Existing home sales plunged nearly 10 percent in February to their lowest level in nine years. It was the largest drop since July. Forty percent of those sales were on distressed properties. And new home sales are on track to come in at just 250,000 this year, the fewest since the Kennedy administration, when there were 120 million fewer people in the United States.
Real estate salespeople love to talk about how anytime is a great time to buy. That cannot be true everywhere. Too many new homes have been built too far from natural communities to be viable. Lots of ingredients go into a sustainable community. Rural communities need arable land for farms, ranches, and vineyards. Urban communities need natural logistics nodes: harbors, deep riverbeds (at bends and forks), or long-established crossroads for rail and barge traffic. Anything else is unsuitable for development.
The long American experiment in unrestrained suburban growth is slowly ending. Existing home sales will continue to fall until the non-viable communities containing those homes are disbanded. New home sales will continue to drop to zero. They will not rise again until they represent a replacement rate for existing housing stock that must be replaced one-for-one in sustainable communities.