Many Home Builders Expect Higher Revenues in 2010

According to a national survey of homebuilders by John Burns Real Estate Consulting, 57 percent of respondents reported they are planning for more revenue in 2010 than 2009, driven by increased community counts, better orders and slightly higher prices. Burns believes the extension and expansion of the tax credit will accelerate demand in the spring of 2010.

The most optimism was reported from the Northeast, Southwest, Texas and Southern California, where pricing strength has remained fairly steady. The shift toward smaller, simpler homes is expected to continue in 2010 and may decrease slightly the median price for a new home.

Other highlights from the survey:
• Average net sales per community declined to 1.4 nationally from 1.6 in November, continuing a slide from a recent high of 2.0 in September. Only Southern Florida and the Southeast reported increased net sales per community, while Southern California, the Midwest and Northern Florida regions reported flat net sales.
• The average unsold, finished inventory per community rose to 3.3 units, up from a recent low of 2.8 units. Burns believes this increase is due to aggressive speculative starts by builders who are hoping for strong sales in the spring. Higher cancellations during November from sales that failed to close within the original tax credit deadline also contributed to the increase.

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