By:Dennis Norman
This morning the U.S. Department of Commerce released a report showing the sale of New Homes in March decreased 0.6 percent from February and is 30.6% less than a year ago.
A decline of less than 1%,following last February’s increase of 4.7% in sales I think again shows the market is perhaps leveling off. In addition,the change in year over year sales from last year has decreased from 41.1% less from February 2008 to February 2009 to 30.6% less from March 2008 to March 2009.
Once again,consistent with my previous comments that I think the market is leveling off,median home prices stayed pretty steady…in March the median home price was $201,400 making March the third month that median prices of new homes have been right at $201,000.
The other good news in the report is that the seasonally adjusted estimate of new homes for sale at the end of March was 311,000 which is down from February’s inventory of 330,000 homes and down 9% from January’s inventory of 342,000. This represents a supply of 10.7 months at the current sale rate which again is an improvement over February’s supply of 12.2 months and an improvement of 17.6% from January’s supply of 13 months.
Overall I find the report this month pretty encouraging and supportive of my thoughts that the market may be leveling off near bottom. Here’s a quick recap of the facts that I think are important to note this month:
- Sales activity stayed pretty consistent with last month with only a minor variation from January
- Median home prices have been holding steady this year
- Inventory of new homes as well as months supply of new homes have been decreasing this year
Time will tell if we are truly nearing the bottom. Also the economy is still very volatile and if it continues downward will put additional strain on the real estate market. So far now I would say the market is perhaps “testing”the bottom.
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