New home sales soar in June
Highest jump in nine years offers hope to a hard-hit industry
The storm clouds could be starting to part over the troubled real estate market.
Realtors, builders and housing experts buzzed over an announcement Monday from U.S. Commerce Department officials that new home sales jumped a surprisingly strong 11 percent last month. That increase beat analysts' expectations and marked the highest jump for newly built homes in nine years.
The Post and Courier
Signs of improving sales dot the new homes in Ryland's Taylor Plantation in Dorchester County.
Sales for June clocked in at a seasonally adjusted annual rate of 384,000, blowing past the expectations of economists surveyed by Thomson Reuters, who were looking for 360,000.
Historically low interest rates and a federal tax credit for first-time homeowners helped fuel the activity, the government said.
"The worst of the housing recession is now behind us," declared David Resler, chief economist at Nomura Securities.
Monday's data came on the heels of an uplifting report last week from the National Association of Realtors that existing-home sales rose during June, the third month of growth. Sales haven't risen for three straight months since early 2004, during the last housing boom.
Charleston's existing-home sales have yet to reflect a year-over-year increase in 2009, but the pace of the declines has eased in recent months.
While new home sales statistics were not available for the local area, the latest national numbers are providing some welcome relief for the real estate industry, which has been contracting for several years.
Monday's report shows that, slowly but steadily, home buyers across the country are chipping away at the massive supply of empty, newly constructed homes.
Housing snapshot
• New national home sales for June reached 384,000.
• The pace of decline in Charleston's existing-home market has eased. Nearly 9,900 homes are currently listed in the Charleston Trident Association of Realtors sales database.
• South Carolina's construction industry lost an estimated 10,900 jobs in the past year.
• South Carolina's unemployment rate was 12.1 percent in June.
And it holds promise that as Charleston-area home builders run out of new homes to sell, some will decide to build more, which could send a jolt of economic activity through the stagnant industry.
"What should follow this is (that) new construction should begin again," said Mary Graham, senior vice president of public policy at the Charleston Metro Chamber of Commerce.
South Carolina's construction industry could use the help. The state Employment Security Commission estimates that the sector lost 10,900 jobs during the past year.
Locally, the supply of new homes surged in 2006 as builders finished properties that they started while demand was still climbing, said Phillip Ford, executive vice president of the Charleston Trident Homebuilders Association.
Many builders slowed when interest fell but continued to sell homes at a respectable pace until last fall, when employers began slashing jobs, the stock market tumbled and lending activity slowed dramatically.
What's revived the new homes sector, experts say, is the $8,000 first-time home buyer tax credit and cheaper pricing.
"One of the things builders have done is they've taken a long, hard look at the market and found a way to build a more affordable product," said Mark Vitner, economist for Charlotte-based Wachovia Corp.
Ford said that custom-built homes, which are typically more expensive, have been slower to sell, likely because there are fewer buyers and it's more difficult to finance big mortgages.
Related story
'Naked' short sales banned, published 7/28/09
Will Jenkinson, an agent with Carolina One Real Estate's new-home sales division, said sales of newly built houses tend to pick up first following a slump because builders typically have more flexibility to cut prices or offer incentives than sellers of existing residences.
"When you have a builder, it's a business and their emotions about the home are very little," he said. "It's an object. It's a number. They want to get that house to move."
The thri-county area still has a large amount of existing properties for sale. As of Monday, nearly 9,900 homes were listed in the Charleston Trident Association of Realtors' sales database.
And economists warned that tracking new-home sales is only one way to measure economic strength. The nation's unemployment rate still stands at 9.5 percent, household savings have diminished and consumer confidence remains shaky.
"There's only so far home sales can rise when you see income falling and double-digit unemployment (in some states)," Vitner said. South Carolina's jobless rate was 12.1 percent in June.
But even with the bloated inventory, Ford said some local builders are starting to plan for growth again. "Over the last few months is the first time I've had conversations with bigger builders ... (about) people starting to buy some lots and build some houses," he said.
The Associated Press contributed to this report. Reach Katy Stech at 937-5549 or kstech@postandcourier.com.
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Comments
BillytheKid (anonymous) says...
