New
homes could get more expensive in the coming months as a shortage of suitable lots
are driving up builders' costs. In 27 leading markets, the average price
of a finished lot ready for building was up 40 percent in the second quarter
from a year ago, according to John Burns Real Estate Consulting. Even
steeper increases have hit some markets that have also seen strong gains in home
values and demand. Year over year, finished lot values were up 87 percent
in San Francisco and Oakland, 75 percent in Atlanta and 70 percent in Las
Vegas. The big jumps are "making up for lost ground" during the
housing downturn when lot prices fell, says David Crowe, chief economist for the
National Association of Home Builders. The higher lot prices may
foreshadow higher home prices months from now. Finished lot prices represent
almost 22 percent of a new home's price, Crowe says. Builders expect
future home prices will cover their higher lot costs.
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can view the updated employment report and Real Estate News at:
- Michael Corboy
www.specialtyfinancialmtg.com
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