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New-home sales show slight uptick
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New-home sales continued to drag in January, but a slight uptick in the number of building permits pulled in recent months indicates some life may be returning to the market.
Some 3,746 new homes were sold in January, down 7.1 percent from the same period in 2006, the latest housing market report from real estate analyst RL Brown shows.
Permits were also down year over year, with builders pulling 2,876 last month, compared with 4,423 in January 2006. But, Brown said, the number of permits has been increasing slightly the past three months.
“It’s an encouraging sign,” he said. “It appears that the real slide from euphoria has bottomed out.” Builders have been cutting prices and readjusting their products, offering fewer extras like granite counter tops to make homes more affordable, Brown said.
“I think the next move we’ll see more and more builders cutting the square footage in houses,” he said. Builders are expected to pull about 40,000 permits for new homes in 2007, compared with 63,000 at the height of the housing boom two years ago.
Brown’s report estimates that builders need to unload 12,000 to 14,000 houses built on speculation still on the market throughout the Valley.
Brown said the excess inventory is expected to be corrected by mid-year or the third quarter. “The general mood is that things are improving in the new housing market,” he said.
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