March 26, 2007

Gee, what a shock. February new home sales crash 18.3% vs. February 2006, prior months worse than previously reported (shock!)


Man, it sucks having to deal with such lazy reporting. Year over year? Versus prior month? Margin of error? You wouldn't know reading lazy AP stories these days...

Update (thank you marketwatch):

Sales were down 18.3%, compared with February 2006. Sales in January were revised lower to show a 15.8% drop to an 882,000 annual rate, compared with the 937,000 reported previously. Reported sales for December and November were also revised lower.

Now here's the lazy AP story as most MSM are going with - the down 3.9% number which is worthless:


Sales of New Homes Fall Sharply for 2nd Consecutive Month in February

WASHINGTON (AP) -- Sales of new homes fell sharply for a second consecutive month in February, a weaker-than-expected performance that dimmed hopes for a rebound in the troubled housing market.

The Commerce Department reported Monday that sales of new single-family homes fell by 3.9 percent last month to a seasonally adjusted annual rate of 848,000, the slowest sales pace in nearly seven years. All regions of the country except the West experienced weakness last month.

The February decline followed an even larger 15.8 percent drop in sales in January, which had been the largest one-month plunge in 13 years. The back-to-back declines provided evidence that the housing market is continuing to struggle with lagging demand and a glut of unsold homes.

The sales decline that has occurred over the past year has left a glut of unsold homes on the market, forcing builders to slash prices and offer a number of incentives to attract buyers.

For February, the number of unsold homes rose by 1.5 percent to 546,000. That meant it would take 8.1 months to sell all of those homes at the February sales pace, up from 7.3 months in January.

The problems in housing are being increased by spreading financial difficulties with mortgage lenders who specialized in the subprime market, where borrowers with weaker credit histories could qualify for mortgages.

The plunge in housing has trimmed overall economic growth and is occurring as part of an effort by the Federal Reserve to raise interest rates as a way of slowing economic activity and keeping inflation under control.

53 comments:

Anonymous said...

Keith dude,

This link is from the MSM is it not? And the story says there is a "housing bust" happening.

Yet a few threads below you complain that the MSM is lying about what's happening.

You've just countered your own argument.

Mark in San Diego said...

Who are these "analysts" that are always "surprised" "shocked" and "unexpected", etc. etc. Don't they ever drive by some housing developments?? Have they visited a condo open house on Sunday to see NO ONE there???. . .Guess the bloggers strike again!. . .Hey - who needs the MSM??

keith said...

the commerce department's raw data isn't available on their site yet. My guess is that the year over year number for February is ugly - down 20% or more. But the MSM doesn't report that

Come on HP community - I'm feeling MSM-lazy today - report the true story here on the new home sales numbers

Corey said...

Today's new home sales report: Demand down over half-a-million homes since 2005. Contractor bankruptcies loom. http://infohype.blogspot.com

keith said...

I guessed 20%, 18.3% was the real number the media should have reported today...

here's the truth (via marketwatch) although in the end this report is a joke, it's all we have to go on...

Sales were down 18.3%, compared with February 2006. Sales in January were revised lower to show a 15.8% drop to an 882,000 annual rate, compared with the 937,000 reported previously. Reported sales for December and November were also revised lower.

Uncle Al said...

According to Bloomberg:

The median price of a new home fell 0.3 percent in February to $250,000 from $250,800 a year earlier, today's report showed.

The number of homes for sale at the end of the month rose to 546,000 from 538,000 in January. That left the supply of homes at the current sales rate at 8.1 months' worth, compared with 7.3 months in January. The number of homes completed and awaiting a buyer rose to 179,000 last month.

...

New-home sales for February fell 18.3 percent from a year earlier, the government said.

http://www.bloomberg.com/apps/news?pid=20601087&sid=aK0xZi0MGUhw&refer=home

Anonymous said...

