May New Home Sales Down 5.9% YOY
From the U.S. Census Bureau:
May Year-Over-Year Sales
United States -5.9%
Northeast -36.3%
Midwest -20.8%
South 8.4%
West -12.7%
The May median sales price of $235,300 is down approximately 6% from the peak price of $250,800 set in February of this year and is down 4.3% from last month.
Caveat Emptor!
Grim
NEW RESIDENTIAL SALES IN MAY 2006(PDF)
Sales of new one-family houses in May 2006 were at a seasonally adjusted annual rate of 1,234,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 4.6 percent (±13.1%)* above the revised April rate of 1,180,000, but is 5.9 percent (±10.8%)* below the May 2005 estimate of 1,311,000.
The median sales price of new houses sold in May 2006 was $235,300; the average sales price was $294,300. The seasonally adjusted estimate of new houses for sale at the end of May was 556,000. This represents a supply of 5.5 months at the current sales rate.
May Year-Over-Year Sales
United States -5.9%
Northeast -36.3%
Midwest -20.8%
South 8.4%
West -12.7%
The May median sales price of $235,300 is down approximately 6% from the peak price of $250,800 set in February of this year and is down 4.3% from last month.
Caveat Emptor!
Grim
60 Comments:
Sticker shock and fewer rational buyers should send home prices faLLING back down to earth.
Martin County to Lennar: Fix the problems, or get out and don't come back
The Palm Beach post is reporting Martin officials rap Lennar over homeowner gripes.
STUART — After weeks of hearing homeowners complain about mold, leaky roofing tiles and shoddy workmanship, Martin County officials have had enough.
The county has told a national home builder to prove its homes meet county standards, fix the problems, or get out and don't come back.
"These horror stories just keep getting worse," said County Commission Chairman Susan Valliere after residents complained Tuesday of problems with homes built by the Miami-based Lennar Corp. "This is really getting upsetting."
Mike Morgan, a Stuart real estate agent, has been complaining to the commission for weeks about faulty electrical wiring, stucco wall and roof problems caused by shoddy building on Lennar's homes in the Martin's Crossing subdivision on Kanner Highway. On Tuesday, Morgan brought the five homeowners to the commission meeting and said he plans to bring 20 to the next meeting to voice their complaints.
"It's been a nightmare," said Rick Scimeca, who said his house has had problems with leaking roof tiles. Scimeca also said his neighbor had a plumbing leak that caused mildew inside her walls. "It's a brand-new house. These things shouldn't happen."
County Building Official Larry Massing met with Lennar officials on Tuesday about the homeowners allegations. Massing said he is requiring the company to inspect the homes with him present and to send him all its reports on roofing tiles, stucco and electrical wiring used in the homes. The county will require Lennar to do more inspections later.
"If I feel Lennar is not doing everything necessary, you'll be the first to know," Massing told the commissioners.
Mark Sustana, general counsel for Lennar, said the company has agreed to have Massing, an inspector hired by Lennar and a private inspector check the electrical wiring on several randomly selected homes at the same time on Friday.
But commissioners were so upset by the homeowner complaints that they suggested going further, such as banning Lennar from building new homes in the county.
"If their workmanship is shoddy, maybe we shouldn't allow them to work here," said Commissioner Michael DiTerlizzi.
Commissioner Sarah Heard also suggested shutting down Lennar's Martin County projects.
"I've heard enough," Heard said. "I think we should suspend operations out there and have them solely focus on bringing houses up to code."
Commissioner Lee Weberman said that if it turns out Lennar's workmanship is poor, he would support revoking its license to do business in the county.
Surprised that I haven't seen a "soft landing" press release from the NAR or NAHB yet..
grim
United States -5.9%
Northeast -36.3%
Midwest -20.8%
South 8.4%
West -12.7%
I am a little confused about the math. What is the percentage of new home sold in South?
60%?. Otherwise how we come up with -5.9%
From Reuters:
U.S. new home sales rise 4.6 percent in May
Sales of new U.S. homes again defied predictions of a slowdown in May and rose 4.6 percent, but median sales prices fell and the U.S. Northeast experienced its slowest sales tempo in nearly two years, according to a government report on Monday.
The pace of new home sales rose to a seasonally adjusted 1.234 million unit annual rate from a downwardly revised 1.180 million unit pace in April, the Commerce Department said.
Economists polled by Reuters were expecting sales of new homes to slow in May to a 1.150 million unit pace from an originally reported 1.198 million unit rate in April. The March sales pace also was revised downward to 1.114 million unit rate from a previously reported 1.142 million pace.
