Comments (16) | Add a comment
New-home sales stall nationally and locally
-
Tony Dejak/The Associated Press
A new home is shown for sale Aug. 22 in Pepper Pike, Ohio. New-home sales fell to a six-month low in August and are on pace for the worst year since the government began keeping records a half-century ago.
Tools
THE ASSOCIATED PRESS
Sales of new homes fell to a six-month low in August. The fourth straight monthly decline during the peak buying season suggests the housing market is years away from a recovery.
The Commerce Department said Monday that new-home sales fell 2.3 percent, to a seasonally adjusted annual rate of 295,000. That's less than half the roughly 700,000 that economists say must be sold to sustain a healthy housing market.
New-home sales are on pace for the worst year since the government began keeping records a half-century ago.
High unemployment, larger required down payments and tougher lending standards are said to be keeping many people from buying homes as are plunging stocks and a growing fear that the U.S. could tip back into another recession.
In line with the national trend, Las Vegas has seen new-home sales fall to the lowest level in more than 20 years, said Dennis Smith of Home Builders Research. He counted 381 new-home sales in August, compared with 316 in July. Homebuilders have averaged just fewer than 300 sales a month this year. Local new-home sales through August totaled 2,383, a 38 percent decrease from a year ago.
New-home closings have fallen from their peak of 38,957 in 2005 to 5,341 last year, Home Builders Research reported.
Pierre Ellis, an analyst at Decision Economics, said that until wages increase and hiring picks up, home sales will languish.
Although new homes represent less than one-fifth of the housing market, they have an outsize impact on the economy. Each home built creates an average of three jobs for a year and generates about $90,000 in taxes, according to the National Association of Home Builders.
Last year was also the fifth straight year that sales have fallen. It followed five straight years of record highs, when housing was booming.
Las Vegas continues to be plagued by a huge inventory of vacant homes, in the range of 65,000 to 70,000 units, RCG Economics principal John Restrepo said. The job market is extremely weak, producing only 11,000 jobs from January to August, he said.
"Most of these jobs were low-wage occupations, not exactly the primary homebuying group," Restrepo said. "Tight lending standards are not helping the situation, either, from the standpoint of homebuyers."
When the median resale price is averaging 55 percent of a new-home price, as it is in Las Vegas, you won't see a lot of new-home construction, Restrepo said. At fewer than 300 a month, new homes account for about 7 percent of total sales since the beginning of the year.
The median sales price of a new home fell nearly 9 percent, to $209,100 nationally -- the lowest price since last October. It's less than $200,000 in Las Vegas.
Las Vegas Review-Journal reporter Hubble Smith contributed to this report.
Comments
Terms & Conditions
The following comments are provided by readers and are the sole responsiblity of the authors. The Review-Journal does not review comments before publication nor guarantee their accuracy. By publishing a comment here you agree to abide by the comment policy. If you see a comment that violates the policy, please use the Report Abuse button.
Some comments may not display immediately due to an automatic filter. These comments will be reviewed within 24 hours. Please do not submit a comment more than once.
Note: Comments made by reporters and editors of the Las Vegas Review-Journal are presented with a yellow background.
RSS
Twitter
Facebook
So, if prices are at the same rates as 20 years ago, then tax revenues are down to the same as 20 years ago. Why is govt spending not at that level? Ohh, that's right, it would affect the middle class public employees.
It is a great time to buy and/or build many are doing it, assuming you have not destroyed your credit buy making poor financial decisions that is. If so blame Obama and Harry Reid for your misery. Don't listen to the LV Haters. Its no better anywhere else.
@poetry you're little story is a laugh. good luck in your tiny little cheap house world. pay more in a bad market makes the same kind of sense as Obama raising taxes during his own Depression.
I bought a house in 2010 and paid 10% more than its appraised value, because it was exactly what and where I wanted. I got a VA loan and closed the sale in less than two months. It was the only home I bid on even though I had looked at over twenty units. 18 months later I refinanced my home from 5.25% to 4% and save another $100 per month. James B Nutter was the third company I worked with for the refinancing, because my home was already underwater.
If you look hard, act fast, pay a premium for what you want, you can find a great home at a great price. My home sold for $250K in 2006 and my house payment is $595, including Ins & taxes.
If you have some cash and good credit, don't let these naysayers keep you from finding a great deal.
Believe it or not, now is a great time to buy. Prices are low as they will ever be. Interest rates lower than imaginable. There is an old saying, "..when the streets run with blood, buy realestate...". That said i know of several investors that have tried to buy foreclosed homes. Cash money in hand. The banks would not sell them. The banks do not pay taxes on vacant, foreclosed homes. They do not pay HOA fee's either. When it comes time to sell the property the new owner must pay the back taxes and HOA fees, on top of home price. What a racket
I bought my home for 52,900 in 1977. In 2006 it would have sold for $300,000+. Today with the "Hope and Change" moron in command my house is valued at a price closer to what I paid for it.
I figure I lost a minimum of $200,000.00 real dollars. No different than the banks and mortgage companies. They received $Billions to cover their ass ets. I can't even right mine off on my income tax. They had no problem taxing me at the higher valuation. Not only did the mortgage holders get a bailout they gotr to keep the mortgages/property. Such a deal I've never seen before.
Hey Las Vegas stop your complaining, take off your bedroom slippers and put on your marching boots. How nice Las Vegas is on Obama's Seventh Fund Raising Tour of his administration, and he will make an appearance in Las Vegas on Oct. 24, in his role of bagman for the DNC. But none of you are on his radar, except for the 25-30 invited attendees (union members) that will appear on his televsied local town hall. But you all must know, he really cares and he will prove it by playing a round of golf at Bears Best.
Nice......just another area to buy A/C's and Cabinets for 10 cents on a dollar!!
WAIT! this cant be right, we just saw a story that said housing was on the upswing...or was it on the lawn swing? need i say it again....Vegas, the first large urban ghost town in America, just around the Obama corner.
why buy a house when values keep falling ...my home is worth less than what i purchased it for in 1997