A recent report showed sales of existing homes were also stronger than expected, rising 10%, and the two reports lend support to some economists who believe housing demand hit a bottom in late summer.Â
It is widely felt that after dropping precipitously after the expiration of the first-time buyer tax credits, new home sales may have stabilized and we may see a gradual recovery over the coming months ahead.Â Â Â
Â Still, the pace of new-home sales is 21.5% below the same level of last year. The pace of new-home sales is also considerably below the 414,000 rate in April, when the market was buoyed by a tax credit that has since expired.
Thereâ€™s also still plenty of supply, with the government estimating supply of eight months of unsold homes, though thatâ€™s down from 8.6 months in August. The stock of unsold houses fell 1% from August and dropped 19% from Sept. 2009.
Â It does not take a genius or a crystal ball to figure out with little new construction going on in the Central Valley of California; inventories of unsold new homes at least are not a problem even with sales at a depressed level, considering the inventory is finite. Â
Â Nationally, the median sales price rose 1.5% from August and 3.3% from Sept. 2009 to $223,800â€”about 30% above the median price of an existing home.
The margin of error for new-home sales is a considerable plus or minus 16.9%. Septemberâ€™s housing market was only partly affected by a foreclosure moratorium of some leading lenders, which gathered pace in October.Â New-home sales, by definition, wouldnâ€™t be affected by foreclosure disputes and in fact could benefit by virtue of purchasers getting â€œcleanâ€ title when buying new properties.
Â Here is a look at the local market for the Tracy/Central Valley area of California.Â