California New Home Market Stays Cold in Summer Heat, CBIA Announces
SACRAMENTO – August 18, 2008 – (RealEstateRama) — The pace of sales at California new-home communities remained sluggish in June, following a resumed trend of deterioration in year-over-year sales declines that began in May, the California Building Industry Association reported today.
The monthly CBIA/Hanley Wood Market Intelligence (HWMI) New Home Sales and Pricing Report showed that new-home sales in June were 58 percent below June 2007. The drop represents a worsening in the trend of year-over-year decline, which had deteriorated to 51 percent last month after coming in at 44 percent in April. During June, 2,712 homes and condominiums were sold in the subdivisions tracked by Costa Mesa-based HWMI, compared to 6,436 in June 2007. During the month, sales of single-family homes dropped by 54 percent, while sales of townhomes and “plexes” – duplexes, triplexes, etc. – were down 38 percent and sales of condominiums were down by nearly 75 percent.
Non-seasonally adjusted total new-home sales in June were 12 percent lower than levels seen in May, whereas the same month-to-month change a year ago was a positive 2 percent. The median price of homes sold compared to last month was 4 percent lower at $365,000.
Jonathan Dienhart, Director of Published Research for HWMI, notes the latest trend of decline means the rest of 2008 will likely be a struggle.
“Demand for new homes continues to remain weak in large part due to stiff competition from a rising number of foreclosure and bank-owned sales in the resale market,” Dienhart said. “While we may see some existing home sales trends improve due to this activity, the new home market will have to bide its time until we move through more of this below-market priced inventory.”
Dienhart also notes the health of the broader economy will play a part in recovery.
“There are many uncertainties surrounding the health of the national economy,” he said. “If we can avoid a recession over the next year, the housing market will have a better chance of recovering within 12-24 months, but at this point such a prediction would be a bit optimistic.”
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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.
Contact:
Michael Castillo
Communications Specialist
(916) 443-7933 ext. 346
mcastillo (at) cbia (dot) org
