Home Sales Tumble Again, Hopes for a Bottom Fade

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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.

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

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Interesting article.

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

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Another interesting article.

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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?

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Another interesting article.

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

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

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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

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Hmmm.

Hmmm.

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Huge Crash Coming - 60 Miuntes

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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.:shock:

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(http://www.bloomberg.com/apps/news?pid=20601087&sid=adkUcqYlJVRA&refer=home) (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](http://search.bloomberg.com/search?q=Nariman+Behravesh&site=wnews&client=wnews&proxystylesheet=wnews&output=xml_no_dtd&ie=UTF-8&oe=UTF-8&filter=p&getfields=wnnis&sort=date:D:S:d1), 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](http://www.bloomberg.com/apps/quote?ticker=ETSLTOTL%3AIND), 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?pid=20601087&sid=adkUcqYlJVRA&refer=home

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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.

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Warning! This message is brought to you from an unemployed Elf, meant to cause grief and unhappiness on this festive day. It contains strong language, use discretion when viewing.

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Interesting

Is this the change we are expecting from the new government?

This one is also interesting if not just for the view!

Here is Ron Paul’s take on the situation. He is a very good man!

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On, on the contrary these links show what 8-years of a George Bush regime has done to the country & the world, unfortunately some of what we had prior to to his presidency may never be restored.

Unfortunately the stiff-neck religious wingnuts who control the Republican party saw fit to dismiss the only true conservative who ran in the primaries, their last best hope was Ron Paul, now they will have to sit in their sackcloth & ashes waiting for their Jesus to return, hope they packed a lunch.

Here is what Jim Kunstler had to say in his last essay entitled legitimacy dwindles.
"Right now, the overwhelming sentiment is to get this country back to where we were, say, ten years ago, when everything was humming nicely*: *Clinton nostalgia. We’re definitely not gong back there, though. It’s an idle wish. And any set of policies designed to lead in that direction will prove very disappointing. Our destination is a land of much smaller-scaled local economies. We could retain our federal ties if the federal government can scale back appropriately from the bloated, feckless enterprise it has become. Otherwise, it might only get in the way and make matters worse, and the public in one region or another of North America might reach a decision that they are better off without it. That would be what’s called a revolution."

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Kuntsler is right we can’t go back and any semi intelligent person shouldn’t want to. Oh wait that won’t stop Obama from trying.

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There really is something weird going on. Mortgage applications are up something like 50%–sure a lot of re-fis but then again those are people who will not lose their homes to forclosure. I predict a crash in the forclosure market with these interest rates. Parts of the country are hurting but some places, like here, are booming. Low gas prices, low interest rates I think will combine to make for a great 2009. I’m still suspect about how bad the economy really is. Spent a lot of time traveling this summer from Vegas to Dallas to Memphis. Just does not seem as bad as the press wants us to believe. I was around for Jimmy Carter and this isn’t even close. I think the press needed to hype the bad economy to ensure the Obama victory. I figure within 24 hours of taking office he should have things squared away, at least accoring to the press.