my office staff to contribute significantly to help homeless families in our community. I’d like to see us do more. While testifying in support of affordable housing funding, I told commissioners that I would like to work with them to explore the possibility of creating a “Homestead Exemption Part B” program to assist Franklin County seniors who just barely miss qualifying for the existing Homestead Exemption program.

This would allow us to reach even more seniors and help them stay in their homes.

We can accomplish this without placing an additional tax burden on our residents. Those interested in reviewing the data I presented to the commissioners may view it on my Web site under “affordable housing proposal” on the home page at www.franklincountyauditor.com.

December 1, 2005

A typical family can afford about 66.5 percent of the homes in the Columbus market, according to a study by the National Association of Home Builders.

Columbus ranked No. 54 for housing affordability, out of 160 markets surveyed. It ranked No. 25 for its region.

The study compared how many homes in each market are affordable by families making the median income. The study assumes families spend about 28 percent of their income on their mortgage. The median Columbus household income was $63,900 a year, and the median home price was $167,000 in the third quarter of 2005.

The median home price means half of home prices are above the median price, and half are below it.

Indianapolis was rated the nation’s most affordable housing market, with 89.7 percent of its housing stock within reach of the median-income family. Los Angeles was the least affordable market — a median-income family in L.A. can afford 2.4 percent of homes.

Nationwide, about 43 percent of new and existing homes are affordable to median-income families, according to the study. That’s a decline of 2.7 percentage points since the association began the survey in 1992.

The association blamed the decrease on a rise in home prices. Home prices can be a “double-edged sword,” said NAHB president Dave Wilson. Home appreciation adds to the wealth of people who already own homes, but make it more expensive for others to buy homes.

COLUMBUS – “One man’s trash is another man’s treasure.” While that saying is normally used in reference to unwanted items being discarded by one individual and sought by another, it describes the ongoing battle between construction and demolition debris landfill operators and some of their proposed neighbors.

One of the latest sagas in this perennial battle is playing out in the Ohio House now, and it will be coming to the Senate committee I chair, Environment and Natural Resources, in a few weeks.

The budget bill passed earlier this year created the Construction and Demolition Debris Task Force, and required members to conduct hearings and submit a report to the legislature by September 30. That same bill included a moratorium on issuing new operating licenses for what are commonly called C&DD facilities between July 1 and December 31 The expiration of that moratorium is driving the initiative to adopt new rules.

C&DD landfills accept the waste material from new construction, remodeling and demolition projects. They cannot accept solid waste. The regulations governing solid waste, the material you put in your garbage cans at home, are more stringent than those for construction debris. Solid waste has more potential for harm to the environment than most construction debris.

As a member of the C&DD Task Force, I participated in the August and September meetings. The committee issued its report, and while there was agreement on many points, some issues remained problematic. Those remaining issues have been the focus of legislative hearings in the House and at least one marathon interested parties meeting.

The most contentious issue is the location of these landfills. Opponents do not want them in their backyards. Others want C&DD landfills to follow the tougher regulations governing solid waste landfills. One problem with that proposal is the C&DD waste will use up more of our dwindling solid waste disposal space.

In addition, if C&DD facilities must meet the solid waste regulations, they might as well accept solid waste, and these same opponents who do not want construction debris in their neighborhood are even less likely to want solid waste.

If the legislature does not act before December 31, the moratorium will expire and C&DD facilities will be free to operate under existing laws. The task force recommended tougher regulations, including greater setback distances from homes, and the House committee is rushing to pass HB 397 so those recommendations become law when the moratorium expires.

The Senate will have limited time for debate if we are to meet the Dec. 31 deadline, so I have taken the unusual step of participating in the House discussions. My goal is to be thoroughly familiar with the proposal so when it comes to my committee I am familiar and comfortable with its contents.

Last Wednesday the House heard various witnesses testify for three hours about the proposed changes. I then joined the chairman and one member of the committee and almost 40 interested parties at what turned out to be a marathon seven-hour interested parties meeting that did not break up until close to midnight.

