New Homes Sold Through Sept. down 26.6 Percent from Year Before
By Dennis Norman, on October 28th, 2009
Dennis Norman
This morning the U.S. Department of Commerce released a report showing the sale of New Homes in September were at a seasonally adjusted annual rate of 402,000, a 3.6 percent decrease from the revised August rate of 417,000 and is 7.8 percent below a year ago.
Like I pointed out however, in my post last month, about the August numbers, I don’t think discussing the “rate” of new home sales paints a realistic picture of the market. Here we are talking about 3/4 of the year being gone (not to mention the best selling season) and to say the new home sales “rate” is down 7.8 percent from a year ago doesn’t make sense to me when actual year to date sales of new homes are down 26.6 percent from this time last year.
The report shows through September, 30, 2009, there have been 293,000 new homes sold compared with 400,000 new homes sold as of the same date the year before for a decrease of 26.6 percent. There were 31,000 new homes sold in September, down 16.2 percent from the 37,000 new homes sold in August. Year to date new home sales is down form last year in all four regions with the South seeing the biggest decline at 29.0 percent follow by the Midwest at 28.0 percent. Not far behind is the West with a 25.3 percent decline and the Northeast is faring the best with a decline of 11.1 percent.
The median sales price of new homes sold in September was $204,800 and increase of 2.4 percent from the August median new home price of $199,900.
The supply of new homes for sale dropped to 251,000 at the end of September a decline of 3.8 percent from the August inventory of 251,000 and, based upon the current new home sales “rate”, an equivalent of a 7 month supply, which actually the lowest number we have seen for supply in well over a year and not far off from a “normal” supply of 5 or 6 months.
One concern I have, which I have echoed many times, including in my post earlier this month about new home starts, is that even the reduced new home construction activity is still outpacing new home sales. Seeing the inventory decline is encouraging, but until we start seeing a real indication of new home sales picking up pace, I don’t think we want to start building inventory again.
Last month I projected that we would end 2009 with about 385,000 – 395,000 new homes sold versus 485,000 new homes sold last year. I had hoped to see better numbers in September as a result of the home-buyer tax credit which soon may come to an end, but based upon where we stand now I would lower my estimate to 375,000 – 385,000 new homes sold for the year.
AI
