If you’re looking to buy a new home just built or currently being built on the housing market, now would be as good a time as any. Why? New home sales and new home sales prices continue to be on the decline, making for better deals for new home buyers.
Although a good alternative would be to do a mortgage refinance due to current low interest rates, buying a new home can save you loads now that new home sales prices are down. Some are even lower than existing home prices in a few major U.S. cities. According to the U.S. Census Bureau, new home sales peaked in 2005, reaching an annual total of 1.263 million sold. Those figures have been on the decline ever since, reaching an all-time low of 374,000 for 2009. That’s a whopping 70 percent decline in new home sales in less than five years.
New Home Sales Statistics
New home sales reporting is broken down into four regions – the Northeast, Midwest, South, and West. To provide a perspective on the impact to new home sales, in 2006, a total of 1.051 million new homes were sold; 776,000 were sold in 2007; 485,000 in 2008 and 374,000 in 2009. In 2009, around 202,000 new homes were sold in the South, which was 54 percent of those sold in the U.S. The south region consistently holds the majority for new homes sold. New home sales for 2009 for other regions include the West with a total of 87,000, the Midwest with 54,000 and the Northeast with 31,000.
New home sales continued to lose steam into the first quarter of 2010. A March joint press release from the U.S. Housing and Urban Development (HUD) and the U.S. Census Bureau indicated that new home sales were down even further at an adjusted annual rate of 308,000 for February 2010. That’s a record low and a 13 percent decrease from the 354,000 new home sales estimated for the month. The figure is also lower than January’s adjusted rate of 315,000.
Advantage to Falling House Prices
Along with waning numbers in new home sales is the decline in new home sales prices. This can be a great advantage for new home buyers, especially if they take advantage of the federal new homebuyer tax credit that runs through April 30, 2010. New figures released in February indicate that the average sales price for new homes is $282,600, and the median price for the same is $220,500. In March of 2007, the average sales price hit a record high of $329,000, along with an all-time high for the median new home sales price at $262,600. Both figures have generally declined every since.
The up side to these down figures is that new homebuyers are at a great advantage in certain major metropolitan areas. Las Vegas, for example, has an abundance of new homes that have never been occupied that can be bought at astronomically low numbers. The Inland Empire, including Riverside, San Bernardino and Ontario, had masses of new homes for sale at all-time lows, and buyers are picking up on the savings. As of late 2009 in Dallas, Texas, a new home could be had for less than the sales price of a pre-existing home – 13 percent less. In Houston, Texas, it costs only 9.7 percent more to buy a new home, rather than a pre-existing one.
You’ll pay only 21.7 percent more to purchase a new home in San Diego, and San Jose offers an even sweeter deal at new home prices around 21.1 percent higher than pre-existing homes. That’s a much smaller spread than you used to see in these two popular cities. New home sales prices are also down in New York, Los Angeles, Chicago, Philadelphia and all other notable cities in the nation; although, there are a few exceptions.
The Bottom Line
The bottom line is that if you are looking for a bargain on a new home, now is the time to be shopping, before prices experience any sharp inclines. Get in while the getting is good, and you’ll find a steal of a deal on a new home. New home inventories have diminished in some areas, however, so you’ll need to work with your local real estate agent to find ones that are still available. Do it quickly, and you may even find a new home in the process of being built, so that you can order it custom-made to your own specifications.