New Home Sales Fall To Record Low

Bargain hunters may be snatching up distressed existing homes, but they still seem skittish of new homes, according to a report released Thursday from the U.S. Commerce Department.

Sales of new homes nationwide plunged to the slowest pace on record last month.

New home sales fell 14.7 percent in December to a seasonally adjusted annual rate of 331,000, from a downward-revised November figure of 388,000. December's sales pace was the lowest among records dating back to 1963.

"This is an awful report. ... Builders just can't cut back fast enough, so prices remain under downward pressure," Ian Shepherdson, chief U.S. economist for High Frequency Economics, wrote in a research note.

For 2008, builders sold 482,000 homes, the weakest results since 1982, when 412,000 homes were sold.

The sales weakness in December reflected a 28 percent drop in the Northeast and a 20 percent drop in the West. The South and Midwest posted smaller declines of 12 percent and nearly 6 percent, respectively.

The commerce department does not provide local data, but Houston-based housing research firm Metrostudy said last week that Bay area builders started construction on 932 homes in the fourth quarter of 2008. That's down 33 percent from 1,399 during the same quarter a year ago.

Annually, home starts in Hillsborough, Pasco, Pinellas, Citrus and Hernando counties were down 35 percent during 2008, at 4,730. That was also a record low.

There were 2,617 empty, new homes sitting on the market in the fourth quarter, compared with 3,496 homes during the same period last year. It would take more than four months to sell those homes at the current selling pace, Metrostudy said.

This week, the Florida Association of Realtors offered some good news. The number of existing homes sold in December in the metro area of Tampa, St. Petersburg and Clearwater jumped 16 percent compared with December 2007. The group says most of the homes were distressed properties, particularly in Florida, which is reeling from foreclosures.