Home Front

A blog about the economy and the Sacramento-area real estate market.

August 10, 2009
Bad June swoon for Sacramento-area homebuilders
Ouch! Homebuilders in Sacramento, El Dorado, Placer and Yolo counties reported their second worst sales month of 2009 in June, selling just 197 homes, condominiums and townhouses, the California Building Industry Association reported about an hour ago.

These things happen. But the regional sales tally was the lowest since January, when builders sold 163 homes, reported the CBIA, a trade group for state homebuilders.

It rather flies in the face of more encouraging news nationally on the new-home construction front. But sales are still very weak here as builders face significant competition from discounted bank repos. These repos still account for more than half the region's sales.

Monthly sales totals in the four-county area by month:
Jan: 163
Feb: 201
March: 297
April: 290
May: 346
June: 197
 June sales fell 43 percent from May, and were down 57 percent from June 2008, according to Costa Mesa-based Hanley Wood Market Intelligence. The firm compiles statistics for the CBIA monthly sales reports.

Statewide, builders reported 2,607 June sales. That was 13.6 percent fewer than in May and down 26 percent from the same time last year. CBIA execs called it weaker than expected and called again for the state Legislature to extend a $10,000 tax credit for buyers of new unoccupied homes in the state. The tax credit, which began in March, ran out in July due to better-than-expected demand. 

Monday, the National Association of Home Builders, also called on Congress to extend the nation's $8,000 first-time buyer tax credit for another year.

Hanley Wood research executive Jonathan Dienhart said today he expects statewide sales to match last year's levels in coming months. But he cautioned in a statement, "It will definitely take a longer time to start mounting a significant recovery with home purchase tax credits due to expire and the broader economy continuing to struggle."

Builders in the four-county Sacramento area plus Yuba and Sutter counties sold 1,764 homes the first half of 2009, Hanley Wood reported. That puts them on track to finish well behind last year's 4,847 sales.

Top capital builders during the first half of 2009, according to Hanley Wood:
1) KB Home of Los Angeles,  161 sales, 9.1% market share.
 2) Dallas-based Centex Homes, 143 sales, 8.1% market share.
3) Miami-based Lennar Homes, 132 sales, 7.5% market share.
4) JMC Homes of Roseville, 123 sales, 7% market share.
5) Beazer Homes, headquartered in Atlanta, 112 sales, 6.3 percent market share.

Other builders in the top 10: Arizona-based Taylor Morrison, Michigan-based Pulte Homes, New Jersey-based K. Hovnanian Homes, Michigan-based Del Webb and Texas-based D.R. Horton.

 As an aside, the combined entity of Pulte, Centex and Del Webb - the result of a Centex/Pulte merger to be finalized later this year - accounted for 299 of the region's 1,764 first-half sales, a whopping 17 percent market share.

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