| Despite an over abundance of homes on the market, | | | | Economist Mark Zandi states that the credit "juiced |
| it seems there is increasing demand for new homes. | | | | up sales as much as 125,000 new homes" citing that |
| March and April have produced gains in the sales of | | | | "new-home sales would have been closer to 375,000 |
| new homes that have not been seen in 47 years, | | | | if not for the credit", instead of the reported |
| and although the numbers are still down from the | | | | 504,000. Mike Larson of Weiss Research has said in a |
| peak during the housing boom, it is definitely a trend | | | | recent report that "even if new home sales manage |
| that cannot be ignored. | | | | to hang on, a recovery in the overall market still |
| Nationally, newly built single-family homes saw sales | | | | faces a towering obstacle... the used home market is |
| numbers spike 14.8% in April and 29.8% in March; | | | | still oversupplied, and will remain that way for some |
| resulting in an increase of 47.8% over 2009 figures. | | | | time thanks to a continuing influx of distressed and |
| With total units sold reaching 504,000, almost 80,000 | | | | foreclosed property". |
| more than analysts had predicted, many are left | | | | So why the surge in new home sales? Aside from |
| speculating the cause of this sudden burst in activity. | | | | the home buyers credit some other factors come |
| It would make sense that in a country with 2 million | | | | into play. Thanks to the recent recession the cost of |
| vacant homes for sale (Census Bureau figure), many | | | | land, labor and materials have dropped considerably |
| of which are foreclosures and short sales with | | | | which means new homes can be constructed and |
| drastically reduced prices, there would be little | | | | sold for less than new homes that had been built |
| demand for new home construction; however, | | | | during the housing boom; homes that remain vacant |
| throughout most of the nation this is not the case. In | | | | in developments that resemlbe ghost towns. Another |
| Las Vegas, for example, where there are over 9,500 | | | | issue to consider as fuel for this trend is the |
| recently built houses sitting empty and thousands | | | | foreclosure/short sale market. Indeed, there are |
| more waiting to be released by the banks as REO's, | | | | some great deals to be had on these properties; |
| contractors are building over 1,000 new homes and | | | | however, the length of time to close the deals, the |
| still struggling to keep up with consumer demand. This | | | | condition of the homes and the neighborhoods they |
| trend seems to be the norm in most areas of the | | | | are in, and the competition from investors that can |
| country where new home sales for April were up | | | | pay cash, make this market very difficult to enter |
| 31.6% in the Midwest, 21.7% in the West, and 10.8% | | | | for first time buyers and average Joes. We also |
| in the South, with the Northeast being the only | | | | cannot discount the American desire for consuming |
| region reporting no change. | | | | the newest and best of everything. |
| These figures are great news for unemployment | | | | So, even though this trend is very real, it is difficult |
| rates in the country as construction workers lace | | | | to determine what is driving it and how long it will |
| their boots back up, although many experts are | | | | last. While the savvy investors are scooping up great |
| cautioning that this trend may be short lived and is | | | | deals out of the massive housing surplus, others are |
| merely the result of the surge in real estate activity | | | | choosing to buck up and buy new; after all, why |
| created by the home buyer credits offered by the | | | | would you want a home that someone else has lived |
| government which came to an end April 30. Moody's | | | | in...Yuk!! |