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Regional Spotlight: Home Sales Playing Catch-up
Posted By beth On March 15, 2007 @ 2:50 AM In Real Estate,Real Estate News | Comments Disabled
RISMEDIA, March 15, 2007-(MCT)-Sales of new homes took an upturn in January, but it may be too soon to know if it's a trend or just a result of other factors.
The California Building Industry Association released a report Monday that showed a 9.4% bump in sales in the state's major new-home communities without a decline in median prices.
The increase was even more significant locally. Sales in the Riverside/San Bernardino/Ontario metropolitan area increased 16.1% from December to January.
That said, both state and local sales figures were down significantly from last year, with California off 18.6 percent since last January and the Inland Empire off 22.3%. CBIA officials looked on the sunny side.
"We think we are nearing the bottom as far as price structure goes, so this is a great time to buy a home," Richard Rivinius, president and chief executive officer, said in a release.
"For the past year, builders have been working through excess inventory that resulted from the superheated marketplace the first half of this decade.
"Once these properties are off the books, many builders will begin construction only on homes that are presold."
Regional economist Jack Kyser of the L.A. County Economic Development Corp. said it was way too early to call it a trend.
"December is not a month in which many people are in home-buying mode," he said. "Add to that the fact that a lot of builders have been very aggressive in offering incentives and I think we have to wait a couple more months to see what it all means."
Kyser cited several examples in which houses and condominiums have slashed prices $50,000 or even $100,000 recently.
"The market clearly is still looking for a bottom," he said. "I don't think we've found it yet."
Patrick Duffy is managing director of Hanley Wood Market Intelligence, which did the survey for the BIA. He said there are some encouraging signs.
"We've continued to hear builders talking about higher-quality traffic visiting sales offices since the beginning of the year," he said. "It appears that the steps builders took in the second half of 2006, such as sparking the interest of home buyers with various incentives and limiting new supply, are working.
"In markets such as the San Francisco East Bay, Ventura County, Visalia and Sacramento, we're actually seeing some significant sales increases over January of 2006.
Not in most of the Southland, where inventories are still high.
But Rivinius said that the failure of prices to fall much despite slow sales speaks to another problem.
"The fact remains that we need to be building 220,000 to 240,000 new homes and apartments every year just to keep up with our population growth," he said. "Until the Legislature enacts reforms that would make it possible to meet that demand — especially the demand for lower-cost, entry-level homes — that state's housing affordability crisis is only going to get worse."
Copyright © 2007, Inland Valley Daily Bulletin, Calif.
Distributed by McClatchy-Tribune Information Services.
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