It was just released that the sales of newly built U.S. single-family homes unexpectedly fell to their lowest level in seven months in November. This represents a blow to the housing market's recovery. Based on the report just released this morning, the Commerce Department said sales dropped 11.3 percent, the biggest decline since January, to a 355,000 unit annual rate, from a downwardly revised 400,000 units in October. Many analysts expected to see an increase on this report to 440,000 annual pace.
However, there are some positive news within the report just released:
1. The median sale price for a new home rose 3.8 percent from October to $217,400, the highest level since May.
2. The number of new homes on the market last month still fell to 235,000 units, the lowest since April 1971.
3. November's sales pace left the supply of homes available for sale at 7.9 months' worth, from 7.2 months in October.
Other positive news released today; Personal incomes rose in November at the fastest pace in six months, while spending posted a second straight increase. Consumer sentiment has improved and there are signs that we might see job growth in the first quarter of 2010.
Conclusion, read between the lines. Eventhough the headlines mention the number of homes sold have dropped the median price increased. Also, the inventory levels have reduced which in turn will help with property valuation as we move towards 2010. These are good news for real estate investors. It is imperative that you maintain the real estate investing principles in place and make sound decisions in your real estate acquisitions. As mentioned in my previous postings, 2010 will be a year of transition and we will see signs of improvements in the real estate market. However, do not expect miracles and unfounded valuations of your real estate portfolio. I still recommend that you invest with a long-term vision during 2010.
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