New Home Inventory Continues to Decline

What is the one think all economists say that will help the housing market turn around? It’s very simple, once the standing inventory is absorbed, we’ll see a big change in the real estate market. This isn’t brain surgery, it’s common sense. Once the inventory is absorbed, the extraordinary promotions and incentives will vanish and your opportunity to get a fantastic deal on a new home in Atlanta will also vanish. So, you should take the fact that the number of newly built, single-family homes on the market declined for a 23rd consecutive month in March. For almost two years straight, we have seen the number of standing inventory homes decline, which means that there are not many more months to go until the standing inventory is completely absorbed and it once again becomes a seller’s market. According to new-home sales data reported by the U.S. Commerce Department inventory shrank to 311,000 units, which is a 10.7-month supply at the current sales pace.

The latest government data indicated that new-home sales in March remained virtually on-pace with a relatively strong, upwardly revised number from the previous month. Sales were reported at a seasonally adjusted, annual rate of 356,000 units, which was off just 0.6 percent from February. Potential home buyers in Atlanta real estate need to pay close attention – many of you have been waiting for the market to bottom out before you begin looking for your new home, but if you wait any longer you will be too late. Just look at what economists at the National Association of Home Builders are saying:

“In line with NAHB’s forecasts, we continue to see evidence that the new-home sales market is bottoming out as historically low mortgage rates, attractive home prices and incentives like the newly created $8,000 first-time home buyer tax credit spur more interest among consumers,” said NAHB Chief Economist David Crowe. “That’s particularly true in the West, where a 15% gain in March can be attributed in part to California’s implementation of an up-to-$10,000 tax credit for buyers of newly built homes – which, when combined with the federal first-time buyer credit, creates a sizeable inducement to purchase.”