The Marketwatch headline today? New-Home Sales Inch Higher in March:
Boosted by warmer weather in the Northeast and Midwest, sales of new homes increased by 2.6% in March to a seasonally adjusted annual rate of 858,000, the Commerce Department reported Wednesday.
That is of course month-over-month. Year-over-year, [YOY] sales are down 23.5%. According to the Commerce Department:
Sales of new one-family houses in March 2007 were at a seasonally adjusted annual rate of 858,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 2.6 percent (±12.9%)* above the revised February rate of 836,000, but is 23.5 percent (±7.9%) below the March 2006 estimate of 1,121,000.
This would be the worst March since 1998, when sales were at 836,000.
Also note the margin of error. 2.6% (±12.9%) would indicate no confidence at all that there even was an improvement in MOM sales. 23.5% (±7.9%) however, would indicate that you can be pretty darn sure sales are down YOY. In addition, as is generally the case, the Commerce Dept. revised the previous month’s figures. February’s less than sunny numbers were revised downward from 848,000 to 836,000.
Marketwatch also reported:
The median sales price rose 6.4% year-over-year to $254,000, as luxury homes continued to increase their market share.
[Increased market share by luxury homes would skew the median upward without "same house" appreciation.]
Inventory is up only marginally from last month, with a reported 545,000 units. This does represent a 1.4% drop from last year. However, with diminished sales, this represents a 7.8 month supply as opposed to a 5.5 month’s supply in March 2006.
Supply remains high as demand remains low. The median price may be up, but that is not a trend I would expect to continue. In addition, the median increase is not adjusted for inflation. Prices also now include a greater number of incentives than a year ago, masking the actual appreciation rate. Market conditions will continue to put downward pressure on prices.
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So NAR says cold weather, and commerce department says warm weather. I suppose warm and cold can be subjective, but……
PSLung-
The funny thing is, I think of the times Mr. Twist and I have gone house hunting. When we were serious about it, bad weather might have put us off for a day or two. I can’t ever think of a time though where we looked out the window and said, “Oh no, lousy weather. We’d better wait until next month.”
I’ve been harping for a while on this site about the MSM’s refusal to do their due diligence when reporting real estate “news”, and thus their direct complicity in the lies that are being spread.
Most times, I’ve had other well-meaning regulars on this site pooh-poohing the idea that the MSM has done anything wrong. I hope that this thread, and the example, MarketWatch headline, “New-Home Sales Inch Higher in March” will make those doubters think twice.
And for those doubters, I would like to add: the MSM’s constant reporting of pro-real-estate-sales lies regarding real estate news doesn’t have to mean that there are conniving, evil journalists leading some big conspiracy. No. Not at all.
All it takes for the pro-real-estate-sales lies to spread is for the people publishing the news to be ignorant, not to do their jobs in checking if the person who is feeding them information has a bias in the given area.
Then, all it takes for us to be sure will continues, is for you and I to sit back quietly as if we could care less.
MikeC – You forgot that a majority of the advertising dollars for newspapers come from the real estate industry. No bias there either…
There is an article on Digg right now about a MarketWatch article from yesterday saying: “Home prices fall at fastest rate in 13 years”
Funny what one day will do to headlines. Must have been cold yesterday.
The comments on Digg are pretty insightful into what the market actually thinks.
http://www.digg.com/business_finance/Home_prices_fall_at_fastest_rate_in_13_years
I’m off to watch the weather report, so I know when to buy. I forget though, what do sunny and blue-skies mean?
AZKevan-
Is it “Red skies at night, buyers delight,” or maybe it was something else? : )
Crushing blow.
This is going to get a lot worse before it gets better.
Out in my neck of the woods (So Cal) we have two booming counties Riverside and the Inland Empire. When prices hit the stratosphere people moved out of LA and OC to these counties so that they could have home with a yard, they still worked in OC and LA counties though.
So now you have just scores of these families who got a home on an “Exotic” loan doing everything they can to make ends meet and pay a very probable Neg-Am or soon to be exploding ARM this summer. Most commutes are 45-120 miles a day (I’m NOT exaggerating this) and now I here gas is going to be $4.00 a gallon by summer. These people do not make that much money, that is why they live Riverside and the Inland Empire, I’m surprised we have not seen some of these people lose it and go postal like in the movie “Falling Down”. The MSM do not know these people or their life, the MSM live in West LA, party in West Hollywood, work in Down Town LA and commute only 20 miles a day. I know this plight is out there and ready to boil over. When I visit those counties you see miles of stucco cookie cutter homes as far as the eye can see, and very recently you have nearly as many “For Sale” as well.
Mark my words this is going to get far worse before it gets better.
Sorry to go off topic, but the CNNmoney foreclosure story posted today contains some interesting passages:
http://money.cnn.com/2007/04/25/real_estate/forecosures_climb_fast/index.htm?postversion=2007042510
Note this paragraph:
“Among metro areas, Detroit got hammered the most. It recorded 16,351 foreclosures during the quarter, one for every 51 households, five times the national average. Vegas was a close second with one per 57 households.”
Now, what does that tell us?
We all know Detroit is in a terrible economic situation. Layoffs, auto industry under seige, worker buyouts, etc. This is the prototypical situation that so-called experts point to when they talk about high foreclosure levels. Yes, it normally takes a terrible job situation or local economic distress to create such a high foreclosure rate.
But what a minute — what about booming Las Vegas, with its supposed 7,000 new residents per month (a figure I have long doubted)? If the local ecomony is so great, then why the No. 2 spot in foreclosures (1 in 57)? If jobs are so plentiful in construction and casinos, and so many rich boomers are supposedly buying second (and third) homes or condos here, why all the foreclosures?
Maybe it’s because, as we’ve been saying, it truly is different this time. The national explosion of foreclosures, I would postulate, has almost nothing to do with unemployment. After all, isn’t the national unemployment rate is around 4.4 percent?
Detroit and Las Vegas? Both have casino gambling. Is that a factor? Are people gambling away their money and defaulting?
Let’s face it, Las Vegas is Subcrime Central, along with Phoenix, Inland Empire and SoCal. And there’s no other way for the spinners to talk this problem away — or to bail out all the Subcrime buyers.
– The Judge
“Sell now or be priced in forever”