Tuesday, May 20, 2008

Home sales in California jump nearly 27 percent

Sales of new property in California jumped nearly 27 percent
from March to April as bargain hunters found it easier to get loans and pick up
property on the cheap.
Something like 37,000 houses were sold in the month, or about 27% in one month in one State of the TOTAL UK new house sales.
The prices were marginally down month on month, and about 28% down on a year ago.
If you have been paying attention, you will know I have great respect for the fluidity and flexibility of the US economy.
Two years ago, a particular house ( excluding land) cost about $190,000 to build.
Now, that same house only costs about $120,000. How? Partly it's explained by the fact that the product mix in US houses is quite different from ours, with lumber being a big input. Contractors have squeezed prices hard, so that only the most efficient mills can keep going. In Canada, which exported over 70% of it's lumber from generally older mills to the US, the industry is in serious trouble - the Yanks are hardly taking anything from over the border.
But my point is twofold. Firstly, houses are approaching a price in the US that people recognise as value. Secondly, even the bankers are realising the same thing and are prepared to bet some money on it.
The US is not out of its problems yet, but its already looking towards the next boom.
Unfortunately, we aren't.

3 comments:

In Actual Fact said...

"about 27% in one month in one State of the TOTAL UK new house sales"

And the population/size of economy of that one state compared to the UK is similar to that of say, oh, I dunno, England? Or are we comparing total annual sales in the UK? Does quick mental arithmetic: 135,000ish new homes must be UK annual total, or?
That said - beach house in SoCal or semi in Surbiton? If I was going for a new build somewhere, it wouldn't just be down to lumber prices....

kinglear said...

Yup about 135-160,000 new UK houses. It fell last year needless to say.
Many years ago an elderly dispossessed Ugandan Asian told me he would retire in SoCal.It was the best place in the world.

Winchester whisperer said...

Yes but they're still down massively yoy