Homebuilder Optimism Grows as Spring Nears

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WASHINGTON -- U.S. homebuilders are gradually growing more optimistic about the depressed housing market and believe homes sales could pick up sharply when the spring buying season begins.

The National Association of Home Builders/Wells Fargo said Wednesday that its builder sentiment index rose for a fifth straight month in February to 29, up from 25 in January. The index has climbed 15 points since September and is now at its highest level since May 2007.

Builders have generally become more hopeful during that stretch about current sales, sales six months out and foot traffic, the report shows.

Even with the brighter outlook, the industry has a long way to go. Any reading below 50 indicates negative sentiment about the housing market. The index hasn't reached 50 since April 2006, the peak of the housing boom.

A key reason homebuilders are more optimistic is they are seeing more people express interest in buying a home. And rising interest has occurred alongside other improvements that suggest the troubled housing market could pick up after four weak years.

Sales of previously occupied homes rose in December for a third straight month. Mortgage rates have never been lower. And home construction picked up in the final quarter of last year.

Still, home prices continue to fall, and builders keep slashing their prices to stay competitive. Last year was the worst for new-home sales on records dating back to 1963.

Ian Shepherdson, chief U.S. economist for High Frequency Economics, said the index is now consistent with new-home sales rising to more than 450,000 annually. While that's below the 700,000 considered healthy, it would be an improvement from the recent trend of just over 300,000.

"The story here is that pent-up demand is being freed by much easier mortgage conditions, low rates and rising employment," Shepherdson said. "It's real."

But some economists have questioned the foundation for the growing optimism. Pierre Ellis, an analyst at Decision Economics, notes that new-home sales are up just 1.7 percent from September through December, the latest government data on sales.

"Recorded sales of new homes have hardly budged since September," Ellis said. He said the credibility of the builders' survey is "shrinking month by month."

New homes make up a small portion of housing sales. But they have an outsize impact on the economy. The builder trade group says each new home built creates an average of three jobs for a year and generates about $90,000 in taxes.


Pros and Cons of Buying a New Construction Home


Builders are struggling to compete with foreclosures, which have forced down prices of previously occupied homes. And many people are finding it hard to qualify for loans or meet higher required down payments.

Low appraisals are scuttling some deals after contracts have been signed. As a result, some people who want to buy a new house are holding off because they can't sell their home.

Those in a position to buy are benefiting from lower prices and mortgage rates. The average rate on the 30-year fixed mortgage is at record lows below 4 percent. Yet those factors have done little to boost home sales.

Builders have pointed to some regional pockets of strength. New Orleans, Pittsburgh and other smaller areas of Texas, in particular, have reported increased buying.

Copyright 2012 The Associated Press. The information contained in the AP news report may not be published, broadcast, rewritten or otherwise distributed without the prior written authority of The Associated Press. Active hyperlinks have been inserted by AOL.

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Homebuilder Optimism Grows as Spring Nears

Median List Price Appreciation: 17.79 percent
Median Age of Inventory: -16.18 percent
Inventory Change: -29.25 percent

Home Price: $2.999 million
Beds/Baths: 4/5
Sq. Ft.: 5,123

After slipping out of Realtor.com's top 10 rankings for the third quarter of last year, Punta Gorda has reclaimed status as a town in the vanguard of real estate recovery. Home prices are reportedly just beginning to trend upward. But they still have a long way to go: home prices in town are 56.2 percent lower than they were in 2006, at the peak of the housing boom. 

Dubbed the "Ultimate Executive two-story residence," by its Realtor, this 5,000-square-foot home offers 250 feet of "sailboat waterfront," -- you know, like water for yachts, not dinghies.  

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The home is outfitted to withstand harsh weather conditions, with high-impact windows and hurricane shutters. 

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Outside amenities abound: The home has an expansive pool with a tiki bar and "summer kitchen." There is also a waterfall, spa and outdoor shower. 

