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January New-Home Sales Hit Record Low

Sales of new single-family homes in January were at a seasonally adjusted annual rate of 309,000, 10.2 percent below the December rate of 344,000 and 48.2 percent below the 597,000 units estimated in January 2008, the U.S. Commerce Department reported this morning. This is the slowest sales pace on record dating back to 1963.

The median sale price of new homes sold in January was $201,100, a decline of 13.5 percent from the $232,400 recorded in January 2008. There were 342,000 new homes were available for sale at the end of January, representing a 13.3-month supply at the current sales rate.

One thought on “January New-Home Sales Hit Record Low

  1. I have been studying the markets from coast to coast along with a very hard look at my own market, Northern Bergen County New Jersey. New home sales can not pick up at any pace until the cost of land and construction is less than what an existing standing home can be bought for. Right now you can buy existing new homes and resale’s, for less than replacement cost without profit an overhead. I believe it will be 3 to 6 months to drop existing new home inventories to the level of equilibrium. It will probably the same time to begin to balance out home sales in Bergen County. Bergen County is a fully developed area for all extensive purposes. The small amount of land was really only infill. Therefore the overbuilding only happened in a different way. Not supplying many more units to the market, but supplying many more high priced, extremely high priced homes. They were bigger and elaborate compared to what they replaced. The homes that were knocked down in most towns were older, much more modest homes. This caused a disparity in pricing in some towns between demand and supply. Purchaser’s ability to buy in these areas, were not up to the level of the new home prices.
    I had seen it coming and pre-saled many properties in 2005 and 2006. It was a non professional ego fest, by new to be builders and speculators that bought up anything they could to build on.
    So when these large homes are sold in Bergen, a new home market of more realistically sized homes will be built. Land is and will continue to correct price maybe a little more. In one Bergen town a good lot in 2005-2006 was $1.1 million now it is $650,000.
    That is a price back to late 2004 early 2005, just before it got stupid.

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