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Through the first half of calendar 2007, builder revenues are down, home deliveries are off and pretax profits are well below year earlier levels. According to Fitch's new forecast for the balance of 2007, it appears likely that builders' financial pressures will continue unabated with full year revenues dropping 30 to 35 percent, on average, while pretax profits, before real estate charges, could plummet 75 to 80 percent. Yet, not unlike life, there are positive opportunities in the negative if we are looking and keeping our eyes opened for them.

"Although real estate continues to struggle, developers, civil engineers and architects can remain healthy by working creatively to stay on top of new market drivers," said Keith Mayer, president and CEO, Giffels-Webster Engineers, a civil engineering firm with a 50-year industry reputation for its vision for today's market and beyond. "Our team at Giffels-Webster has identified the trends that prove opportunities thrive beyond single-family homes in the suburbs."

According to Mayer, the top five hottest market growth areas are:

• Green building and design
• Assisted living centers
• Hospital expansions, education campus additions
• Mixed-use developments
• Urban revitalization.

With increased pressure on communities and businesses to promote environmentally sound designs, developers increasingly are incorporating green elements into their projects. A plan to develop a parcel of land for retail, Mayer says, might include green roofs, rain gardens, or gutter water retention and irrigation systems. "LEED-certified environmental experts soon will become 'must-have' team members as demand for energy efficient, healthy spaces grow stronger."

Assisted living developments are on the rise due to higher life expectancies and the influx of aging baby boomers. By helping seniors lead independent lives in non-institutionalized environments, these projects are designed to incorporate nature trails, community dining, exercise facilities, music rooms, libraries, salons, and game rooms. Opportunities exist to work with both private developers and public government-funded projects.

"While residential is at a peak right now many investors in the Valley are realizing significant cash flow by either directly investing in assisted living facilities or converting existing homes into these potential cash cows," added J. Dan Essa, agent with Team Vision in Scottsdale. "It's a matter of spotting trends and finding opportunities that pencil out for investors and these property types are on fire right now."

Fueled by institutional projects being funded privately though corporate gifts and individual endowments, the third growth market identified by Giffels-Webster Engineers are Hospital Expansions and Education Campus additions. "These 'recession- proof' resources mean even during economic downturns, the market segment moves forward with plentiful building and capital improvement projects," explains Mayer.

With the subprime fiasco still fresh in the minds of the lending community, securing financing for projects can be more difficult. Mayer suggests that builders consider mixed-use developments because they reduce risk. "With this approach, the developer's investment is spread across the spectrum so it remains viable even if one segment does not perform as expected."

"Mixed use is a combination retail and residential with large, national retailers combined with smaller, boutique-type stores, as well as housing varying by size, budget and amenities," added Essa. "There is a project in Gilbert right now dubbed 'the heartbeat," that the entire community is excited about. In fact, this project will provide density as developers will be allowed to go six stories high."

Lastly, municipalities, who are proactively transforming their space to appeal to potential and current residents, will need developer support to make it happen. Municipalities and townships in their efforts to make downtowns, retail hubs and central business districts more inviting and accessible are considering projects such as streetscape improvements, including attractive landscaping, decorative streetlights, brick sidewalk pavers, and strategically planned parking areas, all ways o help improve a bottom line.

While the news today focuses on the negative, there are always two sides to a market. Opportunities, or new market divers, exist if builders keep an eye on what prospective clients -- and possible new ones -- are in need of.

You may have noticed something curious during the final week of August: Standard & Poor's widely-watched Case-Shiller house price index came out with the alarming news that American homes lost 3.2 percent of their market value between mid 2006 and mid 2007. In some areas, such as Detroit (down 11 percent), Tampa (-7.7 percent), Washington D.C. (-7.0 percent) and Phoenix (-6.6 percent), the devaluation was much more dramatic. In 15 of the top 20 bellwether metropolitan markets, said S&P, home values dropped during the year.

The report helped trigger a sell-off on Wall Street, hit the front pages and TV newscasts across the country, and became the latest fodder for housing bust aficionados.

