Tag Archive for: builders

Post Recession Recovery in New Home Sales

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The National Association of Home Builders projected approximately 511,000 new homes would be sold during 2015, and the new home sales numbers surpassed that prediction by a small landslide bringing in 544,000 new home sales on a seasonally adjusted basis in December, 2015.  This was welcome news for home builders showing a recovery in new home sales numbers.  The increase was a 10.8% increase year-over-year, and this also heralded the best year for new home sales since 2007, just before the housing market crash.  In the South region specifically, new home sales were up 17.6% – the second highest percentage in the nation.

In addition to an increase in sales, new home inventory also increased during the month of December by 2.6% toThe single-family housing market in New Orleans is seeing a significant increase in the price per square feet for new homes. 237,000 available homes for sale.  However, the combination of the sales rate and the available inventory shows a trend in supply and demand that is on the rise.  The monthly supply of new home inventory fell from 5.5 months to 5.2 months with the building and selling of these new homes.

The prices of homes being sold are also encouraging.  First-time home buyers have yet to take a strong hold in the market, but second and third-time home buyers are making purchases of new homes in the $200’s – $400’s, which means that they are able to “move up” from their existing homes into their next home.  This also indicates the sale of existing homes for sale, which shows a well-rounded, moving real estate market.

Another positive trend that has emerged is the sale of pre-sold homes.  These are homes that builders are advertising before they ever break ground on the new construction.  The rendering and floorplan, as well as the lot layout may be all the new home buyer has to go on to sign a contract to buy the home, but with the reduction in available inventory, the increase in unused building permits and new home starts, the only explanation is that builders are able to sell their homes before they start building them.  This trend was prevalent during the early 2000’s and shows that the housing market seems to finally be on its way to a full recovery.

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Highest New Home Inventory in 5 Years

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News from the National Association of Home Builders (NAHB) is that new home builders are looking for and buying lots and getting building permits, but new home inventory of homes not yet started is still strong because it is possible that these builders are waiting on buyers (pre-solds) before beginning construction.  There is much good news coming out about new home building permits for single-family homes, new home inventory, and new home sales.Lot 59 Bedico Creek

Single-family home building permits were up 2.4% in October, 2015.  Overall, single-family new home building permits are up 8.6% for the year 2015.  Single-family home starts are up year-to-date as well with a slight dip in October due to storms in the Gulf Coast and Southern regions.  Because building permits and starts are up for the year, new home construction of single-family homes is also up across all regions nationally.

New home inventory stands at the highest level since March, 2010, and increased overall in 2015 1.3% to 226,000 available homes.  If homes continue to sell at their current pace (and no new homes were built), all homes would be sold off in 5.5 months.  Inventory for new homes not yet started is the strongest it has been since the end of 2008, right before the Recession.  Builders are looking for lots and labor as the housing market returns in force.  There is simply not enough land for sale or sub-contractors to build new homes to support the amount of inventory coming out of the ground – which is good news for the real estate industry.

In addition to the high amount of new home inventory, new home sales are also thriving to increase 10.7% to 495,000 in October compared to September’s numbers.  The total number of new homes sold has increased 15.7% year-to-date.  The NAHB is predicting an overall sales pace of 511,000 new homes in 2015, and October’s numbers seem to show that it will happen by end of year.

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Newly built home sales in the Greater New Orleans increased significantly in July, 2015.

Newly Built Home Sales Rise 25.8% Year-Over-Year

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Just like summer here in New Orleans, July’s housing market was hot! The new home sales activity is on its way back to normal with annual home sales already reaching 507,000. The Census Bureau and HUD reports that newly built home sales rose 5.4% from June of this year and 25.8% from July of last year.  New home inventories were reported at 218,000 in July which is the highest level that have been seen in over five years.

This increase can also be seen in private residential construction spending where the high was at an annual rate ofNewly built home sales in the Greater New Orleans increased significantly in July, 2015. $387 billion in July.  This solidifies the continuing economic growth in the construction industry.  Single-family homes have pushed construction expansion 15.8% on a year-over-year basis and multifamily new home construction spending is 21.2% higher than it was reported a year ago.

