New Home Construction Picks Up Pace

March 25th, 2009

Filed under: Uncategorized

New home construction picked up in February and surprised economists. The Commerce Department said sales rose 4.7 percent to a 337,000 annual pace, the fastest increase since April last year. The inventory of homes available for sale in February was at 330,000, the smallest since June 2002. The February sales pace left the supply of homes available for sale at 12.2 month’s worth.   In Clallam County and Sequim and Port Angeles, it has been slow going for new home construction, but some are still building.

The news has focused lately on bad news, and no doubt there is plenty of bad news, but there is also a large contingent in our population who are financially doing just fine and are shopping for their next home. Some are looking at existing homes, but many are still planning to build their own dream home. For these people, the timing could not be better, and with careful planning and wise decisions, by virtue of timing and events, they have won the lottery.

I do have a concern for buyers who are ready, willing, and able, but who are in a waiting mode because they are thinking that somehow the future will be better than the present. The spending our federal government is doing to help the economy recover, including the injection of $1.2 trillion dollars is going to create inflationary pressure on two sides: interest rates will be pushed higher very soon, and price inflation on products and services (including lots and homes) will at some point gain momentum.   This will quickly end the perfect storm opportunity for buyers, and when it starts to happen, there will be no going back.

I recommend planning and moving forward, if you are in a position to buy or build, not rashly and not without good counsel, but in a way that allows you to take advantage of this extraordinary time we find ourselves living in.

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