May survey shows new home indicators maintain improved levels
New home sales and traffic have maintained improved levels, while builders’ expectations for the near term retreated slightly, according to the John Burns Real Estate Consulting May survey. The percentage of home builders rating current sales as Poor continues to decline, now at 53% compared to 56% last month and 87% in January.
Further improvement is tempered by the ongoing competition from foreclosures, limited credit for both buyers and builders, and rising unemployment. Concerns over escalating REOs and further price erosion still weigh heavily. “The changes to appraisal law that went into effect May 1 will likely be another leg down for new home sales,” said Burns. “Appraisers are now more likely to compare new homes to foreclosures, which can be ‘apples and oranges’ in many cases.”
Source: Real Trends