Monthly new home sales for August came in at 25,000.
That was a new record low number of sales for the month of August. With the peak selling months behind us, monthly new home sales will drop below 20,000, if only due to seasonality.
On an annual basis, new home sales are poised for the worst year ever.
New home starts are creeping along at 2009 levels, at nearly 30% of the bubble year levels. Average monthly starts are at 36,000. Starts may appear to be a little high compared to average monthly sales of 25,000, but seasonality is coming into play. Homes started now will not be completed until the Spring, aka, the selling season. Inventories are nearing record lows.
Builders continue to reduce inventories in the face of stiff competition from the used home market.
Even with low inventories, the low sales level is keeping the months supply uncomfortably high.
While the August statistics were gloomy, I anticipate that the results for the balance of the year will look even gloomier. The good news is the worse the market looks the closer it is to the bottom. Consider this...if, for whatever reason (IMO the probable cause will be lower pricing spurring demand, unless, of course, the laws of economics have been repealed) Spring's monthly sales average is something where around 2008's of 50,000 there will quickly be no inventory available. Additionally, builder's older, misconceived & overpriced product has been getting weeded out over the last 2 years. Current inventory is smaller, less appointed, better priced for the market product. Opportunity is knocking.
