Home Builders Gearing Up for 2008
Believing that the new-home market has turned the corner, builders in the South Bay, Calif. area are gearing up for 2008, when they predict the next housing cycle will take off. Sales in the area are up compared to a year ago, thanks largely to incentives offered to lure home buyers to new housing projects.
“That’s gotten a lot of people to get off the fence,” said Paul Desmet, president of the Ryness Co., a data research company based in San Ramon. “The new home builders quite frankly are starting to run out of product.”
According to data collected weekly by Ryness, more Bay Area buyers looked at fewer projects in the week ending Nov. 19 than the same period of last year, resulting in 32% more sales. Almost 7,000 buyers toured 200 projects, and more than 110 bought a house.
“Most of us are positioning ourselves for 2008,” said Roger Menard, a housing industry veteran who now leads John Laing Homes’ Northern California division. “That’s the general wisdom among all of us as to when the market will rebound.”
Desmet agreed: “The market will self correct in 2007 and that will be the foundation for the next cycle.” With 60,000 jobs projected for the area in the next year, “we’re very bullish on building housing next to employment centers,” said Menard, whose company plans to build about 1,000 units in the area.
John Revells, of Palo Alto-based SummerHill Homes, said that he too has noticed that the cities closest to the job centers are doing better than outlying regions. (www.mercurynews.com)
San Jose Mercury News (11/27/06)
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