New Home Supply

Supply Of New Homes At 6.1 Months Nationwide

New Home Sales slowed into the New Year but the market for newly-built homes remains strong. For home buyers in Northwest Indiana and the Chicago suburbs, December’s New Home Sales report is yet one more signal that the housing market recovery may be underway.

According to the Census Bureau, the number of new homes sold in December 2011 slipped 2 percent to 307,000 units on a seasonally-adjusted, annualized basis nationwide.

A “new home” is a home that is considered new construction; a home for which the buyer will be the first owner and tenant.

As compared to December 2010, last months’ sales volume fell seven percent. It’s a statistic that suggests housing market weakness. However, in looking at a different component of the New Home Sales report — the supply of homes for sale — we’re forced to reconsider.

At the current pace of sales, every new home for sale nationwide would be “sold” in a matter of 6.1 months. 

Economists believe that a 6.0-month supply defines a market in balance — anything quicker is termed a “seller’s market”. Statistics like that are enough to create urgency among today’s Lowell Indiana home buyers. 

Unfortunately, the Census Bureau’s data may be wrong.

Although December’s New Home Sales report shows sales down 2 percent, the government’s data was published with a ±13.2% margin of error. This means that the actual New Home Sales figure may have been as low as -15.2 percent, or as high as +11.2 percent. And, because the range of possible values includes both positive and negative numbers, the Census Bureau had no choice but to assign its December data “Zero Confidence”.

It will be a few months before final revisions are made to December New Home Sales data. Until then, therefore, buyers should take cues from the market-at-large and the market-at-large hints at recovery. One example of this is homebuilders showing more confidence in their product than at any time in the last 5 years.

If your plans for 2012 call for buying new construction, therefore, consider using this lull to “make a deal”. As the year progresses, the great values in housing may be gone.

New Home Supply

Top Real Estate and Mortgage Headlines for October 19th

Although Apple managed to sell more than 4 million iPhone 4S over the weekend and arguably more than any analyst expected, those sales could not satisfy the expectations of investors. US stocks fell today on the heals of disappointing earnings from Apple even amongst all the buzz about Siri and iOS 5.

If you’re amongst the millions who purchased an iPhone 4S or upgraded to iOS 5, take a break from your new found technology and review what the top real estate and mortgage headlines are today according to the National Association of Realtors.

• New-Home Building Soars 15% in September
  Last month, homes were built at the fastest pace in 17 months, the Commerce Department reported Wednesday.
• What’s the Best Day to List a Home?
  A new study pinpoints the day of the week that a home should be listed for the best chance of selling it.
• Lenders Are Making More Loans
  While the growth has been modest, lenders are finally starting to make more loans.
• Court: Owner Never had Legal Ownership of Foreclosure
  The Supreme Court in Massachusetts ruled that a home owner who had purchase a home in foreclosure did not have legal ownership of the property because the bank failed to properly process the title during the foreclosure.
• Riding for a Cure
  Challenging his own limits, Good Neighbor Award finalist LeRoy Bendickson discovered a lifelong mission to help people with multiple sclerosis challenge theirs.
• Houston’s Housing Market Posts Big Gains
  The Houston market is off to a strong start for the fall buying season posting lower inventories, a record-breaking median home price, and a big jump in home sales.

These are the top real estate and mortgage headlines for Wednesday, October 19, 2011.

Want to know how these national real estate headlines could impact you right here locally in Northwest Indiana? Subscribe to this blog, Today’s Real Estate Reality, and let our collective years of real estate experience in Northwest Indiana guide you to an informed and successful real estate transaction today.

New Home Supply

2011 NWI Home Builders Association Parade of Homes

Looking for something to do this Father’s Day weekend? Take dad out and tour 50 homes scattered throughout Northwest Indiana in Lake County and Porter County.

Unlike years past, the price of admission to tour the 2011 Home Builders Association of Northwest Indiana Parade of Homes is free. You can pick up a guide to all the parade homes in Northwest Indiana from any of the following grocery stores:

• Strack & Van Til
• Wiseway
• Jewel-Osco
• Town & Country

This years parade of homes is a scattered site parade.

What does it mean? Think of 2011 NWI Home Builders Association Parade of Homes as a scavenger hunt. By touring and visiting at least 10 of the 50 parade homes, you could be eligible to win a nice price.

Simply pick up a stamp card at any parade home and have it stamped at any of the parade homes that you visit. Once you have at minimum 10 verified visits, drop it off at any of the 2011 NWI Home Builders Association Parade Homes to be entered to win of the following prizes:

51″ Samsung Flat Screen Plasma TV courtesy of Hometown Appliance & Electronics

HGTV Green Queen Mattress by Serta courtesy of Maruszczak Appliances

Although the 2011 NWI Home Builders Association Parade of Homes began June 11th, it still continues through Father’s Day on Sunday June 19th. The parade homes will be open from 1 PM – 6 PM so make sure you plan your home tour accordingly. Just remember to have fun on your house hunting adventure.

If you tour a 2011 NWI Home Builders Association Parade of Homes that meets your housing needs, contact one of the qualified Realtors partnered with WelcomeHomeNWI to get proper home buyers representation.

New Home Supply

New Homes Sales Gain in June, But What Does It Mean

After a down month in May, the sales of newly-built homes appears back on track.

As published by the Census Bureau, June’s New Home Sales report showed:

1. A 24 percent sales volume increase from the month prior
2. A 2-month drop in the supply of newly-built home

There are now just 210,000 new homes for sale nationwide.

