From WSJ.com
By ERIC MORATH And JOSH MITCHELL
The National Association of Home Builders, an industry trade group, said Monday that its housing-market index leapt to a reading of 52 in June, up by eight points from May. The jump was the biggest since the summer 2002.
The reading marked the first time since April 2006 that the index registered a reading over 50, which indicates most home builders view sales conditions as good rather than poor. The reading was far above economists' expectations of a 45-point measure for June. The index was based on a survey of 255 builders in June.
"Surpassing this important benchmark reflects the fact that builders are seeing better market conditions as demand for new homes increases," said NAHB Chairman Rick Judson, a home builder and developer from Charlotte, N.C. "With the low inventory of existing homes, an increasing number of buyers are gravitating toward new homes.
Home Builders' Outlook Turns 'Good' for First Time Since '06
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Here in the Catalina Foothills, where many builders got burned during the boom & bust, and who didn’t, most builders appear to be tip-toeing very carefully back into the market. Of the 9 new construction listings in the MLS only 3 of them are spec homes that are actually built or in the process of being built. The others are to-be-built, that is, once a buyer comes along and signs a contract and puts down a deposit. And not until. Also, back in the boom days of the spec home frenzy you never saw a spec listed for less than 1$million, and most were at $1,500,000 and up, and some way up. Today 4 of the 9 listings are at $635, $725, $759 and $995.
And I see that La Quinta is building again along Campbell Ave behind the iron gate just north of Calle La Vela. This is on the 10 acres they acquired in the 2002 purchase, for $1,450,000, of a Joesler estate which they then renovated and sold for $1,550,000 in 2004, but with just 2.4 acres. Meanwhile La Quinta carved out 4 additional building lots from the remaining 7.6 acres.
A good bet and good timing on La Quinta’s part. With the country still reeling from 9/11 and the stock market crash, the high-end market here was dead in 2002. But by 2004 happy days were here again. (and by 2007, when that same Joesler sold again for $2.2m, they were downright giddy – but the end was near)
And La Quinta didn’t get off scot-free either. By the time they got two of their very high-end spec homes in the ground the boom had become the bust and when they finally did sell they sold for steep discounts.
The blue outline is the original 10 acre parcel with the Joesler in the upper left and the 4 lots that were split, two of them with La Quinta spec homes.
One sold in 09 for $1,232,000 after starting in 08 at $1,685,000, the other for $1,600,000 in 2010 after starting in 07 at $2,695,000. And La Quinta’s are beautifully designed, all masonry construction with the very best materials and craftsmanship – a level of quality that is rarely seen.
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