Saturday, October 28, 2006

Waiting List of Home Builders

From the LA Times:

California's housing production plunged 47% last month as builders curtailed construction while working to whittle down their existing supplies of unsold homes, data released Friday showed. Builders obtained permits for 11,590 houses, condominiums and apartments in September, according to statistics compiled by the Burbank-based Construction Industry Research Board. By comparison, 21,717 permits were issued in the year-earlier period. September's permits were the fewest issued for that month since 1996...

Permits for single-family houses experienced the biggest drop in September, plummeting 57% from a year earlier. Production in two of the state's biggest new-home markets — Riverside/San Bernardino and Sacramento — fell by more than 60% [pdf report]...

Meanwhile, builders are holding off on new construction, said Wes Keusder, a builder and chairman of the California Building Industry Assn. Obtaining a permit is the first step in the construction process. "Last year we had a waiting list of buyers interested in our homes before they were even built," Keusder said. "This year, however, it seems as though we're the ones who are waiting."

13 comments:

sippn said...

Good useful information. Thank you.

Over 7,000 fewer homes started in the 6 county region around Sac (incl Sutter/Yuba) 2006 vs 2005 in the 1st 9 months.

That will help create the bottom sooner.

Anonymous said...

With 57% fewer permits being pulled will result in massive job loss across many sectors, construction , retail, and manufacturing. This situiation will only cause a further declines in real estate over the next several years.

Another domino has fallen in the ever decreasing real estate market. This news can only be bad.

So sad that sippin thinks massive job loss is good information. Why do you feel that way sippin? Why?

sippn said...

1. Information was useful
2. Jobs were already lost - these are the statistics for the year so far, (it already happened)
3. Building more homes than needed makes values drop, hurting homeowners, not just builders.

anonymous - the supply of new homes is being decreased until builders can sell at a profit again. They just don't build them as empty monuments!

It is sad. But at least the builders are taking corrective action to fix what they can and salvage some business.

Why do you think I'm Sippn?

sippn said...

Besides, its only been about 40% less year to date, one month of permit differences is no big deal.

But if you want to step forward and make a purchase so more people can work, be my guest!

Gwynster said...

We've already had job loses. As I've pointed out before, I've been watching people leave UCD for univeristy position in less expensive parts of the country. We're also really starting to see the first wave of retirements with everyone hoping to cash out on their house and move out of CA.

The real wake up call for me has been listening to friends who were firm northern CA liberal types who are seriously looking at loving to the midwest despite being worried about the whole red state/blue state mentality. They just say that they've had it and are trying to get the rest of their liberal friends to join them.

Take all of those together with the fact that we're also seeing lots of hispanic immigrants moving to the midwest after short stays in CA, and I sense a significant demographic shift. Who is going to buy all those retiree homes coming on the market along with all the new housing that's not selling?

Anonymous said...

Not to mention that first time home buyers make up a huge percentage of potential home buyers. There aren't too many first time home buyers willing to shell out $400K+ for their first home. I'm willing to bet the pool of speculators and second home buyers is starting to dry out. I'm a recent grad school grad. I know I'm willing to wait it out. I've got at least 20% down at the prices today. Hopefully it'll be more like 40 or 45% by the time I even consider making offers.

Anonymous said...

Real estate is over. Let's hope some other part of the economy picks up and generates jobs for all of the people directly affected by this before we start seeing second-order effects like a depression.

Gwynster said...

Further proof that new housing isn't going to save this area?

These condos went on sale ealier this year and aren't selling. Now they are trying to rent them out-

http://sacramento.craigslist.org/apa/226656938.html

These are located right behind an existing condo complex where the asking prices declined from 299k to 239k in 11 months (last unit sold for 229k in Aug 06 after accepting a low-ball offer).

2 Br homes here rent for 1100/1300, apts/condos for about 900/100.

Anonymous said...

All else being equal, reduced construction will work to stabilize prices because of the reduction in supply. It's a rational economic response by builders to a slowing market.

I'm not a doom and gloomer. Given no sharp upturn in interest rates, I expect a correction in nominal prices of 10-15% over the next couple of years here in Sacto, followed by sideways prices for another 2-3 years. After that, who knows, but I would guess that housing tracks inflation.

We have too many people moving here, to much demand, for prices to fall precipitously.

I don't think the housing slowdown will be enough to trigger a recession--never underestimate the indomitable American consumer.

Anonymous said...

Another Jim Jones Kool Aid drinker shows up...

10 to 15% "correction" in next couple of years?

where you been?

Prices in the least desirable areas...as documented in these blogs has already done better than that...

"Yep, way too many people moving here for prices to drop..." QUICK, find Saca, here's another "sucker"...errrh buyer for him...

Yep, that's "Living Urban in Sac"...with Kool Aid...Jim Jones style

sippn kool aid said...

Yes anon 657, if you can't fall on your sword and accept a total abandonment of housing by civilization as we know it, these guys don't want to hear it.

Have you heard about the new Buick Super Rendevous. Sleeps a family of 4, 1 bath, TV.

Housing is so 2005.

Anonymous said...

I spoke to my Beutler foreman today; the news from the ground is this: John Lang homes, Pulte, Toll, and every builder in aNATOLIA have STOPPED production. THings are strangely quiet here today in Serrano...

JR said...

It is getting strangely quiet everywhere, these days. In September, people on this blog were discussing the heavy traffic on all the roads. Has anyone noticed a distinct lessoning of traffic in the last few weeks. It is winter and construction is seasonal, but the fall off has been pretty dramatic.