Sacramento New Home Construction
Remember last week when we considered the bulls’ and bears’ impressions of recent market boosts? It’s getting a little harder to be bearish: A pair of new reports — both here in Sacramento and a broader national outlook — explore the ways builders are looking to fill in housing inventory shortages. But with values up and a lot of “shadow inventory” also still on the books for lenders, we at can expect HUD homes, bank-owned properties and other REO listings not to be far behind.

For starters, here’s Zillow’s broad view on the recovery, via HousingWire:

“Inventory will likely remain below year-ago levels for a while yet, as builders ramp up capacity and sellers wait to squeeze every drop of equity from their home before listing. But a corner has been turned. Going forward, as this new supply makes its way to market, we expect the pace of home value appreciation to slow down from unsustainably high annual levels of 5% or above to more moderate levels closer to historic norms of 3% or 4%.”

Now, about those builders: Here’s a report putting construction companies’ confidence at 7-year highs, while in Sacramento, local builders describe the readiness of local residents to explore housing changes:

[P]opulation will increase by rates from 1 percent to 1.6 percent annually. In a region with about 2.2 million residents, that means adding 22,000 to 35,000 people a year. […]

“We’re seeing nearly 40 percent of our buyers coming out of rental situations,” said Chris Cady, Central California division president for KB Home. “That signals to me their confidence level is up, and they’re ready to make that purchase decision.”

As home prices rise, and current homeowners regain equity, many will move, industry leaders said. Some might need a bigger house because their families have grown; others will want to downsize because their children have left.

Of course, not all of these prospective buyers are going to jump into new construction — at least not with four or five years to wait before builders are back up to speed and sellers take increasing advantage of a hot market.

So where does that leave us? I can help you secure, market and close your REO property! To learn more, or if you’re interested in making an offer on one of the numerous listings available now at, contact me today!

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