Strong Trend away from New Home Sales
Sales of new home sales in the US were down a staggering 16.9% in February, the lowest since 2003. New home Sales decreased 16.9 percent to a 250,000 annual pace, figures from the US Commerce Department showed today in Washington. Sales compared to last February were down 28%. In contrast, resale home purchases only dropped 9.6 percent in February and the median home price fell to a 9-year-low. The supply of unsold properties rose.
The foreclosed homes market is being blamed for an oversupply of cheap homes. Who would have thought foreclosures would be such a hot market and that agents would be prospecting and selling foreclosures?
Experts are blaming the weather this winter, however these numbers tell the story of buyers lured by low resale prices and foreclosures. The bargains are out there. Canadians are buying more Florida properties given the favorable dollar and the incredible availability of homes in the Sunshine state.
Sandra Pianalto said in a speech at the University of Akron, that it could be well into 2012 before a significant decline in the number of bank owned properties (foreclosed) available. Some research suggests that the number of bank-owned properties could reach a peak in July, at nearly 720,000 units, and that pool won’t likely dry up until mid 2013 at 530,000 units. Perhaps the Fed should just go with it and offer home renovation loans, home improvement and enery retrofits to leverage the market that actually exists. Waiting for 2013 to get rolling again when the banks have so much liquidity just doesn’t make sense.