New-home sales headed for record low in 2011
Sales inched up slightly in October, but it looks as if annual sales will be even lower than last year's tally, which was the smallest number sold in nearly 50 years.
The number of new homes sold inched up slightly in October, but builders aren't throwing any parties.
2011 is shaping up to be the worst year for the sale of new homes since the Commerce Department began keeping records in 1963, with sales below even last year's record low.
"It looks like 2011 will be another year the homebuilders would like to forget," Michael Larson, a housing analyst at Weiss Research in Jupiter, Fla., told Bloomberg. "Sales remain depressed, lending standards are tight, and pressure on pricing remains due to an ongoing influx of distressed used homes."
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Builders sold 1.3% more new single-family homes in October than they did in September. This October's sales were 8.9% above the number of sales in October 2010.
The rate of sales for October would yield total nationwide sales of 307,000 for the year. That's considerably fewer than the 323,000 homes sold last year, the lowest number in nearly 50 years and less than half the number sold in a healthy market.
The median sale price for a new single-family home was $212,300 in October, down 0.4% from September.
October's sales were the best since May, and builders put an optimistic face on the report.
"Today's report is right in line with our forecast for modest and gradual improvement in sales activity through the remainder of the year," David Crowe, chief economist for the National Association of Home Builders, said in a news release. "Particularly encouraging is the fact that builders continue to hold down their inventories to match the current sales rate, with the number of new homes for sale now down to a sustainable, 6.3-month supply."
The number of new homes for sale is at a record low, 162,000 nationwide, which is a 6.3-month supply at the current sales rate. Builders have kept inventory down as sales and prices have fallen, plus they have had trouble getting financing for new projects.
Here is how the building activity looked in October across the four U.S. regions:
- Midwest: Sales up 22.2%.
- West: Sales up 14.9%.
- Northeast: Sales were unchanged.
- South: Sales down 9.5%.
The magnitude of the government's assistance to struggling banks allowed them to grow even bigger and continue paying executives billions in compensation, toss in europe and its now
16 trillion...wtf? Thats your good 'ol boy George Bush............ OWS was right all along...
go ahead read Bloombergs..
WHILE IT MAY BE TRUE THAT NEW HOME SALES SPUR THE ECONOMY MORE THAN EXISTING HOME SALES DO, NEW HOMES COST MORE THAN EXISTING HOMES. SO AS LONG AS THERE
ARE CHEAPER EXISTING HOMES TO BUY AND BANKS KEEP FORECLOSING ON HOMES, THE
NEW HOME MARKET WILL ONLY BE AVAILABLE FOR THOSE IN BETTER THAN GOOD ECONOMIC CONDITION.
Like most leveraged investments,owners must liquidate as soon as possible.
Banks fear losing the collateral.Real estate can still produce income,maybe not as much as needed to cover the principle,but enough to cover the interest until the prices stabilize or rise.
Things were totally out of control and people were spending way more than they could afford. It's about time we've come back to reality. Too bad it will take years for many people to get their feet back under them due to spending like there was no tomorrow.
Everyone complains about how bad things are. Things were much worse when we had run-away inflation on real-estate and run-away credit card spending. At least people now have some fear with the knowledge that money really doesn't grow on trees.
More ultra conservative trolls and teabaggers blasting Obama again. They never shut up, and they never actually THINK!
Bush, the very rich, and greedy Wall Street tycoons are the ones who wrecked our economy. Obama inhereted this mess. Yeah, nothing he has done has fixed it. The reason? IT CAN'T BE FIXED!
It will take a lot of time, probably ten years, and good sound policy to fix this catastrophe.
The GOP and the Teabaggers don't have solutions that will help most Americans, their solutions will just make the rich even richer, turn the USA into a state of corporate feudalism with the wealthy as defacto nobility, and turn the American working class into wage-slaves/serfs.
The Occupy Wall Street people are the first signs of the resistance movement to this tyrrany by the rich. The OWS people have the right idea. More needs to be done. Check out "The Resistance JKL" for more information about how the American people are being systematically enslaved by the ultra rich.
If builders quit building eventually all the homes will be bought up and demand will return to equilibrium. The banks can do what they want with the homes because they are loosing allot of money, but I don’t agree that tax payers should pay the bill for there losses. If you purchased a home and let it go you should be liable which means bad credit. Also, student debt should never be forgiven because you received the money, and students know this before taking on these types of loan. People need to take responsibility and become savers. I just hope this country comes together before we financially rip our selves apart.
And which mega bank is sponsoring this report and article with a leading advertisement? It’s Bank of America, the company who’s Countrywide Mortgage Division is responsible for more foreclosures and distressed home sales than any other.
What a crazy world we live in. A little Twilight Zone music please.
About Teresa Mears
Teresa Mears is a veteran journalist who has been interested in houses since her father took her to tax auctions to carry the cash at age 10. A former editor of The Miami Herald's Home & Design section, she lives in South Florida where, in addition to writing about real estate, she publishes Miami on the Cheap to help her neighbors adjust to the loss of 60% of their property value.