“Numerology” tries to find reality within various measurements of economic and real estate trends.
Buzz: In an era where home sales run sluggishly, a new community of 43 single-family homes in San Juan Capistrano sold out in less than 10 months.
Source: My trusty spreadsheet looked at home sales data from CoreLogic and Zonda.
Fuzzy math: Why are builders having better luck at home sales than the market for existing homes?
Topline
At the Petra neighborhood, located just south of the 5 Freeway/Ortega Highway interchange, Landsea Homes was selling detached houses ranging from 1,759 to 1,964 square feet with three or four bedrooms and two-and-a-half bathrooms. The average contracted price was $1.24 million.
“Demand for our new single-family detached homes at Petra was incredibly strong from the start and continued throughout the lifecycle of the project,” said Patrick Higgins, a Landsea vice president.
Petra’s four-sales-a-month pace is faster than the 3.3 sales seen at the typical project in Los Angeles and Orange counties recently, according to market tracker Zonda. And that regional sales speed is up from 1.9 sales in a month in 2019 and 2.9 in 2017.
“Based on history and current market trends, Landsea’s San Juan Capistrano community sold quite well,” said Ali Wolf, Zonda’s chief economist.
Details
Homebuying overall has slumped due to mortgage rates doubling to nearly 7% over the past year.
Builders are faring better at sales because they’ve lowered prices, offered help with closing costs and/or rate buydowns and have homes to sell.
The resale market has stalled because housing is so unaffordable. Even current owners are balking at buying, and that keeps many homes off the market.
Look at June’s results for Orange County from CoreLogic: Builders completed 1,054 sales. Yes, that’s down 12% from a year ago but resales of existing residences had a 31% dip in the same period. So builders had 9.1% of all sales vs. a 7.3% share a year…
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