Existing Home Sales Up, While New Construction Down
by Murray Balkcom, GRI, Realtor
At a glance, the two articles below seem conflicting. One indicates that sales are down, while the other indicates that sales are up. However, notice that the first article is referring solely to new home sales, while the second refers to only existing homes. I’m not sure that the first article carries much weight in today’s market where the existing homes which are selling are priced well below the price it would take to purchase a lot and build new. We are “below the curve” right now in regards to pricing for existing homes. Add to that, there are not any new condo projects under construction in our area, and therefore no “new” condo sales. There is some demand, though very little, for new construction, as many people look through the existing inventory which is reasonably priced, and don’t see anything which fits their needs and wants. Buyers can find good deals on home sites and build new, meeting the latest building codes, and when they eventually try to sell it, it should bring more than an older home of similar build. Cost of materials is down from the highs, builders are competitive in pricing, as are architects, and due to the decrease in new construction, most builders can complete a job within six months. When a home site buyer builds, they get exactly what they want. Not everyone wants to make those decisions which come with building, but most good builders can select finish packages, making it easy for the buyer, and leaving only the decision of price point to the buyer.
For those who are less particular about their wants and needs, some existing homes can be found at very attractive prices, and price is the factor which is moving inventory. So, it is not surprising that existing inventory is up greatly, while new construction is down. There isn’t really a news story in that observation, in my opinion.
Below, are the referenced articles:
New home sales drop 2.2% in Feb. to new low
The Associated Press, Alan Zibel, AP real estate writer.
WASHINGTON (AP) – March 24, 2010 – Sales of new U.S. homes fell unexpectedly to the lowest level on record in February as stormy winter weather kept buyers on the sidelines. The weak results make clear the difficulties facing the housing industry as it tries to recover from the worst slump in decades.
The Commerce Department reported Wednesday that new home sales fell 2.2 percent last month to a seasonally adjusted annual sales pace of 308,000.
It was the fourth consecutive month of declines and the worst showing on records dating to 1963. January’s results, meanwhile, were revised upward slightly to a pace of 315,000.
Economists surveyed by Thomson Reuters had expected February sales would rise to an annual rate of 320,000.
Sales plummeted dramatically in parts of the country that were hit with bad weather. In the Northeast, they fell 20 percent from a month earlier. Midwestern sales fell 18 percent. Sales fell nearly 5 percent in the South but rose 21 percent in the West.
The new home sales report reflects signed contracts to purchase homes rather than completed sales and thus gives economists a feel for how many buyers were out shopping for new homes in a given month…. (full article)
and then there is the other story by Florida Realtors:
Florida’s existing home, condo sales rise in February 2010
ORLANDO, Fla. – March 23, 2010 – Florida’s existing home sales rose in February, which means that sales activity has increased in the year-to-year comparison for the past year and a half (18 months), according to the latest housing data released by Florida Realtors®.
Existing home sales increased 21 percent last month with a total of 11,890 homes sold statewide compared to 9,867 homes sold in February 2009, according to Florida Realtors. Statewide existing home sales last month increased 13.6 percent over statewide sales activity in January.
Florida Realtors also reported a 59 percent increase in statewide sales of existing condos in February compared to the previous year’s sales figure; statewide existing condo sales last month rose 9.8 percent over the total units sold in January…. (full article)
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Murray Balkcom is a licensed Realtor with The Premier Property Group, serving most of South Walton, including Alys Beach, Rosemary Beach, Seacrest Beach, WaterSound, Seagrove, Seaside, WaterColor, Grayton, Blue Mountain Beach, Santa Rosa Beach, Dune Allen, and Point Washington.