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Location: Mars Hill, NC, United States

A small, highly personalized real estate firm specializing in mountain homes and land in greater Asheville.

Thursday, June 25, 2009

New Home Sales: May 2009

32,000 new homes were sold in May of 2009. This is 35% less than a year ago, and 75% less than the peak in 2005.

Sales were 11% less than the previous record low for May, (1982), and now represent the lowest number of new homes sold since record keeping began in 1963.

Inventories remain high at 10.2 months of supply, something more like 6 months of supply is seen as normal. This is 4.7% less inventory than a year ago.

The reduction of new home inventories was achieved at great expense by builders. For many months now, builders have cutback on new permits, starts, and completions by 30% to 50%, barely outpacing the decline in demand in their effort to pare back inventory.

In the South, new home sales were down 36% from May, 2008.

The Dynamics
For a over a year, builders, (and individual sellers of existing homes), have been utterly unable to compete with the number of foreclosed homes for sale at low prices. Distressed sales have accounted for 45% of existing home sales, falling to 33% in May 2009. Still a staggering number.

The result has been a relative increase in the market share of existing homes, at the expense of new ones. The persistence of this pattern has fundamentally changed historic ratios in the overall market. New homes have lost a lot of ground as a market component, leading to speculation, graphs, and analysis as to what it might mean for a recovery.

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Black Bear Realty Website
828 689 2055
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Filed Under: Real Estate Statistics and Data

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