California New Home Market Edging Toward Recovery
May 28th, 2008 categories: Our Market
Our two most recent articles on the Real Estate market dealt primarily with previously owned homes or resales. Today’s news is from the New Home front and it’s another bit of good news. It looks as though the New Home market in California is bottoming out. The persistent slide of new home values may well be coming to an end as it seems that demand is stronger today than it was this time last year.
During March, 3,565 new homes and condominiums were sold in California subdivisions tracked by the Costa Mesa based Hanley Wood Market Intelligence (HWMI), a company that surveys and publishes new home market analysis for the home building industry. This equates to a 49 percent drop from 2007 levels BUT while a significant decline, the drop is a significant improvement from the year-over-year decline of 57 percent in February.
March 2008 new home sales were 12 percent higher than levels seen in February. Now, March is typically and stronger sales period than February so the increase this year makes sense. What didn’t make sense was last year’s numbers when March sales lost ground to February sales. This anomaly was more evidence that the market was in decline and it continued to a greater degree with each passing month. This year, now for the third consecutive month, the year-over-year decline in new home sales has shrunk, suggesting the market is bottoming out.
Robert Rivinius, the California Building Industry Association’s President and CEO, said the statistics should send a message to both prospective homebuyers who have been on the fence for the past 18 months and to policy makers.
“As the market decline appears to be coming to an end, it is likely that incentives and further price drops will also be coming to an end. And with inventory levels falling and housing starts at their lowest since World War II, it is also quite possible that as buyers return to the market we will see prices harden quickly. Prospective buyers should take advantage of the buyer’s market while they still can”, Rivinius said.
“But to help guarantee that the housing industry rebounds as quickly as possible, creating jobs and higher tax revenues for government, policy makers need to act quickly to enact reforms that will spur sales and new construction”.
He said Congress needs to pass economic stimulus legislation now being debated that would make permanent higher guaranteed loan limits and creating a temporary tax credit for homebuyers, and the the state Legislature needs to quickly pass CBIA-sponsored legislation to give builders more time to begin construction on already approved projects and to defer collection of impact fees until a home is sold.
We have seen the tremendous impact the home building industry has on our overall economy over the past two years. As this critical market begins to recover, a plethora of supporting industries follow including manufacturing. Just think of all the new products created to support a vibrant new home industry…
For buyers interested in purchasing a new home, time is of the essence. And as with all things, it’s not what you know but who you know. If you know JB Home Sellers, you have a much better chance of getting your very best deal on the best new home available in your desired area. We know our way around the industry and will take the steps necessary to make sure our clients get the most out of their purchase dollar and this buyer’s market. Call today and let us help you LOVE where you live!
