A recent client wanted a completed NEW home in Birmingham. With a budget of $2,000,000, one would have thought we would have had plenty to chose from. We did not.
Spec building in Birmingham, and throughout Oakland County, has almost come to a stop. We are still seeing a few spec homes going up around town, but not many at all. Most builders are holding off starting new projects, with a few exceptions.
One prominent local builder told me that other builders are having trouble getting lines of credit for construction. Many of those who have access to cash are risk averse, and not building specs, reserving their work. Anyone who has lived here more than a few years will notice that there are less construction sites throughout the city.
In some ways, this is a good thing. It will help some resale home sellers who might have lost a buyer to new construction, but did not have that option. As the inventory of resale homes diminishes, that can put supply more in balance with demand. Eventually prices will start to head back up, and builders will start building again.
Personally, if I were a savvy builder, I would be looking to acquire land, even if I did not plan to build this year. There are some super values out there, and if the property is rentable it can have a decent positive cash flow for a while.