Volumes may be as high, but units sold this year are smaller and less expensive
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Numbers tell only half the story. While developers are heading towards the record number of private homes sold in 2007, CB Richard Ellis says that the total transaction value of primary market sales in 2009 so far – at about $11.2 billion – is only about half the $23 billion worth of new homes sold in the peak year of 2007.
The smaller value of total private homes sold by developers this year reflects the fact that mass-market homes have hogged the limelight this year, unlike 2007, when the spotlight was on the luxury market.
Median prices per unit transacted, both in absolute dollar as well as per square foot terms, have also been lower this year compared with 2007. With the focus on small-format units to move sales, the median size of units sold so far this year is also smaller than in 2007.
CBRE based its analysis on caveats data captured up to Oct 27 in Urban Redevelopment Authority’s Realis system.
This year, the strongest quarterly showing was in Q3, when developers sold about $5.8 billion worth of private homes, up from $1.36 billion in Q1 and $4.05 billion in Q2.
This pick-up has much to do with the stages of recovery in home buying. Continue reading
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