Connect with us

Hi, what are you looking for?

The American GeniusThe American Genius

Economic News

Home builder construction spending down, expensive land may save builders

Construction spending is down

According to the Department of Commerce, construction spending dropped 1.4% in February for a third month in a row of declining spending. The value of all projects is at its lowest since October 1999 and the spending pace is at its weakest point since April 1997.

Homebuilders’ construction spending decreased 3.7% and new home sales, permits, starts and stocks are at historic lows.

Builders hedging their bets

Despite the disastrous news for the new home sector, several “homebuilders are buying expensive land that threatens to squeeze their margins further,” according to Reuters.

Helen Chirnikoff writes, “Builders hope a housing market recovery will justify their investment, but in the meantime, to stay in business they must buy land and build on it in the knowledge that profits are going to be scarce even in so-called “healthy” markets.”

Advertisement. Scroll to continue reading.

Maybe it’s not the worst bet given that the S&P Case-Shiller shows a decline in home prices in all markets but San Diego and Washington, D.C. where expensive land buys could help a national builder carry their lagging markets.

Tara Steele is the News Director at The American Genius, covering entrepreneur, real estate, technology news and everything in between. If you'd like to reach Tara with a question, comment, press release or hot news tip, simply click the link below.

14 Comments

14 Comments

  1. Sarah

    September 28, 2011 at 4:43 pm

    Interesting strategy for the builders. It will be a wild ride no matter what the result, that's for sure

Leave a Reply

Your email address will not be published.

The
American Genius
news neatly in your inbox

Subscribe to our mailing list for news sent straight to your email inbox.

Advertisement

KEEP READING!

Real Estate Technology

(TECH NEWS) It turns out that Internet of Things, like smart bulbs in homes, are not secure and give up your info - here...

Real Estate Marketing

(MARKETING) Your fancy, self-animating website might be making people violently ill, even if it is insanely beautiful. Sorry...

Real Estate Marketing

(MARKETING) Conduit is a CRM that does more than CRM, it analyzes your networking data to help you see how to improve your relationships.

Real Estate Corporate

(REAL ESTATE) Zillow has long been a data powerhouse, but a lawsuit about a $150M listing offers a look into listings claims.

The American Genius is a strong news voice in the entrepreneur and tech world, offering meaningful, concise insight into emerging technologies, the digital economy, best practices, and a shifting business culture. We refuse to publish fluff, and our readers rely on us for inspiring action. Copyright © 2005-2022, The American Genius, LLC.