Builders broke ground on more new homes nationwide in March, although the increase missed expectations.

Housing starts climbed 2.8% from an upwardly revised February to a seasonally adjusted annual rate of 946,000, the Commerce Department said Wednesday. Economists polled by Bloomberg News called for a rate of 970,000.

The missed expectations come as builder confidence wavers. More builders now see the market for new single family homes as poor rather than good, according to a survey from the National Assn. of Home Builders.

Despite a rapid housing recovery last year, builders have yet to ramp up construction to historically normal levels. Holding them back, they say, are a shortage of ready-to-built lots and skilled labor.

Traffic from prospective buyers has been particularly poor, however.

Part of that is an overhang from winter, and builders expect more robust traffic during the spring home buying season. Still, rapid price surges last year have hampered demand as well. With income growth still meager, buyers have struggled to adjust.

Many economists blamed severe weather for much of the poor construction numbers in recent months.

In March, starts rose 65.5% in the Midwest and 30.7% in the Northeast, two areas that had been crippled by winter weather. Starts fell in the South and the West, a major home building region largely spared the harsh winter.

March’s construction gains came on a 6% rise in single family home starts nationwide, a less volatile sector than multifamily construction.

Building permits, a gauge of future construction, fell 2.4% from February.

 

 

Home prices in Southern California are at their highest level in six years, according to new data, though those gains may be taking a bite out of sales volume.

The median price of a house sold in Southern California rose from $383,000 in February to $400,000 in March, the market’s highest level since February 2008, according to San Diego-based DataQuick, which tracks real estate data.

The figure is up 15.8% from the same month last year and is the first noticeable increase since the torrid run-up in prices last spring and summer.

At the same time, the number of sales fell on an annual basis for the sixth straight month as investors and cash buyers pull out in the face of higher prices, and more traditional home buyers hesitate to jump in. There were 17,638 homes sold in DataQuick’s six-county Southern California’ region, down 14.3% from last March and the second-lowest total for the month — the start of the key spring home-buying season — in nearly two decades.

“Southland home buying got off to a very slow start this year,” said DataQuick analyst Andrew LePage. “We see multiple reasons for this: The inventory of homes for sale remains thin in many markets. Investor purchases have fallen. The jump in home prices and mortgage rates over the past year has priced some people out of the market, while other would-be buyers struggle with credit hurdles. Also, some potential move-up buyers are holding back while they weigh whether to abandon a phenomenally low interest rate on their current mortgage in order to buy a different home.”

The data also show how the recovery is being felt differently at different segments of the market.

While prices have climbed fast on lower-priced homes, the number of sales has fallen sharply, suggesting a lack of homes for sale and buyers who can afford them. Sales of homes for less than $500,000 dropped 26.4% from this time last year.

Meanwhile, at the higher end, price and volume continue to rise, with sales of homes worth more than $500,000 up 2.9% from last year. Sales of homes worth more than $800,000 climbed 5.4%.

Across the region, prices grew fastest in San Bernardino County — up 21.1% to $230,000 — and Riverside County — up 17.8% to $288,500 — and slowest in Ventura County, up 6.6% to $430,000. The number of sales fell just 5.8% in Orange County, but was down 22% in Ventura County.

 

 

If housing demand has softened, someone forgot to tell home sellers.

Sellers have pushed asking prices on their homes to a five-year high, but they are facing slightly more competition than they were one year ago.

Data from the website DeptOfNumbers.com, which tracks inventory and listing price information for 54 large metro areas, shows that inventories are up 7% from a year ago.

A few key takeaways:

—It’s now clear that for-sale inventories probably hit bottom last year after sustained declines that began in 2010.

—While the year-on-year increase through April is large compared to the last few years, the increase is coming off of the lowest levels of for-sale homes in at least a decade.

—Yes, there are signs all around that demand has cooled over the past six months, particularly in some of the most volatile housing markets across the U.S. southwest. But the national picture shows that home supplies are still relatively low. The number of homes for sale is still 15% below the level of two years ago.

