real estate:

Sales of new homes tumble further in 2009

Published Tuesday, March 17, 2009 | 10:32 a.m.

Updated Tuesday, March 17, 2009 | 12:33 p.m.

Real Estate in Crisis

As bad as 2008 was for the new-home industry, 2009 is shaping up to be even worse.

Through the first two months of this year, only 637 new homes sold. If that pace continues, fewer than 4,000 new homes will sell this year. That’s 62 percent fewer homes than the 9,965 homes sold in 2008. January and February sales are typically slower, but when combined they equaled the worst single month of 2008.

SalesTraq released its February data March 16 that show the desperate shape of the homebuilding industry. The median price of new homes sold in February was $216,334, nearly $14,000 less than January. The one bit of good news is that the 353 new home sales in February was 69 more than January.

The new-home market peaked in June 2006 when the median price was $355,435. It has fallen nearly 40 percent since.

That’s because builders are cutting prices and constructing smaller homes to focus on affordability to compete against foreclosures.

In February, 344 subdivisions had sales activity, well off the record of 579 in July 2007. The 1.03 sales per subdivision in February bettered a record low of 0.81 in January.

Because of the sluggish sales, homebuilders remain on the sidelines when it comes to constructing homes. Only 128 permits were taken out in February, the lowest number in 25 years. The 311 permits issued in 2009 means builders are on pace to take out fewer than 2,000 permits in 2009. Local governments issued 5,551 permits in 2008.

Discussion: 6 comments so far…

By 2zero

3/17/09 at 12:03 p.m.

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As soon as the unemployment checks stop, the new home construction workforce might actually go back to mexico??? There must have been 100, spanish speaking, fellas standing out in front of Star Nursery today, and the number of "day workers" just keeps growing........
By KillerB

3/17/09 at 1 p.m.

Suggest removal

2zero -- you talked to each of those 100 to conclude what language they spoke?
By jfnance32

3/17/09 at 2:55 p.m.

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Yeah.....I bet those are all chinese speaking folk in front of the Star Nursery.
By neiman1

3/17/09 at 4:33 p.m.

Suggest removal

Remember they cancelled E verify with the stimulus program. Who are we trying to stimulate. LaRaza and ACORN. What a great country.
By vlakh01

3/17/09 at 7:18 p.m.

Suggest removal

Home Prices nationally have retreated back to the levels of 2003 - the key is how much more will they drop and where are home prices in relation to rents? Once that spread starts narrowing a natural bottom will form in housing.

Vivek L
http://www.smallbusinessplanresources.co...