New-home sales plummeted by 16.6 percent

[Happy renter]

http://biz.yahoo.com/ap/070228/economy.html?.v=10

The fresh look at the housing market was sobering. New-home sales plummeted by 16.6 percent in January from the previous month. That was the largest decline since January 1994 when sales slid by 23.8 percent.

The decline in January — much steeper than analysts were anticipating — left sales at a seasonally adjusted annual rate of 937,000, the lowest level since February 2003. Sales fell sharply in all parts of the country.

Home prices were down from a year ago. The median sales price of a new home — where half sell for more and half for less — dropped to $239,800 in January, a 2.1 percent decline from the same month last year.

[mixxalot]

Yeehaw! Let the heads roll! I cant wait to actually see things crash and then we can put the egg on that stupid jackass chowderheads face! I would love to get to tell that fool

“Uh, no, real estate is not always a good investment. Stop misinforming people.”

[cr]

There is also this on about Existing Homes sales notching up last month though…

http://www.usatoday.com/money/economy/housing/2007-02-27-existing-jan_x.htm

“Home sales rebounded in January, reaching the highest level in seven months, the National Association of Realtors said Tuesday”

The NAR, surprise, surprise…though they do say next month could be down a little.

Of course I would expect them to proclaim a minimal increase and ignore a whopping 16.6% decrease.

[Artifact]

I had just finished reading this story this morning when my phone rang. It was a RE agent calling to see how my home search is going – I have given my phone number to a few new home developers, agents, etc. , including zip realty – I don’t really care if they call. I will buy a home someday – I make enough money and will have 20% down (assuming the market adjusts back to something that resembles normal). It is not easy waiting and paying rent – it has been beaten into me since birth that you grow up, get married, buy a home, have children – but I am observant enough, or at least like to think I am, to see that waiting out this year can do nothing but help my cause.

Anyway, the point is that this agent told me that sales were picking up and if I really wanted to get into the market here I really needed to try and do it this spring, before the summer gets here and it is hard to find a home I want! This following on the heels of reading this article – I am not sure where the interpretation error was, but clearly one of the two of us was not understanding something!

Edit: I had not read the second article which was posted above – evidence of selective reading – me really wanting prices to drop reading only the first article and the RE Agent really want to sell homes and only reading the second.

[LA_Renter]

Looks like The West is getting pummeled. This is from The Street

“At a pace of 937,000 in the month, home sales fell from the revised December rate of 1.12 million, the Commerce Department said Wednesday. Economists expected 1.08 million sales. The sales were down 20% from a year ago.

In the West, which includes previous red-hot housing markets California, Arizona and Nevada, sales fell 37% from December to January. The region experienced a 50% decline in sales year over year.”

[mixxalot]

Job creation, current low salaries and income do not justify the current obscene and inflated market prices for real estate.

Corporations only care about bottom line short term profits and cost cutting and keeping low paid employees so that they can pad executive salaries.

[Happy renter]

Another subprime lender Fremont sinked over 24% in “ONE DAY”. Housing market can only get worst. The housing bubble is extactly like the Dot-com bubble.

http://yahoo.reuters.com/news/articlehybrid.aspx?storyID=urn:newsml:reuters.com:20070228:MTFH00249_2007-02-28_01-40-24_N27245093&type=comktNews&rpc=44

[DaCounselor]

“Of course I would expect them to proclaim a minimal increase and ignore a whopping 16.6% decrease.”
_________________

I will not defend the NAR on any level, but I will say that I think that new homes are a relatively small portion of the market, so it is not surprising that they would focus on the dominant existing home market numbers.

I wouldn’t make too much of the numbers at this time, in any event. I think we have to wait until spring/summer and see what’s going on then.

[LA_Renter]

“I think we have to wait until spring/summer and see what’s going on then.”

I agree totally. the housing market generally goes into hibernation in the winter so it is difficult to determine a true direction. This also allows the perma bulls to get on their blow horns and tell everybody the bottom is in, the downturn is over, blah, blah blah. Homebuilders took a big hit in the past couple of days and I think that sector will be volatile throughout the year (I will not short those stocks, too crazy for me). I remember this time last year focusing on the ballooning inventories and the first true downturn in YOY sales. That was stage 1. This year I am focusing on the NOD’s and foreclosures, and actual prices. This will be stage 2. The real carnage will occur with the inevitable downturn in the economy. That could come into full force late 2007. 2008 will be the ugliest year. Nothing has changed in my mind since I noticed this bubble in 2004. This is playing out like clockwork.

[cr]

Agreed on both accounts. As we’ve seen on here month-to-month is somewhat insignificant in the long run.

On the other hand if new home sales were up this month, and existing were down, we’d probably hear more on the former.

LA_Renter,

I’m a renter in the valley, and there does seem to be fewer houses listed in the last few months. Any thoughts on where prices will go this summer?

[Author]

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