I’ve been on calls all morning, didn’t get a chance to follow up with the New Home Sales. Here are some highlights from the data:
• February 2008 saw a drop of 1.8% from January 2008 (±15.0%) in terms
of seasonally adjusted, annualized data; This was not a statistically
significant number, given the margin of error.• Year-over-year, the drop
was 29.8% below the February 2007 data (±9.6% means this is
significantly significant).• Sales have fallen four months in a row
• The Median and Average sales price of new houses in February 2008 was $244,100 and $296,400 respectively. Median sales price fell 2.7% in the past year to $244,100.
• Sales of new homes in the United States fell to a 13-year low
• Sales figures are overstate due to the omission of the "ballooning number of sales that have been
cancelled."• February’s supply of new homes on the market hit a 27-year high; Inventories are likely understated, also because of cancellations.
• The pace of sales has slowed, leading Inventory
represented a 9.8-month supply at the February sales rate, unchanged
from January and the highest since 1981.• The number of completed homes for sale fell for the second straight
month, standing at 188,000 after peaking in December at 197,000.• A few pieces of encouraging data: The number of homes on the market dropped by 2.1% to 471,000, the
lowest since July 2005. Also, s ales in January and December were revised modestly higher;
Check out the two charts below: I particularly like the cool chart from Brian Jacobs, pricing Median Home Prices in terms of Gold (ounces):
Courtesy of Barron’s Econoday
>
Sources:
NEW RESIDENTIAL SALES IN FEBRUARY 2008
Commerce Dept, March 26, 2008
http://www.census.gov/const/newressales.pdf
New-home sales fall to 13-year low
Rex Nutting
MarketWatch, 10:53 a.m. EDT March 26, 2008
http://tinyurl.com/ypec47
that protest at bear is the NACA
neighborhood assistance corporation of america…
Nice…. a little class warfare…
call the national guard…
Maybe I’m just getting bleary-eyed, but is something amiss in this comment?
It looks like there’s something missing between “leading” and “Inventory”
At times like this, I think back to the 2003 IMF essay called “When Bubbles Burst.” It found that the average housing decline was 30 percent and lasted for 4 years. The average GDP decline during a housing bust was 8 percent.
But hey, what does history have to do with America. I’m sure we’ll just paper this one over.
Why has Charlotte been an outlier since 2000? I though Charlotte was a hot area.
Well, if we can’t sell houses we can always market our fine, superbly engineered, effecient cars, right?
China’s Fuel Efficiency Kicks America’s Butt
Posted by Dr. Joseph Romm, Climate Progress at 12:04 PM on March 25, 2008.
Not a single U.S.-made car meets China’s fuel standards.
Main AlterNet RSS Feed
The Toronto Star reported an alarming factoid earlier this month:
No gasoline-powered car assembled in North America would meet China’s current fuel-efficiency standard.
That’s mainly because:
Their standard is much higher than ours is currently.
Their standard is a minimum-allowable efficiency standard, not a “fleet-average” standard like ours.
Our lame car companies don’t make their (relatively few) most efficient vehicles in this country.
As for our much-hyped new 35-mpg (average) standard — it will take us in 2020 to where the Chinese are now (but not even to where Japan and Europe were six years ago). If we don’t rescind it, that is. So whether you believe in human-caused global warming or peak oil, America remains unprepared to capture the huge explosion in jobs this century for clean, fuel-efficient cars.
Oh, and by 2010, China will be the world leader in wind turbine manufacturing and solar photovoltaics manufacturing. No worries, though, our TV and movie sales overseas still kick butt. For now.
matt,
Emphasis on ‘average’ housing decline. The current boom went on for 9 years; it will take at least 8 to 9 years to unwind.
Bottom = 2013.
Has CNBC put a positive spin on this yet? ‘Cause you know, this data has to be bullish, right?
Pool Shark,
I’d argue there are no good comps for the current US housing problem.
As with the C/A deficit, the realities of USD reserve status and the size and composition of the US economy makes comparison difficult. The US can (and may) monetize the problem if it comes to that.
“Oh, and by 2010, China will be the world leader.”
The rest of that sentence was extraneous.
I’m learning Mandarin and Cantonese.
