March 24, 2010

NAR and The Commerce Dept Feb Figures

Sales of new single-family houses in February 2010 were at a seasonally adjusted annual rate of
308,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 13.0 percent below the February 2009 estimates. This represents a supply of 9.2 months.

Home sales are slumping again just as number of properties on the market is rising. So, prices will continue to drop. Low rates and tax incentives havent trumped a weak market. Even winter cant be used as the reason. NAR points to the weather as a reason but sales were actually strongest in the stormy Northeast and Midwest and weakest in the West.

Sales volume has retraced about two-thirds of its upward swing since last spring, said Sal
Guatieri of BMO Capital Markets Economics. Volume is only 7 percent above the level of February 2009, when many buyers expected the recession to develop into a depression.( Via NYTimes)

To date, we are looking at 2004 prices. A normal market has about six months of inventory,
today we are at 9.2 months of inventory and if Moodys forecast of another 3-6 million foreclosures come to market, we will see even lower prices. Nasty business this price
equilibrium process. 

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