The housing market is stabilizing, with more builders raising price than dropping price in California, according to the John Burns Real Estate Consulting September survey of home builders. This month's sample consists of 269 home building industry executives from public and private companies (62 from California.) In total, their insight is reflective of on-the-ground conditions in 86 MSAs and 1,855 communities. The survey's commentary underscores the positive effect of federal intervention, though most builders also expressed concern about their prospects for the next six months as the Nov. 30, 2009 expiration of the federal tax credit approaches. Other challenges cited include ongoing competition from foreclosures, continuing appraisal problems, lack of job creation and a void in financing for future projects.  Reports of emerging price stability in a growing number of metros are balanced by numerous reports of continued downward pressure on pricing from foreclosures and short sales. In almost all markets, the lower price points are faring better than the higher price points due to FHA financing and the Federal tax credit.  Starts declined in all but 2 of the 10 regions of the country. Only Southern California and Northern California reported increased starts since last month. Many smaller, private builders lack financing to start new construction, sometimes even for pre-sold homes.

Source: John Burns Consulting