U.S. slump is worst in 12 years, but it's just more of same for state
December 29, 2007
BY RUBY L. BAILEY
FREE PRESS STAFF WRITER
Paced by a stunning 28% decline in the Midwest, sales of new homes across the nation dropped to their lowest level in more than 12 years in November.
The Commerce Department reported Friday that sales fell by 9% from October to a seasonally adjusted annual pace of 647,000. It was the worst sales pace since April 1995.
The Midwest, which includes Michigan, led the plunge. Sales dropped 19% in the Northeast and 6% in the South, where tighter credit is limiting investment speculation. They rose 4% in the West.
The disappointing numbers are nothing new for the state.
"We have been down more than" 28% "in Michigan for the past couple of years," said Bob Filka, chief executive officer of the Michigan Association of Home Builders, which has 10,000 members. "The national numbers are starting to catch up to where Michigan numbers have been."
The state's battered economy has led to a surge in foreclosure rates and rapid reduction of property values. Homes -- both existing and new -- are on the market for months.
In response, builders have been offering incentives -- including granite countertops and sprinkler systems -- to try to lure buyers. But the incentives are to little avail, said Jan Calcaterra, an associate broker at ReMax First in Clinton Township.
"They never did that before," Calcaterra said. "They didn't have to. You used to have to put carpet in yourself."
Building permits have been down as much as 70% in the state in the past year from their highs earlier this decade as builders cut back in the face of lagging sales.
But that development could help the state's housing market rebound more quickly when the recovery begins by reducing the overall inventory, Filka said.
"We don't have as much of the oversupply as much of the country has," Filka said. "I think we've pretty much hit bottom."
December 29, 2007
BY RUBY L. BAILEY
FREE PRESS STAFF WRITER
Paced by a stunning 28% decline in the Midwest, sales of new homes across the nation dropped to their lowest level in more than 12 years in November.
The Commerce Department reported Friday that sales fell by 9% from October to a seasonally adjusted annual pace of 647,000. It was the worst sales pace since April 1995.
The Midwest, which includes Michigan, led the plunge. Sales dropped 19% in the Northeast and 6% in the South, where tighter credit is limiting investment speculation. They rose 4% in the West.
The disappointing numbers are nothing new for the state.
"We have been down more than" 28% "in Michigan for the past couple of years," said Bob Filka, chief executive officer of the Michigan Association of Home Builders, which has 10,000 members. "The national numbers are starting to catch up to where Michigan numbers have been."
The state's battered economy has led to a surge in foreclosure rates and rapid reduction of property values. Homes -- both existing and new -- are on the market for months.
In response, builders have been offering incentives -- including granite countertops and sprinkler systems -- to try to lure buyers. But the incentives are to little avail, said Jan Calcaterra, an associate broker at ReMax First in Clinton Township.
"They never did that before," Calcaterra said. "They didn't have to. You used to have to put carpet in yourself."
Building permits have been down as much as 70% in the state in the past year from their highs earlier this decade as builders cut back in the face of lagging sales.
But that development could help the state's housing market rebound more quickly when the recovery begins by reducing the overall inventory, Filka said.
"We don't have as much of the oversupply as much of the country has," Filka said. "I think we've pretty much hit bottom."
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