Irvine, Calif. — Following the noteworthy improvements reported in April, the John Burns Real Estate Consulting May survey results suggest new home sales and traffic have maintained improved levels, while builders’ expectations for the near term retreated slightly.
In May 2009, 234 public and private builder executives from over 159 companies around the country provided market ratings that represent conditions at 1,774 new home communities in 79 unique metros.
On a positive note, the percentage of home builders rating current sales as Poor continues to decline, now at 53% compared to 56% last month and 87% in January.
“We think the season’s modest uptick is fueled by Spring euphoria,” said John Burns, CEO of Irvine, Calif.-based John Burns Real Estate Consulting. “It’s been supplemented by improved affordability, low mortgage rates on conforming loans, and federal and state new home tax credits.”
Further improvement is tempered by the ongoing competition from foreclosures, limited credit for both buyers and builders, and rising unemployment. Concerns over escalating REOs and further price erosion still weigh heavily. “The changes to appraisal law that went into effect May 1 will likely be another leg down for new home sales,” said Burns. “Appraisers are now more likely to compare new homes to foreclosures, which can be ‘apples and oranges’ in many cases.”
Article from: HousingZone, read more here.
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