The seasonally adjusted annual pace of new single-family home sales in the U.S. fell to 250,000 in February, down 16.9 percent from a revised rate of 301,000 in January and down 28.0 percent versus the 347,000 pace recorded in February 2010.
Preliminary U.S. new home sales (versus pace) in February were estimated to be 19,000 (give or take 8 percent), the lowest February on record going back to 1963.
In the West, the pace of new home sales fell 34.1 percent on a year-over-year basis to 58,000, down 14.7 percent versus the month before.
∙ New Residential Sales: February 2011 [census.gov]
∙ U.S. New Home Sales: Down 18.6% Year-Over-Year In January [SocketSite]
∙ New Residential Sales Since 1963 [census.gov]
If a new house is built for 250K and a 5-year old foreclosure sells for 150K, there’s no real purpose in building/buying new homes. Market at work.
Other than custom homes … I am pretty surprised that anyone is building or buying ANY new homes at all. There are simply too many vacant / surplus houses out there in the country for the number of people who can or will occupy them.
Luckily this is a non-issue in most city neighborhoods. There can be no net new housing units added anywhere, ever. EVER. Except in SOMA and Dogpatch.
[Editor’s Note: We’ll assume you’re being sarcastic in your second paragraph. If not, you might want to review San Francisco’s Housing Pipeline And 2009 Housing Element Report to see where 54,790 new housing units in San Francisco could be built.]
Here’s an article talking about how the median for new home prices is 48% higher than old homes. It normally runs at about a 15% premium between new and resale homes. Some of that difference could be mix, but probably not all of it.
This measures contracts signed, not closings. So this reflects extreme slow closing numbers for new homes in the start of the peak spring season.
Some of this is the cheaper-foreclosure phenomenon, but once a home is built the costs are sunk and the sale price is however low the market dictates, not the construction cost. But most of it is the weak economy and the near-universal mindset that there is no downside to waiting.
Editor, is there any update on the housing pipeline? The post you linked to is a year and a half old. It would be interesting to know what current projections are.
Bloomberg’s Chart of the Day story today is that the the gap in prices between new homes and existing properties widened to the largest in four decades . . .
I imagine that gap widening was fueled by the infusion of cheap debt. Why live in a humble home when your loan officer enables you to live large in a super sized McMansion ?
My guess is that it is the result of the mix of the used homes consisting of a large percentage of foreclosures/short sales.
In the county where I just bought a place you can get a 2-3br sfr for what the lot was selling for 6 years ago.