Did real estate rally spring a leak?

The following article is from the OCRegister:

“We hate to be party spoilers, but just as the real estate ball gets rolling this spring … some storm clouds appear.

Take homebuilders, who are enjoying a noteworthy resurgence after their worst sales drought since World War II. One measure of developer psyche in the West tossed out a warning signal last week as the federal tax credit deadline for house shoppers passed.

June’s National Association of Home Builders/Wells Fargo Housing Market Index for the West fell from a revised 19 back to 15 — March’s level — in step with a nationwide drop in builder confidence.

The national Housing Market Index dropped five points to 17 in June. This barometer is derived from a monthly survey, where any number over 50 indicates that more builders view conditions as good than poor…

…Down at the micro level — Orange County, for us — it appears that builders are on a roll. As measured by DataQuick, builders sold 300 new Orange County homes in May — the best month since December 2007.

Orange County builders are becoming a bigger slice of the real estate pie: Local new homes sales were 9 percent of all Orange County residences sold in May vs. 5 percent a year ago. (Psst! From 1990-2008, builders did 15 percent of the selling.)

Plus, it wasn’t just new homes are the upswing. For the entire market, Orange County shoppers were at their busiest since August 2006 with 3,257 residences purchased in the month, up 22 percent from a year ago. Median selling price was $450,000, up 9.8 percent from a year ago.

BUT, THERE IS A ‘BUT’

Homebuilder angst is no anomaly.

The latest Orange County home inventory report from Steve Thomas at Altera Real Estate shows as of June 10 that demand for homes – new escrows opened in past 30 days — tumbled 20 percent after the federal tax incentive ended with April…”

Please go to the OCRegister’s website to read the article in full.

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