New Home Sales Still Improving

Irvine, Calif.  - Net new home sales remain approximately 9 percent lower than February 2010, despite improvement from January, according to results of the John Burns Real Estate Consulting monthly survey of public and private homebuilding executives across the country. Net sales jumped by 26% in February 2011 compared to a normal rise of 12% from January.   

"We told our clients that a 9 percent decline is actually better than it seems, because we are comparing year-over-year to sales which were boosted by the federal tax credit," says CEO John Burns. "If we can get through the spring comping that close to last year, I would say we are seeing stability in the housing market."

Vice President Jody Kahn manages the firm's survey and analyzes the breakdown of average net sales per community by region. "Most regions remain down on a year-over-year basis, though The Northwest, Texas and the Southwest are outperforming the national average," says Kahn.

Average Net Sales Per Community are Down YOY

Kahn notes that despite the lift, the reported average net sales rate at 1.46 per community remains very low compared to the 4.0 per community that builders would budget in a normal market. "Our builder contacts continue to report that the housing market is still very weak, and price discounting is reported throughout the country," Kahn adds.

More Survey Highlights:

• Prices are flat in Texas and the Northeast, and declining slowly everywhere else. 

• Traffic numbers improved during February, but motivation and qualification problems remain. 

• Starts increased in seven regions in February, led by the Southwest. 

• Finished inventory decreased by 9 percent to 2.9 units on average, from 3.2 in January.

This month, our survey results are based on 225 market ratings provided by 197 builders.  Together, survey participants oversee 1,600+ communities. This proprietary survey is available to the firm's Research Clients by the 3^rd business day of each month.