Pool Shark, Estragon,
2013/14 for me…after the next one-term president is booted out (to be fair, they, whoever it turns out to be, will never have had a chance).
In the meantime, we’re already monetizing everything, including residential real estate. The GSE’s are the only game in the mortgage funding market right now.
I suppose if we quit buying stuff from foreigners, it won’t matter that our currency is a fantasy.
Well, we still might need some oil, but hey, what good is having a huge nuclear arsenal if you can’t use it occasionally for blackmail, eh?
Barry,
This post headline (re: “Lowest Reading Since 1995”) sounds more like a propaganda of an opinionated basher than an analysis of a professional Wall Street investor.
Markets are forward looking but you are concentrating on the LAGGING last month data.
The best LEADING indicator is INVENTORIES, and the inventories were DOWN (it was the most important piece of this data set but you put it as a footnote).
~~~
BR: Here is the exact quote, pulled not from a footnote, but the indented bullet points in the body of this post:
“A few pieces of encouraging data: The number of homes on the market dropped by 2.1% to 471,000, the lowest since July 2005. Also, sales in January and December were revised modestly higher.”
Also, since you are focused on inventories, consider this: February’s supply of new homes on the market hit a 27-year high; Inventories are likely understated, also because of cancellations.
So not only did you ignore the factual data in my post, but for reasons known only to yourself, you felt the need to name call as part of your analysis.
Weak, very very weak on your part.
I sentence you over the next 90 days to buy 3 condos in Florida, and 10 houses in any 10 separate states of your choosing. You must hold onto these for exactly 1 year, and then sell them. (Bailiff, enforce this verdict immediately).
PS: Why are Feb Sales lagging data, but the inventory changes that happened last month are not?
Once again, leapyear was not accounted=bigger drop than normal in March. I think Ex.Homes will be hit worse in March, but the surprising thing will be that inventory begins to rise again, matter of fact, it will rise much more than people expect over the warm season.
February is usually a yawner for this type of data.
There’s no home in SF that can be bought for less than 500 oz of gold. That chart is way off.
I definitely agree. I live in North Carolina and there’s no way in hell you’re going to buy a decent, well-built home in Charlotte for 150 oz, either. That kind of money will get you the typical piece of crap thrown together with staple guns and 1/4″ plywood floors.
Case Shiller includes outlying areas.
For instance, Oakland is part of the picture for SF. Have you priced a home in Oakland lately? Prices are down 20% or more. How about Napa? San Mateo? All are in the metro area.
Hey Barry —
Don’t be so polite to that asshat!
I would ban that anonymous coward, “Pessimus Rithotzus” as a troll.
What a tool . . .
Yes I’ve price homes in Oakland. I live here.
The median house price in Oakland has dropped significantly, but it’s still a shade under $500K. IIRC, it was just posted at $480K.
If you expand the Bay Area to include Stockton, Napa etc, the median is actually $550K (SF and Marin are so expensive, it overcomes Oakland, Stockton, Richmond’s etc relative cheapness).
San Mateo? You make me laugh. You can’t buy a house on the peninsula for less than $700K. Many areas are more expensive than SF proper.
And yes, that’s with an overall 17%+ drop from the peak.
Scott, you are correct — I should not even respond to these cowardly asshats. Here’s how the media reported new home sales (propaganda, according to asshats):
US February new home sales fall to 590,000 annual rate, 13-year low
Thomson Financial News
http://www.forbes.com/markets/feeds/afx/2008/03/26/afx4816254.html
New-home sales fall to 13-year low
MarketWatch
http://tinyurl.com/2o6su5
New Home Sales Drop for a Fourth Month
Associated Press
Sales of new homes fell in February for the fourth straight month, pushing activity down to a 13-year low. While the rate of decline has …
http://ap.google.com/article/ALeqM5jsanM66tszKz1zFq0LOG4XvWS7zAD8VLERP81
US New Home Sales Probably Fell to 13-Year Low Last Month
Bloomberg – Mar 25, 2008
http://www.bloomberg.com/apps/news?pid=20601087&sid=auwLMu9Pde.o&
~~~
If you want to be taken seriously, post a real name, and give me a real (it wont be published) email address.