HOUSING MARKET DECLINING RAPIDLY

Friday's New Home Sales report added further evidence that the housing market is declining. Monthly New Home Sales showed the biggest decline in 9 years. The decline in New Home Sales was larger than the real estate mythologists predicted. The annualized New Home Sales rate declined 10.5% during the last month. (Technically, if 0 new homes had been sold during the last month, the annualized sales rate would have only declined 1/12th, or 8.3%. So some previously sold homes must have become "un-sold.") January's number was also revised downward. Had January's number not been revised, the decline would have been 12.5%. The annual New Home Sales rate has declined 21% since July. Median annual prices also declined to a -2.9% annualized rate of increase. Inventories increased from 5.3 months' worth to 6.3 months' in February.

Since October's peak in New Home Sales of 1.345 million/year, the rate has declined to 1.080 million/year. Unsold inventories of New Homes have risen 4 of the last 5 months, from 4.5 months worth in October to 6.3 months' worth in February. The unsold inventory of New Homes is the highest in 10 years according to Briefing.com Over the past year, there has been a 24% increase in new homes on the market, according to CNN Money.

Also, according to CNN Money, the current median price for a new home is now $230,400. This is down $6,900 from February 2005. In addition, the current median New Home Price is down 5.5% from October's $243,900.

In some areas the decline was much larger. In the West, the 1-month decline in the annualized New Home Sales rate was 30%, declining from 357,000/year to 252,000/year. In the West, the annual New Home Sales rate has declined 49% from its October peak of 410,000/year. This information can be found at Briefing.com New Home Sales

EXISTING HOME SALES

The Existing Home Sales report from Thursday, March 23rd, was reported with unjustified opitimism. The seasonally adjusted sales rate actually declined from the previous year. February 2006's annualized rate was 6.190 million/year, marking a -0.3% change from February 2005's 6.930 million/year rate. Meanwhile, Existing home inventories INCREASED 5.2% over the last month, and increased 30.2% over the last year. Below are charts from HoweStreet.com showing these changes.




Once again, the declining numbers are even more extreme in the West, especially in California. Existing home sales dropped 15.5% from the same period 1 year ago. The inventory of unsold Existing Homes in Calfornia is now 6.7 months' worth, compared to 3.2 months' worth a year ago (from the Orange County Register.) In Orange County, California, there are currently 10.4 months' worth of unsold inventory of Existing Homes, compared to 5.7 months' worth a year ago. The median price of existing homes in California declined 2.9% from January 2006.

The Mortgage Bankers' Association purchase index also declined dramatically. The 4-week Purchase Index moving average has declined from 470 in October to 401.5 at present.

In summary, both New and Existing Home Sales are declining, with New Home Sales declining much more. Meanwhile, inventories are rising rapidly in both New and Existing Homes. The biggest inventory increases and sales declines are in bubble areas, especially California. Prices are actually declining in some areas, most notably Southern California. Housing Starts actually increased over the last month, which will increase inventories even further, and put further downward pressure on home prices.

The Housing Bubble is definitely deflating, and appears to be deflating even faster than many predicted.

unlawflcombatnt

EconomicPopulistCommentary

Economic Patriot Forum

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The economy needs balance between the "means of production" & "means of consumption."

Hey want to compare the numbers to the Carter years??

That's just peanuts!

While your add it, compare this
It's the Debt . Don't Forget It!!
http://www.uwsa.com/uwsa-usdebt.html

Facts are stupid things.---Ronald Reagan

Just peanuts?? haha I really don't think so.

I'm comparing the housing market between the Bush years and the Carter years...never did I mention the national debt. Sure the debt is much larger than the Carter years, but isn't this thread about the housing market?

Perhaps one should look at why the numbers are down. Considering the fact that the largest decline can be seen in the West, one must ask what is the cause. Considering that California has seen the largest decline, one has to wonder, maybe it has to do with the fact that the tax rates are higher and politicians in California continue to talk about raising them even more...

Looking at the chart you provided, overall both existing and new home sales increased from January to February and are only down three-tenths of a percent and two-tenths of a percent from the previous year. Add in the fact that we have seen record sales in previous months this is not surprising. Sales fall and rise, that is the nature of the market. If a decline of less than one percent is a bursting of the bubble, well better sound alarms.

Perhaps one should look at the actual increase in some areas. So the west is losing sales, well it seems as if other areas are gaining, hmmm could this might actually have something to do with people relocating??? Moving with jobs or to escape the ridiculous taxes in some areas??

dmk

Housing sales in California are down because all of the property there is already unbelievable expensive, and therefore not worth investing in.

My dad just made a load of money from some property he was a part owner of in one of the Carolinas.

...and unlawflcombatnt rebuttle??

He needs to start being active in threads he starts or the dancing bacon needs to make an appearance.

When you try to find the most minute of all indicators that there is something wrong with the economy it is hard to argue logically. While sales are down last year by three-tenths or two-tenths of a percent but overall sales are up by some 5% from the previous month, its kinda hard to justify that the housing market is declining rapidly.

Furthermore, when you add in the fact that more people today own their own home, the argument is even more illogical and downright ridiculous.

dmk

haha the dancing bacon is probably going to need to make an apperance..