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Median List Price Appreciation: 9.09 percent
Median Age of Inventory: -28.89 percent
Inventory Change: -35.28 percent

At 11 percent, the Lakeland-Winter area has the highest rate of unemployment on Realtor.com's top 10. But the real estate market seems to be another story. Realtor.com says that the area was the fourth-most-searched spot by users of their listing service. Distressed home sales have fallen significantly from last year as well.  

Home Price: $1.3 million
Beds/Baths: 4/6
Sq. Ft.: 7,813

The local market may be on the road to recovery, but distressed home sales still are hindering the market. This French mansion is selling by way of short sale. 

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The home features a cedar double-front door, Brazilian cherry flooring and custom stone columns. Pictured here is the home's glass-enclosed pool. 

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There's also a chef's kitchen with granite countertops and stainless steel appliances along with a wine cooler and wet-bar-equipped butler's pantry. 

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Median List Price Appreciation: 7.84 percent
Median Age of Inventory: -35.71 percent
Inventory Change: -41.63 percent

Home Price: $5 million
Beds/Baths: 6/6
Sq. Ft.: 8,700

Sale prices in this sultry town have risen 18 percent year-over-year, as of November, quite an encouraging sign for the local market. Meanwhile, unemployment is shrinking. The rate fell to 9.4 percent in November. 

This Mediterranean may have just seen its price slashed, but with a $5 million ask, it'll still cost you a pretty penny.

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The home sprawls a whopping 8,700 square feet, which overlooks a large stretch of waterfront.

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The home offers community recreation and boating facilities. And guess what? "Pets are allowed!"

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Median List Price Appreciation: 13.38 percent
Median Age of Inventory: -13.64 percent
Inventory Change: -35.94 percent

Home Price: $19.9 million
Beds/Baths: 6/7
Sq. Ft.: 8,226

Naples finds its way onto Realtor.com's list for the first time this quarter, thanks, in part, to its housing market's 13.64 percent decline in median age inventory and 13.38 increase in median list price. 

Naples offers its fair share of uber-luxury homes. This waterfront mansion, at nearly $20 million, costs $2,419 per square foot. 

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The stucco mega-mansion offers stunning ocean vistas viewable from its kingly balcony. 

See more homes for sale in Naples, Fla. 

Pictured here is a dining room of the home (we're guessing there's probably another one considering the place is 8,000 square feet). The elaborately decorated room features what appears to be a flying saucer. Maybe it can beam up the filet mignon. 

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Median List Price Appreciation: 13.77 percent
Median Age of Inventory: -23.42 percent
Inventory Change: -39.66 percent

Home Price: $1.5 million
Beds/Baths: 4/5
Sq. Ft.: 4,875

A drop in foreclosures in this city shrank its year-over-year for-sale inventory by a whopping 40 percent as of last year's fourth quarter. The city also enjoys the benefit of an unemployment rate that is lower than the national average. 

With all its luster, this brand new 4,875-square-foot mansion gives you a taste of just how far your money can go in the Western city. 

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The one-acre property commands a generous stretch of waterfront and features airy rooms with soaring ceilings and expansive windows. 

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Exposed beams, and elaborate details and finishes, infuse the home's interior with Old World grace. 

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Median List Price Appreciation: 10.78 percent
Median Age of Inventory: -26.57 percent
Inventory Change: -31.01 percent

Home Price: $12.5 million
Beds/Baths: 7/9
Sq. Ft.: 7,194

In Sarasota, home sales jumped 17 percent last year while median list prices defied the national downward price decline by ticking up 2 percent. Realtor.com goes so far as to suggest that the market may have graduated to "seller's market" status, unthinkable in most housing markets across the country. 

Thrust out into the Gulf of Mexico, this jaw-dropping manse practically commands its own square-shaped peninsula. But apparently personal peninsulas don't come cheap in Sarasota: This property is listed to the tune of $12.5 million.

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Touted as the "finest boating estate in Sarasota," by the home's listing description, the property spans two acres that offer 500 feet of waterfront. 

