New home sales take record hit

Decline 26.4% in '07; prices fell sharply in December

By Martin Crutsinger
ASSOCIATED PRESS

WASHINGTON --New home sales plunged in 2007 by the largest amount on record while home prices tumbled sharply in December.

Analysts forecast more trouble in 2008 as housing tries to emerge from its worst slump in more than two decades.

The Commerce Department reported Monday that sales of new homes dropped by 26.4 percent last year to 774,000. That marked the biggest decline on record, surpassing the old mark of 23.1 percent in 1980.

Lexington-area sales also down

Sales of new homes in the Lexington area also slumped in 2007, but not as badly as they did nationwide.

The Lexington-Bluegrass Association of Realtors said Monday that 1,982 new houses were sold in 14 counties including Fayette and those surrounding it. That number is a 22.6 percent decline from 2006, when 2,561 new homes were sold.

Jonah's thoughts: Our predictions are right on. New homes starts turned out as reported and existing homes have fallen below the 5 million sales mark. No one should be any longer looking through rose colored glasses. The two big questions are 1. predicting 2008 numbers. New home starts should level off after a few more big adjustments by the big (track builders) new home builders. The small office (pickup truck) home builders have already stopped building. 2. When does our hibernating buyer shake off this induced sleep? Spring `08 will bring the scouts out and there will be a little bit of relief. But Spring `09 is probably our first hope of returning to a whittled down normal market. There is certian to be a big bounce with the 2010 Alltech World FEI Games.