Where is that TEA Party when ya need one? Sometimes things just work the other way.
July 28, 2009 at 4:33 a.m. ( permalink | suggest removal )
realamerican (anonymous) says...
Must be the Obamessiah's fault that the stock market and home sales are up. The wingnuts are going to have to work harder to make Nobama look bad with all the good news lately.
According to them this is clearly unpossible.
If he can get the public option on health care passed maybe the wingnuts heads will explode.
July 28, 2009 at 5:10 a.m. ( permalink | suggest removal )
bridgeoperator (anonymous) says...
Anyone who knows anything about economics knows that one good month doesn't represent a recovery. First time buyers and very attractive incentive packages by developers stuck with an over stocked inventory of new houses drives these numbers. House prices are still down 12% from last year. I refinanced last month and the attorney's office was packed with people buying new houses. People like realamerican are grasping at anything in Hope that there is going to be Change in the economy. They want their choice in President to not fail so bad they cling to anything. You have to be smart enough to weigh out all the variables. In 6 months if this trend has progressed over that amount of time and the resale and values begin to rise and unemployment begins to drop and car sales also follow the same trend, along with other measuring economic factors then we may be on a recovery. New car sales will soar in August due to this new clunker trade in and low interest. But all of the current plans are short lived plans by someone that does not understand economics. He is a master of lip service, but that's about all he is good for. It's amazing how ignorant people are that speak before they understand economics and build their hope on false change. You can't spend your way out of debt, and short lived plans will not do it either. You have to have positive trends. 1 month is not a trend. 2 months is not a trend. 6 months to a year of positive economic growth is. We don't have that right now.
July 28, 2009 at 6:03 a.m. ( permalink | suggest removal )
realamerican (anonymous) says...
Keep hoping for the president to fail Bridgeoperator. Is that how ignorant people like you want to prove you are right?
You will understand if I don't take economic advice from a minimum wage bridge operator instead of those who study the economy for a living.
July 28, 2009 at 6:22 a.m. ( permalink | suggest removal )
moonpie (anonymous) says...
Keep thinking that RA, this would have cycled out without the Obamaessiah. Same with the recession. But then he couldn't have used it then to socialize these industries he has.
Yep "bridge" is right too, remember when some moron said at the height of the housing crunch ""The worst of the housing recession is now behind us,"? Well some idiot in this article said it AGAIN after one good month. We have had good months" in the past couple years. Put them together in consecutive fasion and call it a recovery then!
July 28, 2009 at 6:49 a.m. ( permalink | suggest removal )
BlackReign (anonymous) says...
realunamerican, why would home sales be up? They have hit the bottom, for now. And the DOW? LMAO, ***where are the new jobs?***
***Where are the jobs being saved?***
Its all a blip, our dollar is as weak as the left wrist of a democrat voter.
Heck obama is now reduced to kissing up to the ChiComs, because they own the massive debt he just passed in the pork-us-all bill and the TARP/bailouts Bush passed.
DOW - Jan 2009 = 9034
Dow - July 09 = 9108
World markets steady as rally runs out of steam
LONDON World stock markets mostly traded in a narrow range Tuesday after a mixed batch of corporate earnings and as investors became increasingly reluctant to extend a two-week rally.
http://news.yahoo.com/s/ap/20090728/a...
BP Q2 profit down 53 percent on lower prices
http://news.yahoo.com/s/ap/20090728/a...
Viacom's 2Q profit falls 32 percent
http://news.yahoo.com/s/ap/20090728/a...
NEW YORK - Cost-cutting at Verizon Communications Inc.'s wireline business failed to keep pace with falling revenues as the nation's largest wireless carrier reported a 21 percent drop in second-quarter profit and announced further job cuts.
The company said Monday it will cut more than 8,000 employee and contractor jobs before the end of the year in the wireline business, speeding up its efforts to keep costs in line, according to chief financial officer John Killian.
http://tech.yahoo.com/news/ap/2009072...
July 28, 2009 at 7:42 a.m. ( permalink | suggest removal )
BlackReign (anonymous) says...
