New home July sales fall 46.3%: Low-priced foreclosed houses lure buyers away from newly built ones

Sacramento, CA — September 15, 2008
By: Sanford Nax, The Fresno (CA) Bee

Sales of new houses continued to tumble in July as homebuilders struggled to compete with the popularity and low prices of foreclosures and a tightening credit crunch, experts said Monday.

In Fresno County, 158 new houses were sold, a 46.3% decline from July 2007 and 17.3% down from June. The median price fell 8.1% to $265,990 over the 12-month period, but was up 7.5% from June.

The monthly gain in price was likely temporary, said Jonathan Dienhart, director of published research at Costa Mesa-based real estate research firm Hanley Wood Market Intelligence, which released the report with the California Building Industry Association.

Dienhart said the one-month price boost could have been due in part to a burst of sales at Montage, a condominium complex in Clovis that sold 19 units in June, the previous month.

With a median price of $200,000, those deals could have helped drive down the June median, Dienhart said.

New-home sales in Tulare County fell 70.1% year-over-year and 26.5% for the month. Prices fell 22.1% to a median of $218,999 from a year earlier.

Statewide, housing production is the lowest since World War II.

At Granville Homes in Fresno, sales are down from last year, but appear to be leveling off, said Darius Assemi, a principal of the builder.

More people are touring model homes, which he said could lead to more sales when price declines stop.

Dienhart said developers are having to cope with the popularity of bank-owned properties, which in Fresno represent almost half of all existing-home sales. In addition, buyers are having a tougher time finding credit.

That is why efforts are under way to pressure legislators to keep seller financing programs such as those operated by Nehemiah Corp. of America, which has provided $8.6 million in down-payment assistance to 1,166 families in Fresno County since 1997, according to Nehemiah Corp.

The program, scheduled for elimination next month, could remain alive if housing advocates prevail in their attempts to pass H.R. 6694, which would allow that type of down payment help to continue indefinitely.

"Continued problems in the credit markets, including the recent federal bailout of Fannie Mae and Freddie Mac, indicated just how broad the problems facing the housing market are," Dienhart said.

Robert Rivinius, California Building Industry Association president, said policymakers need to make it easier for home buyers to get loans.

"Those who have good credit and verifiable income should be encouraged and able to buy a home," he said.

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For additional information, please contact Shelley Mitchell, smitchell@nehemiahcorp.org, 916-231-1999.

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