Monday, March 26, 2012

New home sales in February flat since 2010 in Western U.S.

New single-family home sales were flat in February in the West region of the US, which includes Colorado. New home sales during February were tied at the second-lowest February total in the past decade.

The report, which monitors sales activity for newly constructed houses, reported that in the West, new home sales were up up to 7,000, rising 40 percent during February 2012 from 5,000 new homes sold in February 2011. Nationwide, sales rose 4.7 percent, rising from 22,000 to 25,000 during the same period.

However, at 7,000 new home sales during February 2012, sales are flat with February 2010's total of 7,000, signaling that little has changed since the days following the official end of the 2009 recession.

The first graph shows monthly new home sales totals for each month since 2003:

For the West region:

The second graph shows that new home sales continue to fall and have generally followed a downward trend since the middle of the decade.

New home sales peaked during the spring and summer of 2005 and have trended downward since. The number of new houses sold in the United States is down 80 percent since the peak of March 2005, and new home sales in the West have fallen 881 percent since sales peaked in the region during March 2004.

The third graph shows the declines in both US and regional totals in new homes for sale.

The number of new homes for sale has also fallen off considerably. The number of new houses for sale in the West has fallen 76 percent since the total peaked during June 2007, and the same total has fallen 73 percent in the US since the number of new homes for sale peaked in the US during August 2006.

The number of new single-family homes for sale in the West reached a new low during February and is now at the lowest level it's been in more than ten years.

As a final note, we can also look to the new home inventory. In this case, we calculate inventory by subtracting the number of new home sales in a given month from the number of new homes for sale at the end of the previous month. In the final graph, we see that the inventory is now at a ten-year low of 25,000 homes. This is good news for owners seeking to sell homes since it suggests that fewer new homes are sitting and waiting to be sold, thus diminishing some of the inventory-driven downward pressure on prices.

Overall, this report shows that new home sales are holding steady, and have stopped declining, but that totals are still at the same levels they were during the 2008-2009 recession. Inventory of new homes continues to decline which is good news for many people.