The group agreed on a proposal, and sent the legislation back to be rewritten. An electronic version was made available for everyone to review over the weekend. The House committee will meet again this week to ensure the bill says what those involved agreed it would say.

Regardless of the outcome, it is certain everyone will not be completely happy with the results. Disposal of CC&D or solid waste is always contentious.

Article published Oct 27, 2005
Speaker: Healthy construction industry helps Grant County
BY RACHEL KIPP

A nationally recognized economist told local business leaders Wednesday the recent national boom to the construction industry may decrease soon, leaving a potentially dangerous hole in already-shaky economic conditions.

“I know you don’t believe there’s a housing bubble, but there’s a huge bubble,” economist Edmond Seifried said, telling a story about his sister being offered double what she paid for a Florida condominium months after she bought it.

“We can’t afford for the housing bubble to burst,” he said. “It has to deflate.”

Seifried, an industry consultant and professor of economics and business at Lafayette College in Easton, Pa., was speaking as part of a daylong tour at STAR Financial Bank locations across the state as part of a series of economic forums.

Although Indiana and Grant County aren’t seeing the dramatically rising prices being experienced by parts of California and Florida, Seifried said the health of the national construction industry does have an effect here.

“A healthy construction economy nationwide will help even this county,” he said. “If the economy is healthy nationwide, there will be demand for products and services made here. I don’t think the construction trade here is dead. It would be helped if the mortgage rates stay low.”

The bank used to regularly have economic forums in Marion before moving the business’s headquarters from Grant County to Fort Wayne, bank President Jim Marcuccilli said. Last year, bank officials added Indianapolis as a second location for the forum and this year Marion was included as a third.

“This is our first economic forum in the area in recent years,” Marcuccilli told the group of business owners, local government officials, bank customers and employees who gathered at the Meshingomesia Country Club. “And I’m glad to be able to offer you this opportunity once again.”

Along with the national housing market, Seifried discussed energy prices, interest and mortgage rates and what effect those factors could have on the overall U.S. economy.

“In the last 15 years something very strange has happened in America,” Seifried said. “There’s been a real change in the way we do business … Cities like Marion, Muncie, Kokomo, Bethlehem, Pa., Pittsburgh, Columbus, Ohio, Midwestern cities, old industrial cities began to lose that industrial base to China, India and Asia.”

As Seifried talked, he asked forum attendees to examine charts of economic indicators including the U.S. trade deficit, the 30-year mortgage rate and the federal fund rate. Figures for each were included from 1991 to 2004 and Seifried read statistics for each month of 2005 to give participants an idea of which way the trends were heading.

After the speech, Jim Smith, superintendent of Oak Hill schools, said many of the topics discussed relate directly to what’s happening at the school corporation, particularly as officials deal with the rising cost of running school buses and prepare to begin a $10 million high school renovation project.

“Running a school corporation is like running a business,” he said. “We pay attention to all of the factors that he talked about.”

JEANNINE AVERSA
Associated Press

WASHINGTON – While the high-flying housing market still holds risks, especially for the financially stretched, most homeowners are in a fairly good position to weather a shock if prices drop, Federal Reserve Chairman Alan Greenspan said Monday.

“The vast majority of homeowners have a sizable equity cushion with which to absorb a potential decline in house prices,” he said in remarks delivered via satellite to a banking conference in Palm Desert, Calif.

Still, Greenspan, who has repeatedly warned about the potential perils if the housing market were to suddenly go south, also made clear that there are several factors – risky mortgages and speculative activity in particular – that warrant close scrutiny.

The quicker turnover of second homes – such as for investment or vacation purposes – appears to be feeding the surge in house prices, Greenspan said.

“Speculative activity may have had a greater role in generating the recent price increases than it customarily has had in the past,” he said.

Greenspan’s latest thoughts on the housing market came after the National Association of Realtors reported that sales of previously owned homes in August posted their second-highest level on record. Home prices, meanwhile, increased by the largest amount in 26 years.

