New Home Sales Down Even With First Time Homebuyers Credit
New Home sales dropped in September as buyers decided this may not be the time to purchase a new home. Single family homes sales were down nationwide by 3.6 percent.
What is interesting is that the National Association of Home Builders used the downturn as a call for Washington to increase the $8,000 new home buyers subsidy. Now I understand why, that is $8,000 more per home the government will give the builders towards the price of a home, or if we want to be technical, $8,000 that the home price does not need it to be lowered for the house to be priced right.
The inventory of new homes on the market continued downward for a 29th consecutive month, to 251,000 units in September. This is the lowest inventory since November 1982. However, the slower pace of sales kept the months’ supply unchanged, at 7.5.
Crowe noted that the Midwest, which unlike all other regions posted a significant gain in September home sales, was one area where buyers still had a last-minute opportunity to sign a deal in time to take advantage of the tax credit because of the lesser volume of sales in the pipeline.
On a regional basis, new-home sales were down 10 percent in the South, which is the nation’s largest housing market, and were down 10.6 percent in the West. The sales rate did not change in the Northeast in September, but gained 34 percent in the Midwest due to last-minute deals sparked by the tax credit.
Everyone keeps talking about a bottom forming, but how can that truly be if both interest rates and property values are both being stimulated by tax dollars. A bottom is when the market, not the government, decides it is. If the government does not have the confidence in the market that it has to throw money to keep the market from tanking, we do not have a bottom.
And until we have a true bottom, we are not going to have market that most people will feel comfortable buying into. We may stabilize the ship with these subsidies but we will never make it sail efficiently until we set it free.
Although I agree on most points, I would like to point out that most of the banks that are being ...
The question is when are they going to release them on the market. Las Vegas leads the nation in ...
I keep seeing mentions of Florida's market getting better in multiple blogs. I'm increasingly under the assumption that at least ...
I would like to know more about it. I need to know how you file for it. Please let me ...
Great blog, keep the great content coming! 
If you want to succeed, do not say "we can prevent this in the future." Live in reality. ...
The price of the property depends on its quality and the deal between the management. Good and wise choices are ...
I don't have experience at actualy working in tha automotive bussinnes, but have experience working in a warehouse invironment. ...
Comment by Portland Real Estate on 28 October 2009:
We need to let the market work itself out. If we keep thinking that smart legislation is going to fix everything, then we are going to starve waiting for them to get it right. Let the credit drop.
-Tyler
Comment by Joshua Dorkin on 29 October 2009:
Funny that we both have very similar commentary on the same news on our respective blogs, Tom. I wonder why that is . . .
Great point, BTW, about the bottom of a market being formed by the market itself, not by the government. No matter how much power the White House wants, they can’t change the realities of how a free market economy works, no matter how hard they try.
Pingback by Weekly summary of real estate news, Memphis comments, and other interesting stuff – October 31st - Memphis Real Estate Buzz on 31 October 2009:
[...] Shared New Home Sales Down Even With First Time Homebuyers Credit : The Real Estate Bloggers. [...]
Comment by House for sale on 4 November 2009:
In my experience new tax credit will take a time to boost the home sales.