(Roseville, CA– January 25, 2012) The Central California economy continues to struggle, but indicators suggest a cautious economic improvement through 2012, according to a recent report by Metrostudy, a national housing data and consulting firm that maintains the most extensive primary database on residential construction in the US housing market.

“The Central California economy experienced a gradual improvement in the job loss situation during 2011,” said Greg Gross, director of Metrostudy’s Central California Region. The total number of employed is nearly 1% more than in November 2010, pointing to stabilization.

“However, the improving job market has yet to positively impact the new home market,” said Gross. “It appears we have reached the bottom of the market as paces are stabilizing and both quarterly starts and closings decreased during 4Q11.” Annual housing starts are down 22% to 3,069 from 4Q10 in the Central Valley, while closings are off by 34% to 3,334. Additionally, our average “offer to build” base price for new single family detached homes has dropped to $251,000, down 1.6% compared to 4Q10.

Finished inventory of homes has retreated impressively from the highs reached in 4Q06. With 1,011 Finished vacant homes this quarter, the market has 3.6 months of supply. Finished vacant units are beginning to recede, as starts surpass new lot deliveries this quarter. With 27,701 finished lots, months of supply have jumped to 108 with the continued slowdown in annual starts.

“Metrostudy expects the Central Valley housing market to remain weak for the next year with stronger signs of improvement by the end of 2012,” said Gross. “Kern, Tulare and San Joaquin Counties are the most stable and consistent housing markets in all of Central Valley through 2011 and will continue to lead the Central Valley growth during 2012.”

For information contact:
Greg Gross @ 925.826.3801
email: ggross@metrostudy.com

About Metrostudy
Metrostudy is the leading provider of primary and secondary market information to the housing industry and related industries nationwide. In addition to providing its own primary housing data for approximately 70% of the United States housing market, the company is recognized for its consulting expertise regarding real estate development, marketing and economic issues, and is a key source of research studies evaluating the marketability of residential and commercial real estate projects. Services are offered through an extensive network of offices located in major metropolitan areas throughout the U.S. For more information, visit www.metrostudy.com.

(Roseville, CA– August 1, 2011) The Central California housing market continues to show signs of slight economic recovery in 2Q11, according to a recent report by Metrostudy, a national housing data and consulting firm that maintains the most extensive primary database on residential construction in the US housing market.

“It’s been more than three years since we have seen job growth in any of the Central Valley markets, and in June we have had growth in seven of the 13 sectors we track,” said Greg Gross, director of Metrostudy’s Central California Region. The Central California economy continues to struggle, but now the indicators continue to suggest a cautious improvement through 2011.

However, the improving job market has yet to positively impact the new home market. Annual Housing starts are down 32% to 3,225 from 2Q10 in the Central Valley, while closings are off by 37% to 3,976. This has brought inventory levels closer to equilibrium. It appears we have reached the bottom of the market as paces are stabilizing and both quarterly starts and closings increased during 2Q11. Additionally, our average “offer to build” base price for new Single Family detached homes has increased 1% to $262K since 2Q10.

Finished inventory of homes has retreated impressively from the highs reached in 4Q06. With 1,167 Finished Vacant homes this quarter, the market has about 3.5 months of supply. Finished Vacant Units have steadily declined over the past 8 quarters as lot production has all but ceased.

“Metrostudy expects the Central Valley housing market to remain weak for 2011 and will begin to show stronger signs of improvement by end of year,” said Greg Gross. “The next year will likely be as challenging for us as the market has grasped the idea of having ‘bottoming out’. The new normal will be steady absorptions, difficult lending standards and increased construction costs.”

For information contact:
greg gross @ 916.873.7840
email ggross@metrostudy.com

About Metrostudy
Metrostudy is the leading provider of primary and secondary market information to the housing industry and related industries nationwide. In addition to providing its own primary housing data for approximately 70% of the United States housing market, the company is recognized for its consulting expertise regarding real estate development, marketing and economic issues, and is a key source of research studies evaluating the marketability of residential and commercial real estate projects. Services are offered through an extensive network of offices located in major metropolitan areas throughout the U.S. For more information, visit www.metrostudy.com.

(Roseville, CA– May 1, 2011) The Central California Valley economy continues to show signs of an economic recovery in 1Q11, according to a recent report by Metrostudy, a national housing data and consulting firm that maintains the most extensive primary database on residential construction in the US housing market.

“It’s been more than three years since we have seen job growth in any of the Central Valley markets, and in March we have had growth in seven of the 13 sectors we track,” said Greg Gross, director of Metrostudy’s Central California Region.

However, the job increases have yet to positively impact the new home market. Annual Housing starts are down 31% from 1Q10 in the Central Valley, while closings are off by 23%. This has brought inventory levels closer to equilibrium and indicates stabilizing paces as we reach the bottom of the market.

Finished inventory of homes has retreated impressively from the highs reached in 4Q06. The market currently has about 3 months of supply, with 1,172 Finished Vacant homes this quarter. Finished inventory in this market is right at equilibrium.

Central Valley has been absorbing more lots than were delivered for the past two years, making a significant dent in the number of finished lots. There were 27,640 finished lots throughout the Greater Central Valley in 1Q11. Development is slightly higher than a year ago.

