From CNN Money:
With rising mortgage rates driving up the cost of financing home purchases, most economists have been looking for the real estate market to cool off in 2006 after several years of record sales.
But economist Bob Brusca said last month’s drop in new home prices is a sign that the market for new homes isn’t nearly as strong as the jump in sales would suggest.
He noted that the report showed an unusual drop in prices from both February and a year earlier, which could be a sign that home builders are cutting prices to move a large supply of new homes now on the market.
“New homes sales sprang back top life like a zombie in a cheap horror flick,” Brusca said. “And like that zombie, housing really is dead. Don’t let all that twitching fool you.”
He said that many of the new homes sold in March were probably built in a stronger real estate market.
And unlike existing homes, where sellers can live until they get an acceptable price, “builders can’t live in these houses unless they have a lot of family,” he said. “By and large they must finance them at rising interest costs.”
…
Meanwhile, average prices fell 7.1 percent from February to $279,100, after topping $300,000 for the first time in the February revised figures. The median price, which reflects the point at which half the homes sell for more and half sell for less, also fell 6.5 percent to $224,200.
And while month-to-month declines in home prices are not unusual, more significantly, prices also fell from a year earlier: a 2.2 percent decline in median prices and a 3.6 percent fall in average prices over that time. (emphasis added -grim)
CNN’s headline is completely disconnected from the actual article text.
The article headline, and sub-headline:
New home sales soar
March gain of 13.8% the biggest in 13 years, showing surprising strength in housing market…
I think “housing is dead” or working a “zombie” or two in there would have been better. :)
Avg and median prices down 6-7% MoM on high volume, a.k.a. high ‘sales’? Looks like a strong market to me!
HAHAHAHAHAHAHA.
This is certainly the beginning of along, slow decline. It’s the people with the most interest vested in real estate that are in denial. I’m glad to see that some of the fat, dumb and happy home buyers are finally beginning to wake up. Caveat Emptor – BAM! bullseye!
And even still, people are buying homes on ARMs ??!!??
Median prices fell 6.2% and it’s only the beginning
Ba ba ba ba ba ba ba boycott houses
Boooooyaaaaaaa
Bob
Isn’t it obvious what is happening with the new home sales?
Builders had to move their already-built inventory. So they cut prices. Sales up, prices down.
Would suck to have an existing home to sell when the brand new ones down the street are cutting their prices 6% a month . . .
grim you already see the project ‘on Valley road in Clifton
haulted. the real estate agent
will tell you that the builder
is having a problem refiancing.
however, i believe the project was
haulted by the county or town.
Pesche,
Do you mean the Four Seasons or the one across from the Quik-Chek?
I understand that the builder for at least part of the Quik-Chek project is a guy by the name of Yagins, who has built a few homes in that immediate neighborhood over the past few years.
His primary business is landscaping, and he lives in a very modest half duplex on Mandeville Road in Clifton. He also has a parcel on Stuyvesant Court in his neighborhood which has been approved for two one-family homes.
He’s had them listed with Coldwell Banker for months, (wants $679K) and has a huge preconstruction sign for “Stuyvesant Estates” on the site. If you’re in the area, you should take a ride by. It’s a joke.
If this is the builder you’re referring to, I wouldn’t be surprised that he’s in trouble.
yes that s the builder i was
referring to. what a mess.
estates yes, right.
Hi ##name##, I’ve been working on the backyard a few years. We finally added a pond and a waterfall but I am certainly openlandscaping to some tips on how to make our backyard look great for this spring and summer.