Today, the U.S. Department of Housing and Urban Development and U.S. Census Bureau released new home sales data for December 2011 showing a decrease of 2.2 percent from the month before, and a decrease of 7.3 percent from a year ago. The seasonally-adjusted new home sales rate for December was 307,000 homes, down from an adjusted rate of 314,000 homes the month before. This is the first month new home sales have declined in four months and unfortunately ends the year with the lowest number of new homes sold since the Commerce Department began keeping track of sales in 1963.
The supply of new homes on the market increased to a 6.1 month supply from 6.0 months the month before. The median new home price increased 6.3 percent for the month to $266,000 from a revised median price of $250,300 the month before but decreased 9.3 percent from a year ago when the median new home price was $291,700..
As has been my long-running mantra, I don’t like “seasonally adjusted” numbers and “rate” of sales. Why, for one I can’t figure out how in the world they compute the numbers. Second, I just don’t think discussing the “rate” of new home sales paints a realistic picture of the market.
Here is the raw data, the ACTUAL new homes sold- no fluff, no “adjusting” For December 2011:
- 2,000 new homes sold, down from 22,000 the month before and down from 23,000 a year ago.
- As usual, the South had the majority of the new home sales with 12,000 this month (57.1 percent of the total in US)
- the west region had 4,000 new homes sold.
- the Midwest had 4,000 new homes sold.
- The Northeast had 2,000 new homes sold.
- 2011 comes to a close with a total of 302,000 homes sold – The lowest number of new homes sold since the Commerce Department began keeping records in 1963.
- New Homes in the US in sold during the month been for sale for a median time of 6.7 months since the homes were completed, down from 7.3 months the month before.
I called it a year ago -
Throughout 2011 I was forecasting that there would be 290,000 – 319,000 new homes sold in 2011….. The actual number was 302,000 almost smack-dab in the middle of my forecast….hmm, not bad for just a plain old real estate guy that’s not a PhD.
What’s in store for 2012?
Well, this one is a tough one….While I am confident we are going to see an increase in home sales from 2011, I’m just not thinking it’s going to be much. On the good side of things, mortgage delinquency rates and foreclosure rates are trending downward and new home inventories are declining however, on the bad side, prices are still depressed to the point that there is a significant premium for a new home. Therefore, I’m going to forecast a modest increase and am expecting to see somewhere between 304,000 – 334,000 new homes sold in 2012.