“While there have been some brighter spots regionally with increased traffic in sales centers and resale activity has increased in some areas. It is uncertain if these increased will be sustainable throughout the year given the bleak employment picture,” said Greg Gross. “Metrostudy expects the Central Valley housing market to remain weak for 2011 and begin to show stronger signs of improvement by end of year.”

For information contact:
greg gross @ 925.826.3801
email ggross@metrostudy.com

About Metrostudy
Metrostudy is the leading provider of primary and secondary market information to the housing industry and related industries nationwide. In addition to providing its own primary housing data for approximately 70% of the United States housing market, the company is recognized for its consulting expertise regarding real estate development, marketing and economic issues, and is a key source of research studies evaluating the marketability of residential and commercial real estate projects. Services are offered through an extensive network of offices located in major metropolitan areas throughout the U.S. For more information, visit www.metrostudy.com.

(Roseville, CA– February 1, 2011) The Central California housing market continues to show the slight signs of recovery in Forth Quarter, according to a recent report by Metrostudy, a national housing data and consulting firm that maintains the most extensive primary database on residential construction in the US housing market.

On the national level, Wall Street is beating expectations and recording profits; banks have enjoyed profits and the stock market has performed impressively. “As optimistic as all of this sounds, the Central California economy continues to struggle,” said Greg Gross, director of Metrostudy’s Central California Region. “Now we feel that we have ‘reached the bottom’ and indicators suggest a cautious improvement in 2011.”

Annual Housing starts are down 18% from 4Q09 in the Central Valley, while closings are off by 22%. This has helped to bring inventory levels closer to equilibrium and it appears we have reached the bottom of the market as paces are stabilizing.

“The Central Valley has long been considered the affordable California market,” said Gross. “The problem now lies in the fact that while home prices are now within reach of more buyers, the lingering recession, massive job layoffs, strict lending standards and general economic uncertainty has driven would-be buyers to the sidelines.”

As 2010 demonstrated, the Central Valley is not showing any signs of anticipated economic recovery. Without job growth and business expansion, there will be less demand for new housing.

2011 will likely be as challenging for us as the market struggles with the idea of “bottoming out”. However, a thorough understanding of competitive framework, buyer segmentation and conducting crucial strategic planning will be vital for success and in some cases, survival. While challenging for current business, 2011 will also be a year of opportunity to secure long term land positions in the California market.

For information contact:
greg gross @ 916.231.9370
email ggross@metrostudy.com

About Metrostudy
Metrostudy is the leading provider of primary and secondary market information to the housing industry and related industries nationwide. In addition to providing its own primary housing data for approximately 70% of the United States housing market, the company is recognized for its consulting expertise regarding real estate development, marketing and economic issues, and is a key source of research studies evaluating the marketability of residential and commercial real estate projects. Services are offered through an extensive network of offices located in major metropolitan areas throughout the U.S. For more information, visit www.metrostudy.com.

The California Building Standards Commission has adopted a statewide law that requires all Single family homes built after January 1, 2011 to have a fire sprinkler system. Places like Long Beach, Orange County, San Francisco and about 100 other jurisdictions have had local residential sprinkler ordinances in place, now the rest of the state will follow.

Can home builders pass along the additional costs to consumers while home construction in California is at the lowest level since 1955?  Does the promoted benefit of this new home feature outway the cost?

How much will these systems cost? According to an article in the Sacramento Business Journal from 4/25/2010; that cost varies, depending on who is doing the estimating. Supporters put it at about $1 per square foot of coverage. Bob Raymer, technical director at the California Building Industry Association claimed it’s more like $2 to $2.50 a square foot for materials and labor, and said costs can climb higher with additional requirements, such as hook-up fees by water purveyors. Those have ranged from $5,000 to $15,000 per home, he said.

Builders point out that the majority of home fires where a fatality occurred happened in residences built before 1952. Earlier this year, with almost half of the fire departments statewide reported 44 deaths in homes without sprinklers last year, while no deaths occurred in homes with sprinklers.

Home builders are operating with the thinnest of margins right now, and any additional cost increases are going to be even more difficult to pass along to the buyer.

In addition to Fire Sprinklers, more costs are on the way. Beginning in July 2011, homeowners across the state will be required to install carbon monoxide detectors in existing homes with fireplaces, attached garages or a “fossil-fuel burning appliance.” About 40 California residents die annually from carbon monoxide poisoning, state officials claim. By January 1, 2013, all other residential units must have detectors in place.

Over the past half century, home builders have made tremendous gains in building safer homes and saving lives just as auto manufactures have done with the implementation of anti-lock brakes, air-bags and stability control systems.

The question isn’t whether or not these requirements are needed or justified, the question is; will these added costs be a detriment to the recovery of the home building industry in the short term.

(Roseville, CA– November 1, 2010) The Central California housing market is expected to challenge builders, yet show gradual signs of improvement by 4Q2010, according to a recent report by Metrostudy, a national housing data and consulting firm that maintains the most extensive primary database on residential construction in the US housing market.

