LOS ANGELES (CBS) — New home sales tumbled for the fourth straight month, triggering a warning from government analysts that 2011 could be the worst year for the industry in half a century.
Officials with the U.S. Commerce Department said sales fell almost 1 percent in July down to 298,000 — less than half of the 700,000 level that economists use to gauge a healthy market, the Associated Press reported Tuesday.
Robert Bailey, the former president of the California Association of Realtors and owner of Bailey Properties in Santa Cruz, told KNX 1070 it really is a tale of two markets.
“You’re talking about the new construction market being the lowest in 50 years, but we are starting to see stability in many of the regional markets in existing home sales,” said Bailey.
The Los Angeles housing market in particular is seeing both prices and neighborhood availability begin to open up, according to Bailey.
“Because of the price adjustments we’ve seen in existing homes over the past several years, the value propositions, the square footage one can buy, the neighborhoods they can buy into that they couldn’t is starting to propel many of those regional markets forward,” he added.
Each new home built creates an average of three jobs and $90,000 in taxes, according to the National Association of Home Builders.