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Citi talked to private homebuilders around the country and found a consensus that new home sales will flatline for the rest of the year.70% of builders surveyed said that July sales were flat or down from June, when the data was already down 1% from May.
In the important California market, the five builders surveyed all sound negative. From a note this morning:
“I am hopeful that the debt deal, along with the ‘stronger second half’ that economists keep talking about will boost our sales and buyers confidence. However I am not confident that it will happen. There is a lot of reason to be hopeful with pent up demand, reduction in household formation, etc. However, the timing of the improvements from these things is uncertain and could be in six month or in two years.”
“Debt and equity continue to be available and getting easier to obtain, although some providers of both are nervous about the economy and are pulling back a bit in the last two months.”
“We do not expect any improvement in the market for the remainder of this year. The best we are hoping for is a recognition that prices have hit bottom and maybe a little improvement in absorptions in the fall.”
“The land market seems very quiet, except for one offering in South Orange County.”
“It has been a quiet summer. It feels like everyone is still on vacation.”