New Home Sales Drop Monthly, Annually
Sales of new one-family houses in November 2009 were down (seasonally adjusted annual rate) This is 11.3% (±11.0%) below the revised October rate, and is off 9.0% (±15.3%)* below the November 2008.
The median sales price of new houses sold in November 2009 was $217,400; the average sales price was $280,300. Current inventory is a 7.9 month supply.
As I have warned many times in the past (see this from 2005), New Home Sales are highly volatile (primarily) self reported data, and subject to significant swings.
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Charts courtesy of Calculated RIsk
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Previously:
New Home Sales Data: Don’t rely On Them Either (November 30th, 2005)
http://www.ritholtz.com/blog/2005/11/new-home-sales-data-dont-rely-on-it-either/
Source:
New Home Sales in November 2009
U.S. Census Bureau and the Dept of Housing and Urban Development, December 23 2009
http://www.census.gov/const/newressales.pdf
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December 23rd, 2009 at 11:49 am
Honestly, I don’t know why anyone would ever buy a new home, unless you’re living in a place where there simply aren’t any existing homes to buy. Modern construction methods are designed to maximize profits at the price of quality, you have no opportunity to see what the neighbors are like before buying in a new neighborhood (not much different than apartment life), and you’ll invariably end up in a cookie cutter home with no character whatsoever. Why would anyone buy a new home when there are plenty of existing homes available at low prices?
But then again…I don’t know why anyone would ever buy a new car, considering that you lose 30% in depreciation just by driving off the lot!
December 23rd, 2009 at 12:15 pm
f411:
I don’t know how many existing homes for sale you’ve looked at, but people have a way of ‘customizing’ (for lack of a better word) their homes in ways that make many of them unappealing to many buyers (the older the home, the greater the chances some kind of customization has taken place, and the younger the buyer, the less appealing the customization). This includes everything from sponge-on paint jobs to low quality remodeling (you don’t need a level to tell when Harry Homeowner has had a hand in finishing the basement). The marketing appeal of a furnished model home is should not be underestimated.
December 23rd, 2009 at 12:40 pm
@MA: That’s definitely true but many of the new homes today are built in neighborhoods and towns that, to me, are totally devoid of any character or REAL neighborhood vibe or old (or any) trees, which are a must for me. Maybe because I grew up in New England and always liked the older feel of the towns there that new homes in many neighborhoods elsewhere (especially here in Minny) just don’t appeal to me. It just seems a bit contrived to me, no matter how nice the homes are…….
I always feel more comfortable in an older neighborhood where you can actually walk to things and those things aren’t soulless big box stores. Some of the suburbs here don’t even have a “downtown” per se, but their “downtown” consists of a Home Depot, Wal Mart, Costo, Target, etc. I actually get lost quite easily driving around some of these places. Everything looks the same. Creeps me out.
December 23rd, 2009 at 12:41 pm
new homes, new schools (usually, in burbs at least)
latest designs, granite, kitchen and great room, versus seperate living, dining, family
no crappy homes, crappy yards
less upkeep all equals a perception of no problems
December 23rd, 2009 at 12:45 pm
@torrie: Key word being “perception”. Amenities don’t always equal “happiness”. Sold to the Sheeple.
Know thyself.
December 23rd, 2009 at 3:22 pm
@Franklin411:
What now? Don’t like the New Home Sales data anymore as indicator where the economy is headed? I remember when you cheered a m-o-m improvement in these data, even if it wasn’t statistically significant.
rc
December 23rd, 2009 at 3:45 pm
“The marketing appeal of a furnished model home is should not be underestimated.”
no doubt- although f411 has some decent points-
a quality such as character though is usually developed over time- typically not going to start out that way-
your point regarding sweat equity improvements- whew! No doubt-
one person’s customization is another person’s nightmare
December 23rd, 2009 at 3:51 pm
@Mannwich:
I wouldn’t mind at all to buy a newly constructed 2-BR apartment in New York City. I still can’t afford it with the given price levels, though. A 1-BR apartment in Manhattan is too small for two people who have lots of stuff, including a book. I would have to stretch even for such a one, even me being a part of the global climate conspiracy who has amassed riches and power by brainwashing a gullible public for decades now.
rc
December 23rd, 2009 at 3:51 pm
Good thing they are not selling a lot of new homes, because they are not building a lot either. And good thing they are not building a lot of homes because we have a glut that needs to be worked off. The bigger negative news in housing is a fairly large drop in applications for new purchases.
December 23rd, 2009 at 4:18 pm
@rc: That’s a different story though. Chances are a newly constructed 2-BR apartment in NYC would at least be a neighborhood that has character but would probably cost you about $4-$5K/month. I lived in NYC and our last apartment was what you describe – a tiny 500 square foot (if that) walk-up box on W. 17th Street for $1600/month (which wasn’t a bad deal relative to other places in the city). Loved the the location but the smallness of it was ridiculous. Had to rent a storage unit for another $110-$120/month just store our crap. Big inconvenience, not to mention we could never find anything in that storage unit when we needed it. I loathed going there to find stuff!
December 23rd, 2009 at 4:46 pm
I agree with Mannwhich in relation to character. New housing estates usually have none. Eventually once trees and gardens and corner stores are established they may start to feel nicer. Many new housing estates are doomed in my opinion. The will be entirely unappealing due to the long commuting distances involved. Of course prices can fix many things and it may come to pass that some of these neighbourhoods can be reorganized around a new model. One that has attractive town centers, local facilities, viable local industry and agriculture.
On the other hand the large speculative housing estates in the sand states are more likely either to be pulled down or become ganglands where the main industries are gambling, drugs and prostitution. Come to think of it that is possible quite a viable model in America.
December 23rd, 2009 at 6:59 pm
I’d be curious to know the breakdown in age and demographics of todays buyer, based on the conversation I have with realators it seems there are two groups buying here in texas.
a. move up, if they can sell what they got
b. first time buyers, who are mid thirties, 70k or so combined income, or single female around 40 buying cheapest first time home
it seems they have zero clients in the 24-33 year old range, the typical we’ve been out of school 2-3 years and now is the time for our first home, one wonders if alot of these basically have decided in an internet world or what have you, owning a home is a hassle and not desirable, if there is a generational shift it will cause lot’s of headaches because demand will just not be there