Just got back from Northern San Deigo County. Not as many for sale signs then I was expecting, BUT there were alot. Maybe 4-6 on a street corner(long country streets). Talked to many people on my trip, but I never brought up housing decline, actually I had a hard time getting a word in edgewise, they all were talking about THAT new truck, boat, ATV or watching eBay for some deal. My father in law is a contractor and he was working about 4 hours a day and acted as nothing was wrong. They all acted lazy, I told my wife NEVER let me become lazy. Things are slow in that area and prices still to high.

Anonymous said...

Drop everything you tools. Anna Nichole Smith is the news again today.

Anonymous said...

Only in America can sales crash 18% and the media reports 3%

keith said...

Don't forget everyone that this report is WILDLY OVERSTATED and COMPLETELY WORTHLESS in today's market, as it DOESN'T INCLUDE CANCELLATIONS, which we hear are running 30% to 50%. But of course, the MSM doesn't report that tiny fact.

From the census dept:

How does the Census Bureau handle cancelled sales contracts in the published estimates of New Home Sales?
The Census Bureau does not make adjustments to the new home sales figures to account for cancellations of sales contracts. The Survey of Construction (SOC) is the instrument used to collect all data on housing starts, completions, and sales. This survey usually begins by sampling a building permit authorization, which is then tracked to find out when the housing unit starts, completes, and sells.

http://www.census.gov/const/www/salescancellations.html

Paula said...

Sometimes we forget to notice that several other things are likely to be in the future cards because of the damage from this bubble. People will actually get sick or die because of the stress. Children growing up now will listen--and learn--plenty of truths about "home ownership" no amount of REIC propaganda can contradict. For many the loss of their family's home will be the defining event of their childhood.

Here's some heartbreakers from a piece in today's Washington Post:

"Foreclosure Wave Bears Down on Immigrants
Economic Success Story Turns Sour as Thousands May Face Losing Homes

By Kirstin Downey
Washington Post Staff Writer
Monday, March 26, 2007; Page A01

Immigrants are emerging as among the first victims of a growing wave of home foreclosures in the Washington area as mortgage lending problems multiply locally and across the country.

Nationally, 375,000 high-interest-rate loans were made to Hispanics in 2005, and nearly 73,000 of them are likely to go into foreclosure, said Aracely Panameno, director of Latino affairs for the Center for Responsible Lending. About 1.1 million homes in the United States are expected to go into foreclosure in the next six years, and many native-born Americans are likely to be stuck with burdensome loans. But immigrants are getting hit first in part because their incomes tend to be lower and many have lost construction jobs."

Read the rest of the story.

Uncle Al said...

Good point Keith -- Cancellations are probably going to be higher as a result of the subprime debacle.

Anonymous said...

Anybody see the Wall Street Journal (by may of Le Monde, je parle etc.) 15,000 (that's right) CitiBANK job to be cut - not good stuff. Wonder where this is all headed???

FlyingMonkeyWarrior said...

Keith,

They do not want to start a Housing Panic! Too bad "the people" do not even know what blogging is, never mind reading HP.
Sad, so sad.

Anonymous said...

"Who are these "analysts" that are always "surprised" "shocked" and "unexpected", etc. etc. Don't they ever drive by some housing developments?? "

Amen to that sentiment. I heard a phrase once that described this as "they have been educated beyond their knowledge" that always comes to mind when these geniuses come out with these kinds of statements. Are these "analysts" children or retarded or just cave dwellers?

Smug Bastard

Mort said...

This is just the beginning, wait until the banks start calling in the notes on homebuilders.

Mark in San Diego said...

Has anyone noticed the perfect storm of $3 gasoline again and resetting ARMS?? Here in SD and LA counties, gasoline is over $3, and premium at $3.49. . .all those SUV's are going to be on the market again. . .along with the house, wife, kids and jet skis.

Anonymous said...

PUMPERS BACK IN ACTION !

