Posted on 03/24/2006 7:11:18 AM PST by Lunatic Fringe
WASHINGTON - Sales of new homes plunged by the largest amount in nearly nine years in February while the median price of a new home dropped for the fourth straight month, providing fresh evidence that the nation's once-booming housing market is cooling off.
The Commerce Department reported that sales of new single-family homes dropped by 10.5 percent last month to a seasonally adjusted annual sales pace of 1.08 million homes. It was the second straight monthly decline and was much bigger than the small 2 percent dip that Wall Street was expecting.
The drop in new home sales followed news Thursday that sales of previously owned homes actually rose by a stronger-than-expected 5.2 percent last month following five straight monthly declines. Analysts said the trend in both reports pointed to a slowing housing market after five record-setting years.
I believe your analysis is correct. I'm interested what will happen to the east coast beach people because the insurance premiums have gone sky high or are dropping them?
Will they move to the beaches of California?
February was colder than usual.
January was warmer than usual.
Basic math requirements along with a course in deductive reasoning needed for the liars at AP.
Jay you pro King George English monarchist lover.... you are just wrong.
Interest rates are still low and real estate is regional.
Don't know where you live but here in the beach area of California - there is no development.
I have both. The mining companies I hold have good dividends (for now), but are very volatile. If PM prices decline, they will simply have to stop mining and watch their equipment rust. Like I said about holding metal, it is strictly dead money, but better IMO than paper money since it can't be printed willy nilly.
Large tract homebuilders having a growing inventory of homes. KB homes brought a 42% increase the last quarter, but I think that gain is short lived. The builders are going to have to lower profit margins to continue selling.
Reality Check! Lets look at historical sales rates for new single family homes. (Source: www.census.gov/const/www/newressalesindex.html)
Year # Sales
1986 750
1987 671
1988 676
1989 650
1990 534
1991 509
1992 610
1993 666
1994 670
1995 667
1996 757
1997 804
1996 757
1997 804
1998 886
1999 880
2000 877
2001 908
2002 973
2003 1,086
2004 1,203
2005 1,283
So, the rate fell to the 2003 level. How does it compare to every year from 1986 to 2003?
--Smart? Rich? ;)
If being rich makes you happy then you are smart. I'm not rich but I am happy which also makes me smart. I do the work I want. Some people who don't care if they are rich and also want to do the work they enjoy can't buy a home so they are not happy but they are probably smart too, just unhappy.
in stock prices at the beginning of this decade.
Oh my God!! Don't post facts on this web!!! What are you doing!!! Next you will show how a Fixed 30 year loan at 6.5% compares to a loan at 10% !!!!
You are so mean to the screaming meemees.
Wake me up when existing home sales plunge.
Don't know, but I just got back from beautiful Savannah, but it's clear that we are subsidizing people to build cheaply on the beach through unreasonably low insurance rates.
A 150K loan:
At 6.5%, you monthly payment is $948.00
If the rate increases to 10%, your monthly payment goes up a whopping $368 / month!
Wow, $368 a month is going to really crash the real estate market. We DOOOOOOOMED!
Note: If the rate rises to a reasonable 8.5%, your mortgage goes up about 200 bucks per month, or the cost of going out to eat once a week.
From AP: "The slowdown in sales pushed the inventory of unsold homes up to a record of 548,000 at the end of February. At the February sales pace it would take 6.3 months to sell all of the homes on the market, up from 5.3 months in January."
The stock market would love to see home sales cooling. It doesn't want higher interest rates, and sees home sales cooling as less incentive for the fed to keep raising.
If I could get a $150K house within a 2-hour radius of Washington D.C., I would think we were in the middle of the Great Depression. In fact, if folks could buy a condo for $300K in most heavily populated areas they would think they were lucky. You must live in flyover country.
No moron, if it wasn't too cold to shop for exisiting homes then it wasn't to cold to shop for newly constucted homes. The drop has to do with market conditions in that buyers aren't willing to pay the premium on new homes when there are so many bargains on exisiting homes due to a significant increase in inventory. To save your the trouble of asking, why the premium on new homes? Partly because of increased construction costs due to Katrina et al. and Iraq. The biggest factor, from my perspective, is that builders and developers have overpaid for the land to build on and as a result, they can't drop the price of newly constructed houses all that much and still make a profit.
And if prices fall back to their 2003 level, that would be appropriate, too. That would mean about a $200K discount in my locality of Northern VA.
But they can offer 3% financing . . .
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