Posted on 11/20/2006 11:25:43 AM PST by Toddsterpatriot
Home Sales Fall in Most of the Country This Summer; Leading Indicators Rise
NEW YORK (AP) -- The feeble U.S. housing market showed more frailty in October when home sales plummeted in 38 states, hitting Nevada, Arizona, Florida and California particularly hard, government data showed on Monday.
The once-booming real estate market's persistent weakness over the past year has reined in expectations for economic growth but hasn't been severe enough to offset a rising stock market, lower gas prices and improved consumer expectations.
The National Association of Realtors reported Monday that sales of existing homes fell in 38 states during the summer. Sales retreated to a seasonally adjusted annual rate of 6.27 million units nationwide, down by 12.7 percent from the same period a year ago. Nevada, Arizona, Florida and California led the declines.
Home prices also dropped: The realtors' survey showed that the midpoint price for an existing home sold during the summer dipped 1.2 percent year over year to $224,900. Some 45 metropolitan areas saw home prices decline.
Meanwhile, the latest report of building permits showed the slowest pace of annual growth in nine years in October. Housing construction slid sharply as builders tried to curb swelling inventories of unsold new and existing homes.
Stuart Hoffman, chief economist at PNC Financial Services Group, said he thinks the housing market still hasn't reached its low point.
"I think the permits numbers point to yet another flight of stairs down on housing before we hit the basement," he said. "On the other side, stocks are rising, consumer confidence is good and jobs are rising. Those factors are keeping this decline in housing contained."
A closely watched indicator of future economic activity release Monday provided further evidence of that trend.
The Conference Board, an industry-backed research group based in New York, reported Monday that its Index of Leading Economic Indicators rose 0.2 percent in October. Increased real money supply and improved consumer expectations helped offset the sharp decline in housing permits and weaker vendor performance.
"The economy is growing more slowly, but we have yet to have weakness spread beyond housing and motor vehicles to such a degree that we need to fear the proximity of a hard landing," said John Lonski, chief economist of Moody's Investor Service, referring to when the economy turns from growth to a recession.
The housing market slowdown has weighed on the leading indicators index this year. But all told, strengths and weaknesses in the leading indicators have been roughly balanced, according to the Conference Board report. The index stood at 138.3 versus 139.1 in January -- its peak so far this year. The index has declined four of the last seven months.
The Conference Board's labor economist, Ken Goldstein, said the October index suggests "the economy is unlikely either to reheat or to get significantly cooler."
"Instead, the kind of slow growth now being experienced could continue right through the winter and into the spring," Goldstein said.
In another sign of moderating economic growth, the Federal Reserve held its benchmark interest rate steady last month at 5.25 percent for the third straight session. The Fed had raised interest rates 17 times beginning in June 2004 to stave off inflation, before halting its campaign of credit-tightening in August.
I read on FR a few weeks ago that Portland
has the second strongest real estate market
in the country.
There's new construction everywhere.
Builders are taking an older home, bull-dozing
the house, and constructing four to six homes
on the lot.
Of course, we do have to contend with the UGB.
Always, I wouldn’t bother. Ex-Texan was some DU troll posting crap here to demoralize conservatives and talk down the economy. He’s been nuked and thoroughly discredited. People believe what they want to believe, show them facts, you get anecdotal stories. Show a trend and you get the butt monkeys coming out. The bubble never happened, there was a slowdown and not a crash. Rumor is the Fed will possible bump rates down in the spring a ¼ point, that should keep thing rolling. Next we wlll hear about the 100 per barrel oil and the peak oil theory or how Iran is 12 months away from having MIRV enabled ICBM’s. All you bubble bloggers and wishcasters admit you were wrong and move on the next crisis
That's modern "journalism" for you. Tease them with the headline but don't give them too much info. Let the bastards find their own info!
I like articles that say, "Top 25 places to meet women!" or whatever and then they tell you about the first and last place only.
Idaho would've made my list if I could've gone with 13.
I find it peculiar that after 100+ posts nobody has cited a source listing the 12 'positive' states.
Seattle, WA
Browns fan,
If I lived in the midwest. I would sell now and consider renting for a few years.
Depends on where you are at in the current "cycle". Those who bought in the last year or two (maybe even three) aren't going to be ahead counting inflation and transaction costs for probably 8-10 years. Without the promise of "instant equity" through home price appreciation, a lot of the premium for ownership goes away. At that point, the cost of home gravitates toward the income neccessary to support the payment - and in CA, not enough have the amount of income needed to support an $800K mortgage.
My wife and I have been checking out open houses in our area late on Sundays and we are typically the only people who walked through the door. The realtors were knocking 10-15% off the asking price while we were looking around. I think the market is way over valued and there is room for it to come down.
The new homes are these monsters you describe. They seem to be bought as second homes for people up north, not as primary residences. In FL, the pay just isn't there for most people to afford such luxury homes. An average 1700 sq ft home has an asking price of $350K is not affordable by most people.
Not to mention that 40% of new mortgages are interest only and the conventionals are trending to 0% down. Skyrocketing prices, for a 1st time buyer makes saving for a hefty down payment unrealistic. Exotic mortgages give uyers more money and more money for ome purchases bids up the prices faster than if exotic mortgages weren't allowed.
Just the sand polymorphing into a more interesting morphology.
This happened to a certain extent. Seattle, WA, Denver, CO, and cities in Texas have seen a huge influx of Californians over the past decade.
But there was multiple reasons for this. Many were simply escaping the Grey Davis disaster years as the state was heading toward economic failure. High taxes. Crappy schools. Idiots liberals pushing their anti-family, anything goes agendas.
Seattle and Denver were hit especially hard. We now have a voting demographic heavily biased towards democrats now after over a decade of California immigration.
Go figure that these idiots were escaping the trainwreck democrats created in California, and then they turn around and vote in the same type of liberal scum that has destroyed California. While I'm not some xenophobic freak living up here in Seattle who goes nuts over people moving here, I'm absolutely digusted at the majority of Californians that move up here.
Don't forget all the subprime loans banks have been handing out like crack coccaine and all their "creative" ways they have been approving those with horrible credit.
Whoops. Sorry...already posted. Bump.
Eat dirt. Death will come first.
There must be a link somewhere showing the list in total. I can't find it.
They don't want you (or anyone) to find it.
I'm a boomer, but I'd also prefer 1500 sq. ft. on 2 acres to 2500 sq. ft. on an 80 X 120 foot postage stamp lot.
Sometimes it works the other way around too. People pull up stakes in Ohio, go to California at the top of a market, have to sell at a loss, go back to Ohio broke.
You just described my retirement plan.
:-)
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