Home Prices Take Record Dive
Mish Moved to MishTalk.Com Click to Visit.
In the shadow of the headline Monthly new-home sales hit a 14-year high is the more important subtitle "prices taking record dive".
The beleaguered housing industry is sending mixed signals, with sales of new homes surging in April by the biggest amount in 14 years while prices endured a record plunge. Analysts said the price drop could provide evidence of builders' desperation. They are looking to reduce a glut of unsold homes in the face of the worst slump in sales in more than a decade.Good News
The Commerce Department reported Thursday that sales of new single-family homes jumped by 16.2 percent in April to a seasonally adjusted annual rate of 981,000 units. That was the biggest one-month sales gain since a 16.4 percent surge in April 1993. Even with the increase, however, sales are 10.6 percent below the level of a year ago.
The median price of a new home -- the midway point between the costliest and cheapest -- fell to $229,100, a record 11.1 percent below the March level. The price was 10.9 percent below the level of a year ago, the biggest year-over-year price decline since 1970.
Analysts said the drop in home prices probably reflected efforts by builders to cut prices more aggressively to sell homes. The inventory of unsold new homes fell slightly to 532,000 in April. It still would take six months to deplete this inventory at the April sales rate.
- The Census Bureau Report shows new home sales are up 16.2% from March
- The Census Bureau report shows that housing inventory plunged from 6.7 months supply to 5.8 months supply.
- Median new home prices made a record plunge
- Those prices do not include incentives that are running rampant
- The new home sales figures will likely be revised lower
- March sales were revised lower from 858,000 to 844,000
- New home sales do not include cancellations
- The margin of error on new home sales is +- 13%
- Median home prices are now reportedly back to July 2005 prices and there were few if any pricing incentives in summer of 2005
- Home for sale dropped 540,000 to 532,000 units.
In spite of a record decline in median sales price and a 14 year high in new home sales, actual inventory of homes dropped a mere 8,000 units from 540,000 to 532,000 units.
Having trouble paying the mortgage?
No Problem. Just Charge-It.
American Express is breaking new ground, allowing its card members to pay their monthly mortgage bills on the card. I know what you're thinking, but hold on... Amex is requiring that these be prime loans only, so you can forget that whole subprime mortgage implosion issue. And of course, they'll be charging you $395 to enroll in the program.How anyone can think this is a good idea is simply beyond me. I guess everyone thinks prime is safe. Then again all the lenders acted as if subprime was safe. And of course we all know how well "contained" this problem is, don't we?
"Obviously you have to be approved for the loan and depending on your credit line, it's all governed by the same standards," Christine Elliott of American Express tells me.
The loans, for now, also have to come from American Home Mortgage Corp the first lender to offer this Express Rewards Mortgage program, and oh to think of the rewards!!
Reality TV
Check out the Flip This House reality show on A&E. The entire event was staged right down to "rented landscape" buried in pots that was removed after the filming. It is quite amazing what passes as reality.
Half Price Houses
There is a great video on YouTube about half price houses in zipcode 95832 (Sacramento California).
Less than 2 years ago the above house sold for $526,000. At the recent courthouse foreclosure auction no one wanted it even at half price. That's reality.
This post originally appeared in Minyanville.
Mike Shedlock / Mish
http://globaleconomicanalysis.blogspot.com/
