New neighborhoods are going up, and builder confidence hits 6-year highs
New homebuilders had a pretty good run during the early 2000’s. Beautifully planned communities were sprouting up everywhere throughout Southern California, with many selling out months before they even broke ground. It seemed like the buyers would always keep coming, and that the well of home equity would never run dry.
Of course we all know what happened in 2005, and by early 2007 the housing market was in freefall. This abrupt market collapse caused new construction to come to a screeching halt throughout the United States. Builders were left with unsold lots, and in some cases, entire planned communities sat undeveloped and were eventually abandoned when the builders declared bankruptcy.
Needless to say, the crash didn’t do much to spur new construction development, and builder confidence.
So after all of the ups and downs in the housing market during the last decade, what does it mean now that new construction has started up again?
Well, new construction has long been considered one of the primary economic indicators along with others like unemployment and the stock market. While many of the other indicators have yet to turn around, it seems that the new construction market has rallied and is poised to make a comeback in 2013. Low inventory combined with outrageously low interest rates has set the stage for this resurgence, and builder confidence has reached six year highs.
Orange County in particular is seeing a notable increase. Several new communities that were thought to have been shelved have reemerged, and to overwhelming demand. Developments like Valinda in San Juan Capistrano, have months long waiting lists, and strict requirements for prospective buyers.
In addition to smaller developments like Valinda, large master-planned areas like Rancho Mission Viejo are set to start selling later this summer in the Village of Sendero. This picturesque pocket of land nestled between Ladera Ranch and San Juan Capistrano will offer property options built to suit just about everyone, including the grandparents. With inventory at record lows, there is no doubt that frustrated buyers will jump at the chance to reserve a piece of this new community.
While it still remains to be seen if this resurgence of the housing market will be a long lasting trend, one thing is for certain: this summer is promising to be a banner year for new construciton in Orange County.
