New-home sales plummet in the West

Nationwide median price falls 2.1% in January
Wednesday, February 28, 2007
Inman News

The rate of new single-family home sales in January was an estimated 20.1 percent below the rate for the same month last year, the U.S. Census Bureau and U.S. Department of Housing and Urban Development announced today.

Sales fell to a seasonally adjusted annual rate of 937,000 in January, which was about 16.6 percent below the revised December 2006 rate. This rate is a projection of a monthly sales total over a 12-month period, adjusted for seasonal fluctuations in sales activity.

Regionally, sales dropped an estimated 50.4 percent in the West, 11.2 percent in the South, 1.6 percent in the Northeast and rose 0.6 percent in the Midwest in January compared to January 2006.

The median sales price of new houses sold in January was $239,800, down 2.1 percent compared to January 2006, and the average sales price was $313,000, up 4 percent compared to January 2006.

The seasonally adjusted estimate of new houses for sale at the end of January was 536,000, which represents a supply of 6.8 months at the January sales rate. A supply of six months is generally considered to indicate a market that is in rough equilibrium while a supply greater than six months can indicate market that favors buyers.

An estimated 25 percent of home sales in January were priced from $150,000 to $199,999, compared with 21 percent in January 2006. And an estimated 11 percent of home sales were priced from $300,000 to $399,999 in January, compared with 17 percent in January 2006.

Statistics are estimated from sample surveys, the agencies noted, and are subject to sampling variability as well as nonsampling error. Changes in seasonally adjusted statistics can show irregular movement, according to the report, and it takes six months to establish a trend for new houses sold.

Preliminary new-home sales figures are subject to revision. The survey is primarily based on a sample of houses selected from building permits. A "sale" is defined as a deposit taken or sales agreement signed. On average, the preliminary seasonally adjusted estimate of total sales is revised about 3 percent.

Changes in sales price data reflect changes in the distribution of houses by region, size, and other factors, as well as changes in the prices of houses with identical characteristics, the agencies reported.