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.
Home Sales Rise in 12 states, belying bubble burst babble.
I'm curious how much it is still up since the Chicken Littles started screaming.
A lot more than 1.2%.
It took SEVENTEEN increases in interest rates to yield a declining market.
Housing market explained in 13 words...
Market picks up
Market slows down
Market picks up
Market slows down
repeat
The housing market has been in need of a correction for some time. Too many places with way over inflated prices.
7 years ago I was in Las Vegas for a conference and home prices weren't too much higher than here in Indiana. Went out there last year for a vacation and prices had grown 300 to 400% higher than here. Any wonder why Nevada is seeing a dip in sales?
It may be a source of much hilarity here on FR but people trying to sell their houses right now aren't feeling so good. Those with option ARMS are feeling poorly also.
*rolling eyes*
Of course this is absolute proof the ex-Texan was right all along about the Housing Bubble. At this rate we will meet his prediction of a 40% decline in about 33 years.
I'm laughing at the people who think a 1.2% decline is a crash, not at people who can't sell.
Those with option ARMS are feeling poorly also.
30 year fixed mortgages are at 8 month lows, for those who qualify.
WSJ Report on the radio this morning commented about the decline in new construction. They said that the Gen Xers are in the home market now and they are also carrying 70% of the debt load the boomers are carrying, but are only at the beginning of their careers. The builders have been catering to the McMansion crowd and have neglected the needs of the Gen Xers, which is estimated to be 50% of the new home market. They need homes, but McMansions aren't in their range of affordability.
How long until prices reach the level they were at when he first predicted a crash (4 years ago)?
That's a completely phony statistic since most sellers are still in denial and have not dropped prices to the selling level.
"The housing market has been in need of a correction for some time. "
It's incredible to me that my home in Ohio, a 2100 sq. ft. split, if it were in California would be worth over $1 million. In Ohio, it's a $200k home. That seems out of whack to me.
It was a great opportunity though. I've seen a number of stories of people who took a job in CA, bought a house. In a few years, they sold the house, took the 400k profit and bought a home free and clear in the heartland. If my roots weren't so deep I'd have given it a shot.
The only sellers included in that statistic are sellers who have sold. So how is it phony?
Who buys a home one year and sells it the next? If you buy a home you should expect to hold on to it at least of few years. Unless you have a company who pays for your relocation, you should be renting if you are only staying a year or so.
I'm just waiting for the distressed ARM home-buyers to find that their home is too expensive for them - then cash them out @ .50 cents on the dollar, lowlife-bottomfeeder that I am......
Which 12 states went up? Looked at the article and no mention of them?
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