LECTURE FROM THE REDS: CHINA WARNS WHITE HOUSE ON SOARING DEFICITS
"The Chinese, who have the largest foreign holdings of U.S. Treasury debt at $801.5 billion, have been expressing worries that soaring deficits could spark inflation or a sudden drop in the value of the dollar, thus jeopardizing their investments. Chinese officials said those concerns were raised during Monday's talks.
"We sincerely hope the U.S. fiscal deficit will be reduced, year after year," Assistant Finance Minister Zhu Guangyao told reporters after the Monday talks had ended.
"The Chinese government is a responsible government and first and foremost our responsibility is the Chinese people, so of course we are concerned about the security of the Chinese assets," Zhu said, speaking through an interpreter.
http://apnews.myway.com/article/20090...
July 28, 2009 at 7:43 a.m. ( permalink | suggest removal )
oldglory (anonymous) says...
Cellphones may cause Verizon to go under? What will all the addicts do?
July 28, 2009 at 8:02 a.m. ( permalink | suggest removal )
bridgeoperator (anonymous) says...
Lesson in Ignorance:
1)You don't know what I do for a living, but comparing our ideas on economics it's obvious you probably have trouble counting your change.
2)To assume a persons id on a blog is their occupation makes about as much sense assuming a person is a realamerican by their name
3)Just because you got a raise last week when minimum wage was increased doesn't mean we all got a raise.
4)To suggest somemone wants the President to fail, wants the economy to fail, wants americans to loose their jobs, etc because I disagree with the policies and steps this president has taken is ridiculous. You need to pick another fight, that one is stupid.
Unlike you unrealisticamerican, I want this country to be great once again. I just don't see how the current administration is going to make it happen. I hope he does, and I am waiting to see.
Could you discuss how the President's plan will work and what long term results you think we will see, and specifically state what you think unemployemnt will be in 1 year and how we will get to that number under the current president plan?
If you can do that with any merit then I may assume you are a creditable person to give economic advice and criticism.
You are Up!
July 28, 2009 at 8:04 a.m. ( permalink | suggest removal )
BlackReign (anonymous) says...
Good points bridge operator.
And what realleftistamerican fails to mention, most of these new home sales are being subsidized by the taxpayers;
First-Time Home Buyer Tax Credit
1. Eight grand, new buyers: The tax credit included in the economic stimulus legislation is much narrower than the $15,000 proposal. This credit is equivalent to 10 percent of the purchase price of the home--although it's capped at $8,000--and applies only to first-time home buyers and principal residences. But unlike an earlier $7,500 home buyer tax credit, this one does not have to be repaid.
2. First time buyers defined: For the purpose of this legislation, a "first-time home buyer" is someone who hasn't owned a principal residence for three years before buying a house.
5. Refundable: Because the tax credit is "refundable," qualified buyers can take advantage of it even if they don't have much tax liability.
http://www.usnews.com/blogs/the-home-...
So once again, what we have is government and the taxpayer subsidizing new home sales.
That is not the free market working, that is government shifting the burden of debt from one class of citizen with higher incomes who will pay more in taxes - so another class of citizen can by a home. Its just a shell game.
bernie madoff, where are you....?
July 28, 2009 at 8:30 a.m. ( permalink | suggest removal )
cwmcpa (anonymous) says...
With inventories of unsold homes at an ALL time high and unemployment the highest it has been in a generation, this could be good news. The govt has spent trillions to stimullate an economy that in turn shows at best a modest adjustment. With an unprecedented $8,000 tax credit for new home buyers the market should have jumped 50%. The truth though is there is no confidence in the recovery. People are cashing out on investments before the value decreases another 25% and long term gains tax goes up 5% and a surtax is added at 5.4%. In other words they are taking their money and moving it else where before this congress bank rupts the nation. True indicators will show that sellers are still having to cut prices to sell and the homes are staying on the market longer than anytime in history.
July 28, 2009 at 8:45 a.m. ( permalink | suggest removal )
BlackReign (anonymous) says...
Another good post cwmcpa.
Just wait until the Bush tax cuts expire in 2010, Obama is going to let the Bush tax cuts expire & American taxpayers will be hit even harder.
July 28, 2009 at 9 a.m. ( permalink | suggest removal )
yird (anonymous) says...
