Home building has been the last area of the real estate market to recover from the recession. Generally, it’s believed that builders were hit the hardest during the recession. Many builders use leverage to purchase land and take loans for home building. When the investment market for these loans dried up and the value of the land collapsed, many were forced to downsize, cease operations, or in some cases shutter everything.
Coming out of the recession, builders have been slow to get started. It took a number of years for the market to work through the distressed and bank owned properties. Meanwhile, population growth continues in America and the lack of inventory remains a key issue. Last month, CoreLogic reported that about 1.7% of homes are for sale. This is about half of the normal inventory amount. The lack of inventory is driving transaction prices up even as unit volume remains steady.
Home builders play a key role in supplying inventory to the market. Here are the home builder stats around the nation for March.
Hot Markets
The hot markets in America are The San Francisco Bay Area, Los Angeles, and Orlando. Orlando being the surprise here. They were hard hit by the foreclosure crisis but have been quick to rebound.
Most Improved
Sacramento, Tampa, and San Diego were the biggest gainers in March. Posting higher transaction growth against their peers.
Midwest Weakness
Cleveland, Chicago and Cincinnati were the weakest for home builders.
Biggest Drops
Houston, Las Vegas, San Antonio, Southeast Florida, and Denver showed the largest drops in overall production for March.
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