If you listen carefully, you might be able to hear the sounds of hammers in some parts of California. After nearly five long years of recession and stagnation, recent reports indicate that new residential construction may be picking up.
A recent survey from the National Association of Homebuilders indicates that confidence among home builders has risen to its highest level in four years. Rising from nearly zero may not sound like much--the survey's overall rating of 25 still indicates that conditions are "poor"--but it's still an improvement. Construction in Los Angeles seems to bear out this trend, with $1.51 billion worth of projects--dominated by high-density rental apartments--underway in the second half of 2011; that's a 6% increase over the previous year. Meanwhile, home sales in the Bay Area rose 4.4% in December as compared with December 2010; prices, however, have continued to decline. In Orange County, a developer has evoked headier times with the purchase of a 16-acre tract entitled for up to 143 home at an estimated $2 million per acre. And even in Sacramento, where construction of single-family homes hit a near standstill, the Sacramento Bee reports that a "modest building boom" of six projects is bringing over 250 units to high-density areas of the state's capital.
Clearly, this trend doesn't yet mean that a million tract homes will bloom. But it does mean that developers may be emboldened to restart dormant projects and even seek out new ones. In many cities, there are far fewer planners now than there were when the bubble first burst, but they now might have more work to do than they've had in a long time.
