New-Home Sales Rise in Region
In what's increasingly becoming a tale of widely divergent regional real estate markets, Southern California's new-home sector is holding up much better than other parts of the nation and even the rest of the state.
The latest evidence came Friday when the Commerce Department reported that the number of new single-family homes sold nationwide fell 10.5% last month from the month before, to an annual rate of 1.08 million units, marking the biggest drop in new-home sales in nearly nine years.
The drop pushed a gauge of the volume of unsold new homes to its highest level in more than a decade. In February, 548,000 new homes went unsold, representing a 6.3-month supply -- meaning it would take that long to sell them at current sales rates. In January, there was a 5.3-month supply.
In the West, which includes California, the sales plunge was even worse: down 29.4%, partly reflecting stalling sales in Sacramento and the Central Valley and in other Western states such as Arizona.
Yet in Southern California, sales of new single-family houses and condominiums saw their strongest February since 1988, according to statistics compiled by real estate research firm DataQuick Information Systems. Last month, sales rose 9.5% to 4,980 from January's 4,550, and were up 19% from the year before.
By comparison, new-home sales in the Sacramento area have been much weaker, DataQuick said. Although sales there were up 13% in February from the previous month, that was after January marked the worst month in six years. As many new homes were sold in December as in January and February combined, according to DataQuick. And sales plunged 45% in February from the year before.
What's more, the inventory of unsold new homes in Southern California, although rising, is below levels elsewhere in the West and in the nation.
In February, there was a 2.1-month supply of unsold new homes from Ventura County to the Mexican border, said Steve Johnson, director of the Southern California region for real estate consulting firm MetroStudy. Around Phoenix, there's three times the inventory available.
The reason for the difference: There has been less home building in much of Southern California, thanks largely to tight governmental regulations and a lack of available land.
"We just don't have much excess supply," Johnson said.