The same old fans of the mistake residing in the white house continue defending the indefensible.
The "president" announced some time back that he and his band of merry men had cut something like $110,000,000 as they look for ways to save money by reducing spending.
Increasing the deficit fourfold to a whopping $4,000,000,000,000 is just the cost of doing business as the administration works diligently to get the economy back on track.
One little burst of growth in home sales and we are presumed to be racing toward full economic recovery.
The One is great, all praise the One.
Idiots!!!
July 28, 2009 at 9:11 a.m. ( permalink | suggest removal )
YouKnowMe (anonymous) says...
Wow, I see that some really want our country in the crapper, so they can be correct. (was going to type right, but we all know where they lean)!
July 28, 2009 at 9:29 a.m. ( permalink | suggest removal )
Lithographer (anonymous) says...
Another local newspaper puff piece (especially the headline) to make advertisers happy. Amazing! No quotes from the nation's leading bubble cheerleader, the National Association of Realtors. More obvious is the failure to translate the 9,900 Charleston homes for sale into how long it will take them to sell based on current sales. Was it edited out?
I am not a big fan of Paul Krugman, but he was spot on when he commented there were no Pulitzer Prizes for reporting on the biggest story of last year (decade? century?), namely the real estate bubble and subsequent ovarall economic collapse. He didn't go into why the reporting was so lousy, but isn't it obvious? Editors don't want to upset Suzie Q Realtor.
July 28, 2009 at 9:33 a.m. ( permalink | suggest removal )
maeko (anonymous) says...
BlackReign...about the Chinese concerned about the deficit...
they may be concerned in the short-term, but in the long-term, it may serve to benefit them. they have been able to perpetuate the trade deficit by encouraging the strength of the dollar through total control of their own currency. we could buy more and more of their stuff. if they decide to balk, we may end up with "redbacks instead of greenbacks"!
http://www.time.com/time/world/articl...
July 28, 2009 at 9:49 a.m. ( permalink | suggest removal )
BlackReign (anonymous) says...
YouKnowMe, it has to do with reality, our country has just had its debt tripled by Obama, it is debt we owe to China, the dollar is weak and all this false hope, is not reality.
I want America to retain its greatness and never fail, but failure is what the leftists policies ensure, they always have and always will, Obama, is just the newest in a line of leftists that want to tax and spend us into oblivion. Bush's spending didnt help, but Obama is doing it at hyper speed and that makes him a hypocrite and a liar.
Obama 2004: Bush Rushed Legislation Through Congress Without Allowing Time to Read, Debate ...
http://newsbusters.org/blogs/p-j-glad...
Is the Emerging Market Bubble About to Burst?
http://finance.yahoo.com/tech-ticker/...
Futures Lower; BP CEO Sees 'Drawn Out' Recovery
http://www.thestreet.com/_yahoo/story...
Dollar Falls to 2009 Low as Economic View Reduces Safety Demand
July 28 (Bloomberg) -- The dollar fell to the lowest level this year against the currencies of six major U.S. trading partners as speculation the global economy is emerging from the recession reduced demand for a refuge.
http://www.bloomberg.com/apps/news?pi...
July 28, 2009 at 9:51 a.m. ( permalink | suggest removal )
BlackReign (anonymous) says...
maeko, good point & link.
http://img.timeinc.net/time/daily/200...
Plus, and I know I am going tocatch it, but, China is still a communist state with goals and ideologies of said state.
We are in deep poop.
Obama: U.S.-China Ties Shape 21st Century
Opening Two Days of Talks, President Says Relationship Is "As Important As Any Bilateral Relationship In The World'
http://wcbstv.com/national/obama.chin...
Any Bilateral Relationship In The World'? With the Chi-coms, they own us and we are heading to serfdom.
How about Japan, Taiwan, S. Korea, UK/NATO, Israel....
July 28, 2009 at 10:03 a.m. ( permalink | suggest removal )
counterpoint (anonymous) says...
Can we PLEASE stop running comps against last year or previous years? Given the consensus on the housing bubble, why the hell would we continue to compare current stats to bubble stats?
