As we near the close of 2009, Indiana homeowners are anxious to see how the numbers turn out for the year. While we have several months to await the ending of our last quarter, let’s revisit how the numbers for 2008 new homes sales looked across our nation.
2008 was not a good year in terms of new home sales. Those trying to market Indianapolis homes for sale knew of this struggle first hand as the Indianapolis real estate market was saturated with existing homes not selling as well as before. Several factors went into declining home sales such as the state of our economy, and simply the decline in home values. Some homeowners were only willing to lower the asking prices of their homes so much which resulted in their homes sitting on the market longer than expected. This struggle continues around Indianapolis and the rest of the nation as well.
Because of there being so many existing homes for sale on the market, new homes sales struggled even more to draw in buyers. They figure, why buy a new home when I can get one that is already built for so much cheaper?
Of course, there will always be those who won’t settle for anything less than a brand new home that is designed to their specifications. However, the current struggles in our financial market seem to be reaching even those who before had the disposable income to make these kinds of choices. Nowadays, everyone seems to be looking for the best deal. It’s very difficult for new homes to compete against the forced falling of home prices.
Specifically, December of 2008 showed new homes sales fell by 15 percent, when compared to a month earlier. The Commerce Department reported that sales were down even further when compared to the December a year earlier, by almost 45 percent. New home sales for the duration of 2008 showed just over 480,000 homes sold, which was down nearly 38 percent when compared to 2007. We would have to go back to the early 1960s to see a similar decline on record.
Across the nation, the West and Northeast struggled the most where sales plummeted around 50 percent. The South reported numbers that were down 12 percent and the Midwest fared the best, reporting being down only 6 percent.
We know by various Indianapolis home sales reports in general that we do continue to struggle. Working with an Indianapolis REALTOR® can help maneuver around the current market but the challenge still exists. Although it is encouraging to know that in the Midwest, perhaps things are looking up and as a result we will see a turn around in our local real estate markets.
At the end of 2008, over 50 percent of the new home builders surveyed said that they were no longer making a profit when selling a home. National builders were struggling even more with sales than local home builders. With those kind of statistics, however, it will be interesting to see how many company casualties we will note by the end of 2009.
The new home builders that have withstood this financial climate continue to offer incentives to attract buyers. On the other hand, some home builders are so optimistic because of more recent home builder reports that they are even beginning to return to the mindset of several years ago and actually decreasing their incentive programs. As always, there are differing views about what is actually going on and where our market is heading. General consensus is, however, that there are reasons to be optimistic that 2009 new home sales reports will not be as negative as 2008.