HOUSING MARKET OVERVIEW

While overall new home starts and closings
remain weak, there was a slight increase from
last quarter (13%) in new home starts with
1,422. As the housing market weakened in
2007 and 2008, closings did not experience this
typical second quarter increase. It remains to
be seen, however, if this is a temporary blip
due to the “Home Run Grant” and $8,000 tax
credit or a more sustainable trend. The next
few quarters should begin to bring more clarity
to this question. It is clear however that the
market is near the bottom, if not already there,
as detached home inventory continues to
decrease. While annual detached starts
decreased 26% compared to last year at this
time, there was a 6% increase from last
quarter, totaling 2,756 homes. There were a
total of 1,006 new detached homes started
during 3Q09, which is a 15% increase
compared to 3Q08 and 18% more than last
quarter. Annual closings for detached homes
totaled 4,665, down 38% from last year,
however had a 5% increase quarter over
quarter to 1,266 (3Q09). The attached market
continues to slow as annual starts fell 52%
compared to last year with a current pace of
1,707 units. During 3Q09, there were only 416
new attached units started, which is down 36%
compared to last year and <1% from last
quarter. Annual closings shrunk 32% from last
year to 2,490 units with 556 during 3Q09.
The evaluation of new home activity by price
range shows the reversal of a trend in the
lower price ranges. New home starts priced
below $250,000, the largest segment of new
homes being built, has seen its market share
rebound in the past year. Currently, 54% of all
new home starts were below $250,000,
whereas the 3Q08 analysis shows that 43% of
starts were in this price segment. Closings for
homes above $400,000 continue to far outpace
starts as this product experiences large price
reductions and limited interest for new build
jobs.