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The prospects of owning a home in 2011 looks to be more promising than 2010. The United States economy finally appears to be recovering from the Great Recession. The average price for a home remained relatively flat, with the 2010 value of $271,600 representing a 0.3% increase over the 2009 value of $270,900.
In this publication, we're going to summarize some of the home sale information gathered by the Census Bureau and the U.S. Department of Housing and Urban Development. That review will include the numbers of homes sold in 2010, as well as the number of homes for sale at the close of the year. We're also going to summarize some of the 2010 data into tables, including the percentage of new home sales by price. This is the same approach we've taken in previous years.
Average Home Price
We're going to be providing 2010 statistics relating to new home prices, sales of homes, and homes for sale. This information is based on surveys conducted by the two U.S. government agencies mentioned earlier, and as is the case with all surveys, there are limits to the accuracy of the survey itself.
Please note that as new information is gathered, there may be some recasting of values published in prior months or years. For example, some of the 2009 home values described herein may be slightly different than the values published in last year's article. As new data becomes available, preliminary numbers are adjusted and restated.
New Homes Sold in 2010
There were approximately 321,000 new homes (single family) sold in the United States during the 2010 calendar year. That's a decrease of 14.4% from the 375,000 home sold in 2009. To give you a better idea of the slowdown in new home sales, compare the 2010 value of 321,000 to the 776,000 new homes that were sold back in 2007.
In December 2010, the annualized rate of new home sales was 329,000. This is quite similar to the December 2009 value of 342,000 and the December 2008 value of 344,000.
Homes for Sale
At the close of 2010, there were approximately 190,000 new homes for sale in the United States. Again, this value contrasts sharply with the yearend inventory of 496,000 new homes in 2007.
Since we also know the December annualized rate of sales was 329,000, we can conclude that at the end of 2010 there was just under a seven-month supply of new homes for sale. Therefore, on average, it would take just under seven months to sell a home that was for sale at the end of 2010.
This monthly supply of new homes is calculated by taking the homes that were for sale at the end of the year (190,000) and dividing it by the December annualized rate of sales (329,000), and then multiplying the resultant percentage (57.8%) times 12 months (6.9 months).
The new home sales data also tells us that in 2010, the median number of months it took to sell a home, once its construction was completed, was 7.9 months. In 2009, the median number of months to sell a new home was 14.0, while in 2007 that value was 6.2 months. The median is the mid point in any data. So this data tells us that 50% of the new homes took less than 7.9 months to sell and 50% took more than 7.9 months to sell.
With the inventory of new homes at a relatively low level, it's clear that the decrease in time it took to sell a new home has less to do with robust new home sales, and is more likely a result of the contraction in the new home building industry. For example, back in 2006 there were 1,051,000 new homes sold, with a median value of 4.3 months to sell a home.
New Home Prices
The average price of a new home sold in 2010 was $271,600, which is similar to the 2009 value of $270,900. The median price of a new home sold in 2010 was $221,900, which is slightly higher than the 2009 value of $216,700.
While the economic recession lowered both the volume and value of new homes sold in America, there are signs of market stabilization in 2010.
Distribution of New Home Prices
The last bit of information we'll extract from this survey has to do with the distribution of new home prices. The table below illustrates the range of new home sales prices for the calendar years 2004 through 2010.
Percentage of New Home Sold by Price
| New Home Sales Price |
2004 |
2005 |
2006 |
2007 |
2008 |
2009 |
2010 |
| < $150,000 |
22% |
18% |
15% |
14% |
16% |
18% |
17% |
| $150,000 - $199,999 |
21% |
19% |
20% |
21% |
22% |
26% |
25% |
| $200,000 - $299,999 |
26% |
28% |
28% |
29% |
31% |
30% |
30% |
| $300,000 - $399,999 |
14% |
16% |
17% |
16% |
14% |
12% |
13% |
| $400,000 - $499,999 |
7% |
9% |
8% |
8% |
7% |
6% |
6% |
| $500,000 - $749,999 |
7% |
8% |
8% |
8% |
6% |
5% |
5% |
| > $749,999 |
3% |
4% |
4% |
4% |
4% |
3% |
2% |
From the above table we can draw the following conclusions about historical new home prices:
- When comparing 2010 to 2006, we see a sharp decrease in the percentage of new homes selling for more than $300,000 (37% in 2006 versus 26% in 2010).
- In 2010, about 75% of all the new homes purchased in the United States were sold for less than $300,000.
- Over the last seven years, the most popular selling range for new homes was $200,000 to $299,000.
- In 2010, only 7% of new homes sold for more than $500,000. This represents a 42% decrease from the years 2005 through 2007, when 12% of new homes were sold for $500,000 or more.
About the Author - Average Home Prices 2010
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