Survey: New Home Sales Still Down, but Recent Monthly Improvements Offer Hope
Despite monthly improvements in 2011, year-over-year new home sales are down 9%, according to results of the John Burns Real Estate Consulting monthly survey.
In February, net sales increased by 26%, compared to a normal rise of 12% in January 2011.
“We told our clients that a 9% decline is actually better than it seems, because we are comparing year-over-year to sales which were boosted by the federal tax credit,” said John Burns, CEO of John Burns Real Estate Consulting. “If we can get through the spring coming that close to last year, I would say we are seeing stability in the housing market.”
John Kahn, vice president of the firm’s survey who analyzes the breakdown of average net sales for every community by region, said most regions remain down on a year-over-year basis except for the Northwest, Texas and the Southwest, which are outperforming the national average.
The monthly survey, which is based on 225 market ratings provided by 197 builders, found that community net sales by region are also down year-over-year, with the average rate at 1.46 compared to a normal rate of 4.0 that builders would budget for in a normal market.
“Our builder contacts continue to report that the housing market is still very weak, and price discounting is reported throughout the country,” Kahn said.
Other highlights from the survey revealed that new home prices remained flat in Texas and the Northeast, but declined slowly throughout the rest of the nation.
There were also higher traffic numbers during February, but motivation and qualification problems still exist in the market and finished inventory decreased by 9% from 3.2 in January to 2.9 units on average.