Spokane7
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January 26, 2012 in Nation/World
2011 worst year on record for home sales
WASHINGTON — Fewer people bought new homes in December, making 2011 the worst sales year on record.
The Commerce Department said Thursday new-home sales fell last month to a seasonally adjusted annual pace of 307,000. The pace is less than half the 700,000 that economists say must be sold in a healthy economy.
About 302,000 homes were sold last year. That’s less than the 323,000 sold in 2010, making 2011 the worst year on records dating back to 1963.
The median sales prices for new homes dropped in December, as builders continued to slash prices. It fell 2.5 percent to $210,300.
Still, sales of new homes rose in the final quarter of 2011. That occurred as other signs suggest the depressed housing market is starting to slowly turn around.
Sales of previously occupied homes rose in December for a third straight month. Mortgage rates have never been lower. Homebuilders are slightly more hopeful because more people are saying they might consider buying this year. And home construction picked up in the final quarter of last year.
And hiring has improved, which is critical to a housing rebound. Fewer people are seeking unemployment benefits than at any time in nearly four years, which is evidence of far fewer layoffs. The unemployment rate fell in December to its lowest level in nearly three years.
Economists caution that housing is a long way from fully recovering. Builders have stopped working on many projects because it’s been hard for them to get financing or to compete with cheaper resale homes. For many Americans, buying a home remains too big a risk more than four years after the housing bubble burst.
Though new-home sales represent less than 10 percent of the housing market, they have an outsize impact on the economy. Each home built creates an average of three jobs for a year and generates about $90,000 in tax revenue, according to the National Association of Home Builders.
A key reason for the dismal 2011 sales is that builders must compete with foreclosures and short sales — when lenders accept less for a house than what is owed on the mortgage
Builders ended 2011 with a third straight year of dismal home construction and the worst on record for single-family home building. But in a hopeful sign, single-family home construction, which makes up 70 percent of the market, increased in each of the last three months.
© Copyright 2012 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
Salmonella linked to chicken handling 
DickAdams on January 26 at 8:18 a.m.
IMO, the story has more holes than Swiss cheese the way the writer tip toes through the tulips.
JBlim on January 26 at 8:32 a.m.
Like what?
RedCedar on January 26 at 9:33 a.m.
I realize that what I’m about to write is heresy to the entire real estate industry, but the reason houses aren’t selling is that they cost too much. They’ve gotten interest rates down to approximately zero, and normal people still can’t afford the payments because the price of the house is too high. Worst sales year since 1963? Try dropping the prices to 1963 levels and see how fast they sell. People who have had their house on the market for a long time and haven’t sold it tell me “The market’s terrible, nothing’s selling these days.” I say “I’ll give you $1000 for it.” They get indignant and say, “I’m not going to GIVE it away!”, and then they usually tell me what they paid for it, what it would have been worth 5 years ago, etc. There you have it. A seller wants to sell. A buyer offers to buy. At that point, it should just be a matter of agreeing on a price. Every house in the MLS would sell tomorrow if the sellers were willing to sell for what the buyers are willing to pay.
The_Seer on January 26 at 9:47 a.m.
Near zero interest rates for big lenders are the problem. When Too Big To Fails banks can turn around and purchase U.S. Securities and other low interest but extremely safe investments with zero interest money they aren’t incentivized to circulate the money into housing loans which are, as recent history dictates, much more risky.
JBlim on January 26 at 3:11 p.m.
Lending standards have from way too loose to too stringent. Price and rates aren’t the main problem.
Dazzeetrader11 on January 26 at 4:52 p.m.
Wait! But Obama said everything is ok!…Just the other night he said it! SO it must be true! Right? If it’s not true…why would our beloved say such a thing??? America’s back? Gosh and golly gee…is it election time???
greenlibertarian on January 26 at 9:55 p.m.
The housing market overall, has a least 4 more years of decline and steady state before there’s any real growth.
This should surprise no one as housing was the giant bubble.