L.A. Times: Builders see some growth in residences - "People are tired of waiting to buy"
According to this March 2 article by Annette Haddad, homebuilders are seeing a 40% bounce in new-home orders. In addition, in the first month-over-month increase since June, permits for single-family homes have risen, in January, by some 18%.
Homebuilder Standard Pacific attributes the gains to an "aggressive pricing strategy."
According to the homebuilder, the rate at which buyers are canceling orders is declining. January-February cancellations ran at 24%, better than Q4's 43% drop and 2006's 26% drop.
Industry observers state that new-home community traffic has picked up. One observer says, "Developers say the lights went on at the beginning of the year."
We know what "aggressive pricing strategy" is a codephrase for. Before we celebrate the housing bottom, it should be noted that January permits were still down 21% YOY. And a few industry analysts want to see what happens this spring before making any prognostications about the market.
Yes, we know that January was somewhat of a rebound month. It showed up as such, in the attitudes of homebuyers. That same attitude can show up in homebuilders. What is still apparent here is that the media takes any little blip up in a bigger overall downturn and trumpets it as a sign of recovery. In my opinion, the psychology isn't right for a recovery.
I am not even sure if all the sale data for February is reported, so I am holding off posting the February dollar volume charts. Let me put it this way - in terms of where the data is now, dollar volume in some zip codes in the area I cover (southwest Los Angeles County, (excluding 90249, 90274, and 90710 due to wacky data) are showing plunges to 5-year lows and even exceeding that. So I want to be sure all the data is in. Thanks for your patience.