Compared with a year earlier, the May sales pace was down 5.9 percent.
Median selling prices fell 4.3 percent from April to $235,300, a figure that was still 3.1 percent above the year-ago median price of $228,300.
I am a little confused about the math. What is the percentage of new home sold in South?
60%?. Otherwise how we come up with -5.9%
More than 50% in May.
Sold During Period
U.S. 1,234
Northeast 58
Midwest 190
South 669
West 317
grim
Currently, there are 31,486 properties advertised for sale in NJ on our site. For Residential Properties that are Multiple Listed with Garden State, 99% are available to be searched on this site.
http://www.gsmls.com/
The big question is, will data such as this cause the Fed to go too far?
grim
Hopefully the Fed WILL go "too far" (half point increase), and burst this crazy bubble.
grim said...
The big question is, will data such as this cause the Fed to go too far?
grim
6/26/2006 11:00:04 AM
Yes. Inflation in the system is considered by the Fed as the prime toxin for the economy, so everything else be damned.
It comes comes down to a definition of "too far". Too far for everyone's tastes - yes. As a policy decision, prudent and shrewd.
chicago
Minutes, I often see $2M houses next to $400K houses.
Not.
What was that flipper thinking? (Or, more accurately, was that flipper thinking?)
Foreclosures Jump
In another nightmare of sorts, the Associated Press is reporting Foreclosures May Jump As ARMs Reset.
As more hybrid adjustable rate mortgages adjust upward and housing prices dip, many Americans can't refinance out of this squeeze. They are finding themselves trapped in too-high monthly payments, and some face foreclosures.
In the last several years, millions of Americans took equity out of their houses and refinanced when interest rates were at historical lows and housing prices were at record highs.
Many of them chose to refinance into hybrid ARMs that lenders were aggressively pushing. ARMs, which featured a low introductory interest rate that resets upward after a set period of time, were easier to qualify for than traditional fixed-rate loans.
ARMs are now starting to fall by the wayside as the difference in interest rates narrows. The average rate on a 30-year fixed rate loan in May was 6.60 percent compared to 5.63 percent on a one-year ARM, according to Freddie Mac. In 2003, rates on a 30-year fixed were at 6.54 percent, while ARMs carried a 3.76 percent rate.
This year, more than $300 billion worth of hybrid ARMs will readjust for the first time. That number will jump to approximately $1 trillion in 2007, according to the MBA. Monthly payments will leap too, many beyond what homeowners can afford.
"ARMs are a ticking time bomb," said Brad Geisen, president and chief executive of property tracker Foreclosure.com. "Through 2006 and 2007, I'm pretty sure we'll see a high volume of foreclosures."
Last year, foreclosures hit a historical low nationwide at about 50,000. But that number has more than doubled since then, according to Foreclosure.com.
And delinquency rates appear to be rising, as well. While delinquency rates fell for most types of loans from the fourth quarter of 2005 because of a stronger economy, delinquencies for both prime and subprime ARM loans increased year-over-year in the first quarter, according to the MBA.
"ARMs are a ticking time bomb," said Brad Geisen, president and chief executive of property tracker Foreclosure.com. "Through 2006 and 2007, I'm pretty sure we'll see a high volume of foreclosures."
Bababababababa
BOOOOOOOOOOOOOYcott Houses!
Bob
555,000 New Homes For Sale In May, 2006
The median sales price of new houses sold in May 2006 was $235,300. The seasonally adjusted estimate of new houses for sale at the end of May was 556,000.”
The $235,300 median is down from the high in February 2006 of $250,800. The inventory looks like another record:
448,000 May 2005
458,000 June
459,000 July
477,000 Aug.
491,000 Sept.
492,000 Oct.
508,000 Nov.
515,000 Dec.
525,000 Jan. 2006
533,000 Feb.
547,000 Mar.
553,000 April
555,000 May
“The median price of homes sold did decline to $235,300, a drop of 4.3 percent from the April sales price. Economists believe that the huge backlog of unsold homes will put further downward pressure on prices in coming months.”
PAPAPAPAPPA
PANIC!
Bob
Just keep one thing in mind.
These numbers represent contracts, not closed sales.
Thus, these numbers don't take into account cancellation rates, which have been pushing higher lately..
grim
Freddie Mac reported: One-Year ARM At Highest Level In Almost Five Years
Freddie Mac [reported] the 30-year fixed-rate mortgage averaged 6.71 percent ... The 30-year FRM has not been higher since May 31, 2002, when it averaged 6.76 percent.
...
