The Commerce Department released the Census New Home Sales Survey data this morning, and the reported numbers were slightly higher than anticipated but still represented an incremental decline month over month.  Sales of new single-family homes for May came in at a preliminary figure of 319,000 on a seasonally adjusted annual basis, down 2.1% from a revised 326,000 rate in April.  Compared to a year ago, the May volume was up 13.6%.  This increase was driven by the comparison time frame—the new home buyer tax credits expired last April for signed new home contracts, so the year-over-year comparison on sales is a bit misleading.  The median sales price of new homes during the period was $222,600, up 2.6% from April and down 3.4% from May of 2010.

While the Census data provides a national view based on survey results from across the country, the data is not granular enough to provide state or metro level estimates, nor does it take into account any cancellation of sales contracts prior to closing of escrow.  For that reason, it’s helpful to take a moment and examine actual closing data from May.  While closings lag sales, they provide actual results, real achieved pricing metrics, and greater visibility into state and local performance.

We estimate new home closing figures based on the actual deed closings tracked in Housing IntelligencePro.  Our estimates indicate a decline in the annualized rate of new closings of 4% in May after a similar drop in April.  In other words, the spring selling season has not gone well or at least has not yet started to show positive signs of delivering year-over-year growth in actual new home closings.

The average new home price per square foot rose to $145 per square foot in May compared to $132 in May of 2010.  At the same time, the median new home closing price also rose 9%.  The first half of 2010 was dominated by entry level type of new home product as the new home buyer tax credit stimulated a skewed distribution of new homes.  These improving price metrics are likely an indication that the nature of the buyers and product being closed in 2011 is less dominated by entry level buyers rather than an indication of pricing strength.

Year-over-year transaction volume is still off more than 30% as the comparison of this spring to last spring is a tough one because of the tax credits.  The tax credits expired on new contracts after April and on closings after June.  In terms of state activity, only 5 states saw the same or greater activity in May, and of those only New York is of substantial size.    Looking at total closing volume over the last 12 months compared to the market peak in 2006, only North Dakota, Louisiana, Maine, and Wyoming have been able to maintain 50% or more of closing volume.   The lowest were Arizona and Nevada, with 13% and 12% of 2006 peak volume, respectively.  

Based upon the May closing data we’ve seen so far, we can also point out some metro areas that are on pace to outperform.  Omaha and Albuquerque top the list in terms of volume gain, with April-to-May increases of 12% and 9%, respectively, on an annualized basis.

Compared to 2006 peak volume, there are a few areas that have been more successful at maintaining closing volume.  Pittsburgh has held on to 88% of new home closings, although with only about 1,600 annualized new home closings, it is not a substantial new home market.  The first large market on the list (3,000+ new closings over the last 12 months) is Oklahoma City, which currently is closing 52% of the new home volume seen during the peak years.  Toward the bottom of the list are some of the hardest hit new home markets that were also the largest housing boom cities: Atlanta, Chicago, Las Vegas, Orlando, and Phoenix are only producing a fraction of the new home closings they experienced 3+ years ago.

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