LOS ANGELES – At Lambert Ranch, an Irvine housing development where prices start at $1 million, just two of 98 homes are unsold since the project opened in May.
The builder, New Home Co., is opening 14 neighborhoods in California this year for buyers who want to seize low interest rates amid a scarce supply of homes for sale.
Everywhere we are, we can see it, Larry Webb, CEO of Aliso Viejo-based New Home, said in a telephone interview. Talk about pent-up demand.
U.S. home sales and prices are poised to rise in 2013, solidifying a recovery that began last year after a half-decade slump that was the deepest since the Great Depression, according to analysts and economists surveyed by Bloomberg.
Record-low mortgage rates and attractive prices, supported by declining unemployment, are luring buyers as the inventory of distressed homes shrinks. Homebuilders are responding by adding supply, bolstering economic growth.
Increased new residential construction activity will lead to employment gains, which should translate into higher consumption and modest GDP growth, Robert Wetenhall, a homebuilding analyst with RBC Capital Markets in New York, said in a telephone interview.
The U.S. budget deal reached this month removes a cloud to that outlook, he said.
Sales of existing homes will rise about 7.2 percent in 2013 to 4.98 million, the highest since 2007, based on the median estimates of 15 economists and housing analysts surveyed by Bloomberg News for this story. Prices will gain 3.3 percent after an estimated 4.5 percent jump in 2012, according to the forecasters, who used varying measures of values.
Building is set to jump after the inventory of new homes fell last year to the lowest level in half a century. Housing starts, including single- and multifamily units, are expected to increase 24 percent to 967,000 in 2013, the most since 2007, according to the median of 17 estimates. Purchases of new single-family houses will climb 23 percent to 448,000, extending last year’s rebound from a record low 306,000 in 2011.
We expect housing to continue this momentum into 2013 and in fact show stronger growth rates due to pent-up demand, Mark Kiesel, managing director at Pacific Investment Management in Newport Beach, Calif., wrote in an email.
Kiesel, who predicted the home-price bubble would burst in 2006, is betting on an extended housing recovery.
In May, six years after selling his last house near the real estate peak, Kiesel bought a Newport Beach home in a sign of his conviction that prices had bottomed.
Builders such as New Home’s Webb are seeing a lot of interest from prospective buyers.
More than 6,500 people visited Lambert Ranch’s model homes on opening weekend in May, and high traffic continues, Webb said.
We’re not looking for some crazy boom, Webb said. We’d just like to see consistent sales and modest price appreciation.