Developers are not the only ones that are seeing a positive growth, the National Association of Realtors (NAR) reports increase in existing home sales.  Existing home sales increased in July 0.5% from June and 7.4% from July of last year. Completed sales (closings) were reported at the highest since February 2007.

The confidence for home buyers stems from the strengthening economy.  The Bureau of Economic Analysis reports that the global economic developments (GDP) growth is at a strong 3.7% rate.  These findings were based on several factors including investment, faster growth for consumption, government spending and trade components.

Now is the time for buyers buying new homes or existing homes to tap into the housing market. Sales are solid which makes the real estate market a stable venture. New home prices are continuing to strengthen making real estate a great investment.

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Good News for the Single-Family Housing Market in New Orleans

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After the devastating blow of Hurricane Katrina, local residents were worried about the recovery and “return” of New Orleans.  Luckily there is good news to report about the recovery of the real estate market from the decade-old storm. The New Orleans Metropolitan Association of Realtors reports home prices are up 46% since Hurricane Katrina, and the average price per-square-foot has jumped up 8.5% in the last six months in the community.  Many predicted that the price growth would slow down this year but that is just not the case.  The single-family housing market in New Orleans is seeing a significant increase in the price per square feet for new homes.

The single-family housing market in the New Orleans metro area has an average selling price of $121 per-square-foot which is an 18.6% increase since the storm. The average house sold for $339,743 in the city between January and June of this year. On the Northshore in St. Tammany Parish there has been a 10% increase since Katrina. The average home in the parish sold for $243,770 this year which calculates out to $113 per-square-foot.

The prediction for this year is to see about 2,800 homes for sale which is close to the 3,300 sales in 2005 before Katrina. Rick Haase, President of Latter & Blum Inc., had expressed concern that household members in New Orleans’ neighborhoods are still worried about affordability in the housing market.  Fortunately he believes this will not be an issue as the mortgage lending standards for credit 176 St. Calais Place Front Exteriorscores are beginning to slacken, making it easier for first time homebuyers to be able to purchase and finance a new or previously owned home.

“Rates are low, job creation is continuing to happen, consumer confidence is high and improving, and the Millennial marketplace, which represents a huge slice of the population in greater New Orleans, is now able to get financing even though they haven’t had a lot of time in life to build their credit scores,” Haase said.

In St. Tammany Parish, not only has the new, masterplanned community of Bedico Creek seen an increase in new home prices, but it has also seen a huge surge in home buying in the 10 available Neighborhoods for sale.  Many home buyers are also delving into the custom home market and are buying lots for sale and then hiring one of the qualified St. Tammany builders of Bedico Creek to build their new home.  If you are interested in acquiring a home in the Greater New Orleans area, Contac Bedico Creek at 985-845-4200 or E-mail Info@LiveBedico.com.

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Available Construction Jobs on the Rise

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Well over half a million builders are getting ramped up with the renewal of the real estate market nationwide and are very much now hiring employees as the number of open construction jobs increased in May.  In fact, the number of available construction jobs in the United States has been on the rise since 2012 along with the constant increase of new home sales and new home inventory.  May’s employment increase logged in as one of the 4 highest months of increases since 2012.

Almost 1.8 million contractors, sub-contractors, and trade companies also made up the number of businessesconstruction employment employed in the home building / remodeling categories of the total U.S. employment in June, 2015, bringing the total number of construction employed jobs to 2.442 million.  Now that new homes are being built on lots developed for sale in more and more numbers, the construction industry has gained almost a half a million jobs since the low point of the Great Recession.

In 2015 alone, approximately 127,000 jobs have been added in the U.S. nationwide.  In fact, since hitting the ceiling during 2010, the unemployment rate for builders and construction has dropped from 22% unemployed to 7% slightly higher than the national unemployment rate.  In fact, many builders are facing a shortage in employees as they try to build new homes for the buyer demand as quickly as possible in new home communities that once stood dormant during the Recession.  This increase in demand for construction employment has only been a boon for the real estate industry’s recovery overall.

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