Thursday, February 02, 2006

More Weakness in the New Home Market

Last week, the Sacramento Bee reported on falling housing starts:

...Housing construction also fell last year in the Sacramento region. Permits for 15,559 single-family, detached homes were issued in Sacramento, Placer, El Dorado and Yolo counties in 2005, down 17 percent from 18,680 units in 2004. Across the capital region, permits for 2,901 apartment and condominium units were issued last year, down 19 percent from 3,587 units in 2004, CIRB data show.

In Sacramento County, the 7,811 permits issued last year for single-family homes represented a 23 percent drop from the 10,185 units issued in 2004. It was the largest year-over-year decline among the state's top 10 counties for single-family construction, CIRB data show.

CBS 13 had this report:

...Houses still sprout overnight like pumpkins from fields that used to be rural. Yet, there are signs that the sun is setting on an overheated housing market. California home builders say the number of housing starts--permits to build new homes--dropped from more than 212,000 in 2004, to just over 207,000 in 2005--a drop of nearly three percent. It was the first drop in ten years, but everything's relative. "2005 was a great year, and a 2.7% drop is not bad at all," said John Kellogg, realtor.

Realtors like John Kellog notice a bit of chill in the air. "Last year I could sell a house in a couple of days to two weeks, whereas now it seems to be going more from a month to three months," said Kellogg.

Builders expect construction to decline as much as 11% this year as home values appreciate more slowly. "2006 will not be as hopping as those years, but definitely a solid, good year and we're looking forward to that," said Ana Helman, North State Builders Association.

Kellogg just hopes home buyers are, as well.

"They're not really sure what to do yet, whether the market's going to go down, so I think they're just testing it," said Helman.

So what happens if more and more potential buyers keep testing...and testing?

8 comments:

Lander said...

Blogger is having some issues. It has dropped several posts as well as comments.

Blogger Status

Lander said...

Last night, HighSierraGuy tried to post this:

For those in Sactown, check out the back page of "Ticket" in the Sac Bee today (odd placement for a real estate ad--they generally fill half the paper on Saturdays).

Centex is offering 50K-150K discounts--one day only--on February 11th.

Better hurry and line-up my financing...LOL
______

Anyone want to e-mail me a scan or digital photo of the ad? I'd love to post it here.
-SL

HighSierraGuy said...

Sac Lander: Try these:

http://www.centexhomes.com/Sacramento/norcal12hoursale.asp?Div

http://tinyurl.com/7ozvn

HighSierraGuy said...

Oh,and the photo that accompanies the ad? That's the homeowner who closed in January after she couldn't believe they would throw in a granite counter top for free as an upgrade !

Lander said...

Thanks for the link!

Out at the peak said...

highsierraguy:
Are you serious? That was the same photo I saw that was promoting the last promotion. I think there have been three one day only sales from Centex so far. Two in January and now one in February.

But guess what? They are not going to stop having these sales unless magic happens.

poguemahone said...

Here is a nice graph of the Sacramento Area Housing Price Index:

Sacramento Area HPI

arizonadude said...

In most cases 50-150k is nothing. These 800k houses are worth more like 400k.Bottom line the builders have a lot of fat to trim so they can discount for some time and not hurt profits. I'd like to go some of their company parties. They must be just rolling in the dough and laughing at a lot of fools.