One-year Treasury-indexed ARMs averaged 5.75 percent this week ... The 1-year ARM has not been higher since August 3, 2001, when it averaged 5.77 percent.
the video of Volcker's speech of February 2005 at the Stanford Institute for Economic Policy Research
http://calculatedrisk.blogspot.com/2006/06/popular-internet-properties.html
Could the jump be because newer homes are being priced lower than older homes?
In the link provided average home prices have gone down by 3% from April.
Median price April :245,000
Median price May : 235,000
Average price April :302,000
Average price May :294,000
I bet existing home sales across the country will look a lot worse.
When is the existing home sales report coming out?
VB
EHS for May will be released tomorrow at 10:00am.
minutesfromnyc:
I've been seeing price increases as well. I think it can be attributed to the fact that because so many buyers are offering under asking price, sellers have resorted to raising their price so that the lowball offer is comparable to the price they initially wanted. And while anyone with access to the MLS will see through this little game---most people don't, and I doubt their realtor will tell them---after all, the buyer's agent makes more money when the buyer makes a higher offer.
Lindsey,
I started a new thread on the message board for MAY EHS predictions:
May Existing Home Sales Predictions
grim
From the Boston/New England area:
Economic Growth Continues
Here in much of New England, we bid up real estate while our competitors build-up real estate," said Frederick Breimyer, Boston area economist for the Federal Deposit Insurance Corporation and the president of NEEP.
"High housing costs work against future economic growth, largely because young families either cannot or choose not to pay for the cost of homeownership," said Breimyer.
"This is the group we should be most concerned about, for they either will be our future or the future for someplace else. Every community, every town, every city, every society needs to provide for its own future, and that means making adequate provision for young adults and young families. They require adequate housing, good education, and opportunities to find and hold good jobs. Each of these three basic requirements represents a separate, distinctive challenge for this region."
10Y touching 5.245%, not too far away from 5.25%.
jb
Hopefully the Fed WILL go "too far" (half point increase), and burst this crazy bubble.
Can you believe too far is still only @ 7% interest!?...Let them raise the rates.
We too are waiting for prices to become more realistic. We took ourselves out of the market this summer.
How can you give the Fed so much credit?
While the massive credit expansion was one of the factors that led to the development of the bubble. The bubble itself is, most certainly, not their bubble to pop..
grim
"Yes. Inflation in the system is considered by the Fed as the prime toxin for the economy, so everything else be damned."
Sure - but the funny this is that interest rates are a symptom of inflation, not a cause. The only real cause of inflation is increasing the money supply faster than GDP is expanding. It truly is that simple.
I appreciate your point on stimulus, but I think the concern is the collective decisions made by all actors in the economy, and the tremendous lag there is in the tools available for use.
The other interesting point is that most talking heads are purposely alarmists that squawk about "overshooting" because it is convenient and popular to do so.
Well how about "undershooting"?
This comment has been removed by a blog administrator.
While the NHS numbers were surprising, here is the daily jaw dropper:
US Treasury's Henry-Fannie, Freddie pose risks
U.S. mortgage finance giants Fannie Mae and Freddie Mac pose risks to financial systems that could hit primary dealers, tighten credit and reduce liquidity in markets, a Treasury Department official said on Monday.
"We at the Treasury are confident we are not simply 'crying wolf,'" Emil Henry, assistant treasury secretary for financial institutions, said in remarks prepared for delivery to a financial services industry group.
Henry said the potential for spillover into financial markets from any crisis at one of the government-sponsored mortgage finance enterprises (GSEs) is "nothing short of breathtaking."
His comments came as the administration pushes for legislation that would tighten government oversight of the GSEs after multibillion-dollar accounting disasters at both companies. The Treasury Department has said that anything short of a regulator directed by Congress to cut GSE mortgage portfolio size is unacceptable, but some lawmakers disagree.
Henry said risks from GSEs could conceivably match the scale of the 1998 meltdown of the Long Term Capital Management hedge fund.
A deterioration in GSE financial conditions would almost certainly increase risk premiums and boost yields on GSE debt and mortgage-backed securities relative to Treasury yields and other benchmarks, he said.
Primary dealers holding large positions in GSE debt or mortgage-backed securities could incur substantial losses, which would spill over into other markets, he said.
Another trend I am beginning to notice is houses which are on the market for, say, 30 days are experiencing PRICE INCREASES???!!
I dont understand why though?
It's a marketing technique to get fence sitters motivated. They figure that people who have their eye on the house might make a move if they feel an urgency because the price is going up. Same psychology as when interest rates start to move up, creating urgency to buy before it goes up even more.