June’s data is a major improvement over May, but it’s possible that the true “new home market” may be softer than the statistics suggest. This is for several reasons.

First, we’re comparing June’s sales data to the worst month in New Home Sales history.

In May, sales of new homes totaled just 267,000 units nationwide. That’s one-quarter fewer sales than in the previous worst month in New Home Sales history. May’s sales levels were awful by any measure but June’s improvement to 330,000 units remains second-worst sales levels ever posted.

Second, June’s new home supply of 7.6 months is elevated versus the historical norm near 6.0 months.  The last year has averaged 7.7 months.

For buyers of new homes in Chesterton Indiana, this combination of low sales volume and higher-than-normal inventory may be a positive. It’s the main reason why homebuilder confidence is reeling and the downturn has opened some doors for big discounts and deals. Free upgrades and closing cost credits can make a well-priced home even more attractive in Chesterton Indiana.

Plus, home affordability in Chesterton Indiana may never be better with mortgage rates at all-time lows and expected to rise later this fall.

New Home Supply

Advantage Home Buyers After May 2010 New Home Sales Data

One month after the federal homebuyer tax credit’s official expiration, the New Home Sales report turned in its worst showing ever.

In May 2010, for the first time in 11 months, the inventory of unsold new homes crossed the 8-month marker, posting an 8.5 month supply overall.

Additionally, new homes sales volume fell to 300,000 units nationwide — a drop of 32% and its lowest level since the Commerce Department started tracking data in 1963.

Now, universally, the press is referring to the May New Home Sales report as “poor“.  A closer look, however, shows that may not be the case.

For one, we have to keep New Home Sales in perspective as a percentage of overall home sales. Yes, there were just 300,000 new homes sold in May, but there were also 5.66 million “existing” homes sold.

New Home Sales, therefore, accounted for just 5 percent of the total housing market — a very small percentage.

Another reason why the weak New Home Sales data isn’t so awful is that, when New Home Sales stall, it actually benefits home buyers.  Excess supply puts a strain on sellers which, in turn, gives buyers a tremendous amount of leverage in negotiation.

When home inventories are high, builders are more apt to appease their customers in hopes of making a sale.  For home buyers Crown Point Indiana, this can result in buying a better product at a lower price.

Especially with builder confidence plummeting.

Since February 2009, housing has shown steady gains. There’s been both peaks and valleys across units, inventories, and prices, but overall, the market is improving.  May’s New Home Sales data shows how now may an opportune time to “buy new”.

New Home Supply

Housing Starts Rise In April, Home Prices Under Pressure

Single-family Housing Starts rose by 55,000 last month, suggesting ample housing stock from which home buyers in Chesterton Indiana can choose this summer.

The report is a slightly larger read than what economists had expected.

Furthermore, for the first time since June 2009, Housing Starts appears to have broken away from its half-million unit plateau. 593,000 new homes were started in April.

Ordinarily, both Wall Street and Main Street would celebrate a strong housing sector report like this, but the Department of Commerce’s press release also held two cautionary notes.

The first point of caution is a mathematical one.  Although single-family starts increased by 10.2 percent, the survey had a Margin of Error of 10.7 percent. This means that Housing Starts may have fallen by 0.5 percent and the report is statistically worthless.

The second point of caution is tied to Building Permits, a complementary data point in the same Department of Commerce report.  In April, Building Permits fell by almost 11 percent with a tiny Margin of Error of less than 2%.  This tells us that builders are pulling back — a sign of low housing market confidence

According to the Census Bureau, 82% of homes start construction within 60 days of permit-issuance. Housing Starts, therefore, should ease though June and July.

Home prices are based on housing’s supply and demand.  For the next few months, supply should elevate, helping prices remain suppressed, after which, supply should dwindle. 

The best time to buy a home, therefore, may be now.  As the summer months come to close, we may find that buyers vastly outweigh sellers.

New Home Supply

New Homes Sales Were Strong in March, But How Good?

The sales of newly-built homes soared in March. Even more than what was expected. But the news may not be as glowing as what the media is telling us.

Take a look at the headlines from last Friday:

• Sales of new homes rocketed up 27 percent in March (WaPo)
• New-home sales rise fastest in 47 years (CNNMoney)
• Sales of New Homes Climb by Most Since 1963 (Business Week)

None of these statements is false, per se, but each is somewhat misleading.  The biggest reason why March’s New Home Sales was even able to rise 27 percent is because data from the month before it — February — was the worst in New Home Sales history.

In February, new homes sold posted its lowest level in recorded history. 

A better comparison would be against March a year earlier; or October 2009, the month before the home buyer tax credit’s initial expiration date. 

Against both of those time periods, March 2010 fared well.

Home buyers – first-timers and repeats alike — went under contract last month, taking advantage of the soon-to-expire federal home buyer tax credit program.  The credit gives up to $8,000 for first-time buyers and up to $6,500 for repeat ones.

Buyers must be in mutual contract on or before April 30, 2010 to be eligible for the credit, and must closed on or before June 30, 2010.

The New Home Sales data included other strong housing data, too. The current supply of new homes nationwide is at a multi-year low.  Along with stronger home demand, this should push Valparaiso home prices higher throughout the coming months.

It’s no wonder builders are bullish on the economy.

Contact James K Barath in Valparaiso Indiana to Qualify for Your FREE FHA Home Loan Approval Today!