New home sales plummet in February
see "U.S. New Home Sales Fell 10.5% in February to 1.08 Million Rate" (Bloomberg, 3/24/06)
http://www.bloomberg.com/apps/news?pid=10000087&sid=ak3nY_rjHW9M&
Although February isn't a great month on which to gauge housing, today's report on new home sales was truly horrible. Estimates were for an annual rate of about 1.20 million homes, and the report came in at 1.08 million, a drop of over 10% from the prior month.
Even more frightening for real estate bulls is the current inventory of unsold homes at just below 500,000....a record, as well as prices which continue to decline.
My guess is that you will see weakness in residential real estate snowball as the "weak hands" buyers, i.e. speculators and those buying more house than they can afford because they hope it will appreciate in price faster than their adjustable rates mortgages increase in cost.
I think housing prices will decline (slowly in most places, quickly in others) until you see a special report on CNN asking "Will Real Estate Prices Ever Go Up Again?" When you see that story, go buy a house.
| Print article | This entry was posted by Rossputin on 03/24/06 at 01:22:41 pm . Follow any responses to this post through RSS 2.0. |
Yours truly
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03/24/06 @ 08:12:52 pm
Ross, do you wish you had waited a little longer to buy yours?
03/25/06 @ 08:07:09 am
Hi Lucy,
As a general matter, yes, I do wish I were not buying real estate now. But more specifically with this house, because of the way it was sold we got a very good price on it. Also, I think Boulder has some demographic trends in its favor with so many people from the coasts wanting to move here. So, although I think real estate is going down, I think I probably won't do worse than breaking even on this particular transaction.