New home sales have strong start in face of labor, lots issue

Strong new home sales in January have homebuilders believing the market could reach a post-recession high in 2017.

North State Building Industry Association reported 441 new home sales last month, 148 more than in the same month a year earlier.

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Other figures, such as traffic at neighborhoods for sale and the number of neighborhoods with sales, also were the best for that month since 2007 and ‘09, respectively.

Two major factors, however, will limit how many new homes are built this year and in future years. Builders have reported a shortage of laborers, especially in trades such as drywall and framing. Though a normal homebuilding year for the Sacramento region sees 8,000 new homes at the lower end of the range, builders have said they’re unsure if they could build 6,000 with the current labor force.

Separately, another group tracking homebuilding said builders are also running out of lots to put homes on. In a report released Wednesday, Guy Spitzer, a land specialist with Newmark Cornish & Carey, said there are less than 6,100 “ready to build” lots in the region. As the recession caused many construction workers to find other places or jobs to work, it also constrained the pipeline of new master plan projects and accompanying infrastructure to make them ready to build on, Spitzer said.

As a result, he said, the region could see a noted lack of lots beginning in late 2018.

North State BIA’s report showed south Placer County as the most popular area within the region for sales in January, with 153. The South Sacramento and Elk Grove region, with 71, narrowly beat out 66 sales in Natomas and Antelope for second-most-popular.

The BIA’s figures represent the majority of the builders in the region, and also include Yuba and Sutter counties.

Article and image provided by: Sacramento Business Journal
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