It's official: new homes cheaper than resales in California

A recent post on the Inman News blog states what those working in the new home industry have known for many months: as builders have dropped prices much faster than individual homeowners, new homes have become cheaper. Now the statistics bear this out:

...in California, the median price of single-family detached resale homes was $558,100 in 2007, or 28.3 percent higher than the median single-family new-home price of $434,900. For the month of December, the median resale price of single-family homes in the state was 19.2 percent higher than the median price of single-family new homes.

Ara K. Hovnanian, president and CEO for builder Hovnanian Enterprises, referred to this "backwards" trend last year, as builders have dropped prices and sweetened incentives in an effort to kick sales into gear during this severe slowdown.In many ways, the two sectors are really two distinct markets.