Triangle homebuilders that have spent the last few months replenishing their stockpile of land are beginning to crank up their construction arms as the supply of new homes dwindles, the News & Observer reports.
The number of new homes started in the Triangle jumped 74 percent in the first quarter compared with the same period a year ago, according to the research firm Metrostudy. Over the past year, the inventory of new homes on the market has dropped 13 percent to a little over four months of supply, the lowest level in six quarters.
“There just aren’t as many new homes out there as there have been,” said Tim Minton, executive vice president of the Home Builders Association of Raleigh-Wake County. “We’re not building them as fast as they’re being depleted right now.”
The 74 percent increase does come with a couple of caveats.
The first quarter numbers are being compared to the first three months of 2009 – a period when new home construction came to a near standstill across the country. The first quarter numbers also received a boost from the government tax credit program for first-time and repeat homebuyers, which expired April 30.
Still, the numbers are a positive sign considering that many other housing markets are having a hard time burning off the inventory of new homes left over from the boom years.
“It’s encouraging,” said Ed Dunnavant, who tracks Triangle housing trends for Metrostudy. “All of that could not have come from the tax credit.”
The uptick in housing starts is being felt further down the food chain by some suppliers and contractors whose business depends on new residential construction.
“We’ve seen a greater increase in sales here in this market in the last several months than we have in the balance of the organization as a whole,” said Jim Major, chief financial officer for Raleigh-based Stock Building Supply.
Stock sells windows, doors, roofing and other housing material in 20 U.S. markets. The company went through a bankruptcy restructuring last year that resulted in its abandoning 28 markets.
Stock remained in markets where it thought it could break even by summer.
“The Triangle is one of our largest and most important markets,” Major said. “We certainly expect its performance to reflect that fact.”
Metrostudy collects housing data in an eight-county region. While the 1,567 new homes started in the first quarter was a significant improvement over last year, it was still well below the levels the Triangle recorded before the housing bubble burst.
Between 2001 and 2005 the Triangle averaged 2,757 new home starts in the first quarter.
Among the many national builders that have increased their activity in the Triangle of late is KB Home, which is now building in subdivisions in Cary, Clayton and Durham.
Jeff Logsdon, executive vice president of KB Home Raleigh, said the company was pleased to see that orders for new homes did not fall off even after buyers knew their houses wouldn’t be completed in time to qualify for the government tax credits.
“Even after that moment in time, people were still buying,” he said.
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