RealEstateNews 6.9.25

Weekly News Roundup

• Modular Homes for Disasters
• Pending Home Sales Fall
• Florida Home Market Cools

Modular Homes for Disasters

Companies that use modular construction, 3-D printing or other nontraditional methods have existed for decades on the fringe of home building, often tainted by an association with lower-quality construction and previous missteps. Now, these companies are trying to break into the mainstream by offering a faster and less costly alternative for rebuilding in cities ravaged by natural disasters. Many of the thousands of displaced homeowners in Los Angeles, Hawaii and the Southeast are giving these businesses a look. Victims of hurricanes, wildfires or other disasters can be desperate to rebuild, but their insurance payouts are often well short of what is needed to cover traditional construction costs. 

ICON uses giant 3-D printers to squeeze layers of concrete into the framing for a house. The company received hundreds of calls about building projects in disaster-prone areas, including from Los Angeles homeowners and developers after this year’s fires, Ballard said. Now, the Texas-based company is rearranging its expansion strategy to target disaster-prone markets such as California and Florida. Modular builder Samara is working with billionaire developer Rick Caruso’s rebuilding nonprofit, Steadfast LA, to offer dozens of free modular homes to low-income residents who lost their homes in the Los Angeles fires. And the Los Angeles Mayor’s office is having conversations with more than a dozen alternative builders to explore nontraditional construction options.

Enti’s Massachusetts company builds homes in robotic, artificial-intelligence-powered microfactories. It is planning to build a California microfactory 18 months earlier than initially scheduled, he said, and to hire local Los Angeles employees to meet the postwildfire demand. Offsite-factory construction can accelerate the building process because fewer workers are required and materials are often purchased in bulk. The shorter timeline can sharply reduce carrying costs for a project. And in disaster areas, where many builders are competing for construction labor and materials, factory-home manufacturers have an edge because they can access less crowded supply chains in other cities and states. Source: Wall Street Journal

Pending Home Sales Fall  

The number of homes going under contract in the U.S. fell sharply in April, as high mortgage prices continue to hamper the market, according to a monthly index. Here are the main takeaways from the National Association of Realtors’ report: The pending home sales index, a leading indicator of house sales based on contract signings, sank 6.3% in April, more than offsetting the 5.5% rise in March; Economists polled by The Wall Street Journal had expected a smaller fall of 1.0%; Pending home sales fell 2.5% on year.

“Despite an increase in housing inventory, we are not seeing higher home sales. Lower mortgage rates are essential to bring home buyers back into the housing market,” NAR Chief Economist Lawrence Yun said. Pending home sales fell on month in all four U.S. regions covered by the index. They declined most in the West, following by the South, Midwest and Northeast. Sales of existing home sales also fell in April, NAR data showed last week, as economic uncertainty and high mortgage prices pushed buyers away. Source: Wall Street Journal

Florida Home Market Cools

With the Covid pandemic newcomers rapidly increased demand as well as prices across Florida, investors flocked to the state chasing what at the time seemed like sure-fire opportunities, and builders received authorization for building thousands of new homes to keep up with buyers. But Florida’s once red-hot housing market started showing signs of a significant cooldown over the past year, as domestic migration shrank compared to the pandemic boom, housing costs rose sharply and the threat of more frequent, more severe natural disasters and higher home insurance premiums swayed some buyers away from the state.

The result is that prices have started to drop across much of the state, as historically high mortgage rates are still putting a significant damper on demand, despite growing inventory giving buyers more options. The median sale price of a home in Florida in April, according to Redfin, was $409,900, down 3.2 percent from a year earlier. Home sales were down 8.8 percent from April 2024, at 33,667.

According to most housing experts who talked with Newsweek, what is happening in Florida is the natural correction that you would expect to follow years of overheating. Many locals in the Sunshine State have been priced out of the market in recent years, and without investors buying up properties, demand has naturally come down. Investors backing off the market could exacerbate these dynamics, accelerating downward pressure on prices and forcing other sellers to slash prices to sell their homes. Source: Wall Street Journal