New Home Inventory Levels Improve, but Now What?
New home inventory in the St. Louis, MO market has been steadily declining since November 2008. In fact, new homes that are finished but unoccupied are back to March 2006 levels. Lowering these inventory numbers has been of the utmost importance in builder survival, price integrity and overall market improvement.
However, there is another, sneakier number lurking behind new home inventory - developed lot supply. In theory, as the supply of finished, empty homes begins to dwindle, we will logically need to begin breaking ground on the abundant developed lot supply.
Unfortunately, things aren’t exactly working out that way.
The numbers from the March 2010 Housing and Subdivision Analysis are in and of the 1,508 developments being tracked by MarketGraphics, 63.6% are inactive. No construction activity in the past four months. How exactly are we to eat up developed lot supply without construction activity? The hard truth is that the remaining 36.3% of developments are harboring ALL of the market’s activity.
Why?
Consumers don’t see the majority of developments as viable new home options due to improper marketing, an underdeveloped sense of community, shoddy maintenance and an overall desolate atmosphere.
It’s time to take stock of what your community is conveying. Energy? Activity? Community? Or tumbling tumbleweeds?
The good news is that about half of inactive subdivisions are fixable with a little TLC, outreach and landscaping. It’s easier than you think, give Zanola Company a call for an immediate analysis.
