New home sales down in January
Sales of new single-family homes fell 2.8 percent in January from 605,000 in December to a seasonally adjusted annual rate of 588,000, according to estimates released jointly by the U.S. Census Bureau and the Department of Housing and Urban Development.
This number also represented a 33.9 percent decline from the January 2007 estimate of 890,000.
The median sales price of new houses sold in January was $216,000, down 4.3 percent from November. The average sales price rose, however, 3.25 percent month-over-month to $276,600.
The seasonally adjusted estimate of new houses for sale at the end of January was 482,000. This represents a supply of 9.9 months at the current sales rate. According to the National Association of Home Builders (NAHB), it’s the highest supply level since April 1982.
“While home builders are reporting some glimmers of buyer interest starting to develop, many consumers are still firmly planted on the fence, waiting for just the right incentive to make their move,” said Sandy Dunn, president of the NAHB. Dunn went on to express support for a federal economic stimulus program, adding, “Such action would reduce the inventory of units on the market and help restore housing to its historic role as a primary engine of economic growth.”
Sales down 5.6 percent at Trex in fourth quarter
Winchester, Va.-based Trex, manufacturer and distributor of decking, railing, fencing and trim products, reported a net loss of $40.1 million for the fourth quarter compared with a loss of $13.8 million for the same quarter in 2006. Net sales for the quarter were $30.3 million, down 5.6 percent from $32.1 million from the same quarter in 2006.
For the year, the company reported a net loss of $75.9 million, compared to net income of $2.3 million in 2006. In sales for the full year, the company reported $328.9 million, down 2.3 percent from $336.9 million in 2006.
“We are extremely disappointed with 2007 financial results, which were burdened with charges stemming from poor control over manufacturing operations, quality and fixed asset management,” said president and CEO Ronald Kaplan, who joined the company as chief executive on Jan. 7. The company recently cut salaried work force by approximately 30 people, according to Trex.
“Nevertheless, Trex’s steady sales illustrate our success in improving product quality, the strength of the Trex brand and the expansion of our distribution network,” he added. “We are pleased with the company’s sales performance considering the soft market conditions and overall downturn in the building materials industry.”
Lumberyard sues city over boardwalk project
With the sluggish housing market making headlines, even some lumberyards cashing in on the commercial sector can’t catch a break.
According to (New York) Newsday, a Baltimore lumber company has sued the beachside city of Ocean City, N.J., for $1.2 million for canceling a huge order of tropical rainforest wood for a seaside boardwalk project.
Louis J. Grasmick Lumber filed the suit in U.S. District Court, according to the article, against the city for allegedly refusing to pay for the wood even though some of the wood already has been installed on the boardwalk.
Environmental groups, including “Friends of the Rainforest,” also have protested the project, saying the city had pledged “never to use tropical hardwoods on its boardwalk again.” The city’s mayor’s office received more than 50,000 e-mails urging the local government to cancel the contract on environmental grounds, according to the newspaper.
The city did not cite the environmental complaints for terminating the contract, but rather “lengthy delays in delivery” and “uncertainty” as to when the wood would arrive.
The lumberyard said the delays were due to factors beyond its control, including supplier shipping delays and an accident in which a company truck overturned.