By: Dennis Norman:
This morning the U.S. Department of Commerce released a report showing the sale of New Homes in March decreased 0.6 percent from February and is 30.6% less than a year ago.
A decline of less than 1%, following last February’s increase of 4.7% in sales I think again shows the market is perhaps leveling off. In addition, the change in year over year sales from last year has decreased from 41.1% less from February 2008 to February 2009 to 30.6% less from March 2008 to March 2009.
Once again, consistent with my previous comments that I think the market is leveling off, median home prices stayed pretty steady…in March the median home price was $201,400 making March the third month that median prices of new homes have been right at $201,000.
The other good news in the report is that the seasonally adjusted estimate of new homes for sale at the end of March was 311,000 which is down from February’s inventory of 330,000 homes and down 9% from January’s inventory of 342,000. This represents a supply of 10.7 months at the current sale rate which again is an improvement over February’s supply of 12.2 months and an improvement of 17.6% from January’s supply of 13 months.
While the only way to truly determine the bottom of a market or a cycle is after it happens, at which time it is too late to “get in on the bottom”, I think the new home sales data coupled with the recent existing home sales data I have been talking about is showing that the market may in fact be “testing” the bottom.
For the investor I think this is good news on a couple of fronts: One, if you have been waiting for the market to “bottom out” before you increase your inventory, depending on your local market conditions you may start being tempted to make a move now; Two, once the market does in fact hit bottom, even though I think it will be some time before we see any real appreciation, it will at least stop the downward sprial of home values on your current inventory.
No related posts.
Related posts brought to you by Yet Another Related Posts Plugin.