Central Valley market expects slow but steady growth in 2013

Posted in Central California Market | Posted on 05-08-2013 | Written by Metrostudy News

(Roseville, CA – May 8, 2013) As 2013 begins, the Central Valley continues to demonstrate economic improvement. Job growth remains positive so far this year and improving in most areas, which appears to strengthen the demand for homes, 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 total number of non-farm jobs reached a level not seen since June 2009, standing at 1.095 million. The region added 17,500 new jobs over the past 12-months. The total numberof employed people is increasing with 1.6% more people employed than in February of 2012, again, signs pointing to stabilization. “It’s been more than four years since we have seen job growth in any of the Central Valley markets, and in February, all of the 8 counties we track had positive job growth,” said Greg Gross, regional director of Metrostudy’s Northern California, Central California, Reno and Las Vegas markets. The Central Valley unemployed population has increased to 15%; erasing the improvements made in 3Q12. Compared to the State level of 9.7%, the Central Valley unemployment rates have exceeded state and national averages, but improving nonetheless.

Annual housing starts are UP 55% to 4,904 from 1Q12 in the Central Valley, while closings are UP by 26% to 4,400. This has brought inventory levels closer to equilibrium and it appears we have reached the bottom of the market as paces are stabilizing and both quarterly starts and closings increased during 1Q12. “Builders are starting more homes to meet demand as inventories are low,” said Gross. Compared to 1Q12, quarterly new home starts increased 137% in Kern County and 68% in San Joaquin County, 92% in Stanislaus and 30% in Fresno County.

Finished inventory of homes has retreated impressively from the highs reached in 4Q06. With 876 finished vacant homes this quarter, the market has 2.4-months of supply. The finished inventory in this market is now below equilibrium, and we will continue to see production fluctuate slightly to meet the slight increase in demand expected over the next year. “Builders will be hesitant to add to their speculative inventory this year, but with their cautiously optimistic attitude, new home starts will steadily increase,” said Gross.

Vacant developed lot inventory continues to recede, as starts surpass new lot deliveries again this quarter. Months’ of supply has fallen substantially to 59 (5 years) with the increase in annual starts. We counted 24,095 finished lots throughout the Greater Central Valley. “This is the lowest level since 2006. The number of vacant developed lots has slowly declined over the past two years as lot production has all but ceased,” said Gross.  There are an additional 17,569 lots in the pipeline with 13,513 lots being excavated now, with overall development 18% lower than a year ago.

“Metrostudy expects the Central Valley housing market slowly improve over the course of the year with stronger signs of improvement by the end of 2013. Kern, Fresno and San Joaquin Counties will be most stable and consistent housing markets in all of Central Valley through 2012 and will continue to lead the Central Valley growth during 2013,” said Gross.

For information contact:
greg gross @ 916-231-9370
email ggross@metrostudy.com

About Metrostudy

Metrostudy, a Hanley Wood company, is the leading provider of primary and secondary market information to the housing and related industries nationwide.  Established in 1975 in Houston, Metrostudy provides research, data, analytics and consulting services that help builders, developers, lenders, suppliers, retailers, utilities and others make investment and business decisions every day.  www.metrostudy.com

About Hanley Wood

Hanley Wood, LLC is the premier media, event, information and strategic marketing services company serving the residential, commercial design and construction industries. Through its operating platforms, the company produces award-winning digital and print publications, Newsletters, websites, marquee trade shows and events, Market Intelligence data and strategic marketing solutions. The company also is North America’s leading publisher of home plans.

Starts and closings are up in the Central Valley Housing Market

Posted in Central California Market, National Housing Market | Posted on 10-25-2012 | Written by Metrostudy News

(Roseville, CA–October 25th, 2012) Central Valley housing market is expected to slowly improve over the course of the year with continued signs of improvement by the end of 2013, 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 surge in employment gains during 3Q12. “In fact, the total number of non-farm jobs reached a level not seen since June 2009, standing at 1.094 million,” said Greg Gross, director of Metrostudy’s Central California Region. It’s been more than four years since we have seen job growth in any of the Central Valley markets, and in August, 6 of the 8 counties we track had positive job growth. The Central Valley unemployed population has dropped to 14.0%; standing at its lowest point since September 2009.

The improving job market may be having a positive impact the new home market. Annual Housing starts are up 25% to 3,894 from 3Q11 in the Central Valley, while up by .44% to 3,662. This has brought inventory levels closer to equilibrium and it appears we have reached the bottom of the market as paces are stabilizing and both quarterly starts and closings increased during 3Q12. “Builders are starting more homes to meet demand as inventories are low,” said Gross.