Pit said:

"Just last week, the sector rose after the National Association of Realtors reported that boosted by warm weather earlier in the winter, sales of existing homes unexpectedly rose 3.9% in February, reaching a seasonally adjusted annual rate of 6.69 million units.
Ian Shepherdstown, the chief U.S. economist at High Frequency Economics said Monday that, "this report will counter some of the more gung-ho chat after the strong February existing sales report last week."
However, while describing results at "horrific," Sheperdson cautioned that bad weather for the last few months undoubtedly contributed to the slowdown.
"The weather uncertainty, coupled with the inherent unreliability of these numbers, makes us very reluctant to run with the headlines and argue that this is the start of the second leg down in home sales; we have to wait for the March and April numbers," Sheperdson said. "

Blame the weather again ,wait for April , it might be better,LOL !

Anonymous said...

My sister-in-law purchased a home last fall in the Bay Area for $940k. The household total income is about $190k. They put down $100k, and took out a 10-year interest only loan. They have actually seen some appreciation in comps near them....what gives???

Anonymous said...

The euro climbed against the dollar on Monday after disappointing data from the U.S. on the sale of new homes dimmed hopes of a rebound in the troubled housing market.

In afternoon European trading, the 13-nation euro bought US$1.3333, up from US$1.3290 in New York late Friday.

The British pound rose to US$1.9695 from US$1.9614, while the dollar fell to 117.79 Japanese yen from 118.05 yen.

U.S. Commerce Department reported that sales of new single-family homes fell by 3.9 percent last month to a seasonally adjusted annual rate of 848,000, the slowest pace in nearly seven years.

The February decline followed an even larger 15.8 percent drop in sales in January _ the largest one-month drop in 13 years. The back-to-back declines provided evidence that the housing market is continuing to struggle with lagging demand and a glut of unsold homes.

http://www.chron.com/disp/
story.mpl/ap/fn/4661499.html

the real peyton manning said...

Wow, what an a$$ kicking, and lending standards didn't really start tightening 'til March. Brutal.

Anonymous said...

Who are these "analysts" that are always "surprised" "shocked" and "unexpected", etc. etc. Don't they ever drive by some housing developments?? Have they visited a condo open house on Sunday to see NO ONE there???
---------------------------------

I'm an "Analyst" with a well known reasearch company, mainly technology related but same bullshit. My job is to analyze how best to spin numbers so that clients who buy the reports look best.

And if I write a glowing report about a company today and six months from now it goes under, I will also be "shocked" and "surprised" that it happened. It's all part of the same game.

We're not stupid, we know what's happening, we just like to pretend a alternative universe exists where all is always well and the future is always bright.

Ehhh but what the hell I make mid 6 figures writing this bullshit so why rock the boat?

TODAY'S PREDICTION:
ALL IS WELL, ALL WILL BE WELL, ALL HAS ALWAYS BEEN WELL

Anonymous said...

HAHAHAHAHAHAHAHA!

Invenotry piling up....Toxic Loans readjusting upwards....NO REFI's NO ability to sell your way out of your problem..

CRASH!

The Thinker said...

I enjoyed how this article blamed reduced sales on the glut of inventory. Excuse me AP, but additional inventory may well reduce sale prices, increase incentives necessary to make a sale, prolong the length of time needed to sell any given house, and lessen the chances of any given house selling, but increasing the quantity supplied does not reduce the quantity sold. In fact, the reverse may be true.

Accordingly, it is not the increase in supply that is reducing demand. Something ELSE is reducing demand. But what? If AP asked The Thinker why demand was falling, I would tell them it is because public sentiment has changed from greed to fear.

Markus Arelius said...

If I'm a math teacher, these guys would all get freaking F's!

Somebody is fudging the numbers and no one is investigating why.

showmenouns said...

Seems like a good reason for the market to rally!

Anonymous said...

Immigrants are emerging as among the first victims of a growing wave of home foreclosures...

But Suzanne said we could do this!

Anonymous said...

Where are the bulls and realtwhoretrolls to tell us everything is okay?

Maybe recalibrating their arguments to "well I sold at the top for a $700K profit and then tripled my money with homebuilder puts all the way down". Just like in 2001.

Westside Bubble said...

Incredibly hilarious is Bloomberg yesterday (via Housing Doom - emphasis added by me). "Probably rebounded"!!

Sales of New Homes Rebounded in February: U.S. Economy Preview

By Vince Golle

March 25 (Bloomberg) -- Sales of new homes in the U.S. probably rebounded last month from a three-year low, a sign the worst of the real estate rout has passed.

