Charting the market: Resales surge past new homes

Sales of new homes are lagging behind existing-home sales in the Washington region. New-home sales were down 2 percent in the first quarter compared to 2009. Existing-home sales were up 10 percent in the first quarter.

Why such a big difference? At least two things come to mind. First, there are a lot of existing homes (also known as resales) from which to choose. Buyers had 35,000 resales from which to choose at the end of March. More than 10,000 resales were sold in March, compared to just 1,078 new homes.

So existing-homes sales are 10 times higher than new-homes sales, and home buyers have a greater variety of homes to choose if they look at resales.

Another factor is price. New homes typically cost more than existing homes of similar size. Some buyers have a strong preference for a new home and can afford to buy one.

Many buyers, however, are very cost-conscious and leery of overspending, especially after watching home values drop in recent years.

Today’s charts include data on the median price per square foot for new homes. You can see builders have dropped prices in many jurisdictions.

• PDF: Charting the market

They can go only so low, however. Builders have labor, land, material and other costs they must pay that prevent them from lowering prices too far.

Resale prices, on the other hand, can rise and fall based on the conditions of the market. When the region was flooded with homes for sale in 2006 and 2007 - many of them foreclosures - it caused resale prices to fall for several years.

As a result of falling resale prices, the median sales price for a resale in Fairfax County was down to $353,000 last year, compared to $510,000 for a new home.

In Prince George’s County, the difference was just as large, with a median price for existing homes of $220,000 compared to $379,000 for new homes.

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