According to a report released by the National Association of Home Builders, industry confidence in newly built, single-family homes slipped in March. The index the association uses dipped to 15 in March, down two points from February and back to its January level. An index number below 50 indicates a negative confidence reading. The index was last above that benchmark in April of 2006.
The number of distressed properties on the market makes it difficult for builders to compete, price-wise, with existing homes. Foreclosures and short sales can often push price-per-square-foot costs into ranges with which builders can’t compete.
Still, reports have indicated that some builders are still optimistic about the approaching spring season, when buyers traditionally return to the market. Some large home builders, for example, are reported to be purchasing land and building “spec” homes – homes that are built before being sold.
The construction of new homes is often regarded as a pretty significant indicator of the economy as a whole. New homes sell best when consumer confidence is high, and the continued troubles in the U.S. job market weigh on consumer confidence.
This report is typical of our nation, but in the Jacksonville – Camp Lejuene area we have been protected by the growth of the Camp Lejuene complex over the last few years and with the steady flow of Marines in and out of the area due to deployments, training, and relocations. The Jacksonville NC real estate market actually had an up year in 2009, while most of the nation was down double digits.