The National Association of Home Builders maintains indices that measure conditions for the home building industry. There are three basic measures that the NAHB looks at as measure of were the home building industry is at: traffic visiting model homes, current sales conditions and the most subjective of the three expectations for the next six months. When you look at these numbers 50 is the benchmark number anything under 50 is poor any thing over 50 is good.
Conditions have shown improvement over the last four months.
Last month’s traffic visiting model homes increased from 18 to 21; an increase of about 20% and similar to what we have seen in the “re-sale” home market. (Keep in mind its still winter in the northeast and this is not prime home selling season- really very dramatic news!) Last month’s number for current sales conditions moved from 22 to 25 which measures factors such as availability of financing, terms, interest rates and available inventory among other things and expectations for the next six months moved from 26 to 29.
The NAHB also looks at these number by census regions rather than state by state or just the nation in aggregate. The Northeast moved the most from 14 to 23 and the Mid West moved the least from 23 to 24. It’s probably worth noting that the mid-West has been one of the least impacted regions of the country in our now five + year old real estate downturn.
The South is considered the most important number for the nation and the association because it by far the largest region for population and business in the country. The South moved from 25 to 27. The West moved from 16 to 21.
Obviously, our primary/only concern is the Northeast which includes New England, (New Hampshire, Massachusetts, Vermont, Maine, Rhode Island and Maine). Prospects remain positive and cautious on all fronts in the real estate world and the “all clear” is by no means appropriate at this time. These are not great numbers but they are significantly less bad than the numbers of the recent past and may/hopefully reflect an upward trend that will be unfolding over the next several months as weather improves and the situation becomes clearer to all on employment and other investments besides real estate.
By Dick Thackston CRB, ABR, ABRM
Broker NH, MA & VT