THE VIRGINIAN-PILOT
Copyright (c) 1996, Landmark Communications, Inc.
DATE: Monday, January 22, 1996 TAG: 9601200184
SECTION: BUSINESS WEEKLY PAGE: 16 EDITION: FINAL
SERIES: Forecast 1996
SOURCE: RICHMOND TIMES-DISPATCH
LENGTH: Medium: 63 lines
Virginia Commonwealth University's annual survey of state builders indicates no expected change in new-home prices this year but increases are anticipated in the cost of lots, labor and lumber.
Builders expected a 4 percent increase this year in lumber prices, a 3.9 percent increase in lot costs and a 2.8 percent increase in labor costs, according to the 10th annual survey by the Virginia Real Estate Research Center at the VCU School of Business.
The survey went to 650 state home builders, VCU said. Of those, about 12 percent, or 78 builders, responded to questions on the type and prices of houses they were building in 1995 and their expectations for 1996.
Nearly 82 percent of the respondents expect no change in home prices this year. But, the builders also indicated they had higher unsold inventories of new homes in 1995, compared with 1994, and were slightly less optimistic about housing starts for 1996 than they were a year ago, the survey said.
The survey generally has had ``a little higher response'' in previous years, said James H. Boykin, director of the research center. ``I would sense it is maybe a realistic response giving reasonably accurate results. I would like to have seen it a little higher.''
That the survey's responses contained nothing startling may be ``some measure of its validity. We are not seeing any wild-looking responses there.''
Other indications on the state of home building include:
The trend is to slightly smaller lots. Lot sizes in 1995 decreased from 0.6 acre to 0.57 acre. Average lot price was $1.78 per square foot, with the finished home site price averaging $44,476.
Four-bedroom houses were the most popular. They accounted for 51 percent of all homes constructed in Virginia in 1995.
First-time buyers made up 29 percent of the new-home market. First-time buyers' most popular price category was $75,000 to $150,000. They bought 54 percent of the houses in that range. First-time buyers also bought 23 percent of the houses sold last year in the $150,000-to-$225,000 price bracket, the report said.
None of the respondents said they were building in the under-$75,000 category, and none expected to build in that range this year.
Although demand for single-family housing in Virginia remains strong, the report said, builders in 1995 built fewer houses than in 1994.
Nearly 91 percent of the surveyed home builders constructed single-family detached houses last year. But, only 35 percent of the builders said they built more houses in 1995; 43 percent built fewer homes. In the 1994 report, 68 percent were building more new homes, VCU said.
Home builders also were ``slightly less optimistic about housing starts for 1996 than they were a year ago,'' the survey report said. In the 1994 survey, 57 percent of the builders said they planned to build more houses in 1995. In 1995, only 52 percent said they planned to build more.
The VCU research report received funds from the Virginia Real Estate Foundation.
KEYWORDS: SURVEY STUDY HOUSE PRICE by CNB