Home Sales Tumble Again, Hopes for a Bottom Fade

[Joseph Burkeson, CMI]

Home Sales Tumble Again, Hopes for a Bottom Fade

Posted Dec 23, 2008 03:21pm EST by Aaron Task

Hopes that low mortgage rates will solve the housing crisis took another blow today on news of weaker-than-expected sales of both new and existing homes for November.

Here are the lowlights:

• Existing home sales tumbled 8.6% from October (which was revised down) and 10.6% from a year ago to an annualized rate of 4.49 million vs. the expected 4.93 million.
• Foreclosures and/or short sales accounted for approximately 45% of total sales.
• Average prices fell 13.2%, the biggest drop on record, to $181,300 and declines were evident in every region of the country.
• The inventory of unsold existing homes rose to 11.2 months supply from 10.3 months in October.
• New home sales fell 2.9% from the prior month but down more than 35% from a year ago to an annualized rate of 407,000, the weakest since 1991 and below the expected rate of 415,000. Average prices fell 11.5% to just over $220,000.

About the only positive data point from this morning's data is that the inventory of unsold new homes dipped to 11.5 months supply. Still, there is nearly a year's worth supply of new and exiting homes on the market.
With 30-year fixed mortgage rates available at 5% or lower for qualified buyers, the government has already done a lot to help buoy housing, even as homebuilder CEOs like Ara Hovnanian and Bob Toll lobby for more government intervention.

The issue is not the cost of borrowing, which is only half the battle, as discussed here.

A bigger issue is the fact potential buyers are (understandably) in no hurry, given rising unemployment, general economic malaises and a sense the longer they wait, they lower prices will go. At this juncture, it does not look like there's any "bottom" for housing anytime soon.

[Dennis R. Goudreau]

and with the ARMS getting ready to reset,not so good

[Joseph A. Ferry]

Interesting article.

[Joseph Burkeson, CMI]

Originally Posted by jferry1

Interesting article.

I think most folks would agree that in the big picture regarding Florida real estate Palm Beach is an outlier.

[Joseph A. Ferry]

Another interesting article.

[Joseph Burkeson, CMI]

Originally Posted by jferry1

Another interesting article.

Yes FAR will try and convince you that it is possible to pick up a turd by it's clean end, WTF is your point anyway?

[Joseph A. Ferry]

Another interesting article.

[Joe Funderburk, CMI]

The Messiah will fix everything in January. Just hold on.

[kpierce]

Originally Posted by jfunderburk

The Messiah will fix everything in January. Just hold on.

The second coming? Oooooo! Exciting! Grabbing my popcorn. Oh, you mean Obama, nevermind.

[Joseph Burkeson, CMI]

Average home price $18,513 - Unemployment rate 21%
December 21, 2008

The Great Depression has reached Detroit. The average price of a home is now $18,513 and unemployment has reached 21%, and it’s expected to get worse. Detroit is facing a crisis of epic proportions that officially puts Detroit statistically (and real term) on par with the great depression.

Many readers of Tribble Ad Agency are advertising centric.. and due to the rash of layoffs within all Detroit Advertising firms has put the city on the map for the wrong reasons.

It has become the center of all that is wrong with America… and nothing of what is right.

More about the horrific Bush legacy: http://www.tribbleagency.com/?p=3598

[Joseph A. Ferry]

Hmmm.

Hmmm.

[Joseph Burkeson, CMI]

Huge Crash Coming - 60 Miuntes

[Michael Larson]

Originally Posted by jburkeson1

Huge Crash Coming - 60 Miuntes

What a joke.

"The hole that wall street dug"

Sure, let the politicians off the hook. They are the very ones that twisted arms to encourage lenders to lend to those who could not afford what they were buying.

And wall street was dumb enough to package and resell derivative products backed by the implicit grantee of the federal government.

The pols have their fingerprints all over this one and we get to watch them blame everyone else but themselves while getting all of us to pay for their mistakes.

[Joseph Burkeson, CMI]

U.S. Economy: Home Prices Fall Near Depression Pace (Bloomberg)
By Bob Willis and Shobhana Chandra

Dec. 23 (Bloomberg) -- Sales of single-family houses in the U.S. dropped in November by the most in two decades and resale prices collapsed at a pace reminiscent of the Great Depression, dashing speculation the market was close to a bottom.

Purchases of both new and existing houses dropped 7.6 percent from the prior month, the biggest decline since January 1989, to an annual rate of 4.43 million, government and industry figures showed today. A 13 percent drop in the median resale price from a year earlier was the most since records began in 1968 and was likely the largest since the 1930s, the National Association of Realtors said.

“Housing is still in a freefall,” said Nariman Behravesh, chief economist at IHS Global Insight in Lexington, Massachusetts.

The figures were worse than economists had forecast and signal that the battered housing market that led the economy into a recession may be taking another lurch down. Sliding property values mean more Americans will be under water on their mortgages, destroying household wealth and undermining consumers’ purchasing power.

President-elect Barack Obama plans an unprecedented economic stimulus to restore growth, and pledged on Dec. 13 to limit foreclosures. One tenth of U.S. families who own a home are in financial distress, Obama said.
“We need desperately to get this economy moving,” Vice President-elect Joseph Biden, who is leading the incoming administration’s initiative to bolster the middle class, told reporters before a meeting with Obama’s economic advisers today. Transition officials are “getting very close” to an agreement with lawmakers on the size of the stimulus, Biden said.

Below Estimates

The Realtors’ figures showed home resales, including condos, fell 8.6 percent to an annual rate of 4.49 million, below all but one estimate in a Bloomberg News survey of 63 economists. The median resale price dropped to $181,300.

Separately, the Commerce Department reported that new-home sales fell 2.9 percent last month to a 17-year low of 407,000. The median sales price declined 11.5 percent from a year earlier to $220,400.

Excerpt: http://www.bloomberg.com/apps/news?p...VRA&refer=home

[Joseph A. Ferry]

I continue to think that these predictions of a long-term economic malaise will prove false. Much like the predictions of global warming and permanent $4.00/gallon gasoline. On Saturday, I paid $1.579/gallon. This time last year, it was a dollar/gallon higher.