New Home Construction is Remarkable - Plenty to Say
The November Real Estate Forecast article projected that we could see a very strong month for new construction starts, completions, and units under construction. It also projected the potential for a very strong new home sales month for November and a strong existing home sales month. The questions asked were if the hurricanes that hit Texas and Florida would impact those homes already under construction or under contract. The official supply for new homes and existing homes are at historically low levels. The November forecast article projected that:
The range in possibilities is due to growth rates from October to November and from November to November are very weather specific. Some of these level projected seem unrealistically optimistic, except when you consider that the new construction market is "returning to normal" after a decade of sub-normal levels of activity. New and Existing home sales prices are at record or near record levels for any month of this year. If people are no longer upside-down on their existing homes (owing more money than the home is worth,) they can "move-up" to a larger existing home or buy a more expensive new home. What happened this November?
The number of November Starts number was up from Last Year - Down from Last Month - This is normal. There were 67,900 single family starts. This fell within expectations. We are significantly ahead of where we were last year for the current year starts with 797,800 starts during the first eleven months. We saw 789,300 during all of last year. We are trending toward 900,000 starts The Rolling Year data, the data from the past twelve months stands at 845,000 units and continues its climb. We are seeing more starts than November 1991. This is an accomplishment. We are not quite on track with 1992 or 1993. The Current year data is above the rolling year trend line so the new construction data is expanding.
The Under Construction data was just about as was expected. The under construction data was better than last month and better than last November. The level of 1.110 million units is higher than it was during November 2007-2016. This might not be mentioned anywhere else. It is good news. Good news doesn't sell on most networks or in most newspapers. It's not bleeding. It's not leading.
The Completions data came in at 93,000 units - Better than 2015, not quite as good as 2016. The completions data. It was thought that we could see a spike in completions because we saw a spike last year. The good news is that we are still on track with 1992. We could see a surge in completions next month as builders attempt to get homes off their books. The Rolling Year data is better than 1992 and not quite as good as 1993. There was a slight downward tick in the RY value from last month. The overall trend is still higher month over month. The CY data is trending higher than the RY data so completions are still expanding.
Overall, the data was good. The data could have decreased month to month for starts and completions. They did so. The November to November data could have improved and they did. New construction and new construction sales took a huge hit during the recession. The Recovery continues.
It's the economy.
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