We reported last month limping new home sales stats and despite the multifamily sector experiencing the highest levels of optimism since 2006, this month marks a dark moment in new home construction’s history as February’s housing start numbers experienced their biggest decline since 1984 (when Cyndi Lauper hit us with Time After Time) and approved building permits are at their lowest level ever. EVER!
For the industry cheerleaders saying the recovery has started, tell that to the builders who not only had the rug pulled out from underneath but their kneecaps broken as they fell to the floor. Housing starts dropped 23% in February which barely beats April 2009’s record low.
Even economists that have been predicting a slow spring for builders are stunned. Building permits fell 20% to a record low and the National Association of Builders keeps up the monotonous finger pointing at construction lending as they have for years (despite loans being made on the continually high inventory levels).
Foreclosures remain the biggest threat to builders who in previous years were the kids on the block that could wheel and deal. The good news lies in the investment sector- if your clients are looking to invest, home builders are in a position to bargain. Oh, and if you go into a national builder who says they’re already offering all they can (free blinds and 1 point toward closing) and that they’re doing well, print out this article and hand it to them to see if the onsite knew the historical milestones hit last month.