New-Home Sales Tumble 45%

[4plexowner]

“what will happen after most of the good foreclosures are bought”

some of these properties are being bought by investors – maybe to keep and rent if the numbers make sense – maybe to hold until the market recovers

point being that some of the foreclosures are being held until they can be sold at a profit – same concept as “overhead supply” in the equity markets – as a market moves up it has to work through this overhead supply before it can move into new, higher territory

[equalizer]

These guys think that new home prices are too high, so show this to the sales office.

http://blogs.wsj.com/economics/

“The combination of falling new home sales coupled with sharply lower prices suggests that there’s unlikely to be an end to the pain, as the value proposition offered by existing properties still exceeds that of newly built homes. Until that relationship moves more into line, perhaps from another 20% decline in new home prices, there’s little indication that sales of newly constructed properties will show any improvement. Even the cash-rich among the homebuilders are going to have a rough 2009 and 2010.” –Guy LeBas, Janney Montgomery Scott

“To the extent that low mortgage rates and sales incentives, such as buyers’ tax credits, do facilitate sales, those sales are increasingly tilted towards existing homes. Under these circumstances, new home prices will remain under steady downward pressure, and new residential construction may bottom later this year but will remain weak through 2010.” –Richard F. Moody, Mission Residential

[equalizer]

These guys think that new home prices are too high, so show this to the sales office.

http://blogs.wsj.com/economics/

“The combination of falling new home sales coupled with sharply lower prices suggests that there’s unlikely to be an end to the pain, as the value proposition offered by existing properties still exceeds that of newly built homes. Until that relationship moves more into line, perhaps from another 20% decline in new home prices, there’s little indication that sales of newly constructed properties will show any improvement. Even the cash-rich among the homebuilders are going to have a rough 2009 and 2010.” –Guy LeBas, Janney Montgomery Scott

“To the extent that low mortgage rates and sales incentives, such as buyers’ tax credits, do facilitate sales, those sales are increasingly tilted towards existing homes. Under these circumstances, new home prices will remain under steady downward pressure, and new residential construction may bottom later this year but will remain weak through 2010.” –Richard F. Moody, Mission Residential

[equalizer]

These guys think that new home prices are too high, so show this to the sales office.

http://blogs.wsj.com/economics/

“The combination of falling new home sales coupled with sharply lower prices suggests that there’s unlikely to be an end to the pain, as the value proposition offered by existing properties still exceeds that of newly built homes. Until that relationship moves more into line, perhaps from another 20% decline in new home prices, there’s little indication that sales of newly constructed properties will show any improvement. Even the cash-rich among the homebuilders are going to have a rough 2009 and 2010.” –Guy LeBas, Janney Montgomery Scott

“To the extent that low mortgage rates and sales incentives, such as buyers’ tax credits, do facilitate sales, those sales are increasingly tilted towards existing homes. Under these circumstances, new home prices will remain under steady downward pressure, and new residential construction may bottom later this year but will remain weak through 2010.” –Richard F. Moody, Mission Residential

[equalizer]

These guys think that new home prices are too high, so show this to the sales office.

http://blogs.wsj.com/economics/

“The combination of falling new home sales coupled with sharply lower prices suggests that there’s unlikely to be an end to the pain, as the value proposition offered by existing properties still exceeds that of newly built homes. Until that relationship moves more into line, perhaps from another 20% decline in new home prices, there’s little indication that sales of newly constructed properties will show any improvement. Even the cash-rich among the homebuilders are going to have a rough 2009 and 2010.” –Guy LeBas, Janney Montgomery Scott

“To the extent that low mortgage rates and sales incentives, such as buyers’ tax credits, do facilitate sales, those sales are increasingly tilted towards existing homes. Under these circumstances, new home prices will remain under steady downward pressure, and new residential construction may bottom later this year but will remain weak through 2010.” –Richard F. Moody, Mission Residential

[equalizer]

These guys think that new home prices are too high, so show this to the sales office.

http://blogs.wsj.com/economics/

“The combination of falling new home sales coupled with sharply lower prices suggests that there’s unlikely to be an end to the pain, as the value proposition offered by existing properties still exceeds that of newly built homes. Until that relationship moves more into line, perhaps from another 20% decline in new home prices, there’s little indication that sales of newly constructed properties will show any improvement. Even the cash-rich among the homebuilders are going to have a rough 2009 and 2010.” –Guy LeBas, Janney Montgomery Scott

“To the extent that low mortgage rates and sales incentives, such as buyers’ tax credits, do facilitate sales, those sales are increasingly tilted towards existing homes. Under these circumstances, new home prices will remain under steady downward pressure, and new residential construction may bottom later this year but will remain weak through 2010.” –Richard F. Moody, Mission Residential

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