91视频

Home builders pessimistic about industry outlook

By: Nick Bjork//August 15, 2011//

Home builders pessimistic about industry outlook

Nick Bjork//August 15, 2011//

Listen to this article

Home builders around the country remain pessimistic about the outlook for the industry. Then there’s Oregon.

The National Association of Home Builders/Wells Fargo Housing Market Index, an indicator of builder confidence in the market for newly built, single-family homes, came in at a score of 15 in August. That’s roughly the same level the score has stayed at over the past year.

The lack of improvement in the index serves as confirmation for builders nationally who say they don’t see an end to the woes of the residential market. But locally, builders don’t believe the industry is all doom-and-gloom.

The Housing Market Index, derived from a monthly survey conducted by the NAHB, gauges builder perceptions of current-market, single-family home sales as well as sales expectations for the next six months. The survey also asks builders to rate traffic of prospective buyers.

Scores of each component are then used to calculate a seasonally adjusted index where any number over 50 indicates that a majority of builders view conditions as good; a score below that indicates more builders view conditions as poor. Scores over the last year have hovered between 13 and 16.

Regionally, the Housing Market Index results were mixed in August. While the Northeast posted a four-point gain to 19 and the West posted a one-point gain to 15, the South held even at 17 and the Midwest posted a two-point decline to 10.

Local builders admit that the Portland area housing market is moving slow. But they don’t necessarily view the situation as dismal.

Brad Hosmar, chief operating officer for the Portland-based firm Arbor Custom Homes, said that even though there is no doubt that the market is still soft, homes are getting built.

鈥淲hat we’ve done, and what I think a lot of builders have done, is return to the principle foundations of the business: location and pricing,鈥 Hosmar said. 鈥淲e’re not building as many homes, but we are building.鈥

Hosmar added that while the companies around town may not be building as much, all the builders that are still around have found a way to not only break even, but make a little money as well.

鈥淲e may not be building anywhere near the numbers we were in April of 2006, but we’ve been able to match our overhead with our production,鈥 he said. 鈥淓veryone has right sized themselves.鈥

Building permit numbers show that Portland is improving. New single-family permits in June of 2011 were up almost 60 percent from the same period one year earlier, said Ross Caron, a spokesman for the City of Portland Bureau of Development Services. But there’s no telling if those numbers will hold true moving forward.

New home construction is improving even faster in Bend than in Portland, even though the numbers for the Central Oregon city are nowhere near where they were in peak years.

Bend saw 345 single-family home building permits pulled in the 2010-2011 fiscal year. While the rolling 10-year average for Bend is around 1,000, the numbers from the most recent fiscal year are an improvement from the 253 single-family permits pulled in FY 2008-09 and the 174 pulled in FY 2009-10.

While numbers from around the state that show improvements over record lows from the past few years are reason for them to celebrate, builders are still holding a little caution in reserve.聽 Hosmar and other builders have learned a tough lesson: builders can build in the right areas with the right types of houses, but no one can force someone to buy those houses.

鈥淭he uncertain economic climate and concerns about job security are discouraging many potential buyers from exploring a home purchase at this time,鈥 said David Crowe, chief economist for the National Association of Home Builders. 鈥淲hile buying conditions are very favorable in terms of prices, interest rates and selection, consumers are worried about what the future will bring, and builders are echoing those sentiments in their responses to the (Housing Market Index) survey.鈥

鈥淏uilders continue to confront the same major challenges they have seen over the past year,鈥 said Bob Nielsen, chairman of the National Association of Home Builders and a home builder himself in Reno, Nev. 鈥(These include) competition from the large inventor of distressed homes on the market, inaccurate appraisal values, and issues with their buyers not being able to sell an existing home or qualify for favorable mortgage rates because of overly tight underwriting requirements.鈥



News

See All News

Commentary

See All Commentary

COMMUNITY CALENDAR