Slip Sliding New Home Numbers
"New home sales posted the biggest jump in 13 years in March, but sales got a boost as builders cut prices to cope with higher mortgage rates and a growing backlog of houses on the market."
Also, according to the data, the new houses that are being sold are priced below $300k. How many of those do we have in California? When was the last time you saw new homes below that price point in Sonoma County?
"Despite the strong March new homes sales pace, there were renewed signs the housing boom is losing momentum."
"March sales pace was down 7.2 percent from March 2005."
"Inventories increased as well as new homes available for sale at the end of March reached a high of 555,000."
"The median home price slipped 2.2 percent from a year earlier to $224,200, the first year-over-year decline since December 2003, the Commerce Department said."
"A separate report showed U.S. mortgage applications fell for a third consecutive week, with demand for home purchase loans falling to its lowest level since November 2003 despite a drop in interest rates, an industry trade group said."
"If you dig into the reports, you will begin to see signs of a weaker market."
'"New home sales sprang back to life like a vampire in a cheap horror flick," said economist Bob Brusca. "And like that zombie in the movies, housing really is dead. Don't let all that twitching fool you."'
"Analysts suggested that inventories — the number of new and existing homes for sale — are at multiyear highs, and that's a sure sign that the market is slowing on the demand side. At this point, the country could sell new and existing homes for five-and-a-half months without adding a single new "For Sale" sign. That's a level we haven't seen in more than seven years."
"Many of the new homes sold in March were probably built in a stronger real estate market.
And unlike existing homes, where sellers can live until they get an acceptable price, "builders can't live in these houses unless they have a lot of family."'
"By and large they must finance them at rising interest costs."
"In fact, about one builder in five has reported a jump in cancellations of new home orders, according to a recent industry survey. And Wednesday's report showed that there were 553,000 new homes for sale in March, up 25 percent from a year earlier."
"Median prices for both new and existing homes were flat, or down in March. The median price for existing homes was $218,000 last month — same as in February. New homes saw the median price drop $15,700 to $224,200 during March as builders began to cut prices to get rid of inventory."
The Census Bureau Data:
“Sales of new one-family houses in March 2006 were at a seasonally adjusted annual rate of 1,213,000."
"This is 13.8 percent (±14.9%)* above the revised February rate of 1,066,000, but is 7.2 percent (±12.8%)* below the March 2005 estimate of 1,307,000."
(just want to point out the words used: "estimate" and "revised" and "seasonally adjusted annual rate")
Keep this in mind- from Marketwatch: “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”
“The median home price slipped 2.2 percent from a year earlier to $224,200, the first year-over-year decline since December 2003.”
03.05 = 229,3000
03.06 = 224,200
03.05 = 441,000
03.06 = 553,000
“The number of homes for sale at the end of March was a record 555,000. ‘I am worried about the potential for a trailing-down process that gains some momentum’ in the housing market, David Seiders, chief economist of the National Association of Home Builders, said. ‘I hope the Fed doesn’t overshoot’ on raising interest rates.”