New home sales fell in May, Y/Y & M/M. Theme of the month was sales decline by builder design. Few comments on demand slowing or skittish buyers, even w/new home prices +18% Y/Y nationally (survey record). Builder commentary from across the country per our survey to follow...
#Nashville builder: “Gapped out. Sales resume in June as new communities & phases start to open. By moving ability to contract on inventory homes later to finished drywall stage (window installation stage previously), expect sales to show continued decline. Decline by design.”
#Charlotte builder: “Paused sales from mid-May to mid-June in all communities & will selectively release homes for sale in the last 2 weeks of June & coming months. Sales look lower vs. last month but was capped due to limited lot availability & no inventory.”
#Atlanta builder: “Recalibrating sales strategy with delayed starts (until full cost transparency). Implemented escalation clauses, pre-sale fees, reduced co-op commissions, bid selections, & weekly price increases, with no reduction in demand currently.”
#Knoxville builder: “Sales per community appear to have gone down, but it's due to lack of inventory to sell. We could sell more, but we need more finished lots right now.”
#Birmingham builder: “Only have 1 community able to write contracts at this moment. All others have been put on hold due to excessive backlog & extended build times.”
#Orlando builder: “May sales were capped in 100% of communities. There will be a complete pause in 100% communities for June.”
#Jacksonville builder: “Our community in this market was capped on sales for May. June will be a temporary pause with no sales.”
#Tampa builder: “We have drastically restricted sales for the next 3 months while we reset.”
#Naples builder: “Just sold out & need to replenish communities.”
#Sarasota builder: “Sold out & need to replenish.”
#Phoenix builder: “Pausing in some communities to have more control over costs, manage backlog, & not gap out but still capitalize on margins.”
#ColoradoSprings builder: “Buyer waitlists are so long, we can confidently delay sales in order to deliver a better buyer experience over a shorter time, while doing our best to understand the market pricing deeper into construction process of home.”
#Denver builder: “Stopped selling or slowed releases in every community to take advantage of sales price appreciation & more appropriately price to costs. Fear cost increases will soon outpace sales price appreciation. Raising prices 2% per month & continue selling out monthly.“
#SaltLakeCity builder: “Shut sales down 2.5 months ago. Sold out of 2 communities & shut off sales in other 2. In 1 community we’ll sell last handful of lots with escalation clauses after significant price increases. In the other we’ll only sell homes at Sheetrock stage.”
#Austin builder: “1.5 month sales pause in all communities to get backlog under control & pace pricing with cost increases.”
#Dallas builder: “High prices impacting sales, but not to extent concerned w/future sales. Restricted sales in several communities. Went back to May/June starts w/contract counters of $30k-$60k & retained ~80%. Hard to know what real demand is since stopping/limiting sales.”
#Houston builder: “Deliberately slowed sales to maximize value of each sale & bridge gap until new sections come online. I have land through 2025 secured. Sell out is simply a gap out that we knew was coming due to development delays.”
#Chicago builder: “Sold all of the spec homes we had & are waiting to start anything new due to construction cost & land cost issues.”
#WashingtonDC builder: “Needed to slow sales because backlog is 11-12 months & we’re worried about further escalating costs during that time period.”
#VirginiaBeach builder: “Stopped sales until lumber stabilizes/declines 2 months in a row. Not going to chew up lots on low margin deals. Two communities sold out in current phase & have reservations on all lots in next phase in each community. Not releasing sales prices.”
#Boise builder: “We’re only building spec homes & are listing them at completion.”
#Bend builder: “Not listing homes until they’re in drywall, & they still sell before completion. Can't build fast enough due to subcontractor base issues & material availability.”
#Tacoma builder: “Temporarily paused all lumber package purchases until we can further evaluate the cost of building homes.”
#Reno builder: “Only thing that would prevent us from making our sales goal would be the inability to release more homes for sale. We’re slowing down our sales releases to let construction catch up & this will slow down our sales rate.”
#OrangeCounty builder: “Raising prices to an unprecedented percentage increase & our costs are outpacing us.”
#RiversideSanBernardino builder: “Sense we are nearing the capacities of our buyers with these price increases.”
#SanDiego builder: “Uncharted territory. Raising prices & we keep selling homes. Every time I'm glad we covered our costs with pricing, the costs go up more. Can't keep this up forever.” END OF🧵
• • •
Missing some Tweet in this thread? You can try to
force a refresh
