Posted on 11/20/2006 9:47:58 PM PST by GodGunsGuts
AP Home Sales Plummet in 38 States in 3Q
Monday November 20
By Lauren Villagran, AP Business Writer
Third-Quarter Home Sales Plummet in 38 States During the Summer; Home Prices Also Tumble
NEW YORK (AP) -- The feeble U.S. housing market showed more frailty when third-quarter 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've noticed the same thin. Now that the election is over, perhaps we can all start looking at this issue a little more objectively.
If the idiotic Fed had paid attention to what the price of gold was saying (nearly tripled in 5-6 years), the bubble wouldn't have gotten so big, and other costs wouldn't be rising so much.
You might, if you were a simpleton who thought absolutely every issue has to be about partisan politics. Oddly enough the business cycle will continue to function no matter who is in office.
Eventually people are going to have to move because of life changes. Right now, everyone is sitting around waiting to see what which way the wind is blowing. Those selling are getting few lookers. I think it will be slow until 08, personally.
Amen to that too! You're batting a thousand :o)
The housing market collapse will actually be worse in high tax blue states like MA, CA, NY, NJ. As the Baby Boomers reach retirement age, they are fleeing in droves to low or no tax red states.
Trust me on this. It's not a prediction, it's happening now.
http://www.heartland.org/PrinterFriendly.cfm?theType=artId&theID=18063
I also think a lot of the "health care crisis" is the same "crisis" that affects cable rates, taxi surcharges, UPS rates, college tuition (things China can't produce with slave labor) - it is called inflation.
I'm guessing it will last until 2011 at a minimum (based on the length of previous busts).
Thank you. Then I should stop for safety sake. :)
NYC real estate has tracked the securities markets in the past. Wait for the next bear market in stocks and see what prices do there.
Plummets!
Wow! 12% Now maybe I can afford one. Because the ponzi scheme of housing was really an investments market rather than an issue of shelter, I could care less about it dropping a measley 12%.
Farmers and oil producers in our part of the country deal with swings like this all the time. A drop like this after an admittedly overheated speculative market is nothing I am going to worry about. HAving money invested in 5,000 sq. ft houses is a waste of captial in the first place.
Oldplayer
Oklahoma
That's kinda funny: I can remember the Fed using 18% as a hedge against inflation.
Our SMALL family business was selling $50K per month in new eqpt, plus the service side, and the only interested (pun intended) entity making any money was the bank. It forced our closing.
I think it rather telling that a minor slowdown in sales is considered a near depression. The Idiots who wrote and edited this article really NEED a lesson in basic economics, but what do I know?
Excellent point. And definitely worth looking into. Do you have any links to historical overlay charts on NYC real estate/stock market trends???
Part of the gold price reflects increased demand from Asia, not just an excess of credit in the US. Although there has been plenty of that, too.
That is interesting. Taxes are starting to eat people up in some of these states.
That's about it. If it's a manufactured good it's prone to deflation, courtesy of increasing productivity and outsourcing. But if it's a service that isn't subject to productivity gains or outsourcing then inflation shows up.
I find the term "disposable income' WHOLLY INACCURATE.
The term should be DISCRETIONARY SPENDING.
To me, not one thin dime is disposable. However, I do have some money that I can use for trifles and pleasures, or put away for later, AT MY DISCRETION!
Disposable, NO!
Aren't companies mining more gold than ever now? That has got to effect the price at some point.
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