August 26, 2009
Cash For Closings Has Intended New Home Sales Results
Boosted by an expiring $8,000 tax credit for new-home buyers, the pace of U.S. new home sales increased 9.6 percent from June to July.
The jump in sales was led by a 32 percent surge in the Northeast. Purchases increased 16 percent in the South and 1 percent in the West. They dropped 7.6 percent in the Midwest.
At the same time, however, both sales volume and the median sales price for new homes remain down on a year-over-year basis (down 13 and 12 percent respectively).
∙ U.S. New Home Sales Jump 9.6%, Most in Four Years [Bloomberg]
First Published: August 26, 2009 8:45 AM
Comments from "Plugged In" Readers
It seems to me that a smart move is actually to wait until the program expires to buy. If the $8K incentive was intended to produce a disproportionate increase in sales prices (and it must have been - otherwise it's just a straight subsidy) then you'd expect to save more than $8K by waiting until after the program ends.
Posted by: Po Hill Jeff at August 26, 2009 11:25 AM
Anyone know if they are considering extending this 8k credit?
And when does it expire? End of the year, or before?
Posted by: phatty at August 26, 2009 12:15 PM
credit expires on 12/1
I'll predict that next month's (Aug-09) new home sales will be higher than last month and also higher than Aug-08.
Posted by: anon at August 26, 2009 12:34 PM
Market is getting pretty damn hot lately. Noticed several houses in berkeley 94707 coming online at prices well-above 2004-2008 sale prices at $995k-$1M each. I guess the sellers are anticipating all the bullish profiteers from the stock market are ready to buy.
Gonna take my rapidly inflating dollars lump sum and go on vacation, under the assumption that i'm priced out forever!
Posted by: priced_out_with_envy at August 26, 2009 2:35 PM
^ Yeah, you pump it!
So let's see, there is only one listing in the last 30 days in Berkeley for 94707, 950K to $1M according to redfin.
710 Neilson, sold for $898K in 2004, and advertises $280K in recent improvements. For sale now at $995K, a loss of $180K in 5 years. $437 psft.
Only 4 houses sold in 94707 in Berkeley in the last three months in the 950K to 1M range, from $466 psft to $504 psft. So the home on the market above may go over, and break even from its 2004 price plus recent improvements.
One house is listed as being for sale for more than 60 days in that zip code and price range. 774 Spruce is listed $250K above its 2001 price, but hasn't sold for two months. $416 psft.
But you pump it! The market in Berkeley is ON FIRE!! Not.
Posted by: tipster at August 26, 2009 10:50 PM
tipster, you sound like you could use a good night's sleep or a nice walk outside (well, maybe not in the middle of the night).
Posted by: whew at August 26, 2009 11:43 PM
I'm not pumping, i'm just telling it like I see it.
Nice "family-friendly, move-in ready" homes in the area are moving quick. Packed Open Houses and overbid city. Yeah houses with issues, slide-effected, etc. are sitting dormant and going back to the bank, like they should. Sellers of decent homes are asking for the moon, and for some odd reason they're getting it. My only guess is that there is alot of Ca$h out there saved up pre-crash (remember all the over-FDIC-limit angry savers in line at IndyMac?), pilfered from gov stimulus programs, or extracted from covering short sellers, and will eventually go back into RE. The green shoots team have made it clear they don't give a sh*t about savers, Homedebtors are #1 priority.
Nope, i'm not an owner which is why i'm priced out with envy. Will probably adorn a wife beater, and relocate to a trailer in San Pablo/Vallejo, or move to a cookie cutter in flyover country if i'm ever going to actually own anything.
Posted by: priced_out_with_envy at August 27, 2009 12:43 AM
^ oh don't worry! Soon you'll have many regular posters here telling you how brilliant it is to rent, how perennially overpriced SF RE is, how we're about to go into a decade long japan like recession, and that buying a home is a bad investment. You'll feel much better in no time!
Posted by: 45yo hipster at August 28, 2009 9:26 AM