New home sales plunge
"Sales of new homes plunged in March to the lowest level in 16 1/2 years as housing slumped further at the start of the spring sales season. The median price of a new home in March, compared with a year ago, fell by the largest amount in nearly four decades."
New home sales plunge to lowest level in 16 1/2 years
http://news.yahoo.com/s/ap/20080424/ap_on_bi_go_ec_fi/economy
New home sales plunge to lowest level in 16 1/2 years
http://news.yahoo.com/s/ap/20080424/ap_on_bi_go_ec_fi/economy
Comments
Well I'll up the ante.....I hate to say it...but the earth is flat.
I can understand why you hated to say what you did. Didn't you see the poll a few weeks back about "which inning" we are in? Tim's readers established we are only in the 2nd or 3rd inning. The "trough" is several years off. This spring will be a bust. Next spring....worse.
Having been thru 2 previous economic/RE busts all I can say is that this time is by far the biggest runup in prices I have ever seen. And the previous "smaller" busts usually took about 5 to 7 years from peak to trough.
Couple this with the "perfect storm" of the foreclosure wave, financial industry implosion, job layoffs, rampant inflation in food/gas/etc., and we are in uncharted territory.
Buy hey don't worry, those rebate checks will turn things around!!
old chinese saying...."the bigger the front, the bigger the back".
As a prospective buyer (renter with tons of cash, who would be buying for certain this summer if solid houses could still be found between $200k and $300k), I think the interplay between these two circumstances is one of the most interesting aspects of the bust. The peak was summer 2007, so you might expect the bottom (more or less) to be 2012. But the US is being hit by a figurative tsunami of financial bad news. My gut tells me that each problem means the lows will be lower and that they'll come a little quicker.
Layoffs, that should force sales (or foreclosures) which should hasten the bottom.
Inflation in necessities should reduce percentage income dedicated to housing, while deflation of real income should do the same.
Destruction of the financial sector should worsen it. Imagine if no loans were available at all! Within months, $100k would buy you a house in Seattle proper.
So, all that's to say...how do we know this crash won't be quicker (or much longer) than usual? A bottom in 2008? Certainly not! Almost no legitimate experts are predicting a nationwide bottom in 2008. And Seattle is certainly following trends. My guess is 2010 is the absolute earliest we can see a bottom.
That's what I like to hear! A quick fall, with lots of time to evaluate what you want to do about it. I'm not convinced, but I like to hear it.