Rise in New Home Sales in November Provided Boost to Economy

John Mitty Thursday, December 27, 2012

Joe Moshé, Broker/Owner, Charles Rutenberg Realty, says the increase in new home sales during the month of November may be the result of greater consumer confidence in the job market. He also says that the construction of more new homes will help the Real Estate market and boost job growth, but warned that other economic circumstances may hinder future growth.

“With the ‘shadow inventory’ being held back by the banks, and the ever increasing number of the stricter lending requirements and the possible eradication of the mortgage interest deduction, it may be tough to see any dramatic  improvement in the Real Estate market next year,” Mr. Moshé said.

The Commerce Department reported today that new home sales last month were up 4.4% to a seasonally adjusted annual rate of 377,000 units, compared to October’s figure of 361,000. The November 2012 numbers were 15.3% higher than they were 12 months ago — when the estimated rate was at 327,000 units — and were at its highest levels in two and a half years.

The results fall in line with the National Association of REALTORS’ recent report that existing home sales in November were 5.9% higher than the month before. Mr. Moshé says that lower unemployment and the president’s re-election were signs that consumers expressed greater confidence in the economy. “When people saw the jobless rate go down and more people going back to work, they saw a more robust economy and exercised their purchasing power,” he said. “They believe that this was the opportune time to buy a home.”

Commerce recently reported that housing starts in November fell by 3% compared to the previous month and completions of new homes dropped by 9.7%, but building permits for the same month were up 3.6%, which means more houses are expected to be built in the new year. “The issuance of more permits to build homes means more jobs and a stronger Real Estate market,” Mr. Moshé said. “The biggest question is how many of these homes, once they are built, will sell.”

The major increase in Short Sales inventory continues to be a major factor in Real Estate values. Mr. Moshé said, “Charles Rutenberg Realty saw the need to get professional negotiators and compliance programs for its 900 Real Estate Agents. We are the only Agency to take on such a major endeavor.”

Charles Rutenberg Realty is one of the nation’s fastest-growing Agencies with more than 1,300 Agents on Long Island, Queens, Westchester, the Boroughs and Manhattan. For more information, call (516) 575-7500, or visit www.crrli.com.

jmitty@longislandyellowpages.com

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