New-home buyers re-emerging in Southern California

According to a story in the L.A. Times, buyers are increasingly responding to the efforts by builders such as KBHome and Shea Homes to re-configure how they build homes -- as well as the lower price tags:

Buyers purchased 3,447 new homes in Southern California during the first three months of the year, a 17% increase from the same period last year, according to the San Diego research firm MDA DataQuick.

That's a fraction of what sales were during the peak of the region's housing boom; in the first quarter of 2006, builders sold 17,324 new homes in Southern California. Gone too are the days when developers built on spec, confident that buyers armed with easy credit would line up to purchase the finished product.

Still, there are signs of a rebound. Nationwide, sales of new homes jumped 27% in March from the month before and 24% compared with March 2009. A key index of homebuilder stocks is up 16% this year, compared with a rise of 3.4% in the Dow index. One major builder, Lennar Corp., has seen its shares rocket 47%.

Experts say new-home sales have been helped by state and federal tax credits, as well as by new tactics by builders adjusting to the no-frills post-bubble environment...

Shea Homes, a privately held builder based in Walnut, has also introduced a line of smaller homes with modern design, scaled-down master bathrooms and interior spaces that can be reconfigured, said Patrick Duffy, principal for research firm MetroIntelligence Real Estate Advisors.

"They have gone back and they have reengineered their entire production process," Duffy said. "Where can we find economies of scale, where can we cut price, where can we simplify?"...

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