The Census Bureau and Department of Housing and Urban Development have released New Residential Sales data for January 2011.
New Residential Sales data provides statistics on the sales of new privately-owned single-family residential structures in the United States. Data included in the press release are (1) the number of new single-family houses sold; (2) the number of new single-family houses for sale; and (3) the median and average sales prices of new homes sold.
A house is considered sold when either a sales contract has been signed or a deposit accepted. Included in our estimates are houses for which a sales contract is signed or deposit accepted before construction has actually started; for instance, houses sold from a model or from plans before any work has started on the footings or foundations. These estimates also include houses sold while under construction or after completion. This survey does not follow through to the completion ("closing") of the sales transaction, so even if the transaction is not finalized, the house is still considered sold. Preliminary new home sales figures are subject to revision due to the survey methodology and definitions used. The survey is primarily based on a sample of houses selected from building permits.
New residential sales estimates only include new single-family residential structures. Sales of multi-family units are excluded from these statistics.
Here is a Quick Recap from Reuters...
RTRS-US JAN SINGLE-FAMILY HOME SALES 284,000 UNIT ANN. RATE (CONS 310,000) VS DEC 325,000 (PREV 329,000)
RTRS-US JAN SINGLE-FAMILY HOME SALES -12.6 PCT VS DEC +15.7 PCT (PREV +17.5 PCT)
RTRS-US JAN HOME SALES NORTHEAST +54.5 PCT, MIDWEST +17.1 PCT, SOUTH -12.8 PCT, WEST -36.5 PCT
RTRS-US JAN NEW HOME SUPPLY 7.9 MONTHS' WORTH AT CURRENT PACE VS DEC 7.0 MONTHS
RTRS-US JAN MEDIAN SALE PRICE $230,600, +5.7 PCT FROM JAN 2010 ($218,200)
RTRS-US HOMES FOR SALE AT END OF JAN 188,000 UNITS, LOWEST SINCE DEC 1967, VS DEC 189,000 UNITS
RTRS-TABLE-U.S. Jan single-family home sales fell 12.6 pct
Excerpts from the Release...
Sales of new single-family houses in January 2011 were at a seasonally adjusted annual rate of 284,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 12.6 percent (±11.2%) below the revised December rate of 325,000 and is 18.6 percent (±15.4%) below the January 2010 estimate of 349,000.
The median sales price of new houses sold in January 2011 was $230,600; the average sales price was $260,300.
The seasonally adjusted estimate of new houses for sale at the end of January was 188,000. This represents a supply of 7.9 months at the current sales rate.
Last month we talked about large statistical variations in December New Home Sales data. Here is a quote from New Home Sales Greatly Distorted in December. Standard Error Huge...
"Based on a smaller sample size, with 90% certainty, the Census Bureau's survey indicates the month over month change in New Home Sales was in a range of -0.2% to +35.2%. That is a wide range! The Census Bureau isn't even certain if New Home Sales increased or decreased in December. That means we should view this report as 'statistically insignificant'. "
More explanation from the Census Bureau: These statistics are estimated from sample surveys. They are subject to sampling variability as well as nonsampling error including bias and variance from response, nonreporting, and undercoverage. Estimated average relative standard errors of the preliminary data are shown in the tables. Whenever a statement such as “2.5 percent (±3.2%) above” appears in the text, this indicates the range (-0.7 to +5.7 percent) in which the actual percent change is likely to have occurred. All ranges given for percent changes are 90-percent confidence intervals and account only for sampling variability. If a range does not contain zero, the change is statistically significant. If it does contain zero, the change is not statistically significant; that is, it is uncertain whether there was an increase or decrease. The same policies apply to the confidence intervals for percent changes shown in the tables.
This month the Standard Error was "12.6 percent (±11.2%) below the revised December rate of 325,000 and is 18.6 percent (±15.4%) below the January 2010 estimate of 349,000.
TRANSLATION: With 90% certainty, the Census Bureau survey indicates the month over month percentage change in New Home Sales was in a range of -1.4% to -23.8%. The year over year change in New Home Sales was in a range of -3.2% to -34%. So New Home Sales have continued to weaken, we just don't know by exactly how much. The standard error is so big that it distorts perspective...
Plain and Simple: Although the data is statistically significant, it still paints a confusing picture for potential housing consumers who are wondering if a bottom has been hit. This is why we look for trends as indicated by four months of data, not just month over month changes. Beyond that...certain parts of the country are outperforming others. Location location location I would do much research on local markets when deciding whether to rent or own, if you qualify. There are opportunities to be taken advantage of, you just have to do your homework. For example, I live in D.C....this market is recovering because of BRAC and a stable jobs market. El Paso, Texas is another example of a city recovering faster than others because of a military base realignment. Is that a bubble????
There is value out there...just gotta find it. And then qualify for a loan if you don't have the cash to invest. Good Luck Bargain Buyers!