SACRAMENTO, CA – July 10, 2009 – (RealEstateRama) — The pace of home sales at California new-home communities in May was still below year-ago levels but continued to improve from preceding months, the California Building Industry Association reported today.
The monthly CBIA/Hanley Wood Market Intelligence (HWMI) New Home Sales and Pricing Report showed that sales in new-home communities of 10 units or more were 26 percent below May 2008, but is improved from the 31 percent decline in the prior month and is the fourth consecutive month of that improvement trend.
During May, 3,019 new homes and condominiums were sold in the subdivisions tracked by Costa Mesa-based HWMI, compared to 4,094 in May 2008. Sales of single family homes were down by 30 percent, while sales of townhomes and “plexes” – duplexes, triplexes, etc. – were down 24 percent and sales of condominiums were off by 16 percent.
Compared with the same period last year, the median base price of homes sold dropped by 5 percent.
Non-seasonally adjusted total new-home sales were 9 percent higher than levels seen last month. This is an improvement from a year ago when the April-May interval was a decline of 6 percent. While sales volume is still approximately one quarter off year-ago levels, the steadily shrinking year-over-year sales declines suggest the market is stabilizing.
Jonathan Dienhart, Director of Published Research for HWMI, notes the recent month-to-month increases are a positive sign.
“Typically March is the strongest selling month of the year, not May,” said Dienhart. “The incremental gains since March are counter to this typical seasonal trend, which suggests the market has found the bottom and is truly stabilizing, albeit slowly. But with the state tax credits for home purchases running out and continued troubles in the broader economy, it is not yet clear that an actual recovery is at hand.”
Robert Rivinius, CBIA’s President and CEO, agreed, and added that the continued weakness in the new-home market means that policy-makers need to reduce government fees and restrictions – and to stop trying to impose additional barriers.
“State and local governments must remember that we need to be building more new homes and apartments – not less – to meet the demand caused by our steadily growing population. Many communities have actually reduced impact fees in order to accommodate new housing, we must see more of that, and the continuation of the state tax credit will be critical to sustaining the improvements in the marketplace,” said Rivinius.
The California Building Industry Association is a statewide trade association representing thousands of homebuilders, remodelers, subcontractors, architects, engineers, designers, and other industry professionals. More information is available on the Association’s Web site, www.cbia.org.
Hanley Wood Market Intelligence is the housing industry’s leading provider of rich data and consulting services on residential real estate development and new-home construction and is a division of Hanley Wood, LLC, the premier media company serving housing and construction. More information is available on the company’s Web site, www.hanleywood.com/hwmi or by calling 1-800-639-3777.
Hanley Wood Market Intelligence (HWMI) collects data from new for-sale production subdivisions of 10 units or more on a monthly basis. HWMI Net Sales represent sales contracts signed during the period indicated minus any reported cancellations. Median and Average Prices are based upon the minimum asking price of the plans sold during the period and do not include the cost of any lot/view premiums or upgrades. Because this data is collected monthly and based upon sales contracts that represent future closings, HWMI data is the most forward-looking data source available for new home information in the state of California.
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