Posted on 04/26/2006 7:25:24 AM PDT by Grampa Dave
ECONOMIC REPORT Stunning 13.8% increase in new home sales
Median prices down year-over-year first time since Dec. 2003 By Rex Nutting, MarketWatch
WASHINGTON (MarketWatch) -- New home sales unexpectedly increased by 13.8% in March to a seasonally adjusted annual rate of 1.213 million, the highest level of the year, the Commerce Department estimated Wednesday. The increase more than reversed the 10.9% decline in sales in February. It was far stronger than the mild increase to 1.10 million annualized that was expected by economists surveyed by MarketWatch. See Economic Calendar.
Combined with the small increase reported in existing home sales on Tuesday, the report shows the housing market was much stronger in March than anyone had reason to believe. See earlier story. Other housing market indicators, including mortgage applications, housing starts and builders' sentiment, are pointing to a softer housing market.
The strength in home sales, if it persists, could keep the economy growing faster than the Federal Reserve wants and could lead to higher interest rates than now expected. See our complete coverage of the Fed. New home sales are down 8.2% year-to-date. Read the full report.
The government cautions, however, that its housing data are subject to large sampling and other statistical errors. The margin of error is so large, in fact, that the government cannot say with confidence that sales rose at all in March.
It can take up to six months for a trend in sales to emerge. New home sales have averaged 1.22 million per month over the past six months, down from 1.23 million in February and 1.30 million in November.
The inventory of unsold homes on the market increased 2.8% to 550,000, representing a 5.5-month supply at the March sales pace, down from 6.3 months in February. Median home prices fell 2.2% year-over-year to $224,200. It's the first time prices had fallen year-over-year since December 2003.
In March, sales rose 35.7% in the West, reversing the 30.3% drop in February. Sales increased 6.9% in the South, 10.9% in the Midwest and 4.7% in the Northeast.
In a separate report, the Commerce Department said orders for durable goods increased 6.1% in March, including a 71% gain in aircraft orders. Bookings were solid across most industries. See full story.
Rex Nutting is Washington bureau chief of MarketWatch.
I will let you know after we find out!:)
This whole interaction was amazing. The couple with the Mother stuck in Scottdale discussed the problem, and the couples who are tired of the N Ca rain and cold (40 to 60 degrees), jumped on this like cats jumping on a wounded rat.
I bet some smart investors come up with some type of time shareing buyouts of a lot of property in the Arizon area to sell to Snowbirds and Rainbirds.
"I love that story about the Martha Stewart homes selling out in a weekend in Cary. Finally, a builder (KB Homes) with some sense knocked into his head that people might enjoy something other than a box house with box rooms and box cabinets."
Isn't that amazing when that happens in area where supposedly the market has dropped. A builder decides to offer some nice homes and boom they are bought out.
"Seems like the market is doing what it does very well..."
Amazing isn't it how the market does what it does so very well.
Fractional Fee Real Estate is doing nicely.
With the old time shares, one could use the property only for a set period of time...say 20 years. Then the property returned to original developer.
Where homes may sell for $300 per foot, a fractional fee property may sell for over $1000 per foot.
I will agree with you about people from other areas buying houses with equity from homes they sold. I work for a real estate company in a non-sales position (I'm not at all a cheerleader about real estate; I always try to be a realist about it) and we have seen many folks sell their $500K condo in DC or California, come here, pay cash for a nice $250-$300K single-family home and still have some money left over to put in savings. It's good for relocating folks. For those of us who have lived here for awhile, it makes selling the house you have a plus, but then when you go to purchase another house, the average price is higher than it was the last time you bought, so you don't have nearly the purchasing power as someone relocating. Oh well, I guess there's a downside as well as an upside to everything :-)
Below is another sad tale of the RE Bubble bursting in the IE area of California. Dang Bush!
http://www.freerepublic.com/focus/f-news/1621868/posts
I.E. region's median home price tops $400,000
The Daily Bulletin ^ | 4/26/2006 | Michael Rappaport
Posted on 04/26/2006 9:09:30 AM PDT by Smogger
Going up. For all the predictions that the elevator had reached the top, that housing prices had peaked and would only go sideways, the Inland Empire reached another milestone and posted an all-time high in March. The median price of a single-family home in the Riverside-San Bernardino metropolitan area was $403,000 in March, according to numbers released Tuesday by the California Association of Realtors.
It's the first time the median price has passed the $400,000 mark, and it comes just 21 months after prices topped $300,000 for the first time in June 2004.
"A lot of people who have been talking about the market softening were expecting prices to go down," said Jack Kyser, chief economist with the Los Angeles County Economic Development Corp. "Well, unit sales may be down, but prices are still going up, or at least moving sideways."
Sales were down 16.3 percent from March 2005 locally and were down 15.1 percent statewide in the same comparison. That leaves more homes on the market than a year ago, but the beginning of the traditional sales season shrank inventories from February.
"A lot of people are just kicking the tires right now," Kyser said. "They're trying to figure out what's going on with the market, whether it's still going up or whether they should wait to buy."