Sales rose 2 percent in August to a seasonally adjusted annual rate of 7.29 million units; that was second only to the all-time high pace of 7.35 million units in June.

Low mortgage rates have been powering home sales, which hit record highs four years in a row and are expected to set a new record this year.

Median house prices climbed to a record of $220,000 in August, a gain of 15.8 percent from the same month a year ago. That was the biggest 12-month increase since July 1979.

Sales were up in all regions of the country except for the South, where they dipped. Because Hurricane Katrina hit in late August, its full brunt was not completely captured in the August sales figures, the association said.

On Wall Street, the Dow Jones industrials gained 24.04 points to close at 10,443.63,

Although his speech was devoted almost totally to the housing market, Greenspan did briefly mention that the Fed will be watching carefully the aftermath of hurricanes Katrina and Rita.

“In the weeks and months ahead, the Federal Reserve will continue to closely follow the consequences of the recent devastating events in the Gulf Coast region in order to assess their implications for our economy,” he said.

Citing a research paper he co-wrote, Greenspan said the run-up in house prices has left households with a substantial pool of available home equity. Four-fifths of the increase in home-mortgage debt has come from people taking cash out of their appreciated homes through refinancings, home-equity loans and other things, he said.

“After discussing all the risks, Greenspan summed up by saying the share of households who are very highly leveraged is lower than expected and is not correlated closely with high home price states, other than California,” said Doug Duncan, chief economist at the Mortgage Bankers Association.

Greenspan continued to register concerns about soaring house prices and risky mortgages on expensive homes. He also repeated his warning about signs of “froth” developing in some local markets that may be driving house prices to “unsustainable levels.”

But Greenspan said it was unclear whether such exuberance would spread to more local markets.

“It is still too early to judge whether the froth will become evident on a widening geographic scale or whether recent indications of some easing of speculative pressures signal the onset of a moderating trend,” he said.

An end to the housing boom could have a silver lining, the Fed chairman added, because it probably would be accompanied by a moderation in the growth of consumer spending. That could lead to a boost in Americans’ personal savings rate, which has been dismally low, and could curb Americans’ insatiable appetites for foreign-made goods, helping to narrow the United States’ bloated trade deficit, he said.

“Housing is a fault line in the economy that Greenspan is indeed worried about, but he doesn’t think a housing (slowdown) will undermine the expansion,” said Mark Zandi, chief economist at Economy.com.

Thursday, September 1, 2005

Harley E. Rouda Jr.

If you think you may be ready for a life transformation, you have access to various ways of changing your living situation — while alleviating the stress of doing so.

Individuals older than 55 have a variety of affordable and accessible housing options from which to choose, including condominium housing, downsizing into a smaller home or purchasing vacation homes.

More and more people realize that condos strike the perfect balance among independence, building equity, low maintenance and a manageable price. When condensing your large family home, choosing a condo may be an easier life adjustment, because unlike an apartment, the property inside your condominium is your own to personalize.

Since the exterior areas of a condominium are owned by the condo association, however, maintenance such as irritating snow removal and exhaustive lawn mowing can be eliminated with the purchase of a condo. A manageable fee usually covers these services, as well as garbage disposal and repairs of common exterior problems.

If a condo isn’t right for you, but your family home has become too large in the past few years, it may be time to make an adjustment to a smaller house. By downsizing your belongings you can free up your storage space — and free yourself of climbing up the attic stairs. A more accessible floor plan and a smaller space can also save you time and energy in your everyday life.

A home in another location is also another liberating adjustment to your routine. What you may not realize is that the usual vacation home is not a million-dollar house on the beach or an expensive ski condo in the mountains. The option may be more affordable than you realize.

Owning a second home can be a stable and satisfying investment when dealing with our unpredictable economy. Lenders are always willing to finance vacation properties with increasingly competitive terms, often comparable to the rates available for primary residences.

So if you’re ready to take on retirement living, call your favorite local Realtor to help find an option that will meet your changing lifestyle needs.