The market slowed in November. Closings for the month were 7% lower than they were last November and new (pending) contracts were 8% lower. Inventory is at almost the same level as it was at the end of last November, leaving us with 3 1/2 months of homes on the market, 2 1/2 months of resale homes and almost 7 months of newly constructed homes.
At 7 months of inventory, new home sales have slowed significantly. Closings were 24% lower than last November and new home pending contracts were 17% lower. Resale homes, with only 2 1/2 months of supply, fared better: 3% lower in closings and 5% lower in pendings.
The average price of new homes closed in the last twelve months was 40% higher than the average price of resale homes. It’s interesting to note that the new home price per square foot was 18% higher than the price per square foot for resales and the size of new homes was 19% higher than resales. As we mentioned before, it looks like there is an opportunity for builders and developers to plan for smaller new homes.
Overall, our market this year is down 3% in units, up 5 1/2% in average price resulting in an increase of 3% in total volume.
The first chart below shows trends over the last year in sales, pendings and inventory. The second chart shows inventory levels at different price levels.
If you own a home and have been thinking of selling, with only 2 1/2 months of inventory on the market, this may be the best time to sell. If you’re a buyer, the $87,000 difference in price between new and resale homes gives you plenty of room to invest in a resale home and make its effective age newer.