If you look at all the economic indicators, you would think people would be standing in line to buy houses in the Inland Empire. Unemployment is down, interest rates remain at historic lows, Fannie Mae and Freddie Mac just lowered their down payments to 3%, population is up, the number of potential home buyers is the greatest number in a decade and as a result, housing demand exceeds supply by 600,000 units per year. Consumer confidence is also up. So why aren’t our potential home buyers as anxious to buy homes as they were in the past?
A large majority of the economists say that demand will pick up significantly this year and next. A recent Kiplinger Letter said “New home sales should climb about 25% this year. Housing starts will top a million for the first time since 2007.” Let’s hope so because we are all tired of this real estate recession.
At Rancon, we do not have a crystal ball nor do we have control over the economy. But, we can continue to create value through the entitlement process and be patient waiting for demand to pick up. We do believe we will see some lot sales occur in this calendar year and that sales will continue to increase next year.
- Dan Stephenson