WASHINGTON (Dow Jones) -- New-home sales resumed falling in August, sinking to the lowest level in seven years, and prices tumbled, signaling the housing sector will remain a drag on the U.S. economy.
The median estimate of 26 economists surveyed by Dow Jones Newswires was a 4.6% decline in August sales to an 830,000 annual rate. The level of 795,000 was the lowest since 793,000 in June 2000.
Year-to-year, new-home sales were 21.2% lower than the level in August 2006.
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Builder's condominium auction under wraps
By Emmet Pierce
STAFF WRITER
September 29, 2007
Home builder D.R. Horton has clamped down on public attendance and media coverage of a planned auction today of condominium units at two San Diego developments amid a growing national interest in its marketing strategy.
Horton, the nation's largest builder, is one of the first to use auctions to clear out inventory. It's a practice that many in the anemic homebuilding industry fear may lead to further price slashing.
Late yesterday the auction company retained by Horton, Real Estate Disposition Corp., said only registered bidders with $5,000 in cash or a cashier's check would be permitted to attend the sale of new units at projects in Encanto and North Park.
“We are going to be closing the auction to the press tomorrow,” said Michael Schack, senior vice president of REDC. “We are only allowing registered bidders in. We are not allowing cameras, photography, press, media. It is not our choice.”
The San Diego event has been advertised on the Web as a “public home auction.” Earlier, Schack had said anyone could attend but bidding would be limited to registered participants. Schack declined to give a reason for the new restrictions but said they were the decision of D.R. Horton. He referred questions to the builder's corporate office in Fort Worth, Texas. Officials there didn't return phone calls.
Builder Michael D. Pattinson, who heads Carlsbad-based Barratt American, contends that such auctions could cause consumers to wait on the sidelines for deeper price cuts.
Horton has declined to answer questions about the long-planned sale, which in recent days has drawn attention from The Wall Street Journal and CNBC. It issued a statement saying it views the auction “as an effective alternate strategy to market our completed inventory quickly.”
The auction is scheduled to start at 1 p.m. today at the Doubletree Hotel in Mission Valley. It will include 35 new units at La Boheme in North Park and 21 at the Esperanza townhome development in Encanto. Registration begins at noon.
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