35.3 percent. By any measure, a staggering number. It is by how much new home sales have dropped from July 2007.
But we are in one of those wierd times when figures seemingly contradict one another and “trends” are hard to keep up with.
For example, while it is true that new home sales are down more than 35 percent since July 07, last July sales of new homes actually went up, though not much…2.4 percent, according to the Commerce Department.
Here’s the catch,though.
The National Association of Realtors, says the Associated Press, reports the “number of unsold properties hit an all-time high, an indication that the worst housing slump in decades is far from over.”
Why the confusion?
When things are in flux–especially the economy–it is not all that uncommon for “trends” to seemingly contradict one another. But that often has less to do with the reality of the situation than with the way in which we tend to see the world–in terms of black and white, rather than many shades of grey.
For instance, another new report just out–Standard & Poor’s/Case-Shiller U.S. National Home Price Index–shows that home prices dropped by the sharpest rate ever in the second quarter–15.4 percent during the period April to June, reports the A.P.’s economics writer Jeannine Aversa.
But, of course, it is this very drop in home prices that has brought about a mini-buying boom in parts of Southern California for people with excellent credit who are seeking and getting houses at relatively cheap prices. See what I mean about shades of grey?
Adding to this period of flux and uncertainty is the open question of what will eventually happen with Fannie Mae and Freddie Mac? Both have an enormous impact on mortgages and both, some fear, may soon be in dire need of the very government bailout they claimed only a few months back they didn’t want nor need.
What happens with Fannie and Freddie will , to a large measure, help define the housing situation in this country for some time to come…their fate is THAT important.
In the meantime, we all have to take headlines with a grain of salt…The headline of Monday will surely be challenged if not flat out contradicted by the headline of Tuesday…and on it goes.
Like I said, things are in flux. Uncertainty rules!
Related posts:
- Existing Home Sales Hit 2nd Highest Level Ever
- New Housing Law Makes Costly Tax Changes For Real Estate Investors
- Earning Your Keep: What Makes a Good Real Estate Agent
- Sign of the Times: Southern California home sales down 30 pct in September
- Say Again: A JUMP In Home Sales?
Article Author: Charles FeldmanCharles has written 179 articles for us.
Visit Charles's Website: http://www.thefeldmanblog.com
Charles is currently reporting for KNX Radio in Los Angeles, is the co-author of the book No Time To Think, and can be found commenting about the news on his blog, The Feldman Blog, as well as on The Huffington Post.
Joshua Dorkin
{ 5 comments… read them below or add one }
Predicting where things are heading is an impossible task right now. For every pundit forecasting doom, there’s a report of more vulture funds buying up cheap property. I guess this is the sort of market where brave investors make a fortune – or lose their shirts!
Might be a good time to start looking outside the US for property investments.
When looking at what the media says you always have to take it with a grain of salt. It seems they always want to report the bad part of any story because that is what gets the ratings.
In UK where we are based, the prices have shown the first annual double digit drop for the first time since 1990. Nationwide house price index published yesterday showed that sellers are struggling to sell their houses even at a heavy discount.
An average selling price has traditionally been about 93% of the asking price across UK. We are contacted by vendors on regular basis who can not offload their homes discounted at 20% or more. Not that there is shortage of interest among buyers but they are unable to get mortgage loans they used to without having to put down 25-40% deposit.
Peter
I’m trying to figure out why my Pulte stock is improving right now- in light of the market, one would assume drops, not increases. It’s confounding.