latimes.com LA Land BLOG
Glut: 5.1 million homes for sale
A major homebuilder warned this morning of the growing problem of “surplus inventory” as another month of weak sales of new homes left the inventory of unsold new homes at 529,000, and the total number of homes for sale in America at a staggering 5.1 million.
Homebuilder KB Homes reported a 32% drop in third-quarter revenue and warned that inventory will continue to rise, driving prices lower: “We expect housing industry conditions to continue to worsen through the end of the year and into 2008,” said Jeffrey Mezger, president and chief executive officer. “Rising foreclosure rates are intensifying the problem of surplus inventory and will likely drive further home price reductions.”
Mezger says the “oversupply of unsold new and resale homes” has worsened in many markets. “At this time, we see no signs that the housing market is stabilizing and believe it will be some time before a recovery begins,” he said.
Reuters on new home sales: “Sales of new single-family U.S. homes fell 8.3 percent in August to a 795,000 annual sales pace, its slowest rate in over seven years, while the inventory of homes dropped, a Commerce Department report showed on Thursday.” Inventory dropped 1.5% from July to August, and stands at 529,000.
The National Association of Realtors reported earlier this week there are 4.58 million existing homes for sale, which represents a 10-month supply of homes at the current pace of sales.
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