San Diego, CA (PRWEB) December 02, 2012
The Real Estate Marketing Insider announced its opinions on news in Bloomberg that sales of new homes in October fell a small percentage, along with September sales numbers being revised down; REMI believes this is bad news for the market, and a sobering reminder that the market recovery is still fragile and that bubble conditions could occur easily.
A Commerce Department report showed that October sales of new homes nationwide numbered enough to set a 368,000 annual pace. September’s figure, revised down by 5 percent in the same report, set an annual pace of 369,000. This represents a drop in sales of about 0.3 percent, one of the only negative trends in home sales recently in a sea of surges. In addition, these sales figures disappointed most experts, who had predicted a median annual pace in October of almost 25,000 more homes than was reported.
While most economists believe that the housing market is continuing to recover despite this small setback, experts are also searching for reasons behind the stalled sales growth. Because this figure addresses sales of new homes only, it’s unlikely that the national shortage of existing inventory and real estate leads has had an effect.
However, it’s telling that in the Northeastern U.S., still reeling from the effects of October’s Hurricane Sandy, new home sales dropped by 32.3 percent. The storm has had many effects on the area; in addition to the predictable damage and economic stalling, it’s caused construction firms and contractors in the area to be called to two tasks: repair of existing structures, and replacement of destroyed structures (often paid for with insurance). This allocation of resources may have stalled new construction, thus slowing the sale of new homes. It’s also possible that the severe weather have caused new-home buyers doubts about purchasing in the Northeast, slowing growth by reducing demand.
The sales figure for existing and previously-owned homes carried better news, showing a 4.79 million annual pace. While this is generally considered a weaker barometer of the housing market than new home sales, it shows that the key factors in a healthy market - housing demand and availability of financing resuorces - are still in play, and assuages some fears about what the minor downturn in new sales might mean.
The Real Estate Marketing Insider issued a statement regarding news in Bloomberg that sales of new homes in October fell slightly, disappointing economists who had projected continued growth from September. Most economists are adamant that the recovery will continue, and this is not indicative of a coming slump in housing.
About the Real Estate Marketing Insider: Based in La Jolla, CA, REMI is an online journal providing real estate professionals with news, trend watches, and marketing tips.