When markets are normal, builders build. And that’s exactly what’s been going on lately. According to the California Building Industry Association, new housing starts are up year-to-date with 61,361 new single- and multi-family units.
This uptick in building starts signifies a stabilized housing market. But is this as good as it gets? Is this the new normal?
The fact that the National Association of Homebuilders (NAHB) Leading Markets Index (LMI) for Orange County is back to a level not seen since December 2008 leads us to believe that, if it’s not the new normal we’re certainly getting close.
The NAHB says that while recovery is still happening (albeit slowly), one in every six metros is back to “normal.” And a solid 66% of markets are showing year-over-year improvement. This progress isn’t just happening in other parts of the nation. In fact, two Cali metros— Los Angeles and San Jose— made it onto NAHB’s Top 10 LMI list. And with nearly half of all the 350 major metros on the list showing improvement since August, housing’s outlook is perking up.
However, not everyone believes housing is back to its old, cheerful self. In a recent Zillow survey, 40% of respondents said they thought it would take 3-5 more years for housing to reach full recovery status. So while only time will tell if housing has reached its norm, one thing is for sure…key indicators like construction starts are showing it’s heading in the right direction.
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