FEELING a bit down as a result of the subdued Western Australian property market?
Well, local homeowners ought to be thankful their assets are not in the US, where sellers have experienced the horrors of the lowest number of new homes sold in the 48 years since records have been kept.
The US Commerce Department reported last week that only 302,000 new houses were sold in the whole country during the entire year, the lowest level in records dating to 1963, as a tsunami of foreclosures, high unemployment and tight mortgage lending has kept buyers sidelined since the housing price bubble burst in 2006.
“Last year was the worst year on record for the new single-family home market,” Patrick Newport from IHS Global Insight said.
“Sales set a record low nationally and in at least three of the four regions.”
After two months on the rise, sales fell further in December, down 2.2 per cent from November, the Commerce Department said.
Prices also fell; the median sales price of new homes plunged 7.3 per cent from November, to $210,300.
The industry slump has kept builders from building, so the stock of new houses on the market has also fallen to just 157,000 units – down 0.6 per cent from November and 17.4 per cent from a year earlier.
“Altogether, the general trend remains in place in which new-home sales are moving sideways, albeit at historically low levels, while inventory levels trend gradually trend lower,” Barclays Capital analyst Troy Davig said.
The decline in new-home sales came in contrast to a sharp rise in sales of previously occupied homes in December, the third month of gains in the much bigger sector of the housing market.
Joel Naroff of Naroff Economic Advisers pointed out that the December median price was almost 13 per cent below what builders received in December 2010.
That has discouraged builders from starting new homes on speculation that they can find new buyers, he said.
“The inventory is continuing to disappear as there are a falling number of spec homes on the market,” Mr Naroff said.
Despite the low inventory, at the current sales pace it would take 6.1 months to exhaust the supply.
The Federal Reserve has repeatedly blamed the depressed housing market and persistently high unemployment for holding back the economy’s recovery from recession, and has moved to push down mortgage interest rates to record lows in hopes of stimulating home buying.
In early January, the Federal Reserve sent a white paper on housing to Congress, which identified the glut of foreclosed homes around the country as a key damper on prices, blocking recovery of the sector.
It proposed that property owners such as banks turn foreclosed houses into rentals, noting that there had been an uptick in rental demand “as families who are unable or unwilling to purchase homes are renting properties instead.”
