The Las Vegas housing market was one of the hardest hit in the country by the housing crash. After seeing disappointing numbers across the board, experts are beginning to have an optimistic outlook on the housing future.
The National Association of Home Builders estimates that 610,000 new homes are set for phase 1 of construction. If this estimate holds true this would be a 38% increase from the prior year. These projections are contingent upon uprising totals in the job market. Without an increase in jobs no market will be safe from devastation due to foreclosures. The projected 610,000 new homes are still far below the 1.7 million that were completed at the height of the housing bubble.
The difficulty in getting these homes completed and sold is two fold. Having qualified buyers at the back end of the sale is only part of the puzzle. At the present time home builders are finding it difficult to obtain traditional credit lines from banks that do not seem to want to openly lend. Many of these banks were given TARP funds to assist them so that they could begin to re-open lines of credit. Only time will tell if in fact that is what the banks intend to do.
Edward Sullivan, chief economist for the Portland Cement Association revealed his predictions, and they were not as hopeful as the numbers being reported by The National Association of Home Builders. Sullivan predicts that new home construction projects will only number around 512,000. This would still be a 20% increase from 2009, he sites the factors for his reserved estimations are the amount of foreclosures that are in the works, and the sluggish job market.
There is a battle being waged all across the country for qualified buyers. The market is overflowing with pre-owned foreclosed homes that are priced to sell. New home builders have had to scale back their prices and amenities just to compete against these low cost homes. The median home price in the country has fallen dramatically in part to this lack of competition. Newly released reports estimate that the current median home price is $173,000, This is close to $100,000 less than peak numbers in 2004/2005.
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I am not sure how successful is it going to be. After the crash in the market i am not at all confident of doing business so rapidly in the first quarter of 2010.
New home construction never did stop here in Las Vegas, but there were some builders that did cut back. Some stop building altogether, waiting for the market to pick back up.
.-= Chas@Las Vegas Real Estate´s last blog ..A Rise in the Condo Market =-.
Builders in Spain probably have even more serious problems. The mass over supply of new build projects has come back to bite this market with a vengeance. Thousands of properties now stand completed and empty. Resales in Spain are often cheaper meaning the key ready properties are harder to sell. Not much new build is possible until this problem sorts itself out.
As the economy starts to pick up more and more, new homes will definitely start being built more often.
There is hope of a revival in the construction industry in the need for new homes. Let us all hope that this happens soon.
I would like to see new home sales increase and new construction to continue. However, I dont believe it will happen. The sudden increase in projected phase one building developments are due mostly in part to the sudden increase in banking funds as well as the assurance by builders that they wil be more eco-friendly. A promise that will not be kept as these builders are cutting serious costs (and corners) just to compete with the influx of foreclosures. Which in turn will only make things worse.
I have seen an increase in these phase one developments but I have also been hearing record new homes sale even in states hit hard such as California. Be sure to stop by again!
As the jobs are increased market will go up.
It has been clear for all to see that the housebuilders have been hit in this latetst recession. People have tightened their belts and are not able to get funding from the banks. If keen prices are offered to potential buyers the market will pick up slowly but I feel there is a long way to go until we get back to the property day booms.
.-= Adam @ Anime Costume´s last blog ..Privacy =-.
I have mixed feelings on this. On one hand, it’s good for the economy to bounce back with new homes. On the other, we have literally thousands (thousands) of existing homes out there that are fore sale (or foreclosed upon) that people aren’t buying at much more reasonable rates. Isn’t that what got us into this mess in the first place?
The increase construction of new homes maybe a leading indicator of our economy stepping out of this recession the fact remains is there is a credit crunch going on. More stringent rules for borrowers and tighter bank regulations will decrease the amount of qualified borrowers and buyers in the market, which will translate into less home sales.
As with building new skyscrapers I have to wonder why we would be producing new homes when if I am correct the market still has excess stock across the country including Las Vegas. It just does not make economic and environmental sense.
With the current economic situation, I think it would be a wise strategy to build homes that are affordable. If it lures potential buyers there’s a huge chance for the real estate market to pick up gradually.