Endless Winter for New Home Sales

As noted by Calculated Risk, global warming or no, the spring selling season for new homes never seemed to arrive this year.

There is a strong seasonal component to new home sales. In a typical year, the number of homes sold each month in March through May would be 40% higher than in December. Nine years out of 10, the rate would be at least 20% higher. This year? Only 9%.

And December 2007 was itself down 38% from December 2006 and down 50% from December 2005.

Why no spring? This graph from Peter Hooper may have something to do with it.

Source: Hooper (2008)

Comments

[johnthebear:]

WHAT THIS MEANS IS THERE IS NO FINANCING FOR COMMERCIAL PROPERTIES! THE BANKS ARE BROKE AND HAVE NO MONEY EXCEPT FOR THE VERY BEST CREDIT.

MORTGAGE INTEREST RATES ARE ON THE RISE... HEADING TOWARD 10%, LIKE THE 1970-90 PERIOD.

REALLY TOUGH TIME FOR THE REITS'S. THEY WILL NOT BE ABLE TO PAY DIVIDENDS LIKE THE PAST WHEN THEY TRY TO SELL THEIR PROPERTIES, WHILE NOI IS DROPPING. THE DOW JONES REAL ESTATE INDEX (IYR) IS HEADED DOWN.

2008 Jun 29 08:03 AM

[TN hick:]

SRS

2008 Jun 29 11:35 AM

[Danny Newton:]

Does anybody think that there is a demographic component to the housing slump? It seems like the number of people that need to chase jobs to new communities is going down because the baby boom demographis is starting to have an effect. Does anybody think that there is a demographic component to the housing slump? It seems like the number of people that need to chase jobs to new communities is going down because the baby boom demographic is starting to have an effect.

2008 Jun 29 03:52 PM

[ArtfulDodger:]

No hope in the long run to save our nation, as we've known it.

For as long as so many people want to keep leftists in power so that they can create more government to combat the problems and disasters that their government programs and legislation caused in the first place, we are eventually doomed economically.

And government bureaucrats do this over and over, but always wiggle out of what they've done by blaming private industry (Big Oil, Big Pharma, and the like, and of course a bogeyman such as Bush or Cheney or Rove), and the people for what they have brought about.

With the help of the Marxist media, the people then yell for the government to do even more, thus causing problems that will have to be faced in the future—and that means more government rules, regulation, and legislation that brainwashed parrots scream for.

And clearly, it doesn't help sending our forces around the world to carry out other nation's wars for them. You can't blame Bush for all of this either. The Dumborats in Congress voted to go get the Toy Tiger in Iraq (except for the members of the Black Caucus, which only votes for bills to punish American businesses and individuals); and Bush didn't put troops and bases in over 140 nations around the world. They were there when he took office.

Meanwhile, America has an invasion from the south, crashing stock markets and the dollar, along with hyper-inflation, declining property values, exploding crime (see Sean Hannity's America from Sunday, June 22, `08), and energy and food prices nearly equalling Germany's in the 1920s.

Enjoy the ride, especially those of you who're calling for even more leftists to take over so they can create more government to punish businesses and anyone else who is succeeding in the private sector.

Parasites engender more parasites of different types, because when one begins its feeding, it weakens the host, which invites even more suckers to the party. The host soon withers to nothing. Consider the American people the host.

2008 Jun 29 04:43 PM

[Dabbio:]

One of the things that led us down the wrong road was tilting at windmills, railing about these anti-free enterprise bogeymen that Artful Dodger brings up yet again. If anything, too much free enterprise led to the excesses that built the bubbles.

What really did us in was 63 years of peace. Easy living softens you up, and it softens up civilization, any civilization. How come you don't comment on such obvious things as the laziness of the average American worker? Why you think the Japanese ate our lunch in the automobile market? We just are not sharp any more. Sorry.

2008 Jun 30 12:43 AM

[cariqunyil:]

So people like the Artful Dodger think Bush isn't responsible for the War in Iraq, Marxists run the media, Latinos crashed the stock market, and the Congressional Black Caucus is responsible for destroying the economy?

Criminy, I can think of at least one very obvious reason this country is headed down the tubes, and it is mostly due to the individuals who make crazy insinuations and seem to blame everyone but themselves for voting in what amounts to the most incompetent administration in history...twice.

2008 Jun 30 05:46 AM

[Smalltownba...:]

I think you are all nuts. We over extended. We have over corrected and will eventually return to a normal credit market as soon as prices stabilize. Those buyers who qualify for their mortgages are having no problem getting mortgages. I am one mortgage banker who is busier than I have been since 2003. The reason is simple. Those who did not know what they were doing have been driven out of the market.

Every phase of the market, every downturn of the economy, every boom and every bust creates opportunities if you open your eyes and look for them instead of crying and sticking your head in the sand as the bear and the dodger appear ready to do.

2008 Jun 30 08:11 AM

[user123456789:]

It ALWAYS comes down to the individual, who as a group make up our economy. Where are all the products you buy made? How many times did you decide to buy from a local store rather than a national chain, even at a slightly higher cost? How many times did you decide to buy something you weren't sure you could really afford on credit? How often did you REALLY think about the consequences of your actions? And most importantly, how many people in the US thought JUST LIKE YOU? I think our current economy, culture, and place in the world speaks the answer, both good and bad. There are specific outcomes determined by specific actions, why do we act so surprised when they manifest?

2008 Jun 30 02:28 PM