Major newspapers ran the story today. Statistics gathered by the U. S. Commerce Department show sales of 321,000 new homes in 2010, down a whopping 14.4% from the 375,000 units sold in 2009. This is the 5th consecutive year of declines, since prices peaked in the boom year of 2005. The Wall Street Journal calls 2010, "the worst year on record for the battered building industry" (Zibel & Bates, WSJ 1/26/11), and states tht 600,000 units per year is considered to be a "healthy" rate of sales by most economists. These are sobering words, but what do they mean for each of us? The governent culls this information on a national basis. We know, however, that all real estate is local. Here in Connecticut we saw a slight improvement in sales in 2010.
Despite the startling headline, can there be a silver lining here? Economies rise and fall, and this dip has been deep and prolonged, but the need for housing is basic. As our population contines to grow, the need for housing will too. Prices continue to fall, but this can be a great opportunity for our buyers. The alternative, of course, is to rent. Here in New Haven County, a one bedroom apartment can cost $1000 per month, and utilities are not included. At the end of the lease, renters have nothing to show for their expenditure - no ownership and no tax deduction.
There are going to be some great sales on new construction in 2011, as builders work to clear the excess inventory. It is up to us as agents to scout out the best deals for our buyers. Interest rates are still good, but climbing. This opportunity to buy at a discount in prices and interest rates will not last forever. Don't let a negtive headline throw you off your balance. Seize the opportunity.
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