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.
When Katrina hit, I predicted that we would see NEW HOME sales stagnate as building costs pushed up prices . . . but that we would also see EXISTING HOME SALES increase, because relatively, existing homes suddenly would be better bargains than newer homes.
Nice to be right. This isn't a "bursting" of any "bubble," it's the natural outcome of higher building prices in the Katrina pipeline which took actually longer than I thought to have its effect.
I remember that prediction. Nice job.
As an old man intent on dieing in my present home (no mortgage), I enjoy the sound of popping corn while I read these "bubble" threads.
};^)
I'm in the middle of Katrina, and what you say is right. There are 10's of thousands of home that will have to be demolished and rebuilt, but the Army Corp of Engineers has not issued their new building guidelines and flood plane plans.
Soon there will be plenty of new construction to sadden willie green!
LLS
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?