Finished inventory of homes has retreated from the highs reached in 4Q07. With 1,353 Finished Vacant homes in 3Q2010, the market has about 2.8-months of supply. “We will continue to see production fluctuate slightly to meet the slight increase in demand expected over the next year,” said Greg Gross, director of Metrostudy’s Central California Region. “But builders will be hesitant to add to their speculative inventory this year.”

The Central Valley unemployed population has dropped to 15.8% after peaking in March. The double digit rates are alarming and will have long term effects on housing demand. “The Central Valley has long been considered the affordable California market,” said Gross. “While home prices are now within reach of more buyers, the problem now lies in the fact that the lingering recession and employment uncertainty has driven would-be buyers to the sidelines.”

The 4,061 annual housing starts are down 14% from 3Q09 in the Central Valley, while the 5,750 closings are off by 16%. “This has helped to bring inventory levels closer to equilibrium,” said Gross. “It appears we have reached the bottom of the market as paces are stabilizing.”

“2010 will likely be challenging as the market struggles with the idea of ‘bottoming out’,” said Gross. “However, a thorough understanding of competitive framework, buyer segmentation, and conducting crucial strategic planning will make 2010 a year of opportunity to secure long term land positions in the California market.”

For information contact:
greg gross @ 925.826.3801
email ggross@metrostudy.com

About Metrostudy
Metrostudy is the leading provider of primary and secondary market information to the housing industry and related industries nationwide. In addition to providing its own primary housing data for approximately 70% of the United States housing market, the company is recognized for its consulting expertise regarding real estate development, marketing and economic issues, and is a key source of research studies evaluating the marketability of residential and commercial real estate projects. Services are offered through an extensive network of offices located in major metropolitan areas throughout the U.S. For more information, visit www.metrostudy.com.

(Roseville, CA– August 1, 2010) The Central California housing market is showing slight signs of recovery, and may have “reached the bottom”, according to a recent report by Metrostudy, a national housing data and consulting firm that maintains the most extensive primary database on residential construction  in the U.S. Housing market.

“Job losses have improved, housing inventory is shrinking, and builders are starting to look for land,” said Greg Gross, director of Metrostudy’s Central California Region. “While the economy continues to struggle, we feel we have reached the bottom, and indicators suggest a continued improvement throughout 2010.”

The Central California job losses were dramatic during 2008 and 2009 and now are slowing, while the total number of employed people is increasing. The Central Valley unemployed population has dropped to 16.3% after peaking in March. “Although it’s good to see a drop, these double digit rates are alarming and will have long term effects on housing demand,” said Gross. Read the rest of this entry »

(Central Valley, CA – May 7, 2010) “While home prices are now within reach fore more buyers, the Central Valley is still struggling with the lingering recession, massive job layoffs, strict lending standards and general economic uncertainty,” said Greg Gross, Metrostudy’s director for the Central Valley division. “The tax incentives continue to lower inventory levels, but this will most likely not be a long-term solution.”

The Central Valley has been absorbing more lots than were delivered for the past 8 quarters, making a dent in the number of finished lots. Months of Supply for Vacant Developed Lot Inventory as it begins to recede and starts increase slightly. Currently, there are 26,399 lots in the pipeline with 17,000 lots being excavated now, but development has increased for the first time since the fourth quarter of 2006.

Annual Housing starts are down 7% from 1Q09 in the Central Valley, while closings are off by 29%. The average “offer to build” base price for new Single Family detached homes has decreased 7% to $264K since 1Q09.

“This is helping to bring inventory levels closer to equilibrium and these levels seem to indicate the market has bottomed out,” said Gross. “The rate of declining pricing has slowed significantly as builders (and lenders) liquidate their standing inventory.”

Finished inventory of homes has retreated from the highs reached in 4Q06. With 1,570 Finished Vacant homes, the market has about a 3-month of supply. The ratio of Finished Vacant homes to Total Housing Inventory homes is 38%. A ratio of 30-35% is considered equilibrium.

“The finished inventory in this market is at equilibrium, and we will begin to see production increases to meet the slight increase in demand expected over the next year,” said Gross.

The Central California economy continues to struggle due to job losses. The Central Valley unemployed population has increased to 18.9% after peaking in March. Compared to the State level of 13%, the Central Valley unemployment rates have exceeded state and national averages; however, the market seems to have reached the bottom and indicators suggest a continued improvement over the course of 2010.

“Metrostudy expects the Central Valley housing market to decline through the first half of 2010 and will begin to show signs of gradual improvement by fourth quarter 2010,” said Gross. “2010 will likely be as challenging for us as the market struggles with the idea of “bottoming out”. However, a thorough understanding of competitive framework, buyer segmentation and conducting crucial strategic planning will be vital for success and in some cases, survival. While challenging for current business, 2010 will also be a year of opportunity to secure long term land positions in the California market.”

(Central Valley, CA – Jan. 26, 2010) Central Valley homebuilders are likely to see the housing market reach a bottom in 2010, said Greg Gross, director of Metrostudy’s Central Valley division. Metrostudy, a national housing data and consulting firm, conducts a count of 100 percent of all new housing units in subdivisions within the market area each quarter.

Read the rest of this entry »