Purchases rose to an annual pace of 990,000, up 5.7 percent from January, according to the median estimate of economists surveyed by Bloomberg News ahead of a Commerce Department report tomorrow. The National Association of Realtors last week said sales of previously owned homes rose by the most in three years.

Improving sales will help builders trim a glut of unsold homes, paving the way for construction gains later in the year and tempering the biggest source of weakness in the economy. The figures are a respite for an industry plagued by concerns that defaults on subprime mortgages will derail a market rebound.

The housing market is ``fairly well along in the process of rebalancing,'' said Richard DeKaser, chief economist at National City Corp. in Cleveland. Subprime-mortgage defaults don't ``have the heft to bring the entire market down.''

Economists say that while the biggest declines in residential construction have already occurred, the housing will continue to restrain economic growth for at least the first half of the year. ...

Eileen said...

As an experienced, full time REALTOR with over 30 years experience, I can tell you that this is going to be "the perfect storm."

Our DuPage County stats supplied by Sunday's Tribune showed our market was down 22%, although Saturday's Tribune had it at only 15%.

Who are these economists? Well, one is David Lereah from the National Association of REALTORS.

His classic comment: The housing market will improve, we just don't know when! (and my dues pay for this guy?)

Bourbon Straight said...

“”””Here's some heartbreakers from a piece in today's Washington Post:

"Foreclosure Wave Bears Down on Immigrants
Economic Success Story Turns Sour as Thousands May Face Losing Homes””””

HEARTBREAKER?????

What the one-world-Bush-government would not do, The market may do.
More foreclosures and bus rides back to Mexico warms my heart.

Mark in San Diego said...

ANON Analyst . . .THANKS for the great insight to the real world of analysts. . .I agree with you, if you are making mid six figures for writing glowing reports, go right ahead - the facts are out there for people to see, and if they are too lazy, or want to see only the positive, then it is at their expense - literally!. . .Actually, I have made much of my personal fortune from doing my own homework, and staying a step ahead of the "news" . . .

Doktaire said...

It is scadalous that they are not reporting the annualized rate of new home sales. Almost every other economic indicator is reported at it's annualized rate. People are going to be thinking, hmm 3.9% is not so bad?

Anonymous said...

Whoever wrote that "bus back to mexico" line..

Funny. But untrue.

The illegals that bought homes aren't going anywhere. Case in point is my gardner. Really nice guy, has been here illegally for 10 years and I've been his client for 3 years and gotten to know him pretty well. He's very open about being here illegally, fully knowing that legal or illegal is a mere formality these days. Anyways, long story short, he bought a home he couldn't afford and lost it recently. No biggie, he moved in with some family members (I assume also illegals) until he can regroup and start over. Last thing on his mind is going back to Mexico.

These people are here to stay. They have family here, many of them have American born kids here too. Their lives are in the US and just because they lose a home or a job doesn't mean much. The sooner you all realize this fact the better.

For all you anti-amnesty nuts out there, this is reality. Amnesty or no amnesty, nobody is going home. All amnesty would do is make them pay taxes, allow them to buy car insurance and things like that.

brianb said...

Amnesty would also bring another 10 million more in as soon as these are legalized. That's what the last 'amnesty' did in the mid 1980s. The word at the time was 'OK we'll legalize these but now we're REALLY SERIOUS about enforcing the rules!!'.

"They aren't going home"? Really? If employers are prosecuted, they'll have no place else to go.

GT said...

"Seems like a good reason for the market to rally!"

i love all the realists here!

makes me wanna have a dc area gathering with my fellow HPers

corvinus said...

Anyways, long story short, he bought a home he couldn't afford and lost it recently. No biggie, he moved in with some family members (I assume also illegals) until he can regroup and start over. Last thing on his mind is going back to Mexico.

What if the family members lose THEIR home?

Anonymous said...

'Incredibly hilarious is Bloomberg yesterday (via Housing Doom - emphasis added by me). "Probably rebounded"!!'