No, Skep-tic, there is an inventory glut because of "obstinate fencesitters" like me who are not being honest and forthcoming with our bids.
That's what I've heard.
"The buyer's a liar." If you (the seller) just wait them out, they'll come with the bid.
Pat
Market Alert Market Alert:
Summer vacations and other disctractions cause home prices to drop.
RealtyTimes Market Report:
Summer arrived this past week on June 21st. Interest rates continue to inch their way but haven't quite hit the 7% mark which is still very low! Buyers may have a bit more to chose from now that families are winding down the school year and planning Vacations. This distraction is causing a slight downward trend for home prices. Sellers should plan to make their homes stand out by sprucing up. Clean and uncluttered is the best way to show off the space your home has to offer. A fresh coat of paint really goes a long way.
grim
Nothing like a fresh coat of paint to get the market movin' again...
Did you see the market report on realtor.com from the broker in Bergen county?
It's a hoot, although a little dated.
saw some comments yesterday on arm resets, anyone have any thoughts on its effect on NJ market, market stats on people using arms in NJ?
"High housing costs work against future economic growth, largely because young families either cannot or choose not to pay for the cost of homeownership," said Breimyer.
"This is the group we should be most concerned about, for they either will be our future or the future for someplace else. Every community, every town, every city, every society needs to provide for its own future, and that means making adequate provision for young adults and young families."
New Jersey should sit up and take notice and remember that while "Adult" communities might not increase school rolls, they don't provide for a very profitable future either.
Think about this issue on a relative basis. NJ is in trouble when times are good. We are sliding backwards, while other states are investing in the future. Think GM versus Toyota.
OPINION from the laughably right leaning WSJ editorial pages.
=================
REVIEW & OUTLOOK
States of Plenty
June 26, 2006; Page A14
America's governors must feel as if they've won their own state lotteries. Thanks to the snappy growth of the U.S. economy over the last three years, state treasuries are now overflowing with tax collections.
At least 40 states are in the black, and only a handful, such as the Gulf states wrecked by Hurricane Katrina and perpetually hapless New Jersey, are still spilling red ink. In 2005 state and local revenues grew by 10.5%, according to Census Bureau data, and so far this year tax receipts in most states are climbing at close to that level. California's income tax revenues in April were up an astonishing 55% from last year. Oklahoma is so flush it has exceeded its legal limit on its rainy day fund.
This is all in contrast with 2002-03 when states were scrambling to pay for the many new spending commitments they'd made in the 1990s. Consider the amazing turnaround of California and New York City. Four years ago both were teetering on insolvency, but now Governor Arnold Schwarzenegger and Mayor Michael Bloomberg are boasting multi-billion dollar surpluses. They prove that among the biggest beneficiaries of President Bush's 2003 tax cuts have been state and local governments, even though tax cut opponents predicted states would be losers.
By our calculations, based on revenue estimates from around the country, states and cities will collect $50 to $100 billion in unexpected revenues this year (see chart). That's the good news. The bad news is that most Governors and state lawmakers are spending this money so recklessly that they're making Republicans in Congress look like penny pinchers.
State spending is expected to increase by double digit rates this year, and in many state capitals, such as Albany, this will be the fastest rate of spending growth since the 1970s. Fortunately, some states are investing surpluses in pro-growth tax cuts to boost their economy's competitiveness.
[edited]
nice article on money.cnn.com
The only reason you would think they were up [is] the aggressiveness of the builders' sales techniques," he said. "They're using Realtors more, they're using incentives more. In our January survey, 18 percent said they were doing some level of price cutting. In June, that was up to 41 percent. A year ago they had to do hardly anything to sell. They just had to whisper in the woods that they had a house and the buyers would come running."
link
Lots of sellers giving up / forced to face reality:
MLS 2273504
$850K junk cape cod on busy street
WITHDRAWN after 60 days
http://www.realtor.com/Prop/1059294769
MLS 2275762
$840K junk ranch
WITHDRAWN after 60 days
http://www.realtor.com/Prop/1059682078
MLS 2273624
$940K => $915K colonial on busy street
WITHDRAWN after 70 days
http://www.realtor.com/Prop/1059294679
MLS 2239439
$699K => $659K junk cape cod
EXPIRED after 5 months
http://www.realtor.com/Prop/1055161849
Also a bunch of others in the past few weeks.
(These realtor.com links will soon no longer work.)
gsmls count - 31,510
does anyone know what the inventory level was during 1989-93?
"OPINION from the laughably right leaning WSJ editorial pages."
Makes for a nice juxtaposition with the laughably left leaning NY Times. :)
Unrealtor - You're kidding right? The NYT is a shill for the Republicans.
