Ninety seven homes sales ain't bad. Are we turning corner?

This sounds like some decent news for a change. Realtors have been telling me they're seeing more activity on the market:

Lennar reports it sold 97 new homes in 28 communities in the Tampa Bay region during the first 17 days of March. 

Mark Metheny, president of Lennar in the Tampa Bay region, said the average sale price of a Lennar home during the 2-1/2 week period was $187,895. 

“Lennar Tampa rolled back pricing along with special incentives and financing arrangements for the month of March only. So far that’s been a successful plan,” Metheny said.

Will it last? Is it real? Let's wait until April when they publish March home sales data.

Comments

Good news: inventory reduction. (are those pre-built sales or existing inventory?)

Bad news: at the cost of existing homes and owners in near or already upside down in equity situations. They can't afford to roll back pricing without creating more short sales.

[James Thorner]

Indeed. New home sales are cannabilizing existing home sales. It's tough to sell your 2 year old house when the builder offers the same model down the street for $40,000 less.

[ketchphrase]

Interstingly, the US Census just released the latest population numbers for Florida counties from July 1, 2006 to July 1, 2007.

Intersting Stats:

- Overall the state grew by 193,735 people.

Top 5 Gainers:
1. Lee: up 20,475
2. Pasco: 16,844
3. Polk: 16,723
4. Hillsborough: 12,845
5. Lake: 11,845

Top 5 Losers:
1. Broward: down 13,154
2. Pinellas: -5,456
3. Okaloosa: -1,495
4. Monroe: -1,174
5. Charlotte: -233

2000-2007* Growth Rate:

2001 1.83%
2002 1.92%
2003 1.72%
2004 2.21%
2005 2.22%
2006 1.78%
2007 1.06%

(*dates go from July 1 to July 1 each year)

The biggest indicator is the drop in rate from '06 to '07. Given the further reduction over the past nine months, I would expect the next period's rate to be even lower.

The alarmists will print something like: "State growth rate down a whopping third".
The optimists will print something akin to: "State continues to grow despite negative housing forecasts".

Take your pick.

data link (Excel required): http://www.census.gov/popest/counties/tables/CO-EST2007-01-12.xls

[Fuzzy Bear]

Are the numbers sold or closed sales. I have seen sold by some groups, but the sales end up failing due to financing and go back into inventory.

Would you verify that James?

[James Thorner]

I'm almost certain these sales are contracts that in many cases have yet to close. If people are building a new house, a small downpayment - $5,000 in my family's case two years ago - was all that was needed to reserve the lot. So some of these deals will certainly go kaput owing to lack of financing. Still, I think the number is a sign of buyer interest, whether or not the buyer can actually afford the purchase in the end. Even in good times, builders have to deal with cancellations.

..Can't consider it "sold" unless it's closed. Otherwise, it should be called "pending" "sale pending" or "contract pending". You should get a confirmation from Lennar, otherwise using "sold" is quite misleading. (As in: "sold 97 new homes" as opposed to "sold 97 new home contracts")

[Fuzzy Bear]

Still, I think the number is a sign of buyer interest, whether or not the buyer can actually afford the purchase in the end.

Point well made regarding the buyer affording the property!

It appears to me that if property is priced correctly to where it is aligned more with incomes and rental costs, then sales will pick up. It also looks like Lennar is selling their inventory for less than the secondary market and less than investor/flipper homes in the same subdivisions.