by Bill McBride on 2/24/2012 12:09:00 PM
Friday, February 24, 2012
Even with the upward revisions to new home sales in October, November and December, 2011 was the worst year for new home sales since the Census Bureau started tracking sales in 1963. The three worst years were 2011, 2010, and 2009 with sales of 304, 323 and 375 thousand respectively.
Sales will probably increase in 2012, and sales will also probably be higher than the 323 thousand in 2010. But I expect this year will still be the third worst on record.
The following graph shows the recent minor increase off the bottom for new home sales:
Click on graph for larger image.
Not much of an increase.
Last month I posted a few housing forecasts for 2012. The forecasts for new home sales ranged from 330 thousand to 365 thousand (excluding Moody's) - and that wouldn't be much of an increase from the current level.
The second graph shows existing home sales (left axis) and new home sales (right axis) through January. This graph starts in 1994, but the relationship has been fairly steady back to the '60s.
Following the housing bubble and bust, the "distressing gap" appeared mostly because of distressed sales. The flood of distressed sales has kept existing home sales elevated, and depressed new home sales since builders can't compete with the low prices of all the foreclosed properties.
I expect this gap to eventually close once the number of distressed sales starts to decline.
Note: Existing home sales are counted when transactions are closed, and new home sales are counted when contracts are signed. So the timing of sales is different.
On January New Home Sales:
• New Home Sales in January at 321,000 Annual Rate
• New Home Sales graphs
Earlier this week on Existing Home sales:
• Existing Home Sales in January: 4.57 million SAAR, 6.1 months of supply
• Existing Home Sales: Inventory and NSA Sales Graph
• Existing Home Sales graphs