I'm still laughing. The bulls are reduced to pathetic screeching about an alternate universe where prices and sales are still going up. Truly hysterical.

Anonymous said...

Here's why it's much worse than the government is saying:

The sales stats are raw data based on the number of transfers reported by the title companies, which includes FORECLOSURES, DEEDS IN LIEU OF FORECLOSURE and PRE-FORECLOSURE SHORT-SALES.

Back those sales out and it's probably a 25% decline

Anonymous said...

Amnesty will bring in 10 million more because we NEED 10 million more. Or will you be signing up for the $6 an hour toilet scrubbing job Mr. Anti-Amesty Man?

Anonymous said...

They'll just move in with some other family members. I have Hispanic neighbors - there's so many people living there, I'm not sure WHO'S living there. Oh and let's not forget to mention the seven cars (2 not working) in the driveway!

Anonymous said...

How is an illegal alien making $15/hr with five kids going to pay taxes just because of amnesty? for all you open borders nuts out there, there are at least 1 billion people in China and India ready to move here for the free lunch. If you think that's good for the country, you're nuts.

anti-illegal immigrant said...

So an illegal alien, who broke the law by coming here illegally, will suddenly follow all the laws if he/she is given amnesty? They have already shown total disregard for the laws of this country. Things like insurance and taxes mean nothing to them. They don't pay insurance or taxes in their old country, which they respect and cherish much more than this country. Mexico is a lawless country. Hundreds of policemen are murdered every year. Corruption there makes DC look honest. The attitudes of those people don't change just because they walk across a broken border. they still listen to their Spanish radio, watch Spanish TV and have Mexican flags on their autos.

Natural Eyebrows said...

How did the guy get a mortgage w/o a valid SS#?

BrianB is right. We did amnesty a generation ago, and then saw a new wave of illegal immigration. Now we hear the same arguments for amnesty all over again.

Anonymous said...

"Amnesty will bring in 10 million more because we NEED 10 million more."

No we don't, you wack job!

"Or will you be signing up for the $6 an hour toilet scrubbing job Mr. Anti-Amesty Man? "

Did you ever stop to consider who were doing those jobs 30 years ago? No... because Sean Hannity is your main source of news, you nut!

Anonymous said...

Eileen (realtor) and analyst- Thanks for posting!

Love to hear the facts from the ground.

Anonymous said...

"Ehhh but what the hell I make mid 6 figures writing this bullshit so why rock the boat?"

And I play professional basketball with the NBA. Nice try, but most people know by now that on the internet, you can claim to be anything, or in your case, get paid a yearly salary you have never seen!

Anonymous said...

"if you are making mid six figures for writing glowing reports, "

He doesn't. He is just taking you for a ride.

UK Home Mortgages said...

Great article.

UK Home mortgage man

Anonymous said...

"We did amnesty a generation ago, and then saw a new wave of illegal immigration. Now we hear the same arguments for amnesty all over again."

I believe it is peace for our time!

Anonymous said...

Some idiot liberal said:

"Or will you be signing up for the $6 an hour toilet scrubbing job Mr. Anti-Amesty Man? "

Did you ever stop to consider who were doing those jobs 30 years ago? No... because Sean Hannity is your main source of news, you nut!


Put down the dailykos talking points for just a second and try doing something liberal never to...THINK. Sean Hannity is about as anti-illegals as it gets idiot and would agree with YOU on this issue. And do you know who is against you on this issue? Every single Democrat in the House and Senate who voted in favor of amnesty last year. That's right libtard, every single Democrat voted FOR AMNESTY.

Proving once again that you sir are a docuhebag.

Anonymous said...

Another moron said:

"Ehhh but what the hell I make mid 6 figures writing this bullshit so why rock the boat?"

And I play professional basketball with the NBA. Nice try, but most people know by now that on the internet, you can claim to be anything, or in your case, get paid a yearly salary you have never seen!


Oh right I forgot this is a blog for renters who make $200K a year and have $3M saved in the bank. Now that's realistic indeed.

Anonymous said...

The MSM isn't lazy. It is filtered.