Home Buying in San Jose>Question Details

Tina Lam, Real Estate Pro in San Jose, CA

Do you think more new homes will come to the market next year?

Asked by Tina Lam, San Jose, CA Mon Oct 15, 2012

I saw more home builders releasing new communities in the 2nd half of the year. Do you see new communities breaking ground to be ready for next year in your areas?

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Our local newspaper featured a story yesterday that said that construction starts are at the highest level in more than four years. With prices stabilizing – and even rising in some markets – and with the current strong interest from home buyers, builders find that it makes economic sense to build again. The rate of new construction has surged in the past twelve months.

Of course, that is the national picture. On the local level, small builders are still finding it a challenge to obtain financing for new projects. The cost of land and the difficulty in obtaining approvals are challenges for all builders in our area.
1 vote Thank Flag Link Fri Oct 19, 2012
I see a lot of new home communities being built and from what I've read the building industry has several projects in the works.

The demand is strong and prices are increasing.
Web Reference: http://www.terrivellios.com
1 vote Thank Flag Link Mon Oct 15, 2012
Here is a recent article for you:


In Southwest Florida and nationally, builders feel things are looking up

By ALEX VEIGA AP Real Estate Writer
Published: Wednesday, September 19, 2012 at 1:00 a.m.
Last Modified: Tuesday, September 18, 2012 at 9:07 p.m.

Confidence among U.S. home builders rose this month to its highest level in six years, and many expect the housing recovery will strengthen in the next six months.

"We think things have turned around and this recovery is sustainable."
– Patrick Newport, an economist with IHS Global Insight

The National Association of Home Builders/Wells Fargo builder sentiment index released Tuesday increased to 40 in September. That is up from 37 in August and the highest reading since June 2006 -- just before the housing bubble burst.

Any reading below 50 indicates negative sentiment about the housing market. The index has not reached that level since April 2006, the peak of the housing boom. Still, a measure of builders' outlook for sales in the next six months rose to 51. That is up from 43 in August and also the highest level since June 2006.

Builders reported seeing the best sales level since July 2006. Turnout by prospective buyers returned to levels not seen since May 2006. The positive trends have helped bolster optimism that the U.S. housing recovery will endure. In Southwest Florida, That optimism was first seen in Southwest Florida in places like Lakewood Ranch, where home construction has been rising for all of 2012. But that activity seems to have spread to most parts of the region.

During a traditionally slow time of the year, this summer has been one for the record books in the post-Great Recession world. In June, for example, Sarasota County government issued 117 permits, the highest number since June 2006. In July, the average value for a newly permitted home hit $332,000, the highest its been since September 2008.
0 votes Thank Flag Link Fri Oct 19, 2012
Absolutely. Homes For Sale Inventory is considerably low, compared to just a few years ago. Just a couple of years ago we had anywhere from 4000 to 5000 single family residencies for sale at any one time. At the time I am writing this message there are 1299 homes for sale in Cape Coral. As demand increases and home inventory remains low, and the shadow inventory held by the banks fades away as it is... Home prices will continue to rise as they have been since the 4th quarter of 2010. When the price of purchasing a home equals the cost of building a NEW home (and we are just about arriving at that intersection on the graph) builders will will begin building more. This is because home buyers will be obviously more motivated to buy and build a new home verse and older one. Also, that time when the cost of buying vs. building cross, land will start going up in price as well, as builders will start buying property to build on and that demand will begin rolling again.

If you would like to talk about the details in person, feel free to give me a ring.

While you can see a million homes on the web, actually locating and buying your home is another matter entirely and can be very demanding. Let me represent your best interests and relieve your stress by locating homes and negotiating the finest conditions and contract terms protecting your families interests every step of the way.

Kind regards,

Terence Trombetti • Real Estate Agent
Mobile Phone 239.560.1574
terencetrombetti@gmail.com
http://www.gulfcoastproperty.net
http://www.capecoralfloridahomes.net
Gulf Coast Realty Network
4002 Del Prado Boulevard S.
Cape Coral, Florida 33904
0 votes Thank Flag Link Fri Oct 19, 2012
Fla.'s Housing Market Continues Upswing in Sept. 2012
By Florida Realtors
Published: Friday, Oct. 19, 2012 - 8:12 am

ORLANDO, Fla., Oct. 19, 2012 -- /PRNewswire-USNewswire/ -- Florida's housing market had higher pending sales, higher median prices and a reduced inventory of homes for sale in September, according to the latest housing data released by Florida Realtors®.

"Florida's real estate market is no longer in recovery mode – stability and growth gain solid footing," said 2012 Florida Realtors President Summer Greene, regional manager of Better Homes and Gardens Real Estate Florida 1st in Fort Lauderdale. "Realtors across the state are reporting consistent increases in home sales and median prices, and multiple offers from buyers isn't unusual. In fact, increasing buyer demand in many local markets is creating inventory shortages – and that's putting pressure on prices. For sellers who may have been reluctant to enter the market, it's now time to reconsider. Conditions are turning to a sellers' market."

Statewide closed sales of existing single-family homes totaled 15,643 in September, up 2 percent compared to the year-ago figure, according to data from Florida Realtors Industry Data and Analysis department and vendor partner 10K Research and Marketing. Closed sales typically occur 30 to 90 days after sales contracts are written.

Meanwhile, pending sales – contracts that are signed but not yet completed or closed – of existing single-family homes last month rose 40.1 percent over the previous September. The statewide median sales price for single-family existing homes in September was $145,000, up 7.4 percent from a year ago.

