New Home Sales Fall to Historic Lows in 2011

Sales of new single-family homes dropped in December for the first time in four months, making 2011 the slowest year on record for builders, according to figures released Thursday by the Commerce Department.

The median sales price of new homes fell to $210,000, the biggest drop in four months, and a 12.8 percent drop from December 2010.

Sales of single-family properties fell to a seasonally adjusted rate of 307,000, a 7 percent drop from the December 2010 estimate of 331,000. It marks the lowest level for the construction industry since 1963, when new home sales were first formally tracked.

Sales in the Northeast and West reached an historic bottom, while purchases in the South were at their lowest since 1966.

Figures for November 2011 sales were also revised down by 1,000 to 314,000.

The numbers will continue to languish as a tight credit market and slumping employment constrict consumers, said Jonathan Miller, principal of Miller Samuel Real Estate Appraisers.

The state of credit on new construction has not eased and it has not expected to ease given the sluggish nature of the economic recovery outside the housing market, he said. It's like a see-saw. We're going to have this discussion for the next several years, bouncing along some low level activity. In and of itself it doesn't mean in anything, except it's not improving.

I can't imagine credit being any tighter than it is now and I can't see unemployment rising. We're at some sort of low point, he said.