Surge in San Diego new home construction
Those looking at real estate in San Diego can rest assured the inventory of homes for sale is on the rise. CNNMoney recently reported that in June, housing construction starts went up by 6.9 percent nationwide, making the annual rate the highest it has been in four years, at 760,000. Local newspaper the La Jolla Light reported that San Diego is part of this building boom.
The report from CNNMoney came out July 18 and further revealed that housing starts are up 23.6 percent from last year, with permits to build new homes slightly lower than May but up 19.3 percent compared with June 2011.
Glenn Kelman, a real estate professional, told CNNMoney, "Homebuyers are like a herd of hungry goats right now, going from hillside to hillside looking for something to eat." He added, "There's not enough inventory to go around."
The shortage has been observable mostly because while the housing market has shown significant improvement since the recession, it has not been restored entirely. Homeowners are reluctant to sell their homes and take a loss financially, and so they are "sitting on them." However, this has led to the surge in new construction as house hunters who had begun looking for homes for sale in San Diego that are in "picture-perfect, move-in condition," were "disappointed in what they found," Kelman said, according to CNNMoney. In order for buyers to find what they were looking for, they had to look into new construction as a solution.
The National Association of Home Builders reported in a separate release recently that home builder confidence is at a five-year high. Barry Rutenberg, NAHB's chairman, said, "Builder confidence increased by solid margins in every region of the country in July as views of current sales conditions, prospects for future sales and traffic of prospective buyers all improved."
Another significant report came from recent polls conducted by the National Association for the Remodeling Industry. These revealed that 26 percent of homeowners plan to remain in their homes for 16 to 20 additional years, and 23 percent plan to stay in their homes for 6 to 10 years more. With homeowners expecting to stay put for a while, this could mean that the surge being observed in new construction projects will only grow stronger. However, these findings also suggest "a shift in focus for the remodeling industry, as homeowners turn their attention from upgrades designed to increase property value alone to more specific improvements for their daily use," according to La Jolla Light.