It may be that year-over-year gains of 20 to 30 percent or more are a thing of the past, but the local median was still up 15.1 percent over 12 months ago. The state median of $561,350 was 13 percent higher than March 2005.
Those numbers still leave California in a different world than the rest of the country, where analysts were excited about a 7.4 percent increase to a median price of $218,000.
David Lereah, chief economist for the National Association of Realtors, said in a release that the numbers were a hopeful sign that sales will experience only a slight dropoff this year.
"This is additional evidence that we're experiencing a soft landing," he said. "The market clearly is stabilizing."
That stability nationally is at a much lower level than the Inland Empire, let alone the higher-priced parts of California. With prices like $682,500 in Norco, $612,500 in San Dimas, $610,000 in Upland, $570,000 in Chino Hills and $567,500 in Diamond Bar, it's pretty clear that Southern California's "affordable alternative" is no longer as affordable.
"Affordable housing now means the High Desert, places like Victorville and Apple Valley," Kyser said. "In Los Angeles County, it means the High Desert around Lancaster and Palmdale."
Vince Malta, president of CAR, said March is the month in which the market "gears up for peak season activity, and this year is no exception."
Seasonally adjusted sales jumped 4.9 percent statewide in March from February, even though they were still way down from last year.
"But those were record-setting levels," Malta said. "The pace of sales seems to be picking up. Many buyers who had adopted a `wait-and-see' approach with respect to interest rates earlier this year realize that while rates are higher than they were six months or a year ago, they still remain just above historically low levels."
Plenty of homes are on the market. CAR's Unsold Inventory Index stood at 4.8 months in March, a significant drop from 6.6 in February although well above the 2.2 figure of March 2005.
"Unsold inventory climbed significantly in the first two months of this year as listings increased and sales declined," said Leslie Appleton-Young, chief economist for CAR. "Although the supply of homes for sale increased again in March, this was more than offset by a seasonal increase in sales."
Appleton-Young said she expects the supply to decline gradually over the next few months, although she doubts it will approach last year's levels.
Bill Velto, manager of Tarbell Realtors in Upland, said the picture actually was somewhat mixed, with some cities up and some down.
"If you look at the cities that took the biggest jumps, they were some of the lowest last year," he said. "If there's one thing clear in this picture, it's that there is still a demand for housing. There are lots of buyers out there and lots of sellers.
"Houses may not be selling as quickly, but that's because buyers can be choosier. There aren't that many people right now looking at it as if they have to buy this week."
- Michael Rappaport is business editor of the Daily Bulletin. He can be reached at (909) 483-9395 or at m_rappaport@dailybulletin.com.
Less than A cups?
What's the saying?
"...and the MSM is deeply saddened."
"...and the MSM is deeply saddened."
Little Tommie Da$$hole is probably very happy not to go out and lie about our economy each week as he used to with his soap box to stand on.
How dare you try and inject some rational to the conversation.
Right stock indexes are soaring, assisted by various energy related firms massive earnings, but energy prices are also soaring. Housing in selected markets is still booming & over inflated, but gold and the metal's group has climbed due to the some people concerned over the future of oil fueled inflation.
The American dollar(USD) is stuck in a rut, while the Canadian dollar(CD) which at the beginning of 2000 was being exchanged at 50 cents less then the USD. Today the CD is worth only 12.5 cents less then the USD. Many people keep saying the economy is booming yet all of us are shelling out far more for energy, paying more at the supermarket, while the USD continues declining not only against the CD, but the Pound, Euro and most major currencies.
Let's see what these guys say in 6 to 8 months from now :)
But these are not the good new homes.
~Nancee Pelosee
ROFL!
Must be a virus going around. I just bought another house, quite unexpectedly. Wasn't really looking, certainly wasn't planning to relocate. It just sorta happened, like a change of life baby. A month ago it wasn't even on the horizon. Next week we're moving in.
I haven't felt so perky since Reagan got elected. :)
"Must be a virus going around. I just bought another house, quite unexpectedly. Wasn't really looking, certainly wasn't planning to relocate. It just sorta happened, like a change of life baby. A month ago it wasn't even on the horizon. Next week we're moving in.
I haven't felt so perky since Reagan got elected. :)"
That apparently happens a lot.
We have a friend who sells big ticket homes in the wine country of California. A very large % of her sales go like this.
She gets a call:
1. "Hi we are out visiting our son, or our daughter, or our parents or our friends, and we seem to like this area. We aren't really ready to relocate or sell our present home."
or
2. You were recommended by our friends or relatives, we wonder if you had the time to show us around the area and a few homes.
Some people start the buying process the first day they look around and find something they like. Some wait a few days and some go back to their home and come back to "look" again before they buy.
Most of them are not up her standards, a little 8-10,000 square foot home on 25 acres of prime vineyard land with a special waver to start a non union winery on the property.
and since she already is Firemarshall Bill, she can ignore the saftey and OSHA requirment since she is most likely employing illegals.
I believe that people are pretty much done re-financing, which would account for the disparity between mortgage applications and sales.
/Democrat
Beware anything which they "seasonally adjust". Xlinton really did this a LOT. They are manipulating because they have to to make the numbers better than they are.
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