On the Low End
New home sales were the lowest reported since 1963, settling in at 331,000 in December. Compared to the same time in 2008, when builders sold 482,000 homes, which were the lowest results since 1982.
New home median prices also dropped to $206,500, a 9.3 percent drop from December 2008. The glut of unsold homes sits at about 357,000 – it is estimated that it will be over a year before the inventory is sold.
The overall picture is divided into a 28 percent drop in the Northeast, a 20 percent drop in the West, and a lower 12 and 6 percent in the South and Midwest.
The rising unemployment rate combined with tighter mortgage qualifiers has brought the new home market to a standstill.
The market overall lost $3.3 trillion in 2008, with an average of one in six homeowners owing more than their homes were worth. Over 2.3 million homes went into default or were seized by lenders.
Median price drops by city include:
Los Angeles: -21%
Las Vegas: -26.8%
On the High End
Existing home sales showed an unexpected increase in December especially for foreclosure deals in California, Nevada and Florida. Sales resulted in a 6.5 percent increase over November; still the worst year for real estate in over ten years. Markets did; however, exceed the doom and gloom originally forecasted for drop of 4.4 million. It seemed the bargain basement prices and attractive interest rates made smart buyers sit up and take notice.
Existing home sales in December 2009 topped 4.74 million, up from 4.45 million in November. Median sales prices were $175,400; a 15.3 percent drop from $207,000 in December 2008. The last time prices were that low was in May 2003.
Median price increases include:
Fayetteville, North Carolina: 6.9%
Yakima, Washington: 6.2%
Utica-Rome, New York: 5.3%
Also on the upswing in December was the number of unsold homes on the market. This number fell almost 12 percent to 3.7 million. In early February, the stock of U.S. homebuilders rose almost 12 percent – another positive sign that the decline may be leveling off.
It appears that recent activity is not as bad as originally forecasted. “Generally speaking, the recent data that has been coming in points to poor economic activity in an absolute sense,” said Myles Zyblock, chief institutional strategist at Royal Bank of Canada. “However, it is coming in (a) less bad than expected and (b) less bad than what was indicated a few short weeks ago.”
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