Those of you lamenting how hard it is to sell your existing home should be glad you aren’t a home builder. New-home sales were down a stunning 36 percent during the first half of 2008. That is the largest drop in sales I have on record, and my figures go back 17 years.
The last really good year builders had was 2005, when 14,508 new homes were sold in the first six months of the year. Since then, sales have fallen by 56 percent.
Sales fell the most in Virginia. In 2004, Virginia builders were selling many more new homes than those in Maryland. However, Virginia sales plummeted in 2006, and sales are about the same on both sides of the river.
The decreased demand for their products and the falling prices of existing homes have forced builders to drop their price per square foot this year.
Today’s charts include data on the median price for a square foot of new home, covering all housing types sold during the first half of the year.
Surprisingly, prices in the District are up this year. That can be attributed simply to the higher prices of the six single-family homes sold there this year. The median price per square foot was down 10 percent for town homes and 1 percent for condos.
The price drop in Fairfax County is more typical of the market. With sales down to just 241 homes in the county this year, builders had to cut their prices by 16 percent to compete. That’s on top of a 10 percent price cut last year.
Prices have fallen by about the same amount in Montgomery County, even though sales there have been better than in nearby Fairfax.
In fact, Montgomery outsold Fairfax 2-to-1 this year, which is surprising considering how much better Fairfax new-home sales were doing just two years ago.
Contact Chris Sicks by e-mail (firstname.lastname@example.org).