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Pictured here is the home's covered dock that parks at least two boats. Inside the home you'll find an exercise room, library and attached "oversized" verandas. Other outdoor amenities include an expansive pool and shuffleboard courts. 

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Median List Price Appreciation: 31.27 percent
Median Age of Inventory: -17.60 percent
Inventory Change: -35.31 percent

Price: $8.7 million
Beds/Baths: 6/13
Sq. Ft.: 13,723

The Fort Myers-Cape Coral area continues to chug along the path to recovery with its median sales price zooming upward by 20 percent last year. But there's more to brag about: The area experienced the highest year-over-year increase in median list price for the fourth quarter -- 31.27 percent. 

This magnificent home is a beast: It stretches more than 13,000 square feet and has 13 bathrooms. 

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The foyer area has a distinctly palatial feel with its sweeping marble floors and double staircase. 

See more homes for sale in Fort Myers, Fla.

The thatched gazebo is obviously not your average one, seeing as it covers its own personal lagoon and pool bar. 

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Median List Price Appreciation: 8.22 percent
Median Age of Inventory: -36.52 percent
Inventory Change: -44.02 percent

Home Price: $3.99 million
Beds/Baths: 5/8
Sq. Ft.: 8,676

Year-over-year inventory plummeted by 44 percent in Orlando in the fourth quarter of last year, while list prices rose 8.22 percent. Both movements point toward a market that is truly beginning to right itself. 

Fit for the big-swinging, cigar-smoking mogul, this luxury home, which recently had its price cut, puts you close to the links. 

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Exquisite details sweeten the interior throughout its many rooms. Look no farther than the gourmet kitchen for proof: Here a chandelier and chic hanging lights infuse the area with a dash of grandeur.

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The home costs $460 per square foot. One cool amenity mentioned in the listing? A game room!

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Median List Price Appreciation: 15.38 percent
Median Age of Inventory: -27.47 percent
Inventory Change: -48.10 percent

Home Price: $5.995 million
Beds/Baths: 6/8
Sq. Ft.: 11,039

An area that had its housing market severely bruised by the foreclosure crisis, the Phoenix-Mesa area is mounting a recovery in a big way. While residents continue to file for foreclosure at a rate above the national average, the glut of cheap homes idling on the market has lured bargain-hunters. The area's relatively low unemployment rate of 7.7 percent also will work in its housing market's favor. 

This stately, well-landscaped chateau, despite its enormous price tag, is probably a bargain, considering Phoenix's post-housing bust nosedive in home prices. 

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The home features dark wood flooring, granite and marble and custom millwork. There's a wine room, gourmet kitchen, theater room and exercise room. 

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The amenities go on for quite a while: dry sauna and office, master suite with sitting area and marble baths, recording studio, pool, spa, outdoor fireplaces and four-car garage, to name a few. 

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Median List Price Appreciation: 28.57 percent
Median Age of Inventory: -30.89 percent
Inventory Change: -51.44 percent

Home Price: $6 million
Beds/Baths: 2/3
Sq. Ft.: 3,870

Buy in the city where the heat is on -- all night on the beach 'cause the housing slump's gone! Welcome to Miami (beinvenido a Miami)!

Miami leads the pack of cities building toward a recovery. Existing home sales in the Miami area leaped 51 percent in the third quarter compared to a year ago. Meanwhile, inventory shrank by half. Realtor.com suggests that much of the improvement is attributable to strong foreign activity in the market. 

This luxury apartment may soon be the trophy home of some foreign magnate. According to Realtor.com, in May of last year, international buyers purchased about 60 percent of existing houses and condos and 90 percent of the newly built homes in Miami.

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Through its floor-to-ceiling windows, the sleek, modern condo offers truly mind-blowing views of Miami's glittering skyline. 

See more homes for sale in Miami, Fla. 

The home's stark, airy interior offers a rich array of colorful, alternative furnishings. You have to be cool to live here. 

See more homes for sale in Miami, Fla.

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