Orange County homebuilders are trying to sell their largest supply of completed new homes in 12 years.
According to Metrostudy, local builders had 1,022 newly constructed residential units ready for immediate sale in the second quarter, up 340 or 50 percent in a year. That’s the highest level since the end of 2006. For those who get antsy about overbuilding, builder inventories averaged 458 in the previous boom years of 2004-2007.
1926 cottage on Laguna Beach Charm House Tour selling for $2.29 million
Lease doc: Contract ambiguities can work in a tenant’s favor
Irvine mansion offered as a rare short sale for $7 million
Allen Buchanan: Why hire a broker – just do it yourself!
Signed a contract? The fun is just beginning
This growing supply comes as Orange County builders may have cooled their construction pace. Metrostudy found 2,780 residential units under construction, off from the recent peak of 3,087 in last year’s third quarter — the fastest development pace since 2006. Note: Construction averaged 3,012 units in 2004-2007.
One change in how builders work is constructing smaller communities. That increases the number of model homes to sell: 386 in use in the second quarter, up 12 in a year. Models averaged 274 in 2004-2007.
And builders have amped up their inventories of ready-to-build lots. The 6,208 available in the second quarter was down 841 (12 percent) in a year but lots counts averaged 2,385 in 2004-2007.
Builders aren’t the only home sellers facing rising inventories. ReportsOnHousing says there were 7,011 existing homes and condos listed for sale as of Aug. 23, the largest supply of resale housing on the market since September 2016.
CoreLogic reports builders are successfully juggling the greater supply, so far. In the 22 business days ended July 11, 429 new homes were sold — up 16 percent in a year. Sales of existing homes fell by 6 percent.
Let’s not forget the homebuilder’s high-end target audience: New home median sales price of $896,500 vs. $735,000 for the overall market.
How many Californians can ‘afford’ their home?