June 29, 2007

FLASH: Lennar tells us what new homes are REALLY selling for, and it's ugly. Really ugly.

We all know the NAR and US Government housing numbers are bullsh*t, as the price data doesn't include the rampant and desperate incentives and cash-back kickbacks used to move dead inventory.

Well, Lennar in their horrific numbers this week exposed the average incentive used to move a new home last month.

Ready?

Their reported new home price plummeted from $322,000 to $298,000, down $24,000, or down 7.4% vs. last year.

And their average incentive value last month?

Ready?

$43,700!

So that new home that sold for $322,000 last year? It's only really worth $254,000 today, a drop of $68,000 or 22%, and we're going even lower.

The new home price data is bullsh*t. And builders are in total firesale mode today (and so are their stocks)

Lennar Swings To Loss On Lower Home Prices As Supply Builds

For the second quarter, home deliveries fell to 8,940 from 12,506 a year earlier. The average home price dropped to $298,000 from $322,000 in the year- ago period. To attract uncertain buyers, Lennar said sales incentives averaged $ 43,700 a home versus $24,700 in the same quarter last year.

Orders for new homes plunged 31% to 8,056 from the prior year with the cancellation rate running at 29%.

24 comments:

Anonymous said...

I'm in an area that is claimed to be bubble proof. Last week during lunch, I noticed that the restaurant's newspaper rack had two issues of one of those glossy picture books of houses for sale put out by realtors -- May and June. So I took them both home and had much fun comparing month to month prices.

The largest drop was 175,000 on a 1.8 million dollar place. But there were a significant number of 30-50k drops in the 350-600k range, and lots of 9-30k drops in the 200-350k range.

There was one place that started at 225k, and the next month was 200k. For such an inexpensive house, that suggests desperation to sell.

Anyway, It was quite informative. Can't wait till the July issue comes out. ;-)

Anonymous said...

I'm in an area that is claimed to be bubble proof. Last week during lunch, I noticed that the restaurant's newspaper rack had two issues of one of those glossy picture books of houses for sale put out by realtors -- May and June. So I took them both home and had much fun comparing month to month prices.

The largest drop was 175,000 on a 1.8 million dollar place. But there were a significant number of 30-50k drops in the 350-600k range, and lots of 9-30k drops in the 200-350k range.

There was one place that started at 225k, and the next month was 200k. For such an inexpensive house, that suggests desperation to sell.

Anyway, It was quite informative. Can't wait till the July issue comes out. ;-)

Anonymous said...

SUZANNE!!!!!!!!!!!!!

HauspocalypseNow said...

GO LENNAR!
BUILD UNTIL THERE ARE NO FORESTS LEFT STANDING THEN CONTINUE BUILDING WITH MUD AND STRAW!!!!
BUILD
BUILD
BUILD
BUILD
BUILD
BUILD
BUILD

anonymous wimp said...

One favorite trick here among the bigger realtors is to wait until the house sells, then, right before closing, re-list the house at the agreed sale price. That way the houses' time on market is zero days and there is no recorded drop in price from the asking price since the sale price is the (newly) listed price.
Neat little trick, huh?

borkafatty said...

This just about sums it up Keith

http://www.321gold.com/editorials/willie/willie062907/1.gif

You've been Suzanned said...

Imagine being one of the people who paid full price a year ago after your nag wife and Suzanne pressured you into buying a Lennar home saying it was a great deal and near great schools.

BIG_J said...

One of my freinds just bought a townhouse in the north suburbs of the twincities area, and they ONLY GOT 40k in incentives! Ha-ha...I guess it's pretty close to 43:)...I think it's going to be even worse though..!

Mikey said...

To be fair, you also need to include the $24,700 in incentives paid last year. That reduces the previous year 322k to 297.3k.

That makes the drop 14.5%, not 22%. It's still really ugly, though.

Joe said...

