On June 16, 2010, NAR published an article about the home builder confidence market index falling five points to the lowers level since March. A lowly of low "17", anything less than "50" is considered negative.
There are several economic experts contributing the drop to the expiration of the home buyer tax credits.
The day before, The Wall Street Journal published an article on Florida New Construction. The article explained that Home Builders are snapping up cheap real estate in Florida, paying 40 percent to 60 percent less than they did during the housing boom. In Lee County, land is actually more like 70% to 80% less than it was during the housing boom! "Because land is cheap, builders are able to make money selling homes as small as 1,800 square feet, built for about $150,000 and sold for $160,000 to $170,000, says Steve Fusilier, principal in Fusilier Realty Group in Orlando."*
According to the Gulf Coast Business Review, builder sediment in Cape Coral is rising. While there is no doubt there is a distressed home inventory to contend with, there is a need for new construction. A substantial portion of the distressed inventory are older homes. Studies have shown homes built after 2002 fare better in hurricanes than homes built prior. In 2004, the code for hurricane standards became even better. The latest provisions of the code, 2007 Florida Test Protocols for High Velocity Hurricane Zones, became effective on March 1, 2009. It is very expensive to take an older home and implement the latest hurricane codes.
With the environment hot on the radar, I believe "Green" Construction will be a rising trend.
If you are looking to buy land, you can search all areas of Lee County on our web site. If you are considering new construction, be sure to inquire at info@floridawestshorerealty.com
*Source: The Wall Street Journal, Robbie Whelan (06/15/2010)
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