Home Builder Reports from California
Thursday, November 09, 2006
The Desert Sun in Palm Springs reports from California. "Home builders across the Coachella Valley have their pulse on the slowing new-home market, and they're reacting by constructing fewer homes, bolstering incentives and scrutinizing construction costs.""As jittery home buyers abandon sales contracts or balk at buying amid uncertainties in the housing market, builders in the valley and across Southern California have cut back on construction. There were 2,782 homes being built at the end of September across the valley, down from 3,748 at the same time last year, according Metrostudy."
"In the Riverside County/San Bernardino/Ontario area, 1,691 building permits were issued in September, down from 5,101 in September 2005, according to the California Building Industry Association."
"The slowdown in new-home building permits is in direct response to growing new-home inventory. Some 1,511 new homes sat vacant at the end of the third quarter in the Coachella Valley, compared with 537 at the same time during 2005, said Steve Johnson, of Metrostudy."
"'The builders are taking the initiative to slow down their construction starts to deal with this inventory,' he said. Home builders are reacting in other ways, too. They're beefing up home-buyer incentives, reigning in escalating construction costs wherever possible and analyzing land deals."
"Ashbrook Communities, with developments in Cathedral City, Palm Springs and Indio, is watching its spending on everything from construction materials and marketing to payroll, while at the same time aggressively introducing new incentives to attract pensive buyers."
"Now you really need to focus on the basics as a builder," Robert Perryman, president of Ashbrook Communities' Desert Division, told fellow builders and real estate agents at a recent real estate forum in Cathedral City.
That's a marked change from two years ago, when families stood in line at home builders' offices in the valley to put their names on lists for the newest development phase. Then, home builders could afford to absorb more of the costs."
