While the timing of the true turning point and bottoming out of the current cycle is still uncertain, one indisputable point is the amount of pent up demand that exists in the marketplace. With uncertainty and negative press surrounding residential real estate for 18+ months, many would be buyers have been sitting on the sidelines for quite some time, waiting for that critical turning point to provide them with the confidence to move forward with their next purchase.
Our custom builder group manages a pipeline or funnel of potential customers, which serves as the best leading indicator of future year activity. For 2008 YTD, the pipeline of our prospects has steadily bulked up to the point that 2009 is looking like a strong year for custom homes. The prevailing theme amongst these propsects however, is whether they have the confidence to pull the trigger on their dream home amidst the market uncertainty. Those who have more cash to execute the transaction are more aggressively moving forward, while those who rely more heavily on mortgage financing are tending to hold back until they feel the dust has settled more.
Our read on these metrics is that the underlying demand is gathering steam for new luxury homes in the Atlanta / Alpharetta area, and once the market has bottomed, there will likely be an immediate flurry of new housing starts and activity.
The timing of the absolute bottom of the current cycle is still to be determined, but for those that are considering building a custom home at some point in the next few years, now is a great time to kick the tires on land selection and architectural planning and thus be prepared to make a move once the market turns.