Sally and I have some lots listed for sale and, talking with other Realtors and buyers, it is becoming more apparent how building costs are playing a big role in why they are selling so slowly. For example, there are 123 lots for sale on the MLS as of this morning. That’s high but the real telltale is that only five sold in the past six months (twice the normal range of 90 days that we used to use to find comparables).
Now compare to home sales: 21 for sale today, forty five sales in the last six months.
Asking prices for lots here are lower than they have been for years but demand for them is slack. Why is this ?
Building costs are rising, making it more difficult for builders to put up homes and sell them with any kind of reasonable return on their invested labor and money. There is a national discussion about the housing shortage that revolves around construction cost increases as an ingredient for this problem and we here in Lake Shastina are seeing it first hand.
California has enacted several energy conservation measures in recent years (see http://www.energy.ca.gov/title24/) intended to save consumers money in their utility bills. The intent is sensible . . . build fewer power plants, etc. . . but the cost is hitting the housing industry, hard.
More to follow.