Bleak new home sales data dash forecasts

More headaches for housing: New home sales fell to the lowest level on record in December and added to the growing surplus of unsold properties and pressure for lower prices.

by Broderick Perkins
© 2008 DeadlineNews.Com

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Deadline Newsroom - The housing hangover took another pounding in December, as new home sales fell to the lowest level on record and added to the growing surplus of unsold properties.

Sales of new one-family houses in December 2008 were at a seasonally adjusted annual rate of 331,000, according to estimates released by the U.S. Census Bureau and the Department of Housing and Urban Development.

The numbers were lower than 70 Bloomberg News survey forecasts ranging from 345,000 to 412,000.

An estimated 482,000 new homes were sold in 2008 This is 37.8 percent below the 2007 figure of 776,000 and the fewest since 1982.

The housing report also revealed, even with lower sales, builders couldn't clear inventory fast enough. The number of homes for sale fell 10 percent to a seasonally adjusted 357,000, the fewest since Sept. 2003.

Sluggish sales will likely pile more downward pressure on home prices and prolong the housing slump beyond 2009. The median sales price of new houses sold in December 2008 was $206,500, the lowest in five years and down from $227,700 a year earlier.

From John Burns Real Estate Consulting, a research report, "Unlocking the Housing Market Recovery" says stabilizing home prices is central to an economic turnaround.

"It's clear that the general economic environment and the housing market woes are intertwined," said John Burns, CEO of the company.

New-home purchases now account for less than 10 percent of the market, but are a better indicator than existing sales because they are based on done-deal contract signings.

Previously-owned homes, which include an untold number of foreclosures that haven't yet made it to market, are compiled after the close of escrow to reflect contracts weeks or months old.

© 2008 DeadlineNews.Com

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Broderick Perkins, an award-winning consumer journalist, parlayed 30 years of old-school journalism into a digital real estate news service, the San Jose, CA-based DeadlineNews Group -- DeadlineNews.Com, a real estate news and consulting service and Web site and the Deadline Newsroom, DeadlineNews.Com's news back shop. Perkins is also a National Real Estate Examiner. All the news that really hits home from three locations -- that's location, location, location!

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