Drop in New Home Sales Inventory

According to Triad’s Business Journal, new home inventory in the Triad has dropped by more than one-third since last year. Is our market stabilizing? If so, why?

The article states that the number of newly constructed but unsold homes in Alamance, Forsyth and Guilford counties declined to 1,466 in May 2009. In May 2008, the number available was 2,192.

According to MarketGraphics Research Group, a relatively “healthy” inventory of unsold new homes for the area the size of the Triad is in the 1,200 to 1,300 range.

So why the drop? Triad builders say the inventory decrease mostly stems from the fact that they have sharply reduced the number of “spec” homes — houses without a specific buyer under contract — being built in the past 12 months in order to adjust to weakening demand and give the market time to absorb the product already built.

Of course, the drop in inventory is also a reflection of a slower building market overall and, to top it off, there are fewer active builders now than there were a year ago. Who’s gone? John Kavanagh Co., Pierce Homes of Carolina Inc., Indiana-based C.P. Morgan, Sandra Anderson Builders and Empire Homes. Portrait Homes has had several of its projects halted or foreclosed on because of problems with its financing.

So, overall, the Triad new home market is stabilizing. This is good news for anyone needing to sell their home and for the builders who are still building!