The best number out of today’s report on sales of newly built homes is not the 7.3 percent bump up in signed contracts, it’s the drop in inventories to a 6.5 month supply.

That number is based on a quicker sales pace and a drop of 5000 in the absolute number of newly built homes on the market.

That volume is the lowest since at least 1963, according to Miller Tabak’s Peter Boockvar, who worries that the supply of existing homes is still simply too much for anyone to be touting the builders.

“The best response on the part of builders is to shoot themselves in the foot for as long as they can financially stand, so the market can more quickly absorb the excess inventory of existing homes which make up most of the overall market,” writes Boockvar.

Aristar’s JT Smith chimes in on the actual April sales number: “Unadjusted sales of 32k makes April 2011 tied for the worst April sales number in recorded history.”

My concern is not over the inventory of newly built homes. I think it’s a big positive. My problem is the glut of bargain-priced REO (bank owned) homes against which the builders compete.

Check out a chart we re-made from data by the Calculated Risk Blog.

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Article source: http://www.cnbc.com/id/43151710?__source=RSS*blog*&par=RSS

There were also signs the market continues its long trek back to normalcy: The portion of homes bought with adjustable-rate and “jumbo” loans rose, while the share of sales involving foreclosures, investors and cash buyers fell, a real estate information service reported.

A total of 6,789 new and resale houses and condos sold in the nine-county Bay Area last month. That was down 3.7% from 7,051 in March and down 3.1% from 7,003 in April 2010, according to San Diego-based DataQuick.

On average, Bay Area home sales have risen 4.4% between March and April since 1988, when DataQuick’s statistics begin.

Last month’s sales were the lowest for an April since 2008, when 6,310 sold, and were the third-lowest on record. April sales have ranged from a low of 5,636 in 1995 to a high of 14,430 in 2004, while the average is 9,147. Last month’s sales tally was 25.8% below that average.

“April activity looks weak on the heels of March, which eked out the highest sales for that month in four years. But it’s also to be expected that sales and other statistics will behave more erratically these days. Part of the reason is that short sales are at relatively high levels, and they can take much longer to close escrow. Lenders can vary the pace at which they sell off distressed homes. What’s clear now is that 2011 is off to a slow start, but it’s a little soon to write off the rest of the year,” said John Walsh, DataQuick president.

“Higher job growth or lower home prices, coupled with low mortgage rates and rising consumer confidence, could still push sales well above today’s subpar level. Of course, everything will be tempered this year by the people who won’t buy until they’re convinced prices have hit rock bottom, and by those who can’t buy because they owe more on their existing homes than they’re worth.”

Article source: http://www.thestreet.com/story/11120821/1/san-francisco-home-sales-at-3-year-low.html