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Although 2011 was among the slowest years ever for single-family construction starts, observers say builders across the country are preparing to commence work on new developments.

The National Association of Home Builders’ Chief Economist David Crowe says 2011 starts came in around 425,000, down from the previous low of 442,000 in 2009, with declines in consumer confidence helping to pinch the number of groundbreakings. According to Census data, single-family homes account for just 2.3 percent of the 9 percent increase in starts in November.

Meritage Homes CEO Steve Hilton does not expect construction activity to return to 2005 and 2006 levels, but he does expect a pick-up this year and for starts to reach 800,000 to 1 million during the next few years.  The company will break ground on homes in Tampa in the first quarter, moving to the Sunshine State to take advantage of what Hilton expects will be one of the strongest housing markets in the coming years.

Meanwhile, Toll Bros. is setting its sights on Dallas, Houston, and the Washington, D.C., to Boston corridor, hoping to capitalize on pent-up demand as consumer confidence rises.  Other builders ramping up production include Lennar, focusing on the Pacific Northwest; and Pulte Group, which plans projects in northern Virginia, Texas, and the Carolinas.

Zelman & Associates CEO Ivy Zelman says builders must compete with a glut of existing homes; and they are pulling back on square footage, options, and upgrades to make their offerings more affordable.  She says an increase in household formation, a low supply of new homes, more tenants seeking to buy as rents rise, stabilizing home prices, and investors looking to buy single-family homes to rent out have combined to give a boost to the new-home market.

Source: “Will Homebuilders Dig Out of Their Holes This Year?” Investor’s Business Daily (01/06/12)

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If you are in need of an owner’s representative for building your own dream home in Aspen or Snowmass, Colorado or simply need to know how to go about building a house as an absentee owner in the Aspen  area or the surrounding communities of Snowmass, Snowmass Village, Woody Creek or Basalt, Colorado, we are happy to assist! Please give us a call today at 970.948.8258 for a FREE consultation

New-home construction and building permits — a future gauge of construction — surged last month, slowly helping to pull the new-home market out of one of its worst years for home building.

Builders broke ground on more homes in November, a 9.3 percent increase over October, reaching the highest level since April 2010, the Commerce Department reported Tuesday. Year-over-year, new-home starts were up 24.3 percent in November.

Home construction increased to a seasonally adjusted annual rate of 685,000 homes in November. However, while it’s an improvement, the rate is still below the 1.2 million home pace that economists consider healthy for the new-home sector.

November’s increase was mostly driven by construction of multi-family homes with at least two units, which soared 25.3 percent in November. Construction of single-family homes increased 2.3 percent for the month.

Building permits jumped 5.7 percent in November, the highest increase since March 2010, with the increase mostly driven by apartment construction permits.

Builders Feeling More Confident

Meanwhile, for the third consecutive month, builder confidence in the new-home market continued to edge up, according to the National Association of Home Builders/Wells Fargo Housing Market Index for December. The index is at its highest point since May 2010.

While the index reached 21 in December, it is still far below 50, a reading which indicates more builders view conditions as good rather than poor. The index hasn’t reached that point since the housing boom in April 2006.

“While builder confidence remains low, the consistent gains registered over the past several months are an indication that pockets of recovery are slowly starting to emerge in scattered housing markets,” Bob Nielsen, chairman of the National Association of Home Builders, said in a statement. “However, the difficulties that both builders and buyers continue to experience in accessing credit for new homes are holding back potential sales even in areas where economic conditions are improving.”

Source: “Apartment Construction Spurs 9.3% Jump in Housing Starts, But Level Remains Low,” Associated Press (Dec. 20, 2011); “U.S. Nov. Housing Starts +9.3% to 685K; Consensus +0.3%,” Dow Jones International News (Dec. 20, 2011); and National Association of Home Builders

If you are in need of an owner’s representative for building your own dream home in Aspen or Snowmass, Colorado or simply need to know how to go about building or remodeling a house as an absentee owner in the Aspen  area or the surrounding communities of Snowmass, Snowmass Village, Woody Creek or Basalt, Colorado, we are happy to assist! Please give us a call today at 970.948.8258 for a FREE consultation