Home Sales Keep Sliding

In yet another dark sign for the national economy, new home sales toppled an unexpected 9% in November, although there were signs the city’s housing market continues to hold its own.

The November decline, revealed Friday in a Commerce Department report, represented a drop from October levels. But the picture was even more bleak when compared to November of last year. By that measure, new home sales are down a staggering 34.4%, the largest year-over-year drop since 1991.

The latest figures followed a report this week showing sales of existing homes were down significantly in October. It bodes poorly for the economy because homeowners tighten their wallets when housing prices go down.

“Builders are facing all kinds of hurdles to get people to buy,” said Mike Larson, a real estate analyst at Weiss Research.

One such hurdle, Larson said, is getting financing in the midst of a credit crunch.

But residential construction in New York was strong throughout the first 11 months of the year, with new permits being issued at a rate 5% above 2006.

“Sales in new developments are very strong,” said Greg Heym, chief economist for city-based Halstead Property.

In the third quarter of 2007, the average price per square foot for a new apartment hit $1,241, up 13% from the same period last year, Halstead’s research showed.

Next week, the real estate firm will report fourth-quarter figures and they are also expected to be solid. The numbers will get a lift in part because they will include sales in two of the city’s swankiest new condos, The Plaza Hotel and 15 Central Park West.

One factor helping the city buck the nationwide real estate slump has been foreign buyers using a weak dollar to help prop up the market. Also, New York did not have the building frenzy that left markets like Miami and Las Vegas a glut of unsold homes.

But, “we have to worry about a slowing economy and the Wall Street slump,” Heym cautioned.

Beyond New York, the Northeast is feeling the tremors of the weak housing market. The Commerce Department figures show new homes sales fell 19.3%, making the Northeast the country’s second weakest region for new home sales behind the Midwest, where sales plummeted 27.6%.

Home sales keep sliding
BY PHYLLIS FURMAN | DAILY NEWS