New home sales still in the tank nationally

Here's latest new home sales report.

Note that new home sale prices are up in the South, but that just illustrates the shortcomings of the national and regional approach. The housing market in the South includes both lively Charlotte, N.C., and left-for-dead Miami.

Sometime in April Tampa Bay area housing analysts will tell us how sales stood in the first quarter of 2008. I'll post the data here as soon as I get it.

Comments

maybe some insight here> http://blogs.tampabay.com/realestate/2008/03/vegas-miami-top.html#comments

[k]

I'm currently showing an estimated 18 months of inventory.

It's going to take the extremely painful decision to create a temporary moratorium on new contruction before the this gets back to normal. So who wants to commit political suicide? Any takers?

I'm currently showing an estimated 18 months of inventory.

Double that number and that is still a conservative estimate of what exist out there in terms of inventory.

[k]

Change that to 22.5 months. ugly

Change that to 22.5 months.

You forgot to add in the hidden inventory consisting of rentals, foreclosures and for sale by owner which will up your number by more than 12 more months.

[k]

no...then you would have to divide by their sales as well....find a good source for that! The figure is for SFRs only.

[James Thorner]

While I think "months of inventory" is a worthy measurement, it's awfully volatile. A sales rebound - whenever that arrives - can deplete that 22 month number in a hurry. That will happen at some point when buyers sense we're reaching a bottom. Also keep in mind that many homes heading for foreclosure ARE listed for sale since the buyers are desperate to unload them. Likewise rental homes: A couple on my block are available for rent while still for sale. So they aren't so much "hidden inventory" as already counted inventory.

[Chris]

A moratorium on new homes is just plain wrong... and illegal at best.

If the gov't puts the breaks on what little construction is actually still occuring, we will then have thousands more of Tampanians losing their jobs.

That will further trickle down and we'll be even worse off.

Not only that, gov't intervention would be illegal. Why should one industry suffer just so others can have a better chance of selling their homes? Sound's like a misuse of powers to me....

And before anyone starts blaming builders, think about who bought the houses. The builders were only serving the demand that was out there. Blame your fellow neighbors and friends who were buying homes to flip if you want to blame anyone. Builders didn't hold a gun to anyones head forcing them to buy.

Just my two cents.

If builders are allowed to continually undercut and cannibalize existing homes, the credit crisis will continue. Permit moratoriums are used by local governments all the time to restrict overdevelopemnt of local communities stressing the infrastructure. Legality? Ask a city planner. A study should be implemented to determine just how much of a restriction is needed to keep the credit/equity crisis from escalating, it may be quite less than a temporary total ban.

I don't think anyone is blaming the builders. If one were allowed to build a home and make a profit, who could blame them?

[Chris]

Actually, in nearly 90% of the situations where a resale is being undercut by another home, it's either because the home undercutting it is a short sale or bank owned sale.

It used to be that the builders were undercutting the resales, but now it's the short sales and foreclosures that are doing the undercutting.

[Tino]

I don't understand how short sales and builder discounts are a bad thing for the markets. They are quite the opposite.

If I want to sell my shares of Exxon at $90 and someone else wants to undercut me and sell at $85, how are they doing something wrong?

If you think the prices are too low, buy. If you think the prices are too high, sell.

I think that it is good that builders are dumping excess inventory. It is making homes more affordable for those who are looking to buy. Sounds like a functioning market to me.

[Florida - Paradise Lost]

Again - supply and demand. Florida politics has always been bought and paid for by the real estate industrial complex. For all intents and purposes there has been ZERO restraint when it has come to development planning. It's been, "Builders gone Wild!" for 60+ years now.

Don't get your hopes up that the local gov't is suddenly going to wake up and prescribe any sort of limitations on development - only the smallest and most expensive communities can be counted on doing so.

Add this "keep on building, and we all get rich" mentality to the funny-money pyramid scheme of lending/lying/flipping over the past 5 years. Double the selling cost (on median income basis) over that of historical norms.

Create a tax system that penalizes new buyers with double the property taxes of existing owners for LIFE.

Another ingredient: raise the price of gas 30-40% in one year.

Finally, pull the plug on false prosperity financing.

End result: An unprecedented number of homes that, not only are for sale, but are still at or near historical all-time highs.

Remember, prior to our "funny money" half-decade, the historical norm for the Tampa Bay region home prices has been <= 3 times income. Right now, median income is ~$48,000 for the region.

Quick math: until the median price gets below $150,000, (or incomes double - good luck with that happening) we will not hit stasis and there will be no recovery.

And do not forget: the portability law will provide additional drag on demand, as municipalities will have to come up with new taxing schemes, which in turn will further lessen the purchasing power of Florida consumers.

[Florida - Paradise Lost]

...oh, and I would be remiss if I didn't say...

Cheers!