Big housing blow: New home sales fall, again
WASHINGTON – Sales of new U.S. homes fell to a six-month low in August. The fourth straight monthly decline during the peak buying season suggests the housing market is years away from a recovery.
New-homes sales are on pace for the worst year since the government began keeping records a half century ago.
High unemployment, larger required down payments and tougher lending standards are preventing many people from buying homes. Plunging stocks and a growing fear that the U.S. could tip back into another recession are also keeping people from entering the housing market.
Pierre Ellis, an analyst at Decision Economics, said that until wages increase and hiring picks up, home sales will languish.
The "bad news is the evident absence of optimism that sales will pick up to any degree," Ellis said.
While new homes represent less than one-fifth of the housing market, they have an outsize impact on the economy. Each home built creates an average of three jobs for a year and generates about $90,000 in taxes, according to the National Association of Home Builders.
Last year was also the fifth straight year that sales have fallen. It followed five straight years of record highs, when housing was booming.
The median sales price of a new home fell nearly 9 percent to $209,100 — the lowest price since last October. That suggests builders are slashing their prices in order to compete with comparably lower-priced previously occupied homes.
Foreclosures and short sales — when lenders accept less for a house than a mortgage is worth — are forcing prices down. Those homes are selling at an average discount of 20%, and they are lowering neighboring home values. That's made many re-sales a bargain compared with new homes, creating an average 30% disparity in prices.
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ReplyDeleteThis isn't a good news for all especially to real estate investors and businessmen in the country. May I suggest to uplift the company's profiles as well as the company's product and services by means of adapting high technology and high innovations in promoting the product and services of certain real estate. I believe that somehow, the sales of new houses will surely not fall as fast as this. Its just a matter of marketing strategy and techniques.
ReplyDeleteLocation indeed is a great factor in having a sale, not to mention the neighborhood around it. ;) But yeah, we cannot predict the sales, it may go up tomorrow, it may decline on the next day. Housing prices and sales nowadays are very unpredictable.
ReplyDeleteThis market is so volatile. It's the same way with Seattle homes. Many of the seasoned realtors I know have said this is one of the most difficult times ever.
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