Builders change their ways
Real estate brief
By Inman News, Monday, October 20, 2008.In September, single-family housing starts in the Midwest, Northeast and West hit the lowest paces since government record-keeping began in 1959, and analysts say that some big and small builders may be doomed to fail as the housing slump progresses, according to a Reuters news analysis.
The article quotes Carl Reichardt, a Wachovia Capital Markets analysts: "Builders exiting markets, selling off assets, consolidating with each other, or failing all help rationalize the marketplace in the long run," adding that large public builders had cut the number of communities they were building by 22 percent, on average, as of Sept. 30.
Other analysts stated that some builders are focused on building smaller homes with lower construction costs these days, and that builders will likely expand the use of land-option contracts that give them the right to buy land and serve as an alternative to buying land outright.
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Submitted by Stephen Graham on October 20, 2008 - 2:33pm.
In my opinion, oil prices have put pressure on building costs. The elimination of DPA has hurt too.
Associate Broker | Buyer's Agent
http://www.realtown.com/BuyersAgentGeorgia/blog
www.georgia-new-homes.net
Submitted by Larry Douglas McGee on October 20, 2008 - 10:07pm.
A builder friend of mine once said to me "builders build". That simple statement is more profound than first meets the eye. Certainly in the post WWII era, with the advent of production home builders, builders have found a way to continue building, and have meet the challenges of the market place by building smaller or larger, or building homes to take full advantage of available financing methods, and, in recent years, created the financing vehicles themselves. Jim Cramer (www.TheStreet.com) wrote in a recent column that we do not need any more new homes in this country. Of course that is silly. As long as we keep building people, we will keep building homes. But builders will definitely be smarter about what we build for the foreseeable future.