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St. Louis Real Estate Search

 

New Home Sales In July Drop to All-Time Low

Dennis Norman

The good news is May’s new home sales rate of 267,000, which was the lowest sales rate on record, was revised upward to 281,000. The bad news is June’s sales rate of 330,000 was revised downward to 315,000 and now new home sales for July were reported at 276,000 the new lowest rate on record. Due to the dismal sales, the inventory of new homes on the market increased from an 8 month supply in June to a 9.1 month supply in July.

My Mantra

As has been my long-running mantra, I don’t like “seasonally adjusted” numbers and “rate” of sales. Why, for one I can’t figure out how in the world they compute the numbers. Second, I just don’t think discussing New Home Sales September 2009the “rate” of new home sales paints a realistic picture of the market. I think this holds especially true when we have artificial forces affecting the housing market such as tax credits as we have seen what an artificial “bubble” in the market this can cause.

Here is the raw data, the ACTUAL new homes sold- no fluff, no “adjusting”

  • 25,000 new homes s6old in July, a decrease of 13.8 percent from June’s 29,000 new homes sold (revised) and a 32.4 percent decrease from July 2009 when there were 38,000 new homes sold.
    • 60.0 percent (15,000) of the new homes sold were in the South region-
    • the west region had 4,000 new homes sold.
    • the Midwest had 4,000 new homes sold.
    • The Northeast had 3,000 new homes sold.
  • YTD – In the first seven months of 2010 there have been 207,000 new homes sold, a decrease of 8.0 percent from the same time last year.
  • Median sale price of new homes in the US in June was $204,000, a 6.0 percent decrease from June’s median new home price of $217,000 and 4.7 percent decrease from a year ago when the median new home price was $214,200.
  • New Homes in the US in July have been for sale for a median time of 11.3 months since the homes were completed, a 8 percent decrease from June’s revised figure of 12.3 months.

My prediction for 2010

I’m not feeling real optimistic about the housing market at this point and the possibility of a “double-dip” recession seems very real so I think after sticking with my original projection all year I need to adjust it downward at this point. Previously I said I felt there would be 336,600 – 355,000 new home sales in 2010 but now I’m going to say 300,000 – 336,600.

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