Source: California Housing Affordability Continues Slide in Fourth Quarter, CBIA Announces
While certain markets in California have seen some pricing stabilize, pushing the Affordability Index lower, there still are many Southern California sub-markets that remain at historically high levels of affordability. As an example, while the rest of the State was at about a 60% average in Q4 of 2009, all of Riverside County was experiencing affordability levels of over 70%. Riverside and parts of San Bernardino counties still have very good affordable priced new homes, much better than the higher urbanized centers in the State.
New home sales continue to improve, especially for first time buyers and those who could take advantage of the tax credits. It appears that the State is well on its way to extending the State tax credit, which is planned to include credits for both new and resale homes. The combination of the lowest historical pricing, low interest rates and tax credits, make the current market an excellent buyers market and a great time to purchase a new home.
Although sales of new homes have been improving, historically the number of sales are well below the last 15 year average, at around 60% lower. New home supply has been reduced significantly over the last 12-18 months and we can see supply in some sub-markets will not be able keep pace with the current recovery and demand. This seems to also be the case for finished lots for builders. The finished lots in prime market areas have been aggressively pursued by the big builders and the remainder supply is located in mostly the secondary market areas.
What does all this mean? The balance between supply and demand has certainly improved and overall pricing has stabilized, meaning that those who need a home should be out shopping. Interest rates and tax credits will likely be good for this year, but hard to say for the future.
If you would like more information about how the housing market, connect with the building industry experts at Builders Development Group. BDG is a home building company in California which collaborates with the industry’s best talent. Real estate development expert, Michael Vairin, is the driving force behind Builders Development Group.
Thursday, February 18, 2010
Tuesday, January 26, 2010
Are there New Home Deals in Southern California?
We all see the media reports, nearly everyday, regarding the state of the home building industry and real estate in general. There are more signs and reports that pricing has stabilized or even reached bottom in some submarkets. However, these are still very cautious times. The new home inventory is certainly down and within reason. The Southern California new home market is no different.
Our new home competitors in Southern California are mostly the resale market and the foreclosure market, which have been impacting values and inventory. While there might be signs of some stabilizing in that sector, it is still difficult to find reliable data and be able to reasonably project future inventory.
So where do the smaller private California home builders turn to find deals? The demand for finished lots in core markets increased dramatically the last half of 2009, as the appetite for those lots from the larger public home builders grew. Builders Development Group has deployed resources to find smaller lot deals that have been overlooked. Some are infill type new home projects and some are lots in newer projects that did not get finished but since there are usually a small number of lots, it does not make sense for the public home builders in California.
Riverside and San Bernardino home building markets have hit historically affordable levels and are poised for entry level products that can compete with the resale housing market. Searching on the fringe of those new home markets may in fact be just the right place to make a claim. There are deals out there; it is going to take more effort to find them and to be creative with the land seller to maximize their profits and investment.
Our new home competitors in Southern California are mostly the resale market and the foreclosure market, which have been impacting values and inventory. While there might be signs of some stabilizing in that sector, it is still difficult to find reliable data and be able to reasonably project future inventory.
So where do the smaller private California home builders turn to find deals? The demand for finished lots in core markets increased dramatically the last half of 2009, as the appetite for those lots from the larger public home builders grew. Builders Development Group has deployed resources to find smaller lot deals that have been overlooked. Some are infill type new home projects and some are lots in newer projects that did not get finished but since there are usually a small number of lots, it does not make sense for the public home builders in California.
Riverside and San Bernardino home building markets have hit historically affordable levels and are poised for entry level products that can compete with the resale housing market. Searching on the fringe of those new home markets may in fact be just the right place to make a claim. There are deals out there; it is going to take more effort to find them and to be creative with the land seller to maximize their profits and investment.
Sunday, January 17, 2010
“True Cost” of Finished Lots for New Homes in Southern California
At the peak of the last new home market cycle, many projects were stopped and ultimately could not be built out. Those same finished lots today are now very sought after. My estimate is that finished lots in the best core home building markets are going to be acquired quickly and will push the market edges out to the perimeter markets. Regardless of where they are, most likely they present opportunities because they simply are irreplaceable at current costs.
There are a number of key factors and components in determining the value of a finished lot and a mistake in that analysis can be damaging. A lot has changed in the past year in the area of impact fees associated with home building in California and land development. What has not changed is that fees are still a big component of the finishing costs. However, it is more challenging to fully understand what fees may remain on a partially completed or improved project. Some fees may have been paid in advance and others have changed.
There has been great progress made by the local Building Industry Associations in the Inland Empire, which has resulted in the combination of fee reductions and the timing of fee payments on new home projects. It is critical to get the most accurate information from the agency that manages those fee programs. The good news is that 2010 will likely be a good year to activate permits and maps on new home developments in California in order to take advantage of these newer lower fees.
Now is the time to find those new home deals that have these advantages, be the one to understand them and move quickly to acquire. The caution is to not take some outdated analysis on the costs but to conduct your own independent analysis and to verify the accuracy of all information.
If you would like more information about how to estimate the “True Cost” of finished lots before you make that purchase, connect with the building industry experts at Builders Development Group. BDG is a new home building company in California which collaborates with the industry’s best talent. Real estate development expert, Michael Vairin, is the driving force behind Builders Development Group.
