Analyzing July new home trends from our just published monthly builder survey. Top 3 themes: 1) Frenzy phase for housing is over, but still solid demand. 2) Fewer builders restricting sales. 3) Hitting price ceilings in more markets. Commentary from across the country to follow.
#Austin builder: “Builders are starting to offer incentives again to drive traffic and sales.”
#Dallas builder: “We have hit price ceilings in the majority of our submarkets.”
#Denver builder: “Already seeing prices flatten. Little buyer urgency in the market right now. Some is seasonal but feeling like the market is tapped out in pricing. Market is still very healthy but has lost its frenetic pace. Feels healthier and a bit more balanced.”
#SanDiego builder: “The frenzy is over, but things are still strong. However, you can feel the difference.”
#RiversideSanBernardino builder: “It doesn't feel like we're done with price appreciation. It feels more like a decline in the rate of increases. Prices have now reached a point where it is getting harder to qualify people.”
#Atlanta builder: “Major pause in the market w/on-line activity, which is 1/4 normal, w/leads way down & sales significantly down. Very little inventory to sell, mixed w/first 'seasonality' in almost 2 years. White hot frenzy from January to May of this year is clearly over."
#Charlotte builder: “No sales in June because we did not allow any and we had maximum that could be sold in July. Need to give production and design time to catch up on our backlog.”
#RaleighDurham builder: “The market can’t maintain its trajectory. If it does, local and long-term residents will be completely priced out of the market.”
#Greensboro builder: “We continue to experience delays in construction that stop our cycle build time, which limits our inventory and frustrates buyers, sellers, and trades.”
#Wilmington builder: “Just starting to put specs on the market again but trickling out based on stage of construction. Not preselling. Getting some price resistance now, but not backing off our price.”
#Nashville builder: “Starting to feel price hesitation, especially from first-time homebuyers and in outer shoulder markets.”
#Chicago builder: “We have seen a slowdown in overall activity in the last few weeks. Pace of sales is still good but not what it was, and seeing more price reductions than we have in the past.”
#Jacksonville builder: “Sales have definitely slowed down which is expected in July. The sales we are seeing are mostly from out-of-town buyers who don't have the sticker shock like the "locals" do. I do believe we've peaked as far as pricing is concerned."
#Naples builder: “We continue to have a sales moratorium in Southwest Florida. This most likely will last another 60 days before we can release any new homes. We need to spend this time to catch up on our backlog.”
#WashingtonDC builder: “There is a pronounced slowdown due to communities selling out faster than expected, limitations on sales, particularly townhomes and condominiums, and the lack of affordable first time buyer products.”
#Harrisburg builder: “Sales have decreased due to not having enough available lots ready in this market.”
#Provo builder: “Cancellations aren’t a concern - see some buyers' remorse after quick contracts. We are able to rewrite cancelled homes with another new buyer quickly.”
#Reno builder: “Sales are tapering due to reduced starts, driven in part by labor & material shortages. Seeing traffic slowing (seasonal slowdown, people traveling, taking vacations & school starts in a few weeks) which contributes to tapering sales.”
#Oakland builder: “We continue to be temporarily sold out at all of our communities and have long waiting lists.”
#Seattle builder: “Seeing a small correction as more inventory becomes available. Suspect we'll find the market & pricing remain flat with some incentives on move-in ready homes.” END OF 🧵

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More from @RickPalaciosJr

26 Jul
Land is the most important yet least transparent part of homebuilding. To help, here’s commentary from land brokers across the country per our July survey. Top themes: 1) Builders going further out for deals. 2) Bigger land deals are back. 3) Development delays & lot shortages.
#SaltLakeCity land broker: “You can't get all the lots you need even when you overpay.”
#SanAntonio land broker: “Getting a vaccine approved took less time than getting land entitled.”
Read 17 tweets
15 Jul
Today's Fed Beige Book updates on housing sound familiar...

#Atlanta Fed
#Dallas Fed
Read 4 tweets
14 Jul
Doing monthly review of our macro housing/econ 350+slide deck. Ten charts grabbing my attention for July:

1/10: Percentage of banks easing credit standards for HELOCs (home equity line of credit) now highest ever post-housing induced 2007-2009 recession.
2/10: Acceleration in residential electric customers (proxy for household formations) has subsided. Ties directionally to some of the normalizing we're seeing in for-sale housing market.
3/10: Home builder labor shortages get a ton of attention lately (rightly so), but more of a structural issue than cyclical/transitory. Builders reporting elevated labor shortages goes all the way back to 2013 coming out of last housing downturn.
Read 10 tweets
5 Jul
Analyzing June new home sales & pricing figures from our monthly builder survey. As one builder noted: “It’s not fun to be a builder anymore.” Lumber relief is nice but pick your poison on other issues. Market commentary from across the country to follow...
#Richmond builder: “It's not fun to be a builder anymore. Cost pressure is killing us. Not only will builders like myself who take 12-24 months to build a house lose margin from increases, but the affordability is becoming a major issue.”
#Atlanta builder: “Costs have driven up prices & we’re no longer preselling. We will not sell a home until frame stage, so our sales numbers are off for June while awaiting framing stage.”
Read 26 tweets
19 Jun
Here's a housing🧵to chew on over weekend. Mid-June update from 100+home builders across country. 1) rumblings of price ceiling. 2) slightly shrinking pool of qualified buyers. 3) some home releases not selling out immediately. 4) normal summer slowing as vacations take priority.
#Austin builder: “Some interest lists are shrinking & others are not. Seeing buyers who are no longer able or willing to afford the monthly payment. Definitely seeing attrition here. Frustration that prices continued going up without an opportunity to purchase.”
#Dallas builder: “Interest lists are definitely shrinking because of pricing. Some drop off is happening due to price. But the re-sale market is still so tight it hasn’t dropped substantially. Extremely concerned about pricing going forward.”
Read 31 tweets
14 Jun
Going through our monthly macro housing/econ deck again for June. Here are some charts catching my attention this month.

1/7: The share of Americans expecting home prices to increase over the next year is now higher than back in 2005.
2/7: Looks like tax advantages of owning a home aren't as big of a driver for housing as some thought.
3/7: Trend of shrinking home from 2015-2020 appears to be over. Hopefully not the return of McMansions.
Read 7 tweets

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