New Home Construction Rebounds
December 20th, 2009 categories: Buyer Resource
Custom Built Home In Petaluma California
New home construction rebounded in November 2009, from a 6 month low that was recorded in October 2009. The actual numbers came in at an annualized rate of 574,000 units, as compared to Octobers’ woeful 527,000 units. We see any increase as good news, and the November increase was listed as an 8.9% improvement in monthly annualized numbers, a large increase.
The improvement in new home construction starts was regionalized however. The Northeastern U.S. saw a remarkable 16.4% rise, the Southern U.S. saw a 12.3% rise, the Midwestern U.S. saw a 3.0% rise, and we recorded a 1.9% increase here in the western U.S. Again, we will take any improvement, and are happy to see positive numbers.
We, as a nation, are still behind last years numbers. November 2008 recorded 655,000 new construction starts…we are 12.4% short of that number. Again, I will reiterate, we are happy with any signs of improvement, especially an 8.9% monthly increase in what is traditionally a slow time of the year for construction.
Is it too soon to start new construction? In many parts of the country you can still purchase a home for less than it costs to build a comparable home; Sonoma County is no exception to this trend. Many of these new home starts are for people who want a specific property that is not on the market, retirees and “moveups” who are looking for their dream home, and even those who cannot seem to find the perfect home listed for sale. We have written about a shortfall of homes on the market in some price ranges, and the new construction may be an outcome of that situation.
Another reason for the new construction numbers was the extension of the $8,000 tax credit for first time home buyers. Many builders noted that this alone was the reason for many buyers to enter into a contract to build a home, and we are excited that the government had the foresight to extend this important stimulus plan.
It is fair to note that this new home construction “recovery” is a month to month numbers comparison, and the new home construction numbers are trailing off towards the end of the year, which is typical in the new home construction industry. What happens in 2010 remains to be seen. We will surely post an article with our 2010 Real Estate predictions before the end of the year.
If you have any questions regarding new home construction, or Sonoma County Real Estate in general, please do not hesitate to contact us. We look forward to hearing from you and answering your questions.
This article was contributed by Chris Ingram.
Good article