Just two days later, the Office of Federal Housing Enterprise Oversight (OFHEO), released its quarterly survey on the same subject. But its numbers were nearly mirror-image opposites: Year to year second quarter house prices were up by 3.2 percent on average nationally, buoyed in part by strong performances in the Pacific Northwest states, some of the Mountain states, Utah, Texas, Wyoming, and parts of North Carolina, among others. The agency found prices up on average in 226 out of the 287 largest markets.

The OFHEO report, made public the day before the start of the Labor Day holiday, attracted almost no media attention, and generally was backburnered in the publications that mentioned it at all. Though both surveys use a similar "repeat-sales" transaction methodology, the bad news got all the press, and the good news alternative got buried. Most American real estate owners were none the wiser.

Putting aside the media's appetite for the negative and the pre-holiday release of the OFHEO study, how could large, respected national survey organizations arrive at such contradictory conclusions? The answer is buried away in the empirical data sources used by each organization.

The Case-Shiller survey was created to provide market-by-market benchmarks for a new breed of real estate financial instrument: Futures contracts tied to housing price movements, allowing investors to hedge their bets elsewhere on the direction of real estate values in key areas around the country.

The OFHEO House Price Index was created with a totally different objective: To allow the agency, which has regulatory oversight of Fannie Mae and Freddie Mac, to keep track of the value of the collateral backing the two congressionally-chartered corporations' mortgage loan and securities portfolios. OFHEO's data pool is rich -- vast numbers of new loans and refinancings on houses financed by Fannie or Freddie. The data covers every state, drills down to the smallest and most rural of metropolitan markets, and comes with access to appraisals and other loan file details.

However, because it solely consists of Fannie Mae and Freddie Mac-financed properties, the OFHEO database is limited to houses with conforming, conventional loans no greater than $417,000, the current limit for both companies. The data omits FHA/VA loans, jumbo mortgages, most subprime and Alt-A nonconforming loans, and condominiums. It does include refinancings, which OFHEO freely admits tend to come with higher valuations than they would be if the house were sold outright.

The Case-Shiller index, on the other hand, covers houses with mortgages of every type and size, recorded at hundreds of courthouses around the country and scooped up by data aggregators working on contract. It includes no refinancings. More significantly, it has no data whatsoever from 13 states -- including several that OFHEO ranks among the current strongest price gainers -- and has incomplete data from 29 states for a variety of technical and legal reasons. Case-Shiller also weights properties by their values -- so a $250,000 house gets half the statistical weight of a $500,000 house.

These inherent differences, which are virtually never spelled out as potential limitations in press reports, have created indexes that are essentially measuring different pools of houses and price changes. The Case-Shiller index is more heavily weighted toward higher-price markets, such as California, parts of Florida and the Northeast. OFHEO undersamples upper-bracket luxury houses in the same areas, but covers a far wider geographic spectrum than Case-Shiller.

As a result, when high-cost areas on the two coasts saw their appreciation rates take off during the early boom years, Case-Shiller was out in front capturing the big spike upward in those states. Similarly it appears to be out in front on the way down for those states and metro areas, but its national index may be missing some of the positive appreciation apparently underway in states where its data is thin.

You don't have to answer the question, "Which index should I follow?" The fact is, neither index is perfect, neither index is capturing everything going on in home real estate. Follow them both. But don't ignore their built-in limitations, and roll with the newscasts and headlines accordingly.

The kids are back in school and now it's time for you to do your home work.

If you have not updated your home inventory and estimated value of your possessions for more than 12 months, you may be in trouble if faced with a "final exam" -- an insurance claim.

Simply paying property insurance premiums on time is not enough. To ensure your possessions, shelter, financial well-being and your home-based business, if you have one, are safe and secure, you should actually read your insurance policy or go over the details with your insurer's representative.

The contract between you and the insurer -- your policy -- must accurately estimate full value and must include relevant details of what you own, which usages are involved and what replacement would cost. If you carry too little insurance or if changes in use would disqualify some or all of a claim, that's your problem because the insurance industry considers it your responsibility to arrange correct coverage for your property and lifestyle.

From a consumer perspective, "The Best" insurance brokers and agents may be those who contact clients annually to ensure coverage reflects property value increases, renovations, new acquisitions and extended usage like a start-up home-based business, a new equipment-intense hobby or the inclusion of foster children.