July 28, 2009 at 10:05 a.m. ( permalink | suggest removal )
maeko (anonymous) says...
agreed, counterpoint, it is completely irrelevant and has no bearing of future performance. that's why i'd rather talk about China...
BlackReign...heading towards serfdom! ha! China has been looking like "the cat that ate the canary" for quite some time, i'm afraid. well, make that the Dragon that ate the Eagle!
July 28, 2009 at 10:42 a.m. ( permalink | suggest removal )
JohnS (anonymous) says...
The closings were mostly due to the new tax credit. One good month does not mean recovery.
July 28, 2009 at 10:42 a.m. ( permalink | suggest removal )
tc1 (anonymous) says...
The Chinese are not here for talks. They are performing Due Diligence for current investment and any further support.
BR lets hope for serfdom rather then peasants. Serfs did have few but some rights peasants had none.
July 28, 2009 at 10:49 a.m. ( permalink | suggest removal )
nopartisan_noproblem (anonymous) says...
Of course these taxpayer funded programs are going to increase sales in industries. If somethings free, they're gonna take it. How do you think we got into such a dependent state as a nation.
"If it moves, tax it. If it keeps moving, regulate it. If it stops moving subsidize it." - Ronald Reagan
Is this not the exact path government takes on industry.
July 28, 2009 at 11:12 a.m. ( permalink | suggest removal )
zoomru (anonymous) says...
WOW.......!?!
Educated and thoughtful citizens of South Carolina realize the farce and down right crap in this article.....!!!!!
Geez......does Charles Rowe ever get out and DRIVE around and actually LOOK at how many homes are for SALE....!?!?!?! This is a blatant example of an EDITOR trying to PUMP a flat tire....!!!!
KATY.....we know that you had to ROLL YOUR EYES when ol' Charles mandated that you spend time on this fluff for REAL ESTATE advertisers for this PAPER....!!!!!! Can you imagine what the Post's janitor thinks when he is reading this while on the crapper ...???? KATY.....you need to show Charles some of your MOXIE....!!!!! Are you as FED UP as we all are about the lack of TRUTH and Common Sense being flushed in this very PAPER...???
KATY.....is the flag blowing outside the POST today...??? It is not blowing outside SRC's building on remount but guess what the FLAG on top of WESTVACO is DOING...?!?!?! KATY ...is this ENERGY Being harnessed...!?!?! Is it being REPORTED to educate YOUR READERS about the TRUTH....!?!?!?!
KATY...get BUSY..!!!! (Fist POUNDz..!!!)
July 28, 2009 at 12:23 p.m. ( permalink | suggest removal )
zoomru (anonymous) says...
WOW.....MAYOR Riley..!!!
What do you think about this article..??
How about you ....Bobby Harrell..??
What about you Governor FORD....!?!?!
My BACKSIDE....!!!!
So Ladies of the Lowcountry, are you going to stand for this reporting by KATY...!?!?! Geez...Girlz ??
Ladies, do you think that MAYOR Summey is SPUNKY..!?! http://www.postandcourier.com/news/20...
Well...girls....DO YOU ?? Do you really approve of KATY's work here...!?! We highly suggest you ladies pick up the PHONE and really ...TALK !!! Heck, just come in right here to the COMMENT SECTION and let KATY know what you really...THINK..!!!! Katy can pump real estate fluff all she wants but the FACT remains that MAYOR Summey has lost ANOTHER business in his North Charleston woods..!!! Charleston Boat Center on Rivers Ave. is Closing..!?! SO what are those workers and salesmen and buyers GOING...!?!?! Are they going to drive farther down Hwy 17 and burn MORE gas to get to work...??? Does KATY inform you all about the REAL business climate here in the area...!?!?!
So ladies....just what is going to DRIVE these home sales in the coming MONTHS...!?!?! Maersk expansion...??? CSX and Norfolk Southern track repair....!?!?! More campaign fundraising Bar-B-QUES...!?!?!
WHAT....!?!?!?!
Will someone at the POST stand UP and actually report like WALTER Cronkite....!?!?! Lou DOBBS...!?!?!
NANCY...GRACE......!!!!!! (FIST POUNDz...!!!!)
