It’s Official: real estate markets across the country are in the tank. The National Association of Realtors released information on Sept. 5th showing its seasonally adjusted index of pending sales for existing homes fell 16.1 percent in July as compared to July 2006 and has fallen 12.2 percent from June of this year. July’s reading of 89.9 was the second-lowest ever for the association’s pending sales index.

For folks who have been making plans to build a custom home, this is actually good news. The reason is simple: custom home builders are hungry for business. When real estate markets were booming, home builders were maximizing their profits by building and selling spec homes. With little worry that their projects would linger on the market, four out of every five homes that custom builders put up were speculative. Now that most markets are struggling to sell inventory, home builders have largely abandoned their spec home activities and are seeking custom building projects. If you're getting ready to build a custom home you can expect to find more builders from which to choose. You’re also likely to get more favorable cost estimates – builders are “sharpening their pencils” to land the job.

The weakness in new home sales has also taken pressure off of building supply prices. Nearly every region of the U.S. is seeing better deals on lumber. According to the National Association of Home Builders, the price for 1,000 board feet of lumber has decreased from a high of $474 in August of 2004 to the current average price of $285.

If you’re deciding whether of not to start building your dream home, the timing looks ideal. The combined effects of a soft real estate market and lower building supply costs means you can save money by green lighting your custom home project in 2007 or 2008.