Feb Sales Plunge – Has the Storm Arrived?

By Mr. Propwise

By now you’ve read the scary headlines – new home sales in February “plunged” by 65% on a month-on-month basis to 708 units (excluding Executive Condominiums), versus the 2,013 units sold in January. Sounds like a big drop doesn’t it?

Looking more closely at February sales

But when you start drilling down deeper into the numbers, a somewhat different picture emerges.

For one, developers only launched 261 units in February. In other words, they sold 271 percent more units than they launched. Otherwise known as the Developer Monthly Sell-Through Rate, the ratio of units developers sold versus what they launched is a gauge of how quickly developers are selling their launches and of how hot the market is. You can see this statistic tracked over time in the chart below (courtesy of PropertyMarketInsights.com).

Figure 1 – Developer Monthly Sell-Through Rate till February 2013 (from PropertyMarketInsights….