July 28, 2009 at 12:49 p.m. ( permalink | suggest removal )
zoomru (anonymous) says...
LADIES.....are you sick to your stomach..!?!
http://www.fitsnews.com/2009/07/28/si...
July 28, 2009 at 12:51 p.m. ( permalink | suggest removal )
signseeker17 (anonymous) says...
Since when does a tax credit make a home purchase, or anything else "free"? (Think I'll go get a "free" house). Since when is a tax credit a BAD thing? Since when is GOOD news BAD news? Because Obama-haters hate HIM so much they want the COUNTRY to fail. I don't know why some are talking about China here, but... Of course the Chinese want to invest in the US! How else can the biggest CONSUMERS in the world continue to buy their stuff? Check the labels on almost everything YOU own. Ask the big companies why they outsourced so many jobs to a country that has much lower labor costs because the workers have no rights. Tax cuts didn't exactly create jobs HERE, did it? The old "trickle-down economics" crap is what got us here in the first place.
July 28, 2009 at 1:14 p.m. ( permalink | suggest removal )
HardWorker (anonymous) says...
signseeker, the problem is that you LOVE Obama so much that you're unable to open your eyes to the catastrophe that he is setting up for this country. You and the media both. You think one good month justifies your vote for him, and your admiration for him as a god.
And, what got us here is plain and simple: foreclosures. Barney Frank and democrats are completely responsible for that by making it possible for people who couldn't afford houses to buy them. It had absolutely nothing to do with Bush, tax cuts, deficits, wars, and anything else you think you can blame Bush or the republicans for. Bush's tax cuts are what got us out of the recession following 9/11, which had nothing to do with the sitting president. You probably don't remember that, do you? That's because the tax cuts worked incredibly, and got us out of that recession fast, unlike the current president's efforts to get us out of the one that his colleagues caused.
July 28, 2009 at 1:26 p.m. ( permalink | suggest removal )
WhyDoIBother (anonymous) says...
Interesting, two weeks ago housing starts numbers 584,000/year (approx) sales as reported number 384,00. Starts=584,000 sales=384,000
Surplus=200,000 or 4,000/state for the year. Oh, we need to start building???
Mary, do the numbers. Big picture!!!
July 28, 2009 at 2:07 p.m. ( permalink | suggest removal )
bridgeoperator (anonymous) says...
signseeker,
the fact that you don't understand why china is mentioned here and the fact you think when the USA is borrowing from them, means they are investing pretty much tells me you are out of your league in this debate today. maybe some economic lessons and a history lesson may help. I'm not sure who made the most ignorant statements today in this blog, realamerican or signseeker. Both are hardcore Obama supporters looking for their hope and change. Change is coming but it's not going to leave you much hope.
July 28, 2009 at 3:12 p.m. ( permalink | suggest removal )
buff_o_rilla (anonymous) says...
LOL i have never seen the Obama Zombies get so excited in a while. False hope, Its all manipulation. Wait for the crash and hyper-inflation because it is coming and you can bank on it, That is until they have a bank holiday after our currency crashes from the loser Obama going into more debt to get out of a problem that was caused by debt. Oh yeah keep an eye on the T-Bill Auction LOL, No one will be interested, Chinese, Japanese, Arabs they see the writting on the wall from this clown and his massive debt, They wont be buying. I guess the federal reserve will have to monitize the nations debt again just to keep Obama's head above water.
July 28, 2009 at 4:22 p.m. ( permalink | suggest removal )
gringolandia (anonymous) says...
• The pace of decline in Charleston's existing-home market has eased. Nearly 9,900 homes are currently listed in the Charleston Trident Association of Realtors sales database.
• South Carolina's construction industry lost an estimated 10,900 jobs in the past year.
• South Carolina's unemployment rate was 12.1 percent in June.
lol, nice bull manure headline, P and C. Housing is going to continue to decline once the tax credit deadline comes.
July 28, 2009 at 8:02 p.m. ( permalink | suggest removal )
BlackReign (anonymous) says...
HOLY CRAP! I AGREE WITH GRINGO!
The last sign of the apocalypse! Yird, stock the bunkers!
July 28, 2009 at 8:07 p.m. ( permalink | suggest removal )
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