Here’s the meat from the commerce department’s July new residential sales report released yesterday.
Sales of new one-family houses in July 2009 were at a seasonally adjusted annual rate of 433,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 9.6 percent (Â±13.4%)* above the revised June rate of 395,000, but is 13.4 percent (Â±12.9%) below the July 2008 estimate of 500,000. The median sales price of new houses sold in July 2009 was $210,100; the average sales price was $269,200. The seasonally adjusted estimate of new houses for sale at the end of July was 271,000. This represents a supply of 7.5 months at the current sales rate.
Inventory has fallen to 7.5 months from 12.4 months earlier this year because builders simply aren’t building. The general thinking is that the tax credit and low rates have helped move properties more than they would have otherwise. However, distressed property sales are now competing with new construction and credit remains tight.
The number of new properties available for sale is the lowest it has been since 1993.
Sales picked up in three out of the nation’s four geographic areas, with a sizeable gain of 16.2 percent in the South, the nation’s largest-selling region, which includes the Washington area. Sales fell only in the Midwest, by 7.6 percent.
Tags: Commerce Dept, New Home Sales, Census
An article in Realty Times expresses the fear that this is a burp after the bubble.
The author, similar to other opinions I’ve read, seems to think there is still an enormous problem with “affordable” housing, and that investors are scavenging. Don’t get me wrong, every market needs a floor, and investors provide that. But just go figure their entrepreneurial profit or what ever you want to call it and are we getting back to the entry level? Not here, not just yet. The investors will either have to lower their expectations or the REOs will have sell even lower. My read is that the banks are lending only to the lowest risk borrowers if at all. It would be interesting to know the terms of these purchases and how they are leveraged. I have heard that starts are up too, which is taken for returning health in the housing industry, but how can health be returning so soon after we were so sick?
I wonder about the impact of the $8,000 first time home buyer credit soon expiring may have an impact too. With how long it takes to close a sale, you be seeing more buyers enter in to take advantage of the credit.
[…] Matrix – New Home Sales Up 9.6% – New Is Better Too? […]
I thought the reason inventory is so low is because the numbers don’t include all the REOs that the banks are holding upon direction from the government?
Apparently there’s 10s of thousands of houses in California alone, that are owned by the banks, vacant and unable to be sold until the government allows…