Builders see improvement in local housing market
| Wednesday, Feb 04 2009 09:51 PM
Last Updated Friday, Mar 27 2009 12:58 PM
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Builder Matt Towery sold 21 homes, some of which are in contract or in escrow, since Thanksgiving.
His few “spec” homes built without a particular buyer in mind recently sold, too. These nearly finished units moved without any extra incentives from Towery Homes.
“We held tight to our prices. They came back a day later and bought them,” Towery said.
And the local builder is encouraged by the buyers — their credit scores are stronger and “they’re serious about buying,” he said.
Towery is one builder who’s seeing improvement in the local housing market as buyers take advantage of affordable prices and low interest rates.
While a forecast of 2009 released this week by the California Building Industry Association suggests new home construction in Kern County would hold steady at 2008 levels, builders here are more optimistic.
Lenox Homes, for example, cleared out most of its inventory — 13 homes — in December, President David Cates said. Although January wasn’t as good for the company as the previous month, Cates said recent buyers are qualified to purchase using 30-year fixed mortgages.
Home prices now are below what it costs to build them, Cates said, because the houses occupy land bought at the height of the market, when prices were high.
McMillin Homes started building 19 homes locally in January.
“It’s a pretty good start. I think we’re going to have a pretty good year,” said Carrie Williams, vice president and general manager of the company’s Bakersfield division. “It’s not going to be stellar like it was several years ago, but that was a false reality.”
Bakersfield caught the wave of the housing market’s rise early and crashed hard. That leads custom-builder Phil Gaskill to believe the community should feel the recovery before other areas. But consumer confidence remains shaky, and that could be an issue for some buyers.
The California Building Industry Association predicts 63,400 homes — single- and multi-family units — would be built in 2009. That’s a 3 percent decline from 2008’s 65,380 permits, the lowest level recorded since 1954.
The numbers come from the Construction Industry Research Board, a nonprofit that’s funded by the construction industry and tracks building permit activity. The forecast used how many building permits were previously issued in 37 of the state’s 58 counties during 2007 and 2008.
The industry board looked at the last six months of building activity in those areas and used three assumptions, said Ben Bartolotto, the industry board’s research director.
They are: “That there’s an early but very minor recovery at the end of the first quarter. Or a modest recovery in the middle of the year or a more robust (recovery) at the end of the year. It’s anybody’s guess — it might not occur,” Bartolotto said.
California needs about 220,000 new homes and apartments to be built each year to meet housing needs from population growth, according to the the state’s Department of Housing and Community Development.
The statewide builders association thinks a homebuyer tax credit, similar to what was offered in the early 1970s, would boost the economy, said John Frith, vice president for public affairs.
