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Homebuilder Comments in February: “Demand is still high"
Limiting Sales due to Supply Constraints, Strong Demand
Some homebuilder comments courtesy of Rick Palacios Jr., Director of Research at John Burns Real Estate Consulting (a must follow for housing on twitter!):
Here is Rick’s summary of builder comments for various markets (emphasis added in bold):
#Charlotte builder: “Restricting sales in all communities. Several communities with VIP lists over 1,000 and one of those communities only has 51 homes. Increasing mortgage rates haven’t slowed buyers down at all.”
#Charlotte builder: “HELP WANTED signs have driven direct construction costs up +20%. Keeping your employees from jumping ship to work for another builder costs 25% more.”
#Charlotte builder: “We’ve stopped selling homes in the majority of our communities due to supply chain & labor delays. We release homes for sale once they get to drywall stage. This will throw off our community counts & sales numbers."
#Boston builder: “We continue to limit lot releases, even sold our models. Our agents are not holding open houses nor advertising. Lots are reserved within days of release.”
#Nashville builder: “Market is still extremely strong even with rates moving up. Still a large shortage of homes on the market.”
#Nashville builder: “We’re still limiting contracts to homes that have completed the framing stage with windows and roofs installed. We do not anticipate any presale opportunities until supply channels become consistent.”
#Dallas builder: “We’re limiting sales to spec inventory in order to limit inflation risk.”
#Austin builder: “Traditional detached sales (entry level and move-up) continued to be very strong in February."
#Houston builder: “Costs continue to increase, and with higher rates we may see a slowing but we have not seen it yet.”
#SanAntonio builder: “Lack of lot supply, shortage of labor, and uncertainty of material costs and availability is limiting the number of sales we are willing to commit to contract.”
#Knoxville builder: “Some neighborhoods have several hundred people on a waiting list for less than 50 homes to be built.”
#Atlanta builder: “Strong interest lists are forming for our May/June openings. Many coming from apartments."
#Wilmington builder: “We offer homes for sale at about the insulation stage. These homes sell quickly after offered. Still experiencing shortages and delays in materials and our subcontractor base is weaker.”
#Charleston builder: “We can’t seem to start and build homes fast enough. Demand is still high, but with pricing still being an uncertainty, we may soon begin limiting sales to after the home hits drywall.”
#Tampa builders: “Our increase in prospects has been driven by spillover from lack of availability in the resale market. Our prices are up $30,000+ in the past 90 days. Affordability is becoming a larger issue every month.”
#Naples builder: “We’re restricting sales to 4 per month in this community right now to catch up on our backlog.”
#WestPalmBeach builder: “Still metering sales in every location. Every release comes with a [price] increase. We sell our allotment right off the bat. Priority interest lists remain strong.”
Quick chart tying to that last builder comment on quality of home buyer interest lists being 'about the same' or 'more qualified' than February 2021.
#Stockton builder: “Restricting starts & sales, so both come in spurts when released. Still seeing strong interest from well qualified Bay Area relocation buyers. First time buyers are being challenged by interest rate increases, but it’s creating buyer urgency.”
#Oakland builder: “Restricting the number of homes we release now to try to keep our margins high.” THE END