New Home Sales Drop Again But Prices Fairly Stable
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Sales of new single family houses dropped again in November
according to a joint report issued Friday by the U.S. Department of Housing
and Urban Development and the U.S. Census Bureau.
Single family homes sold at a seasonally adjusted annualized rate of 647,000
units. This is 9 percent below the revised October rate of 711,000 and 34.4
percent below the estimate of 987,000 for November one year ago.
Only in the West region were sales up from the previous month and then by a
scant 4.0 percent. Sales in the Northeast were down 19.3 percent, in the Midwest
27.6 percent and in the South 6.4 percent.
And the inventory of unsold houses continues to mount. The
report estimates that there were 505,000 new homes for sale at the end of November.
This is a slight drop in the actual number of homes, 514,000, that were available
at the end of October but the sales pace has slowed, resulting in a 9.3 month
supply at the current absorption rate. In October there was an 8.8 months supply
and in November, 2006 the inventory was sufficient for 6.5 months.
The median sales price for houses sold during November was
$239,100, up from $229,500 in October which was the low point of the last 12
months. The average price, however, was down to $293,300 from $307,900. While
the general trend in house prices is down, it certainly is not a precipitous
drop. In fact the November 2006 and November 2007 figures are remarkably close.
In November 2006 the mean price was $240,100 and the average was $291,800.
Over the last year the median has been as high as $262,600 (March) and the
average has fluctuated from last November's low of $291,800 and $329,400
also in March. Builders, of course, are notorious for holding to their asking
price while making other concessions to move the merchandise. There is no way
to tell how many appliance upgrades or how much creative financing is lurking
behind the median and average prices.
Houses had been on the market a median duration of 6.2 months by the time they
sold in November. This is marketing time after completion. In October the median
was 5.9 months and one year ago it was 4.1 months.
The National Association of Realtor's® report on the sales of existing
homes is also due to be released in the next few days.
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