Friday, September 28, 2007

Lots of Lots for Sale

Lots of Lots for Sale in the USA

U.S. new home sales dropped a larger-than-expected 8.3% in August, to 795,000 units annualized, the lowest level in more than seven years. Although there were rumours of a double-digit decline ahead of the release, the fact that the three prior months were also revised down tempered any "better-than-worst-feared" talk.

New homes available for sale slipped 1.5% to 529,000 units. Although this is down for the fifth consecutive month, relative inventory levels remain elevated because demand has been falling more sharply than supply. Month's supply stood at 8.2, up 0.6 ppts from July and just a notch below March's 8.3 reading, which was the highest in more than 16 years.

The median sale price of a new home is down a steep 7.5% y/y, and even though this is not a great measure of house price deflation, it does support the dismal story that was already painted by Tuesday's S&P/ Case-Shiller home price index.

The Bottom Line: Weak new and existing home sales along with housing starts and building permits point to yet another hefty drag on GDP growth coming from the housing sector during the third quarter, and it shows no signs of letting up anytime soon.

Read about our marketplace

Search the MLS or read more about Interest Rates, Power of Sale Properties, Price Trends and more at my website. Homes for Sale

Thank you for reading my blog and if there is anything else I can help you with please don't hesitate to contact me,

Mark

A. Mark Argentino
P. Eng. Broker
Specializing in Residential & Investment Real Estate


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