Makes for a nice juxtaposition with the laughably left leaning NY Times. :)
6/26/2006 05:16:20 PM
Ultimately, I don't really care that much about these types of issues. However, I really get fatigued by the NY Times' taking reality, and reconstituting through the view of an affluent individual who either inherited or married into their wealth, and walks through life with a repressed feeling of guilt that colors everything they think and say.
Anonymous 5:34
Have you ever read the paper? I love the Times, but the last thing I would think to describe it as is a "shill for the gop."
I don't think prices will fall until there is a credit squeeze. We still read reports about ARM loans constituting 30% of total mortgage applications. The credit squeeze will not happen until we see default on loan payment. The default on loan payment won't happen until about 6months to 1 year from when majority of the ARM loans reset. In my opinion 2008 spring is when things might start looking good for a buy.
unrealtor,
MLS 2239439
$699K => $659K junk cape cod
EXPIRED after 5 months
http://www.realtor.com/Prop/1055161849
I actually try to lowball this one at $570k which I think is a very fair price under the current market, but the seller denied the reality.
"Unrealtor - You're kidding right? The NYT is a shill for the Republicans."
I hope you're joking. They just disclosed national security secrets twice in the past few days for no other purpose than to hurt their boogeyman GWB.
I think there may be prosecutions this time, though, they've gone too far one too many times with their publication of classified national security secrets.
"Ultimately, I don't really care that much about these types of issues. However, I really get fatigued by the NY Times' taking reality, and reconstituting through the view of an affluent individual who either inherited or married into their wealth, and walks through life with a repressed feeling of guilt that colors everything they think and say."
Well put. There's a term for such self-loathing, but this is not a politics board.
"I actually try to lowball this one at $570k which I think is a very fair price under the current market, but the seller denied the reality."
They'll regret not taking your offer.
The comps on that street are historically very low, a couple from domania.com:
10 Mount Ararat Rd Aug 2004 $495,000
19 Mount Ararat Rd Aug 2004 $375,000
15 Mount Ararat Rd Dec 2003 $415,000
10 Mount Ararat Rd Nov 2003 $445,000
Unrealtor sais: I think there may be prosecutions this time, though, they've gone too far one too many times with their publication of classified national security secrets.
But I guess it was OK for the White House to give away the undercover identity of a CIA agent. We lost all sense of democracy in January 2001. Thanks God for the NY Times and anyone else who exposes this administration for the crooks and slime that they are.
All politicians are crooks.
Can anyone tell me what the housing inventory was during 1989-1991?
GSMLS - 31564. For some reason GSMLS seems to be growing at about 70 a day for sometime now. How easy is it to fudge GSMLS numbers?
I thought about housing inventory in 89-90 and asked here last week.... nothing came back. But when I think about interest rates dropping then, I'm not sure the inventory pattern will follow now. Plus homes then didn't function as Mac machines.
Treasury Secretary Snow's letter to the traitors at the NY Times:
http://tinyurl.com/mdg2s
And "Anon" who writes: "We lost all sense of democracy in January 2001."
Please get a grip.
I'd suggest the exercise of some critical thinking skills (if available), as there was no "covert agent leak," as anyone who actually read the fabled Novak article would know:
http://tinyurl.com/b4wrn
I will not post further on these topics in this thread.
I think this one is just juicy considering its implications:
Property Address
67 Jefferson St
Hoboken, NJ 07030
Market Value*
$785,166
Default Amt
$500,000
RE: Housing inventory in 1989
Have you looked at Grim's article:
http://www.youdovoodoo.com/80sbubble.htm
The link to it is always on the right sidebar.
I just read this quote.
excellent
========================
"Advertisements contain the only truths to be relied on in a newspaper." -- Thomas Jefferson
Unrealtor said: I will not post further on these topics in this thread.
"So there!" LOL. You get a grip. Republicans! HAH!
"So there!" LOL. You get a grip. Republicans! HAH!
Substance-free, as expected (mixed with a bit of tourettes)
Try picking a handle, by the way.
"But I guess it was OK for the White House to give away the undercover identity of a CIA agent."
1: She was not an undercover officer.
2: Wilson was lying publicly about his trip and who arranged it.
3: White House was not the leaker. It was (according to most experts) Armitage who is anti-war state dept official.
The only purpose of his actions was to hurt Bush admin. He didn't do any work in Nigeria. It is still open issue (the conclusion made by european agencies and 9/11 commission was that the former head of Iraqi nuclear program met with Nigerian officials - we don't what they talked about)/
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