I think this data is generally suspect, being it's from the government, but here it is anyway - pretty ugly.
We especially know the median price number is completely, totally and wholly bogus and unreliable, as it does not include the massive incentives being offered to move all this dead inventory (cars, pools, cash back, etc).
The media will just report the numbers without actually doing any reporting, so people will be led to believe that prices aren't tanking. Bad news folks. They are.
There's this little thing called supply and demand, and we all know what happens to prices when supply skyrockets and demand tanks. Econ 101.
WASHINGTON, DC, United States (UPI) -- New home sales in the United States last month tumbled 4.3 percent from the previous month`s level, the Commerce Department said Thursday.
Economists had expected sales of new one-family residences to decline 2.7 percent to about 1.105 million.
Instead, the figure was 1.072 million, which contrasts with 1.12 million in June and is about 21.6 percent below the July 2005 level. Meanwhile, the median sales price of new homes fell in July to $230,000.
The new data are expected to reinforce the perception that the U.S. economy is slowing significantly and that the central bank has no reason to resume its interest rate increases next month.
August 24, 2006
FLASH: New Home Sales Tumble Badly (and median price number again is completely worthless)
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another day, another sign housing has absolutely fallen off of a cliff - kapow!
code red for sure
Housing is irrelevant to the mission of the fed. It is price stability which as we know Gspan abandoned twice. If Ben is doing his job he will fight inflation and not prop up pols for November or 2008.
"FLASH: New Home Sales Tumble Badly (and median price number again is completely worthless)"
The San Diego real estate market seems to be imploding:
"July 2006: San Diego Housing Market - single family attached & detached homes: Homes sales continue to decline, sales for July were 2,396 versus 3,779 for last July. This is a drop of 37% from last year and a 19% decline from this June. July Pending sales were a dismal 2,310, which is a predictor for a continuing decline in home sales. The sales in August 2005 were 3,927 and it looks like we will come in 35% to 40% below this level. While we are on track to sell 30,000 homes this year, I believe that the continuing erosion of sales makes it likely that home sales will be below the 30,000 level. The inventory at the end of July was 22,919; this is almost a 10 month supply of homes and an increase of almost 1,000 homes in the month. Approximately 65% of this year listings have gone off market by expiring, cancelling or being withdrawn, approximately 90% of those re-list and are put back on the market."
The pricing picture is a little more complicated and only goes to show that asking ain't getting. Check out the link below:
http://realtytimes.com/rtmcrcond/
California~San_Diego~bobcasagrand
Nize Notes
"It's a Housing Recession"
"There is no question we have what could be called a housing recession,'' says James O'Sullivan, a senior economist at UBS Securities LLC in Stamford, Connecticut, according to Bloomberg.
Yes, at this point it is a housing recession.
Today's data from the Commerce Department brings more of the bleak news.
Purchases of new homes, dropped 4.3 percent to an annual rate of 1.072 million. There were 568,000 new homes available for sale at the end of the month, a record high.
New housing accounts for approximately 15% of all home sales. Existing home sales account for approximately 85%.
Sales in the Midwest slumped to the lowest level in almost nine years. Overall, sales plummeted 8 percent in the South, the busiest sales region, and by 21.3 percent in the Midwest. They rose by 11.7 percent in the West, the second busiest sales region of the country, and by 1.8 percent in the Northeast.
Housing is definitely leading the way in this recession, but it won't stop with housing. This is going to be a full fledged recession that will touch many sectors of the economy. As if to back this thought up, the Commerce Department also released data today that show orders to U.S. factories for big-ticket manufactured goods fell 2.4 percent in July.
If you haven't started operating your business in recession mode, it may be time for you to wake up and smell the coffee. Recession is ahead, with inflation at the consumer level. Think stagflation.
We sit in the car outside your house
I can feel the heat coming 'round
I go to put my arm around you
and you give me a look like I'm way out of bounds
well you let out one of your bored sighs
Well lately when I look into your eyes
I'm goin down
We get dressed up and we go out, baby, for the night
We come home early burning, burning in some fire fight
I'm sick and tired of you setting me up
Setting me up just to knock-a knock-a knock-a me down
I pull you close but when we kiss I can feel a doubt
I remember back when we started
My kisses used to turn you inside out
I used to drive you to work in the morning
Friday night I'd drive you all around
You used to love to drive me wild
But lately girl you get your kicks from just driving me down
Stagflation- I kinda liked the 70's- it was a good time for me.
