The key to the homebuilding turnaround
I live in a Centex house in a Centex neighborhood. My wife describes Centex houses as "boring and bland". We have a small garage, a small yard, and an HOA that tells us we can't put a shed in the back yard or even put solar screens on the windows without their permission. We also get the privilege for paying $420 per year to fund these guys to make sure that none of our neighbors can put solar screens on their windows and mess up the aesthetic of the neighborhood. The homeowners in our neighborhood don't control the HOA because the builder is still building or at least could be building if they had anyone who wanted to buy a cookie-cutter house in a cookie-cutter neighborhood, so the builder maintains complete control of the HOA.
We have two young children and we'd like to move to a house with a bigger yard and a bigger garage and be able to put a storage shed in the back yard for kids toys, lawn equipment, power tools, etc so we'd actually have room to keep the cars in the garage. We are looking for a house. Yes, we are in the market. Are you listening builders?
We have looked around and found plenty of other "Centex neighborhoods". I put that in quotes because Centex isn't really the only one who builds neighborhoods like ours - cheap cookie cutter houses with small yards and HOA's. We can spot a Centex neighborhood from the highway and just avoid them. There are a ton of these type of houses available, but they still seem to be building them.
We have also looked around and found plenty of upscale Centex neighborhoods. These are just better quality houses and more massive houses but still just as close together and you still have an HOA telling you what you can and cannot do. They just don't meet our needs.
We have also found a few "80's neighborhoods". Back in the 1980's, bigger yards were popular. But the problem is so were smaller houses with smaller bathrooms and outdated kitchens. They don't build neighborhoods like this any more. Circle driveways, huge back yards, houses that don't all look the same, etc. But I want a newer house to go with all that.
We have also found "out in the country neighborhoods" where you get an acre or two, but you are about 30 miles out of town and still in a HOA that tells you what kind of fence you can have among other things. I don't really want a 30 mile addition to my commute or a horse barn for that matter.
My point is that the houses being built right now are just same same as the ones in foreclosure or the one we already live in. The builders just don't think we have enough supply of Centex-type houses yet. Small yards are the only way to go in a place like north Texas where there is nothing but land. You develop a little section of land out in the middle of nowhere and you cram 500 houses on it like you're setting up dominoes. The you put them on the market along with the other 5000 homes just like them and expect to make a profit by doing this.
If we are going to see a turnaround in homebuilding, it will not be from demand suddenly increasing for suburban homes crammed together in cookie-cutter neighborhoods with small yards and HOA's. They are going to need to build something different that isn't already over-supplied by the existing homes market.