New Home Sales 2011 – The 2011 new home sales are not looking great. The sales of these homes in 2011 have fallen for the third straight month in a row. Obviously, this is really not doing much for the overall economy with the sagging real estate prices.
Even those involved in real estate investing are becoming increasingly more concerned with the falling prices. While making properties and homes more affordable, many investors are wondering where the bottom of the market lies. Seems like it is no where in sight as we will find out below.
New Home Sales 2011
New Home Sales 2011
Economist and real estate experts are saying if new home prices continue to fall at this pace, then 2011 could lead to the worst year in at least 50 years in this country.
Let’s add some numbers to the fall in the new home sales for 2011. The month of July saw new home sales decline 1 percent during the month adjusted for the annual rate, according to the Commerce Department on Tuesday. The sales reached 298,000, which is less than half of 700,000 sales that shows a relatively healthy market.
During the month of July 2010, there were 323,000 new homes sold. From that point until July 2011, it is the worst year on record going back to 1963. The problem is things don’t seem to be getting any better.
New home sales may not seem like they are very important to you or the over all economy. They are only one fifth of the housing market today. However, they have a significant impact on the greater economy. The reason they are critical is because they have to be built. That takes man power, people, machinery, purchases, and sales of products that go into these homes.
According to the National Association of Builders, each home built is responsible for three separate jobs. This means people are working, making money and the economy is benefiting. In addition, each new home sale represents about $90,000 in taxes for local municipalities, states, and even the federal government.
There are several reasons at play on why the new homes sales continue to fall in 2011. You can make an argument for many different reasons, but the fact remains clear the high unemployment rate, lack of jobs in the country, tougher lending standards and even the 20% down payment needed to purchase a home are all leading to a decline in new home sales. In fact, these elements are helping the entire real estate market sag and slump as well.
Do you think it is possible for the real estate market to rebound during the second half of this year or do you think it will continue to sag lower and lower?
Let’s hear yours thoughts on the real estate market and the new home sales for the rest of teh year. - New Home Sales 2011
Existing homes are at a low right now even though the price is below replacement costs. Part of it is the market is very unstable and the amount of inventory out there. This adds to the crisis in new home sales. Combine this with unemployment, this should be a surprise.
The market is saturated with foreclosure and short sales. Why pay more for a new construction? Once the market stabilize, the new home sale should recover quickly.