Maybe I can bring back the knee length, tube socks with stripes? In fact, a co-worker and I were just discussing my upcoming trip to Upstate NY and how he wanted me to stop at the Champion Factory Outlet and pick up some Span Jan shorts, a few half-shirts, a hooded sweat jacket with the zipper, and a couple of those baseball style t-shirts (the ones with te 1/2 sleeves). Maybe I can get an iron-on t-shirt too!
The United States is headed for a recession that will be "much nastier, deeper and more protracted" than the 2001 recession, says Nouriel Roubini, president of Roubini Global Economics.
"This is the biggest housing slump in the last four or five decades: every housing indictor is in free fall, including now housing prices," Roubini said. The decline in investment in the housing sector will exceed the drop in investment when the Nasdaq collapsed in 2000 and 2001, he said.
"If you haven't started operating your business in recession mode, it may be time for you to wake up and smell the coffee. Recession is ahead, with inflation at the consumer level. Think stagflation."
Good advice. Don't be afraid to raise prices. Some customers will scream, but in their heart they know what's going on. Get rid of the marginal employees and any other overhead that doesn't contribute to te bottom line. That smilling banker who was your buddy yesterday won't even answer you calls six months from now, so don't count on any lines of credit being there when you need it.
Homebuilders stocks... were now lowering their year guidance numbers to keep in-line with Analysts estimates.... to prevent massive stock sell-offs !!!
They do huge share buybacks also to mask LOW HOME SALES !!!!
Have fun folks !!!
...
"That smilling banker who was your buddy yesterday won't even answer you calls six months from now, so don't count on any lines of credit being there when you need it".
Funny you say that anonymous, my sister, who bought late, but got a decent deal..wanted to take a loan, a second mortgage to put up a garage addition, she has very good credit.
Funny thing is tho she was denied..for no apparent reason..you want to know what the banker told her..this is what she told me no bull shit..
"sorry we are not giving out loans at the moment"
It will be a rerun of the 70's, but without the free sex.
That will be depressing.
Hey, lookie, we got ayatollahs coming out the wazoo too!
borkfatty
Most commercial loans and lines of credit are callable with 30-90 days notice. Friends of mine were run out of business in '91 when the Bank called and gave them 90 days to pay up. One lost his house (and wife) because he had signed a personal guarantee. The sad part was they had contracts with the government and aerospace companies and had just hired several new people, so business was good. What they didn't have was the cashflow to pay off the asshole banker in 90 days, so it was "game over dudes".
Banks, in general, suck.
Banks, in general, suck.
Agreed Other than the direct deposit so I can cash my check every 2 weeks, I keep nothing in a bank..dont trust the fookers.
That picture of homes stacked on top of each other is truely repulsive. Gald I don't live like that. What a bunch of total losers.
"That picture of homes stacked on top of each other is truely repulsive. Gald I don't live like that. What a bunch of total losers. "
Amen brother! I see nobody when I gaze out from my back porch. Just rolling open farm land. I cannot imagine living in that neighborhood, much less overpaying for the priviledge.
people are going to wake up in the morning and wonder:
"why the F*CK did I buy a cookie cutter home in a Wal-Mart neighborhood full of uneducated uninteresting surburban materialistic fools, so that I could pay $4,000 a month to be a slave to a mortgage?"
Then they're going to turn to their side and see the person who pressured them into doing it so she could impress her girlfriends
Welcome to being a male, 2006 style
pookie princess town
BIG LIE: 4.3% drop; try 5.5%!
Don't you love how they massage the numbers with the revisions? Did anyone else actually look at the raw report?
Last month's reported Jun new home sales number was 1131. Conveniently, this month Jun was revised down to 1120 (as well as downward revisions going back to Apr).
This has the effect of:
1. Last month, making the preliminary number appear a lot rosier than it really was. People get a false sense of security: "oh, it's not so bad". Since no one cares about the prior number anymore, and no one reports it, revising it down causes no pain: out of sight, out of mind.
2. Making this month's percentage M/M comp number appear rosier than it really is. The reported after-revision number was 4.3%. Sure, that's bad, but do the math on the unrevised/reported numbers: 1131/1072 = 5.5%! Surely in many peoples' minds a number over 5% would be much more fear-inducing. 5% in one month is HUGE when you're talking about a multi-trillion dollar housing market.
Who here thinks these numbers are purposely over-stated each month in order to reduce the fear/panic? It's a little convenient that the revisions to the units sold numbers in the past 6 months have *all* been downward revisions. I've been noticing this with the existing homes numbers also.
At least the Y/Y numbers can't be fudged in this way.
howcantheylivethatway, enjoy your bucolic pleasures. When the desperate times come, people in those cracker boxes are going to forage. They will find you. They outnumber you...
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