New homes sales grow in South, fall elsewhere

Data from the Commerce Department shows that while the market for new homes across the country is experiencing strong struggles, the Houston real estate market and others across the South are performing much better.

According to the report, the sales of new homes across the country fell 8.1 percent in October compared to the previous month, and was 28.5 percent below sales figures from October 2009. However, sales actually increased by 3.1 percent in the South region - which includes Texas - and dropped at least 12 percent in every other area.

"So much bargain-priced, 'used' home inventory is available that the builders just can't compete," Mike Larson, of Weiss Research, told CNNMoney. "Over time, we'll work through that mountain of existing home supply. But the key words are 'over time.' New home builders won't have much to be thankful about any time soon."

Builders are also dropping their prices in an attempt to compete. The median new home price in October was $194,900 - down nearly 13 percent from September.

New home sales will likely recover quickest in areas where there are fewer discounted properties reducing prices - which bodes well for Houston homes. According to CoreLogic, Texas has just a 5.5-month supply of distressed homes - sixth-lowest in the country.