Paper Economy: New Home Sales: Northeast Meltdown Continues!

Wednesday, December 27, 2006

New Home Sales: Northeast Meltdown Continues!

Today, the U.S. Census Department released its monthly “New Residential Home Sales” report for November showing continued weakness to the nation’s new home market most notably in the Northeast region where sales were down an astounding 42.4% as compared to November 2005.

Generally reported as showing “strong” signs of market “stabilization”, the report does, in fact, show an increase to the median and average price for a new home but as we all are well aware, the significant incentives that home builders have been offering are NOT reflected in this report so the price movement is a bit of a “red herring”.

Additionally, the report showed significant increases to inventory and months supply on a year-over-year basis.

Look at the following summary of today’s report:

National

The median price for a new home was up 5.4% as compared to November 2005.
New home sales were down 15.3% as compared to November 2005.
The inventory of new homes for sale increased 9.0% as compared to November 2005.
The number of months’ supply of the new homes has increased 28.6% as compared to November 2005.

Regional

In the Northeast, new home sales were down 42.4% as compared to November 2005.
In the West, new home sales were down 9.0% as compared to November 2005.
In the South, new home sales were down 19.2% as compared to November 2005.
In the Midwest, new home sales were up 1.2% as compared to November 2005.