Finished inventory of homes has retreated impressively from the highs reached in 4Q06. With 819 Finished Vacant homes this quarter, the market has 2.7-months of supply. “The finished inventory in this market is now below equilibrium, and we will continue to see production fluctuate slightly to meet the slight increase in demand expected over the next year,” said Gross.

As 2012 comes to an end, the Central Valley continues to demonstrate economic improvement. Job growth remains positive so far this year and improving in most areas, which appears to strengthen the demand for homes. “We are optimistic that pent up demand will continue to build through 2013,” said Gross.

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

Modest improvement in Central California’s housing market expected through 2012

Posted in Central California Market, In The News | Posted on 07-30-2012 | Written by Metrostudy News

(Roseville, CA– July 30, 2012) Central Valley housing market is expected to slowly improve over the course of the year with stronger signs of improvement by the end of 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 surge in employment gains during 2Q12. The region added nearly 16,000 new jobs over the past 12-months. “The total number of employed people is increasing with 1.5% more people employed than in May of 2011, again, signs pointing to stabilization,” said Greg Gross, director of Metrostudy’s Central California Region. The Central Valley unemployed population has dropped to 14.7%; standing at its lowest point since September 2009.

The improving job market may be having a positive impact the new home market. Annual Housing starts are up 8% to 3,478 from 2Q11 in the Central Valley, while closings are off by 15% to 3,468. “This has brought inventory levels closer to equilibrium and it appears we have reached the bottom of the market as paces are stabilizing and both quarterly starts and closings increased during 2Q12,” said Gross.

With 815 Finished Vacant homes this quarter, the market has 2.8-months of supply. The finished inventory in this market is now below equilibrium, and we will continue to see production fluctuate slightly to meet the slight increase in demand expected over the next year. “Builders will be hesitant to add to their speculative inventory this year, and demand varies from sub-market to sub-market” said Gross.

As the first half of 2012 comes to pass, the Central Valley continues to demonstrate economic improvement. Job growth remains positive so far this year and improving in most areas, which appears to strengthen the demand for homes. “We are optimistic that pent up demand will continue to build through 2012,” said Gross.

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.

Central California shows continuing signs of economic recovery in 1Q12

Posted in Central California Market | Posted on 04-30-2012 | Written by Metrostudy News

(Roseville, CA– April 30, 2012) The Central California economy continues to show signs of slight economic recovering, 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 the first quarter,” said Greg Gross, director of Metrostudy’s Central California Region. The total number of employed is increasing with 1.2% more than in February of 2011, again, signs pointing to stabilization.

However, the improving job market has yet to positively impact the new home market. Annual housing starts are down 13% to 3,049 from 1Q11 in the Central Valley, while closings are off by 30% to 3,305. “It appears we have reached the bottom of the market as paces are stabilizing and both quarterly starts and closings decreased during 1Q12,” said Gross. Additionally, our average “offer to build” base price for new Single Family detached homes has dropped 1.5% to $256,000, compared to 1Q11.

Finished inventory of homes has retreated impressively from the highs reached in 4Q06. With 995 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.

“We are optimistic that pent up demand will continue through 2012,” said Gross. “The San Joaquin/Stanislaus region will benefit from the improving Bay Area market and buyers move inland to find more affordable and abundant housing.” Metrostudy expects the Central Valley housing market to remain weak for the next year and should begin to show stronger signs of improvement by the end of 2012. Kern, Tulare and San Joaquin Counties are the most stable and consistent housing markets in all of Central Valley through 2012 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.

The Central California market demonstrated signs of economic recovery in 2011

Posted in Central California Market | Posted on 01-25-2012 | Written by Metrostudy News

(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.

2Q11 Indicates Signs of Economic Recovery for Central California

Posted in Central California Market | Posted on 08-15-2011 | Written by Metrostudy News

(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.

1Q11 brings signs of economic recovery for the Central California Market

Posted in Central California Market | Posted on 05-18-2011 | Written by Metrostudy News

(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.

Central California continues to show slight signs of recovery in 4Q10

Posted in Central California Market | Posted on 02-08-2011 | Written by Metrostudy News

(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.

Mandated Construction Costs Ultimately Hurt Housing Demand

Posted in Central California Market, Economy, Northern California Market, San Diego Market, Southern California Market | Posted on 12-16-2010 | Written by Greg Gross

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.

Central California housing market to challenge builders, show gradual improvement signs by 4Q10

Posted in Central California Market | Posted on 11-09-2010 | Written by Metrostudy News

(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.