New-Home Sales Still Historically Slow in February, CBIA Announces
Association hopes tax credit will boost March sales numbers
SACRAMENTO, CA – April 15, 2009 – (RealEstateRama) — The pace of home sales at California new-home communities continued to be historically slow during February but at least showed a modest improvement over January, the California Building Industry Association reported today. But Robert Rivinius, CBIA’s President and CEO, said he is confident March sales figures will show a significant increase due to the landmark California tax credit for new-home buyers that went into effect at the beginning of the month.
“The Franchise Tax Board reported last week that it has received more than 3,100 applications for more than $30 million in tax credits since the program went into effect,” Rivinius said. “That strongly suggests that the tax credit is working and stimulating the market. And since housing traditionally leads us out of recessions, that’s great news for the state and national economy as well.”
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 54 percent below February 2008, slightly better than the 64 percent year-over-year decline seen a month earlier.
During the month, 1,918 new homes and condominiums were sold in the subdivisions tracked by Costa Mesa-based HWMI, compared to 4,170 in February 2008. Sales of single-family homes were down by 55 percent, while sales of townhomes and “plexes” – duplexes, triplexes, etc. – were also down 55 percent and sales of condominiums were off by 51 percent. Compared with the same period last year, the median base price of homes sold dropped by 15 percent.
Non-seasonally adjusted total new-home sales were 42 percent higher than levels seen in January. While it is typical for new home sales to pick up in February, the increase was much larger than the 11 percent increase recorded during the same period a year ago.
Nevertheless, sales volume is still well off year-ago levels. Median base prices of units sold statewide were 6 percent lower than in January, although with sales volume so meager, month-to-month changes in the median base price of homes sold can be volatile.
Jonathan Dienhart, Director of Published Research for HWMI, notes the figures from February could be important.
“February sales figures were poor, as expected,” Dienhart said. “But with the incremental improvement from January, they suggest we may finally be seeing the bottom of housing declines.”
###
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.
