Sales at California's major new-home communities rose in January by 9.4 percent compared to December 2006 according to a California Building Industry Association (CBIA)/Hanley Wood Market Intelligence (HWMI) report (PDF). HWMI is a sister division of BUILDER Online. The study finds that more than 6,000 single-family homes, townhomes, and condominiums were sold in the 25 metro areas tracked.
Robert Rivinius, CBIA's president and CEO, says the sales increase suggests buyers should take advantage. "For the past year, builders have been working through excess inventory that resulted from the superheated marketplace the first half of this decade," Rivinius explains. "Once these properties are off the books, many builders will begin construction only on homes that are pre-sold. "We think we are nearing the bottom as far as price structure goes, so this is a great time to buy a new home."
Patrick Duffy, managing director of consulting for HWMI, says the report shows that there are some encouraging signs. "We've continued to hear builders talking about higher-quality traffic visiting sales offices since the beginning of the year," he says. "It appears that the steps builders took in the second half of 2006, such as sparking the interest of home buyers with various incentives and limiting new supply, are working."
A combination of sales incentives and fewer releases of new homes by builders also kept statewide inventory levels in check, which rose by less than 1 percent to 16,770 homes by the end of January 2007.
According to the study's findings, overall sales were still 18.6 percent less than sold in January 2006, but median asking prices rose by 2.2 percent compared to January 2006.