If you are on your own with this annual up-date, tie the inventory review to a seasonal shift associated with "buying sprees" like back to school or Christmas. Include taxes in your listing. Minimum contents coverage is usually calculated as a percentage of building value. If the value of your possessions exceeds the insurer's calculated percent, then additional coverage may be required to protect the new home theatre, latest diamond ring or "had-to-have" golf clubs.

To up date the building's replacement value, contact your insurance representative. "Insured value" does not include land value, often a considerable portion of market value.

The Insurance Bureau of Canada (IBC), the national trade association of the private property and casualty insurance industry representing more than 90 percent of non-government home, car and business insurance, provides consumers with details on their responsibilities and rights. Armed with accurate information on what to expect, you are well prepared to ask the right questions whether you are searching for a new insurer or renewing a policy. Not convinced there's value in learning more? Did you know ... ?

• Decide on Agent vs Broker: "Agents" work for one insurer and can only offer that insurer's policy types and features to consumers. You must fit this insurer's criteria for "insurable" or find your own alternative supplier. "Brokers" each represent a small range of insurance companies, ideally chosen to provide the most useful range of products and options for the client base served by that broker. When shopping around, ask each broker which criteria they use in selecting companies and how their business is distributed between the insurers. If one insurance company drops you, the broker will attempt to switch you to another insurer.

• Compare beyond price: IBC Consumer Information Officer Don Stewart provides an example: "Coverage matters. All policies are not the same as companies can enhance their policies or not enhance them. For example, all companies will insure to estimated replacement cost. Most will add 'sleep at night' enhancement—guaranteed replacement cost." Steward goes on to explain that some insurers will pay all the replacement cost even if it exceeds the insured level while others will cap over-payment to a percentage, perhaps 20 percent.

• Read the fine print: "People should always read their policy so they know what they are covered for because it's better to know before than after," said Stewart. For instance, policies do cover wind damage—something blowing off or onto your house—but a tree falling on a home can add complications beyond the damage. The policy may include payment to have your tree taken off the building, but not off the property. If the tree belonged to a neighbour, your insurance covers the damage to your home. If the tree was known to be in dangerous condition and the neighbour did nothing about this, your insurance company may go after the neighbour's. Let the insurers fight this out rather than taking on the tree owner yourself since any resulting settlement from your neighbour will be based on depreciated value whereas your insurer will pay you replacement value.

• Hidden Secrets May Cost You: Owners of older homes may have knob-and-tube or aluminum wiring within the walls without knowing it. If the house burned down and one of these deficiencies was discovered later, the policy would still stand. However, if your insurer inspects your property at any point and finds a "red flag" like an oil tank or knob-and-tube wiring, you could be given notice to modernize or face having your policy cancelled. Switching insurers could trigger a similar situation. Once you sign up, an insurance inspector may discover a condition the insurer will not cover and you'll have to fix the situation, or find an insurer who will overlook it.

• It's For The Unaffordable, Not Home Maintenance: IBC explains that home insurance is there to protect you from having to pay out a huge amount at once, often at the very worst time emotionally. "Auto insurance is claims rated and it is affected by claims," said Stewart, comparing insurers' reactions to a claim. "In home insurance, you would lose the discount for being without a claim. Where you run into a problem with home insurance is two or three claims in two or three years. When you have a claim and it goes on record, the amount does not matter. Frequency does....Home insurance is not a maintenance contract...legally you can claim all kinds of things, but insurers don't like this so they will drop you, and others will not want you."

Insurance is an integral part of the price of real estate ownership. If property insurance lapses, existing mortgages are in default and may become due and payable. New financing may not be possible. The accompanying loss of millions in personal liability coverage places you at risk from law suits. Consider insurance premiums, insurer-driven renovations and continuing property modernization as basic ownership costs.

"Welfare is society's problem, not insurance," said Stewart. "They are there to try and make a profit. If you can't afford to keep a house, you'd better sell it ... . A lot of insurance companies do charity on the side, but not in business. GM does not reduce the price because you cannot afford it."