Q: What trends do you see in Homebuilding?
A: The best trend that we are experiencing is that business is improving.
Across the nation, homebuilding activity is up year over year. The past twenty year average of national housing starts is about 1.3 million. We bottomed out in 2009 at about 350,000 starts. End of 2013 projections is approximately 611,000 housing starts. That is good news. Keep in mind that the next 20 year average housing start demand is estimated at 1.6 million. We anticipate that by year 2016 we will be at that level.
High Performance Green Building is taking traction. The public is becoming aware of the benefits and now want these improvements in their home. Look for more and better techniques in the future.
Prices are going up, up and up. The last two years locally we have averaged about 10% appreciation per year. We believe that double digit appreciation will occur in each of the next 3 years. Why?
Scarcity. Lots are not in the development pipeline to meet future demand. It will take time to bring lots to the market. That only means prices for land and lots will go up. Labor and materials are expected to rise as well. There is a shortage of both right now.
Demand. The boomers are buying. Clark County is on the map for boomers who are relocating. Expect to see more coming. Job improvement will bring on more homeowners. More people can qualify for home loans. Those who had given back their homes during the downturn are now starting to qualify for home loans.
The herd mentality. It’s hip to buy a home again. The reasons are different from before. Homebuyers are now are taking a longer term view in home purchases. Boomers are looking to purchase their “last home”. Younger buyers are planning to stay in their homes longer.
Build well and enjoy life.
Please submit questions to email@example.com Jon can be reached direct at 360.907.5800. Tune into Green Building with Jon Girod on 1550 a.m. on Saturdays at 9 am. See you next week!