Credit Becoming More Available According to NAHB Survey
There are a lot of factors that go into the overall funding of a real estate venture. If you are a developer and are looking to build a new subdivision out of raw land, you not only have to get all of your survey and engineering plans approved (and in Louisiana, get a wetlands permit 
from the Army Corps of Engineers), but you also have to go through the rigorous hoops that lending institutions will put in your path in order to ensure that you will have a return on your investment and be able to pay back your loan. In the case of a master planned community, you may have to secure lease agreements with potential commercial businesses in order to obtain the money to develop your land both commercially and residentially. Even if you are “only a builder,” lending institutions now require a litany of paperwork and verification in order to obtain a construction loan. During the heart of the Recession, builders and developers were up against very tight credit conditions that pretty much stifled growth of housing and urban development. According to the National Association of Home Builders (NAHB), credit conditions started easing up and getting better in the middle to end of 2012. The way that the Association gathers a lot of its statistical information is by surveying its members based on their industry, price point, amount of volume and other factors.
Based on the AD&C (Acquisition, Development, & Construction) survey conducted by the NAHB regarding tightening credit restrictions, during the 3rd quarter, the overall net tightening index went down by 27% from -22.7 to -31 (the lower the score the less tightened credit conditions are). Less than 15% of respondents report credit conditions worsening in the third quarter based on the three response areas below:
- Availability for credit for land acquisition – 38% surveyed said it got better
- Credit Conditions for single-family construction – 43% surveyed reported better conditions
- Credit available for land development – 44% surveyed said it had gotten better
Also, the NAHB reported that this is the highest number of participants who have had a positive credit experience in all three AD&C categories since the survey was inacted in 2005. At Bedico Creek Preserve in St. Tammany Parish, we have had 5 new builders purchase new lots and begin building either custom or spec homes since August, which is a high number to join “all at once.” At this time, we currently have 17 active builders in our master planned community, so in Madisonville, it seems as if it is becoming more feasible to acquire a construction loan to purchase lots and begin building. To view our homes for sale by our Bedico Creek builders, come visit our subdivision. For sales office hours and directions, Call 985-845-4200 or E-mail [email protected].
