“The combination of falling new home sales coupled with sharply lower prices suggests that there’s unlikely to be an end to the pain, as the value proposition offered by existing properties still exceeds that of newly built homes. Until that relationship moves more into line, perhaps from another 20% decline in new home prices, there’s little indication that sales of newly constructed properties will show any improvement. Even the cash-rich among the homebuilders are going to have a rough 2009 and 2010.” –Guy LeBas, Janney Montgomery Scott
“To the extent that low mortgage rates and sales incentives, such as buyers’ tax credits, do facilitate sales, those sales are increasingly tilted towards existing homes. Under these circumstances, new home prices will remain under steady downward pressure, and new residential construction may bottom later this year but will remain weak through 2010.” –Richard F. Moody, Mission Residential
