New-home construction rises???

[DavidS]

New-home construction logs unexpected gain: Financial News - Yahoo! Finance

WASHINGTON (AP) -- The number of new housing projects that builders broke ground on in February rose sharply, defying economists' forecasts for yet another drop in activity.

The Commerce Department reported Tuesday that construction of new homes and apartments jumped 22.2 percent from January to a seasonally adjusted annual rate of 583,000 units. Economists were expecting construction to drop to a pace of around 450,000 units.

 

[mascale]

In Weird Los Angeles, which even has a newspaper, bucking the trend--and going against the grain--is itself actually normal.

"Hopes Stir In Housing Market," is front page March 18 story. Mostly, the Irish Pubs on the Westside had lines forming: Way before the sun went down., (and likely before lunch).

So with things looking up, what is the news? The six Southern California counties turned in a 41.3% increase in home sales compared with February, 2008. The median selling price was down about the same percentage from last year: But was unchanged from January, 2009.

Even in pop culture advertising: You can't have a bottom without Southern California. And you can't have a tan without Coppertone!"

"Crow, James Crow: Shaken, Not Stirred!"
(Now watching Her Majesty's former aborigines--Now Post-Davos, like the PM accurately suggested--just magically discovering their bottoms again.)

 

[auditor0007]

New-home construction logs unexpected gain: Financial News - Yahoo! Finance

WASHINGTON (AP) -- The number of new housing projects that builders broke ground on in February rose sharply, defying economists' forecasts for yet another drop in activity.

The Commerce Department reported Tuesday that construction of new homes and apartments jumped 22.2 percent from January to a seasonally adjusted annual rate of 583,000 units. Economists were expecting construction to drop to a pace of around 450,000 units.

This is wonderful news; more homes on the market to help drive prices down further.

 

[waltky]

Recession in the home building industry continues...

Building permits fall to all-time low
March 16, 2011 -- The housing market just can't seem to catch a break. The number of permits issued in February for future housing construction fell to a new all-time low, according to a government report released Wednesday.

Building permits fell to an annual rate of 517,000 permits last month, down 8.2% from a revised 563,000 in January, the Commerce Department said. That was the lowest level seen since the government started tracking the figures in 1959, and much worse than economists had expected. Uncertainty about the job market and rising gas and food prices are still keeping potential homebuyers on the sidelines, even as mortgage rates and home prices are at attractive lows. "It's consumer nervousness," said David Crowe, chief economist with the National Association of Home Builders. "It's a fragile recovery to begin with, and then you throw in high energy costs, new uncertainties about Congress, and it's just enough to spill over the glass again."

Builders rushed to secure permits in December and start building in January to get ahead of new zoning laws, but that effect should have been minimal on February's numbers, Crowe said. Instead, both permits and new construction remain more than 20% below their prior-year levels. "Bottom line is that here in the 20th month of the economic recovery, the sector that normally leads both recessions and expansions has yet to gain any traction," David Resler, chief economist for Nomura Securities, said in a research note. New home construction also dropped more than expected in February, falling at its fastest rate since March 1984.

Housing starts, the number of new homes being built, fell 22.5% to an annual rate of 479,000 in February, down from a revised 618,000 in January, the Commerce Department said. Economists had forecast the figure to fall no further than 545,000 in February. Single-family home construction fell 11.8% during the month, but a huge decline in apartment building was an even bigger drag on the overall number. Construction of buildings with five units or more -- which tends to be volatile month-to-month -- fell 47% in February, after surging 80% the month before.

Source

 

[American Horse]

New-home construction logs unexpected gain: Financial News - Yahoo! Finance

WASHINGTON (AP) -- The number of new housing projects that builders broke ground on in February rose sharply, defying economists' forecasts for yet another drop in activity.

The Commerce Department reported Tuesday that construction of new homes and apartments jumped 22.2 percent from January to a seasonally adjusted annual rate of 583,000 units. Economists were expecting construction to drop to a pace of around 450,000 units.

I would expect the cost of drywall, cement/concrete, glass, HVAC/furnaces and lumber to go up just like it has in the past when we had domestic disasters such as hurricane's in Florida.

Prefabricated building systems like trusses or engineered or steel beams won't change much.


Energy costs such as gasoline or diesel fuel don't have much impact.
Consider how much an extra hundred dollars worth of fuel (on top of the status quo ante) will add to a product when a 100,000 pounds is transported, and then sold by the piece or individual bunk. S
Say a bunk of 350 studs costs $10 more to get to the yard; that's an increase
of $0.03 per stud increase.

 

[American Horse]

Builders aren't holding back because of fuel costs.
They are holding back because they already have unsold inventory, or they realize they can't compete with the distressed inventory that is held by others. If they go ahead and build it speculatively they stand a very good chance of working for nothing.

Some will have to start something, but mostly builders will do just enough to survive. In a case like that they might build a singly unit and do as much as they can with one key employee and work at it themselves. The big companies like TK-Constructors will go ahead with any project they have customers for. And that particular company (one of the biggest) has no land acquisitions, and they only build for customers.