Thursday, December 27, 2012

New home sales in West flat in November, but 2012 has shown growth

New single-family home sales in the U.S. West were flat from November 2011 to November 2012, following nine months in a row of year-over-year increases in new home sales. 2012 showed sustained growth in new home sales over 2011, but November new home sales have moved little since 2008, and are generally hovering around 5,000.  According to today's New Home Sales report, released by the Census Bureau,there were 5,000 new home sales in the Western U.S. during November 2012. 

The report, which monitors sales activity for newly constructed houses, reported that in the West, new home sales were back to the lowest total recorded since January 2012, and this reflects seasonal patterns. We will have to wait until Spring 2013 to get a sense of how 2013 will shape up for new home sales. 

The first graph shows monthly new home sales totals for each month since 2003. New home sales have generally been flat since 2008 during November, although this year's summer months showed some significant growth. 

For the West region: 

New home sales peaked during the spring and summer of 2005 and have generally trended downward since. As of November 2012, the number of new houses sold in the United States is down 78 percent since the peak of March 2005, and new home sales in the West have fallen 86 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. As of November 2012, the number of new houses for sale in the West has fallen 68 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. 

As we see signs of growth in new home sales, the number of new homes being offered for sale was flat in the West but showed numbers inching up a bit for the first time since 2006. This slight increase in new homes for sale suggests some optimism among builders, but this is not yet showing up in the West region's stats.  For a longer historical perspective, see here

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 in recent months has been near a ten-year low, and was at the lowest point reached since the early 1990s.  During the past two months, however, the inventory has inched up as builders have been responding to very low inventories in existing homes for sale.