There are a number of key factors and components in determining the value of a finished lot and a mistake in that analysis can be damaging. A lot has changed in the past year in the area of impact fees associated with home building in California and land development. What has not changed is that fees are still a big component of the finishing costs. However, it is more challenging to fully understand what fees may remain on a partially completed or improved project. Some fees may have been paid in advance and others have changed.
There has been great progress made by the local Building Industry Associations in the Inland Empire, which has resulted in the combination of fee reductions and the timing of fee payments on new home projects. It is critical to get the most accurate information from the agency that manages those fee programs. The good news is that 2010 will likely be a good year to activate permits and maps on new home developments in California in order to take advantage of these newer lower fees.
Now is the time to find those new home deals that have these advantages, be the one to understand them and move quickly to acquire. The caution is to not take some outdated analysis on the costs but to conduct your own independent analysis and to verify the accuracy of all information.
If you would like more information about how to estimate the “True Cost” of finished lots before you make that purchase, connect with the building industry experts at Builders Development Group. BDG is a new home building company in California which collaborates with the industry’s best talent. Real estate development expert, Michael Vairin, is the driving force behind Builders Development Group.
Tuesday, January 12, 2010
Builders Development Group Partners with Hunsaker & Associates
Builders Development Group, Inc. has partnered with Hunsaker & Associates for civil engineering services. Hunsaker & Associates offers a full range of planning services including research, project feasibility and general plan amendments. In support of Builders Development Group home building activities and construction management services, Hunsaker & Associates will provide planning services such as preliminary design, due diligence cost estimates, and tentative map improvements. As a liaison for Builders Development Group clients, Hunsaker & Associates will provide support and consultation with planning commission and review boards. Working in a collaborative environment will provide clients with integrated set of solutions.
Builders Development Group business industry partners are strategically selected to provide a wide array of expertise that share the same passion for excellence and conduct business with a high level of integrity. The core beliefs of collaboration, win/win solutions, and caring for people are what makes this partnership work for Builders Development Group clients.
Builders Development Group business industry partners are strategically selected to provide a wide array of expertise that share the same passion for excellence and conduct business with a high level of integrity. The core beliefs of collaboration, win/win solutions, and caring for people are what makes this partnership work for Builders Development Group clients.
Tuesday, January 5, 2010
Launch of Builders Development Group, Inc.
Building industry veteran Michael Vairin is the driving force behind Builders Development Group, Inc. (BDG) a new cutting-edge philosophy that brings together building industry experts in a collaborative structure that provides new homes in Southern California with a blend of services that focus on construction management, real estate consulting and distressed real estate management.
Builders Development Group is structured to provide the highest level of construction and partners with building industry experts in all areas of the industry. This concept enables BDG to draw upon the best of the industry for the most efficient solutions for each project, while at the same time controlling operating costs in order to provide the most competitive cost basis in providing services.
Given the reasons for this new collaborative philosophy Michael stated, “My involvement in the home building industry for the last 30 years has created such a passion and I can see that it is time to launch a new company. I see many highly experienced industry veterans that have so much to offer, yet not many companies that can hire them.”
BDG has the one of the most comprehensive set of skills and strengths which results in the development of clear and concise project plans that are focused on delivering the maximum value of the real estate asset. Their project plans and real estate solutions quantify opportunities, includes risk management strategies, and execution of every detail of the plan in order to achieve the highest results and return on the investment.
Michael is very confident that Builders Development Group is well positioned in the building industry for 2010. “I believe that there are numerous opportunities for those that can see them, interact with each other and find the winning strategies to develop more business opportunities.”
Builders Development Group is structured to provide the highest level of construction and partners with building industry experts in all areas of the industry. This concept enables BDG to draw upon the best of the industry for the most efficient solutions for each project, while at the same time controlling operating costs in order to provide the most competitive cost basis in providing services.
Given the reasons for this new collaborative philosophy Michael stated, “My involvement in the home building industry for the last 30 years has created such a passion and I can see that it is time to launch a new company. I see many highly experienced industry veterans that have so much to offer, yet not many companies that can hire them.”
BDG has the one of the most comprehensive set of skills and strengths which results in the development of clear and concise project plans that are focused on delivering the maximum value of the real estate asset. Their project plans and real estate solutions quantify opportunities, includes risk management strategies, and execution of every detail of the plan in order to achieve the highest results and return on the investment.
Michael is very confident that Builders Development Group is well positioned in the building industry for 2010. “I believe that there are numerous opportunities for those that can see them, interact with each other and find the winning strategies to develop more business opportunities.”
Monday, December 28, 2009
2010 Predictions
This is the time of year we will all be flooded with predictions on our industry. It will certainly be interesting reading. In the end, we all have to determine our own strategies. It is clear that the market has seen some stabilization. I believe that there are numerous opportunities for those that can see them, interact with each other and find the winning strategies to develop more business opportunities. What are you doing to make it through another year...
If you would like to discuss how BDG can help you with your 2010 plans, please contact Michael Vairin.
If you would like to discuss how BDG can help you with your 2010 plans, please contact Michael Vairin.
Tuesday, December 15, 2009
Company Formation
My involvement in the home building industry for the last 30 years, has created such a passion and I can see that it is time to launch a new company. I see many highly experienced industry veterans that have so much to offer, yet not many companies that can hire them. Therefore, this is the perfect time to launch a new cutting-edge collaborative that brings top industry talent together to work in partnership on home building, construction management, real estate consulting and distressed real estate management. So here we go...more to come as we put together the details.
This new company will be called Builders Development Group.
This new company will be called Builders Development Group.
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