New home sales in the California Inland counties of San Bernardino and Riverside increased in the first quarter this year, but home builders are still concerned about foreclosures and foreclosure VA lists that continue to haunt California.
Home builders are worried about the continued rise in unemployment and foreclosures, including foreclosure VA lists. The builders said that the rise in new house sales may have been caused by temporary factors, such as temporary foreclosure moratoriums and tax credits for first-time homebuyers.
The market for new homes has been defeated by bargain-priced homes in foreclosure listings and in foreclosure VA lists. To be able to compete with discounted prices, home builders lowered their prices for new homes, even to unprofitable levels.
Many economists in the state recommended the rejuvenation of the home construction industry to spur employment and to help reduce the number of jobless homeowners who lose their houses to foreclosures or to foreclosure VA lists.
In the counties of San Bernardino and Riverside, sales of new homes increased by 36 percent in the first quarter, compared to the fourth quarter of 2009, based on records from Hanley Wood Market Intelligence.
Many home builders have stopped starting new housing projects, reducing inventories of new homes. The builders who continued building have stopped cutting their prices and have reduced free upgrades to cut their losses.
Mike Van Daele, CEO of Van Daele Development, told reporters that he has sold 125 houses in the first quarter. He is hopeful because the sales figure was near his sales level in the first quarter four years ago, when the housing market was nearing its peak.
Lennar Homes also observed that its homes which are priced higher than units in previous sales phases sold quickly in the first quarter.
Similarly, KB Home is experiencing brisk sales for its affordable home products, which are priced lower than $200,000, with other units priced lower than $265,000 and lower than $350,000.
Beazer Homes also reported that it is selling more homes despite its increase of prices and reduction of giveaways such as stainless steel appliances.
All the builders cite low mortgage rates, new tax incentives and state and federal tax credits as added factors for their increased home sales. They all hope the glut of foreclosures, including foreclosure VA lists, could be eliminated so that the housing sector can recover more quickly.
Comments on this entry are closed.