Will a gain in single-family starts mean more business for California RE agents? Increases in single-family starts should be good news for agents and brokers dealing with these properties, as it could mean more business is ahead.
The Census Bureau recently reported that housing starts increased slightly in August, up 0.9% from July, and while this is a small improvement, this increase was far less than what was originally expected. This report did come with some good news though; single-family starts made in impressive gain.
The seasonally adjusted rate for housing starts was at 891,000 in August, 8,000 higher than the revised July estimate. While this is still an increase of 19% from the year before, expectations were much higher, and if there had not been downward revisions to this estimate, this data would have been below the original approximation.
While the rates are lower than what had been expected, the data may appear more troubling at first glance. Why? Single-family starts went up. The seasonally adjusted rate for single-family starts went up to 628,000 in August, an increase of 7% from July. The total monthly starts were largely brought down by the loss in multi-family starts, which dropped nearly 10% to a seasonally adjusted rate of 252,000.
Even for those selling pre-existing homes, if more single-family homes are being built, there should be an increase of potential buyers who can afford these homes. This also will provide some relief for the lack of available housing we’ve seen lately.
The change in rates is highly attributed to the vigilance of builders. Rick Sharga, the Executive VP of Auction.com, commented on the matter saying, “What we’re seeing is really an adjustment as builders try to figure out where they really are.” This is a good sign though; builders need to be cautious after the past few years, and overextending the market too much could lead to another collapse.
Do you think this increase in single–family starts will mean in increase in your business? What are your thoughts?
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