Home prices began their rebound two years ago due to short supplies of homes for sale and rising demand. Inventories fell as banks liquidated large numbers of foreclosed homes.

Inventories have stayed low for a number of reasons. Millions of homeowners still owe more than their homes are worth, even though values are up by around 11% over the last two years, according to Zillow Inc. Millions more have a little bit of home equity but are unwilling to sell for less than either the price they paid or the price they think their home should be worth. Meanwhile, some homeowners may be less incentivized to move because they locked in a super-low mortgage rate in 2012 or 2013.

Low inventories have given sellers more pricing power, though there are questions over whether sellers may be getting too greedy in the aftermath of last year’s jump in mortgage rates. Median asking prices, while still up by double digits from a year earlier, have seen their pace of increase flatten out at around 11%. For the 54 metro areas tracked, the median asking price stood at $269,020 in April, the highest level since July 2008.

Home prices are expected to rise around 4% this year, according to the latest forecast from analysts at Goldman Sachs. But they note that the greatest risk to that forecast is that low inventory persists, in which case home prices will overshoot their forecast

“If homeowners with negative equity or in a money-losing position choose to wait for further house price growth before listing their homes and moving, and if construction of new homes stays far below normal, inventory on the market will remain low, leading to larger price appreciation than our central forecast suggests,” wrote Hui Shan, a strategist at Goldman.

Follow this data closely over the next few months to see if the pace of asking price gains slows down. This will be a sign that sellers are throwing in the towel after being too aggressive earlier this year. On the other hand, if inventories decline further, then price appreciation could stay elevated.

South County Sanitary Service will be conducting their Spring Clean-Up Week April 21 – 25, 2014. Grover Beach’s Day is Tuesday April 22, 2014. This service is provided FREE to single family residential customers. Charges apply to some bulky items. For more information or to arrange for pickup of bulky items, please contact South County Sanitary Service at (805) 489-4246.

Spring Clean-Up Week April 21 – 25, 2014 Flyer

What would you do if you went to a store and found bare shelves and high prices? If the answer is come back later, then you have a good idea of how home shoppers are feeling as real estate heads into the important spring selling season.

In March, the traffic of potential home buyers was down a little more than a third from March of last year, according to a monthly survey of real estate agents by Credit Suisse. The survey tracks 40 big U.S. home markets, and traffic was down in two thirds of those cities.

That was well below what real-estate agents were hoping for and suggests there could be a dark cloud over real-estate sales in the coming months. Credit Suisse said comments from real-estate agents included that sellers were backing out of listings, buyers are frustrated by the lack of homes for sale, and that the strongest segment remains luxury new homes.

Of course, some markets remain hot, such as most of Texas: Austin, Dallas, Houston and San Antonio had strong traffic and pricing.

The buyer slowdown has been worst in markets that might be described as boomerang cities: Places like Phoenix, Las Vegas and Riverside, Calif., where home prices were crushed during the recession but have snapped back as much as 20% over the past year, according to CoreLogic.

Efforts to overhaul the U.S. housing-finance system could hinge on how far Congress is willing to go to ensure that young, low-income and minority home buyers can get mortgages.

A bipartisan bill drafted by Senate Banking Committee leaders Tim Johnson and Mike Crapo relies on incentives to persuade financiers to lend to groups with higher risk profiles. Consumer and civil-rights organizations are pushing instead for a mandate that those groups must be served, a concept that has become a political flash point since the housing bubble burst.

Key Democrats on the banking panel whose support is needed to pass the measure may vote against a bill that doesn’t include a mandate, especially as mortgage borrowing has dropped among blacks, Latinos and first-time buyers.

The Arroyo Grande Recreation Services Department presents its annual Family Egg Hunt and Festival on Saturday, April 19, 2014 at 10:00 a.m. at Elm Street Park.

View Press Release