From WSJ – More evidence that homebuilding (and real estate) has bottomed out and is improving. Here are some highlights from the article:
- Pulte is buying lots. One deal for 88 lots ($64,700 per lot) and another for 100 lots in the Phoenix area.
- Nationally, finished-lot prices, which saw low-single digit increases in the first quarter, are up nearly 20% from the trough.
- Builder’s confidence has substantially increased. “The builders think this thing has turned and they’re making sizeable investments in both finished lots and raw land.”
- Lot prices in Phoenix and Southern California’s Inland Empire have soared more than 60%. Sacramento, Orlando and Los Angeles are up between 30% and 40%.
- As home sales collapsed, builders slashed staff and hoarded money. Now, several—including Pulte, KB Home and Toll Brothers Inc.—boast more than $1 billion in cash. Also, 16 home builders estimate they are due tax refunds totaling more than $2.6 billion, thanks to a part of the economic-stimulus bill.
- Toll has spent about $100 million on some 3,000 home sites since November and is actively “searching for additional opportunities” nationwide
- Standard Pacific Corp. plans to spend as much as $400 million on land deals this year, up from $64 million last year. “Our strategy is to overbuy in this 24-month window” before home prices start to rise, said Ken Campbell, Standard Pacific’s chief executive.