Shift in supply and demand sweeping the nation. A friend of mine moved to Orange County, Calif., just before the housing market collapsed.
...all this indicates if not a turnaround for homebuilders, at last the bottom of the market has been reached and it's time to climb back out. I should temper such excitement by adding that the market still has a huge way to go before the industry looks anything like it did before the fall, but progress is progress.
According to the Eye On Housing blog, from peak to trough, new-home sales fell 80 percent from July 2005 to February 2011, but starting in fall 2011, new-home sales increased 22 percent. Eye On Housing expects new-home sales to reach 372,000 this year.
Another housing blogger, Calculated Risk, reports 2012 will be the first year since 2005 that new-home sales will climb above year-prior numbers. It expects 360,000 new-home sales in 2012 versus 306,000 in 2011 and 1.2 million in 2005.
Calculated Risk also said the ratio of existing homes sold to new-home sales is normally 6-to-1. Today, it's about 12-to-1, which is an improvement from the abyss when it was 18-to-1.
Outside the industry itself, others are beginning to take notice that things are looking better for homebuilders. In August, Wells Fargo, as an example, announced it was unveiling a new division that will solely focus on lending to regional and midsize homebuilders, a group that uses debt to purchase development land.
Via Debe Maxwell www.iCharlotteRealEstate.com