Smashing Estate

According to, the Commerce Department report, new home sales in the USA rose by 2.7% surprisingly in September as median home prices slumped to the lowest level in four years. Report say, sales of new one-family houses, have increased to an annualized pace of 464,000 units, above property market expectations of 458,000 units. Even though the statistics showed a monthly gain, it was still below 33.1% from the previous year, reflecting the record meltdown in the US real estate sector after a years-long boom.

The average sales value of new houses was $218,400, compared to $221,900 just a month earlier. Therefore, September rise in new property sales followed a 12.6% dropped in the last month. Moreover, the median home sales price of $218,400 was 9.1% lesser than the year-ago point. Besides, the figure is the lowest since the $211,600 level reached in the month of September 2004, when the property market was on the upswing. As a result, analysts who had been expecting a decline for previous month become surprised. On the other hand, the inventory of unsold property fell, at the end of September, slightly to 394,000 units, a supply of 10.4 months at the recent sales rate, below from 11.4 months for August 2008.

Regionally, new property sales decreased by 21.4% in the Northeast last month and were down 5.8 % in the Midwest. However, in the West home sales shot up by 22.7%. Sales in the South edged up 0.7% as well. While a report by the National Association Realtors last week showed that U.S. current home sales rate increased by 5.5 % previous month and that is the biggest gain in more than five years period because the lower home prices of September seem to have attracted many buyers since the housing inventory of 394,000 units was the lowest since the 383,000 homes for sale in the month of June 2004. Though analysts and experts said high inventories would continue to create pressure on prices. One of the rates strategists at RBC Barclays Capital Markets in New York, T.J. Marta said, “The tremendous overbuild suggests that prices will remain under year on year pressure out at least through mid-2009,” so wait to see what happen in futurer.