According to the National Association of Realtors® (NAR), the national median sales price for existing single-family homes in August 2012 was $188,700, up 10.2 percent from the previous year. In California, the statewide median sales price for single-family existing homes in August was $343,820; in Massachusetts, it was $317,750; in Maryland, it was $255,498; and in New York, it was $225,000.

The median is the midpoint; half the homes sold for more, half for less. Housing industry analysts note that sales of foreclosures and other distressed properties continue to downwardly distort the median price because they generally sell at a discount relative to traditional homes.

Looking at Florida's year-to-year comparison for sales of townhomes-condos, a total of 7,329 units sold statewide last month, down slightly (-2.9 percent) from those sold in September 2011. Meanwhile, pending sales for townhome-condos in September increased 30.6 percent compared to the year-ago figure. The statewide median for townhome-condo properties was $105,736, up 18.8 percent over the previous year. NAR reported that the national median existing condo price in August 2012 was $176,700.

Last month, the inventory for single-family homes stood at a 5.2-months' supply; inventory for townhome-condo properties was also at a 5.2-months' supply, according to Florida Realtors. Industry analysts note that a 5.5-months' supply symbolically represents a market balanced between buyers and sellers.

"The onward march of Florida's housing market continues," said Florida Realtors Chief Economist Dr. John Tuccillo. "Inventories have now tilted to the point where we truly have a sellers' market forming. Prices are up smartly and have been for quite a while. It's getting to the point where Florida is the place to buy, but it may soon move out of reach for many households."

The interest rate for a 30-year fixed-rate mortgage averaged 3.47 percent in September 2012, lower than the 4.11 percent averaged during the same month a year earlier, according to Freddie Mac.
To see the full statewide housing activity report, go to Florida Realtors Media Center at http://media.floridarealtors.org/ and look under Latest Releases, or download the September 2012 data report PDF under Market Data at: http://media.floridarealtors.org/market-data

Editor's Note: Florida Realtors 2012 housing market data releases mark a new statewide data reporting partnership between Florida Realtors Industry Data and Analysis department and new vendor partner 10K Research and Marketing. Housing sales data from the state's local Realtor organizations is collected and organized with the goal of providing unique, localized market reports to the local Realtor boards and associations within Florida Realtors, enabling the groups and their Realtor members to serve as the definitive voice of real estate in their respective local markets. At the same time, Florida Realtors is providing comprehensive statewide housing market statistics – but this new data series only refers to statewide data and does not include metropolitan statistical areas (MSAs).

Read more here: http://www.sacbee.com/2012/10/19/4924101/flas-housing-market…
0 votes Thank Flag Link Fri Oct 19, 2012
In the last 12 months housing construction has been down. Some of this is due to construction financing limitations and lengthy permit approval processes. There is some new home construction occurring in Livermore as builders see increasing demand for their properties.

Sally Blaze
Alain Pinel Realtors
DRE#01856137
925-998-1284
sblaze@apr.com
0 votes Thank Flag Link Mon Oct 15, 2012
Dear Lam,

In the San Jose area, at least, raw land is becoming scarce, so it should follow that new home construction will become less available. Availability of new homes, however, depends on where you prefer to live as well as how much you can afford to purchase.
At this stage, I believe that now is a good time to buy because real estate prices are still lower than they’ve been in many years, and there are indications that prices will not stay suppressed indefinitely. In my opinion, it is best to act now.

Best,
Debra Tsai Realty
0 votes Thank Flag Link Mon Oct 15, 2012
I don't think that new construction can significantly affect the supply, at least short term. Economy improving will make people more mobile and will make it easier to move around. We don't see much of non-discretionary sales for quite some time.
Web Reference: http://talisrealestate.com
0 votes Thank Flag Link Mon Oct 15, 2012
Hi Tina,

As others have stated we are seeing builders moving forward on a number of new projects. With the demand, rising prices and great interest rates builders are feeling more confident the market is recovering enough for them to start building again. It takes developers/builders a long time and lots of money to get their projects approved and many have been holding off until they felt the market was right for them to move forward. It appears we are at that time right now so I believe you will see many new projects over the next few years. I personally have been working on a parcel of land in Almaden Valley and the builder that we are currently in escrow with has several projects in the works and they feel very strongly that it is a good time for them to move forward with building new homes. As a matter of fact I am still getting calls from other builders asking me to call them if this deal does not go thru. I hope our information has helped you.

Regards,
Jim Guido,

Realty World/Blue Property Group
Cell: 408-472-2074
Email: jim@jimguidorealtor.com
Website: http://www.jimguidorealtor.com
DRE# 00700635
0 votes Thank Flag Link Mon Oct 15, 2012
Inventory will increase as prices increase. If you can you should find a home now that best meets your needs. You may also want to find an agent that farms foreclosures because short sales will offer you the best value for the dollar.
0 votes Thank Flag Link Mon Oct 15, 2012
Thank you Ms. Lam:

With the seller's market that we have and the shortage of housing that we have here in San Jose, many builders see an opportunity to build and sell at a profit again.

I expect to see a number of new homes and communities coming on the market next year. Often the largest obstacle is the often very lengthy approval process with the City that must issue the building permits.

Thank you,
Charles Butterfield MBA
Real Estate Broker/REALTOR
American Realty
Cell Phone: (408)509-6218
Fax: (408)269-3597
Email Address: charlesbutterfieldbkr@yahoo.com
DRE#00901872
.
0 votes Thank Flag Link Mon Oct 15, 2012
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