FLASH: New home sales (supposedly) crater 23%, prices crash 13% vs. last year

Let that sink in a bit. New home prices without even including the massive builder incentives and cash-back have crashed 13% versus last year. On a highly leveraged asset like housing, that's bankruptcy or financial devastation for most new buyers who listened to realtors on commission last year instead of HP.

$500,000 home
-13% price decline or $65,000
-7% selling fee or $35,000
-10% incentives/cash back or $50,000
= $150,000 loss in 12 months

Should have rented.

Oh, nice to see our lazy, corrupt and incompetent MSM headline that new home sales were actually up this month. Seriously, someone take them out back and shoot them. The MSM no longer serve a purpose for society.

FLASH: New home sales plunge again - down 21% vs. last year, prices crash at least 8% but nobody knows...

Everything's fine. Housing is in a soft landing. There was no bubble. Now's a great time to buy! There's never been a drop in the US median home price. Housing is your best investment. Renting is throwing money away.

Remember the idiots who used to post such dribble on this blog? Meanwhile, if you bought a new home in the past couple of years, technically, on paper, you're probably bankrupt.

Hat-tip to Doom for the chart that's worth a million realtors on commission... Too bad we can't get real pricing information though. This report is 100% bullsh*t when it comes to that as they don't include the firesale incentives. Prices are probably down another 20% or more than we're hearing...

And I love the MSM reporting the 8.3% drop from LAST MONTH. Uh, MSM, you look at YEAR OVER YEAR in this business. Idiots.

WASHINGTON (AFP) — Sales of new US homes slid 8.3 percent in August to their lowest level in seven years, Commerce Department data showed Thursday in yet another sign of the troubles in the real estate market.

The report showed new-home sales at a seasonally adjusted annual pace of 795,000, worse than market expectations of a decline to a rate of 825,000.

The pace of new-home sales is down 21.2 percent from a year ago.

Also, the median sales price fell to 225,700 dollars, an 8.3 percent decline from the previous month and a level not seen since January 2005.

"This is just hideous," said Ian Shepherdson, chief economist at High Frequency Economics.

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.

New homes supposedly plummet only 16.6%, real number is probably down 66.6%

Man, I sure wish we (and the market) had access to some real data, vs. the BS put out by the NAR and Commerce Department.

This new home survey is so worthless, I don't even know where to start. How they can put out a number with a straight face regarding new homes when they know damn straight (just read the homebuilder announcements) that cancellations are running 40% - 50%, yet this report just shows offers, not closed deals.

The price number is also laughable, knowing that builders are offering everything but the kitchen sink to sell dead inventory, but those discounts and incentives aren't recorded here.

At least the MSM is now talking about how laughable the data is (see below). But the headlines are still misleading at best. And today's new home report makes the NAR's report yesterday even more laughable and discredited. Americans, you're being misled, you're being lied to.

Here's your real headline, HP version:

NEW HOME SALES FALL OFF A CLIFF - DOWN 66.6%, REAL PRICES PLUNGE ANOTHER 20%. HUNDREDS OF THOUSANDS OF REIC JOBS DISAPPEAR, HOUSING CRASH OF EPIC AND HISTORIC PROPORTIONS IS UPON US

Instead, here's what the Commerce Department and MSM give us today:

New-home sales plunge 16.6% to 937,000 - Commerce Department reports biggest percentage drop in 13 years

Sales of new homes plunged 16.6% in January to a seasonally adjusted annual rate of 937,000, the Commerce Department reported Wednesday.

It was the lowest sales pace in four years, and was the biggest percentage decline in 13 years.
Sales were down 20.1% compared with January 2006.

The decline in sales was much sharper than expected. The median forecast of economists surveyed by MarketWatch was a drop to 1.08 million units, annualized. See Economic Calendar.

Home builders have piled on incentives, including offering free vacations and new cars, to sell homes and reduce inventories. Such incentives aren't subtracted from the sales price reported to the government.

Sales are reported when a contract is signed, not at the closing of the sale. Home builders have reported a large increase in cancellations in recent months. Cancellations aren't reflected in the government data, so the reported sales are probably overstated.

Update - I liked this analyst quote later today:

"Let's cut to the chase - these numbers were ugly," wrote Mike Larson, real estate analyst at Weiss Research in Jupiter., Fla. "While the month-to-month changes in new home sales figures can be volatile, the magnitude of the decline is impressive.