Has anyone else been monitoring listings. My community is subdivided, roughly 25% SFH and 75% Townhomes. I was cruising through the TH's and counted 15-20 for sale by realtors. There are only about 250 total as it's a small community. I checked the MLS via Ziprealty, realtor.com, ERA realty, C21 and Remax. Not one had any aof these listings on them. Are realtors not putting properties on the MLS to artificially lower the # of units for sale. What the Fk's up? S. Florida blows! It's becoming more 3rd world everyday. I rent!! Saving roughly 45% compared to an exact model for sale 5 doors down.

Anonymous said...

Hey Bork, your link takes one to:

Forbidden
You don't have permission to access /editorials/willie/willie062907/ on this server.

Thanks anyway!

wawawa said...

Short home buidlers at will. You will not regret it. I am still holding on my shorts from 9 month ago and I am smilling.

Anonymous said...

Well if you just have to buy a home it looks like a new one loaded with options will be the best deal for the next few months - unless prices start breaking dramatically.

Still not a good time to buy overall.

K.W. - Southern Ca. said...

What's being called a "trick", is nothing more then deceptive, non-ethical and crooked.

How rotten the whole thing has become.

A huge correction is definitely in order, sad part is, many honest, hard-working people will get taken down the drain as well.


anonymous wimp said...
One favorite trick here among the bigger realtors is to wait until the house sells, then, right before closing, re-list the house at the agreed sale price. That way the houses' time on market is zero days and there is no recorded drop in price from the asking price since the sale price is the (newly) listed price.
Neat little trick, huh?

K.W. - Southern Ca. said...

It's good to be objective about
the housing crisis as you have
done through *factual* price comparisons.

No need for David Yun, or any of the other "experts" who would sway us to believe otherwise.

No area is immune from price drops
due to a nation-wide bubble burst.

Anonymous said...
I'm in an area that is claimed to be bubble proof. Last week during lunch, I noticed that the restaurant's newspaper rack had two issues of one of those glossy picture books of houses for sale put out by realtors -- May and June. So I took them both home and had much fun comparing month to month prices.

The largest drop was 175,000 on a 1.8 million dollar place. But there were a significant number of 30-50k drops in the 350-600k range, and lots of 9-30k drops in the 200-350k range.

There was one place that started at 225k, and the next month was 200k. For such an inexpensive house, that suggests desperation to sell.

Anyway, It was quite informative. Can't wait till the July issue comes out. ;-)

Anonymous said...

Proper link to jim willies article:
http://tinyurl.com/2ldfk3

EconE said...

To be fair, you also need to include the $24,700 in incentives paid last year. That reduces the previous year 322k to 297.3k.

That makes the drop 14.5%, not 22%. It's still really ugly, though.


ditto...you should repost this with the correct figures as we have to stay on top of our reporting here on HP...we don't want to look like the NAR now do we?

its a lie said...

I think Lennar is lying. The bush Administration says that home prices increased 5% this year over last year. NAR did not report home prices dropping either.

Anonymous said...

Lennar walked away from 40 lots here in Colorado Springs last week. Each cost roughly 100000 so I know that had to hurt. Pass the popcorn please.

Sequoia512

borkafatty said...

http://tinyurl.com/2gzw33


sorry fixed

Anonymous said...

Build
Build
Build
Build
Build
Build

Aquire

Expand

Accumulate

Prosper

build build build build build!

Sell
Sell
Sell
Sell
Sell
Sell


lose your ASS!


Blame someone else!

Get federal bailout!


Build
Build
Build
Build
Build.......................!

Anonymous said...

BAGHOLDERS EVERYWHERE

Anonymous said...

Lennar builds in the worst areas of Phoenix. I wouldn't even want one!!!!

Scummy said...

I love Lennar. Shorted them too many months ago. I held when 20% down. My mistake.

Now I'm 20% up and watching like a hawk for when to cover.

When to cover wasn't today.

I'll have 20% down when I buy.