The seasonally adjusted annual pace of new single-family home sales in the U.S. jumped 11.6 percent in December to an annual rate of 481,000 sales while the November pace was downwardly revised from 438,000 to 431,000.
New home sales are now running at a pace which is 8.8 percent higher than at the same time last year but 28 percent lower than the long-term average over the past 50 years (664,000). The pace of new single-family home sales in the U.S. as measured in December peaked at 1,242,000 in 2004, 158 percent higher than last month.
In the West, the pace of new home sales only increased 3.1 percent from November to December but is running 23.6 percent higher versus the same time last year (versus 10.7 percent higher on a year-over-year basis last month).
And in terms of inventory, the number of new single-family homes for sale in the U.S. is currently 11.1 percent higher than at the same time last year, with the greatest number of new homes on the market (219,000) since 2010.
That’s nationwide and the SF Bay Area is probably very different from the rest of the country.
A view from the other extreme: from the heart of the last bubble craziest market (Las Vegas) I still see a ton of empty houses. Speculators have snatched all the distressed properties and many have been rented. But there’s still more homes than people to put into. Many condo towers are 1/2 empty, with many speculators who have been stuck since 2006. Prices lost 70% and have recovered around 1/2 of that. There are a few houses built, but upscale on the fringes of town.
Not quibbling, but just curious about your observation of the LV market: “Prices lost 70% and have recovered around 1/2 of that.” Does this mean the general prices in your LV condo tower is now at the following percentages of 2006 prices:
(1) 100*30% + (1/2)*70% = 65%
(2) 100*30% + (1/2)*100% = 80%
(3) 50%
(1)
In Mid 2006 the Zillow index was at 300K. It dropped to 108K in Feb 2012 or a 64% drop. Today it’s at around 190K. It has recovered 82K.
A Condo I have seen: sold in 2007 for 370K. A similar condo sold for 110K in 2011. Today these condos sell on the market for 220 to 230K
Yeah, but this is an important macro metric. New home construction and sales generate a ton of economic gains – materials, construction, appliances, lending, etc., lots of jobs, especially blue collar. Sales of existing home are pretty irrelevant to the economy.
Typically, new home construction and sales lead us out of a recession as jobs beget moving into new homes which begets more jobs. But, of course, this recession was largely caused by way too many homes (and the financial shenanigans that accompanied them). Like San FronziScheme states, we still have too many. It will be a great sign when the economy finally recovers to the point where the excess gets absorbed and new home construction rebounds. SF is not an island and will only benefit from a stronger national (and global) economy.
Yes, SF is definitely not an island. I’ll add that even though SF is a great place to live, at some point you could ask yourself whether it deserves such a premium. Rents in LV are 4 times cheaper than SF. FOUR!
I have made the jump: collecting market rent in SF, still being paid with SF money, but living for much cheaper (and with very decent standards of safety, space and comfort). I’ll come back one day with my bags of cash.