When I first saw the news I had to rub my eyes and refocus. What I looked at on the screen might be just a mirage, the result of wishful thinking that is playing mind games with me. But it was true. It was real. The Commerce Department reports that in April the sales of new single-family homes leaped by 16.2%, a much larger increase than most experts had predicted. No problem, I'll take that number regardless of the economists' gloomier expectations.
It's the best news we in the residential real estate business have received in a long while. But we have to be careful not to overdo it. We need to keep our feet to the ground. This is just the first sign that maybe a recovery has finally started. It's still a long road to a completely healthy market environment.
South had the best showing with a 27.8% climb in new home sales, West was next with 8.5%, Northeast had a 3.8% gain and Midwest actually fell by 4%. As we can see, it's still for the most part a regional issue. And a local issue.
That's the good news. Now to the other side, the less than good news. The median price of a new home dropped a record 11.1% in April, to $229,100. The major reason to that decline is that builders have aggressively cut prices to move inventory.
What's the best about this is that the media is at last reporting something positive about the real estate sector. It has taken a while to get this far. For the last several months it has been nothing but trouble here and trouble there. Congressional hearings in Washington and blame games and foreclosures and subprime bankruptcies. It appears that there's light at the end of the dark tunnel.