2011 was the Worst New Home Sales Year on Record

I saw an article in the StarTribune today stating that 2011 was the worst new home sales year on record, at least dating back to 1963. New homes simply weren't as appealing to homebuyers, especially as foreclosures and short-sales continued to clog the market. However, with mortgage rates at historic lows and the economy picking up steam on the road to recovery, many analysts believe that 2012 will be better.

According to the article, sales of new homes rose in the fourth quarter of 2011, as did sales of previously occupied homes. Despite the slow market, data show that home construction also built up in the last three months of 2011.

The article quotes Ian Shepherdson, the chief economist at High Frequency Economics, who said easier lending requirements, historically low mortgage rates and improved hiring all point to consistent, albeit slow, rises in sales in the coming months. "A sustained rise in new home sales is imminent," he said. "Homebuilders say so too, and they should know."

However, many economists also warn that the housing market is still near the bottom, and has a long way to go to get back to health. As noted above, many builders say that a "key reason for the dismal 2011 sales is that builders must compete with foreclosures and short sales — when lenders accept less for a house than what is owed on the mortgage."

Thankfully, we didn't suffer the same housing bubble here as in other parts of the state and nation. Our home values have remained more steady, making now a great time to buy or sell your house, especially with the low mortgage rates and pent-up demand from buyers.

If you are looking for a competent, professional real estate agent who is easy to work with and eager to help you make a great housing decision, please call me 320-894-7528. I would love to help you take advantage of these low interest rates, affordable options, and improving housing market.

Sincerely,
Noah Hultgren
noah@farmlandman.com
320-894-7528