New home sales in the Northeast are still plunging, despite a revival in other parts of the country.
Figures released by the Commerce Department show that across the country, new home sales in March showed a mere 0.6% drop from February, after a record low in January. Analysts say this could be a sign of stabilization, but the regional breakdown tells a more detailed story. In the West, sales were up 15%, but here in the Northeast, new home sales in March were down 32% from the previous month.
Housing analyst Mike Larson of Weiss Research cautions that the sample size in the Northeast is small, but he says it does make sense that the region is getting hit harder at this point in the downturn.
"The greater New York area and parts of Connecticut, New Jersey and so on, that are bedroom communities so to speak for people who work in the New York area. Finance is a big driver of how that market performs, and obviously the greater New York City area did well early on in this downturn, because Wall Street was still doing ok. Now we have a totally different ballgame out there. So I think some of those markets that had been holding up in some of those areas have now been weakening."
Larson adds that former bubble markets in Florida and California have seen prices fall much farther and faster, to the point where buying is once again attractive. But he adds, that continued foreclosures and rising unemployment will be a check on the housing market for the foreseeable future.