New home sales take a dive in November

Dennis Norman

 

Dennis Norman

New homes were started in November at an annual rate of 482,000 homes and I asked why in my post last week since new home construction was already outpacing sales….well, today the gap got worse..

This morning the U.S. Department of Commerce released a report showing the sale of New Homes in November were at a seasonally adjusted annual rate of 355,000, an 11.3 percent decrease from the revised October rate of 400,000 and is 9.0 percent below a year ago.

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 and other incentives. This can create unseasonal bursts or declines in sales that don’t really have anything to do with the underlying fundamentals of the housing market.

Effect of tax credits on homebuyers like kid’s “sugar-rush”?

Last month I described the effect of the homebuyer tax credits on the market like a kid’s sugar rush and said “come December we may very well see new home sales slow significantly and lose the momentum that was a result of the “sugar rush affect” on homebuyers of the tax credits that gave them that quick surge of energy and motivation to buy, but then quickly wore off as the urgency subsided with the extension of the credits.” Well, December is here and look what happened to new home sales. Kind of makes it appear I’m “in the know”, huh? Nah, just lucky and also predicting something that appeared to be obvious.

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

  • 25,000 new homes sold in November, a 24.2 percent decrease from October’s 33,000 new homes sold and a 7.4 percent decrease from November 2008 when there were 27,000 new homes sold
    • 48 percent (15,000) of the new homes sold were in the South region- an decrease of 25.0 percent from October’s 20,000 new homes sold
    • the west region had 5,000 new homes sold, a decrease of 28.5 percent from October’s 7,000 homes sold
    • the Midwest held steady with 5,000 new homes sold, the same as October.
    • The Northeast had 2,000 new homes sold, a decrease of 33.3 percent from October’s 3,000 new homes sold.
  • 349,000 new homes sold this year through the end of November which is a 23.9 percent decrease from this time last year when there were 459,000 new homes sold.
    • on YTD new home sales all four regions of the US have seen a decrease from the year before
      • Midwest decrease of 23.2 percent
      • South decrease of 25.0 percent
      • West decrease of 24.5 percent
      • Northeast decrease of 15.2 percent
  • Median sale price of new homes in the US in November was $217,400, an increase of 2.4 percent from October’s median price of $212,200.
  • For the new homes sold in the US in October the median time they have been on the market for sale is 13.6 months.
  • Inventory of new home in US at end of October is 234,000 a 2.0 percent decrease from October’s inventory of 239,000 – this is very good news…

My prediction

For some time I have been predicting new home sales for 2009 would end up around 385,000 – 395,000…last month I pinned the number down at 390,000…I was feeling somewhat optimistic because of the tax credits but now I can see the numbers are probably going to fall short of my prediction. If you have been reading any of my posts for a while it’s kind of hard to believe I was overly optimistic, isn’t it?

Merry Christmas

New Home Sales in US through October; UP 5.1 percent OR DOWN 24.1 percent from a year ago, take your pick

Dennis Norman

Dennis Norman

This morning the U.S. Department of Commerce released a report showing the sale of New Homes in October were at a seasonally adjusted annual rate of 430,000, a 6.2 percent increase from the revised September rate of 405,000 and is 5.1 percent above a year ago.

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. For example, in September there were 31,000 homes sold and the original “seasonally adjusted annual rate” of sales was given as 402,000 homes. In October there were 35,000 new homes sold and this 4,000 home increase over September boosted the Continue reading “New Home Sales in US through October; UP 5.1 percent OR DOWN 24.1 percent from a year ago, take your pick

New home sales in Midwest down 5.8 percent in August

Dennis Norman

Dennis Norman

By: Dennis Norman

This morning the U.S. Department of Commerce released a report showing the sale of New Homes here in the Midwest region in August were at a seasonally adjusted annual rate of 49,000 units, a 5.8 percent decrease from July’s revised annual rate of 52,000 units (originally reported as 61,000  in July) and is down 31.9 percent from a year ago.

house-construction

The U.S. as a whole saw a slight 0.7 percent increase in new home sales in August over the month before and is down 3.4 percent from a year ago.

The report does not break down new home median sale price data by region, but for the US the median price of new homes sold in August was $195,200 down 7 percent from July’s price of $210,100.  The average time on market for new homes sold in the US in August was 12.9 months up from 12.4 months in June and up 30 percent from a year ago when the median time on market was 9 months.  Continue reading “New home sales in Midwest down 5.8 percent in August

New Home Sales in Midwest drop 7.6 percent in July; All other regions saw increase for July

Dennis Norman

Dennis Norman

This morning the U.S. Department of Commerce released a report showing the sale of New Homes here in the Midwest region in July were at a seasonally adjusted annual rate of 61,000 units, a 7.6 percent decrease from Junes annual rate of 66,000 units. The U.S. as a whole saw a 9.6 percent increase in new home sales in July over the month before with the Midwest beign the only region not to show an increase for the month.

house-construction

New home sales in the Midwest for July 2009 lag 4.7 percent behind July 2008 new home sales which is better than the 13.4 percent decline from a year ago for new home sales in the US as a whole.

Continue reading “New Home Sales in Midwest drop 7.6 percent in July; All other regions saw increase for July

New home sales in Midwest increase a whopping 43.1% in June

Dennis Norman

Dennis Norman

This morning the U.S. Department of Commerce released a report showing the sale of New Homes in June were at a seasonally adjusted annual rate of 384,000, an 11% increase across the US from May.

However, here in the Midwest the numbers were significantly better showing a seasonally adjusted annual rate of 73,000 new homes sales in June, a 43.1% increase over Mays rate of 51,000 homes.  In addition, the Midwest was the only of region of the four in the U.S. that showed an increase in sales from the year prior.  In the Midwest, June’s rate is 5.8% better than June, 2008’s rate of 69,000 home sales.  The US market as a whole was down 21.3% from a year ago.

Median prices for new homes in the U.S. decreased from $221,600 in May to $206,200 for June. Homes in the $150,000 – $299,999 range continue to dominate sales with 56% of the sales for June falling in this price range.  The Commerce Department does not publish median home prices or inventories for the regions so we can’t look at the Midwest alone.

house-construction

Perhaps the best news in the report is on the inventory of new homes. Inventory declined again to 281,000 homes which represents an 8.8 month supply based upon current sales rate. This is the lowest inventory we have seen in a long time and is a very positive sign to me. Continue reading “New home sales in Midwest increase a whopping 43.1% in June