Existing-home sales fell last month
Existing-home sales fell 1 percent month-over-month in April, to a seasonally adjusted annual rate of 4.89 million units from an upwardly revised pace of 4.94 million in March, according to the National Association of Realtors. Sales of existing homes were 17.5 percent below the 5.93 million-unit level in April 2007.
“In the past week, Freddie Mac and Fannie Mae announced that they were eliminating their ‘declining market’ policies, effective June 1,” said NAR president Richard F. Gaylord, voicing some optimism on the downturning market. “This means consumers across the country will have access to safe, affordable financing with down payments of only 5 percent on most mortgages, with 100 percent financing available on some loan products, and we could see an upturn in home sales this summer.”
The national median existing-home price for all housing types was $202,300 in April, 8 percent below a year ago when the median was $219,900.
Total housing inventory at the end of April rose 10.5 percent to 4.55 million existing homes available for sale, which represents an 11.2-month supply at the current sales pace, up from a 10.0-month supply in March.
Single-family home sales slipped 0.5 percent to a seasonally adjusted annual rate of 4.34 million in April from 4.36 million in March, and are 16.1 percent below the 5.17 million-unit level recorded one year ago. The median existing single-family home price was $200,700 in April, down 8.5 percent from April 2007.
Existing condominium and co-op sales fell 5.2 percent to a seasonally adjusted annual rate of 550,000 units in April from 580,000 in March, and are 27.9 percent below the 763,000-unit pace in April 2007. The median existing condo price was $214,900 in April, which is 3.7 percent below a year ago.
Regionally, existing-home sales in the West rose 6.4 percent in April to a level of 1 million but are 15.3 percent below a year ago. In the South, existing-home sales were unchanged from March at an annual rate of 1.92 million in April, but are 18.6 percent below April 2007.
Existing-home sales in the Northeast fell 4.4 percent to an annual pace of 870,000 in April, and are 14.7 percent below a year ago. In the Midwest, existing-home sales were at an annual rate of 1.10 million in April, which is 6 percent below March and 19.7 percent lower than April 2007.
Toro expects a flat year for sales
A weakening economy and late spring season have put Toro’s second-quarter earnings 16.3 percent lower than the same quarter last year, according to the company.
The manufacturer of landscaping equipment reported net earnings at $62.8 million, down from $74.9 million last year.
Net sales were $638.5 million, down 7 percent from $686.7 as reported last year.
“We remain focused on managing our business in light of these difficult conditions and will continue to drive customer demand for our innovative products,” said Michael Hoffman, chairman and CEO.
For the year, the company expects net sales to roughly equal 2007, at $1.9 billion.
Sign of the times: Lennar’s Memorial Day Sell-a-thon
As a glut of new homes in the United States challenges home builders as never before, many are turning to sales tactics more often seen in retailers and car dealers.
Case in point: Lennar has announced a Memorial Day Sell-a-thon featuring “hundreds of homes nationwide” and “once-in-a-lifetime deals.” An advertisement for the sales weekend features a promise of “no mortgage payments for nine whole months,” meaning no “live” mortgage payments for that time period. Buyers would then begin to pay on the principal and interest of the purchase after that time period.
Other home builders have big sales plans in the works similar to Lennar: Ryland Homes has extended its “Get More Sales Event” through May 31 from an original end-date of May 18.
In its most recent study of home-builder confidence, the National Association of Home Builders said confidence levels are still hovering around record lows set in December.
“The single-family housing market is still deteriorating,” said NAHB president Sandy Dunn. “Even fewer builders now foresee market conditions improving over the next six months compared with our April survey, and builder ratings of buyer traffic through model homes also have dropped off over the past month on a seasonally adjusted basis.”