SPRING SALES: A NICE SHOT IN THE ARM
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Bet on builders being more astute when it comes to resurrecting their spring sales as the market looks to be on the verge of a comeback. In Austin, Texas, Homebuilder beats out competition by as much as 10% in its communities, having revamped its Internet presence. Carolinas-based Homebuilder bounces back, stepping up sales 35% compared to last year thanks to the stimulus package. Homebuilder lowers its price points in Jacksonville, Fla., and bumps up sales 55% while Homebuilder's new community in Granada Hills, Calif., nabs 1 sale/week right out of the gate. Texas Homebuilder notes a slight lull in sales mainly due to challenging lender conditions and the expiration of the tax credit.
Historically low mortgage rates, a bottoming out in home pricing and the welcome return of employment growth of 290,000 jobs last month adds momentum to the already expired tax credit and drives March housing starts up 47% from 361,000 to 531,000, year-over-year. However, chances are homebuilding and purchasing will plateau mid-year as purchases that would have normally taken place in late spring/early summer were pushed forward to qualify for the tax credit.
Following a dire spring season in 2009, national sales intensified considerably from 332,000 in March 2009 to 411,000 a year later, jumping about 25%. Sales remain strong in new communities located close to employment opportunities. With cautious optimism, Economist expects builders to replenish their very low inventories and pent-up buyers to return to the market as the growing economic strength provides its own stimulus for the rest of 2010. With consumers returning to stores, firms are building up inventory in anticipation of a continuing trend. States first out of the recovery box include Texas, Louisiana, Alabama, most states in the center of the U.S., and regions that avoided crushing falls in construction and pricing. Mortgage-stressed California, Nevada, Arizona and Florida continue to struggle and are likely to be the last to rebound.
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bottoming out of home pricing, builders, building up inventory, challenging lender conditions, economist, employment growth, employment opportunities, expiration of the tax credit, falls in construction and pricing, Historically low mortgage rates, homebuilders, homebuilding and purchasing, Internet presence, last to rebound, low inventories, lowers price points, March housing starts, national home sales, new community, pent-up buyers, spring sales, stimulus package |
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Crittenden BuildersReport
delivers the latest news and analysis in homebuilding, covering a range of topics from home sales and design to financing and distressed deals. The report provides the strategies and goals of public and private builders, as well as land merchants and master plan developers. Receive advanced information on what projects will work in the upcoming year and who will buy them.
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