Frankly beyond making a few comments on statistical truths, I do not follow the housing statistics well enough to intelligently comment. So with that, this post is a link to others who can.
Firstly the report from the Commerce Department:
Sales of new one-family houses in June 2009 were at a seasonally adjusted annual rate of 384,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 11.0
percent (±13.2%)* above the revised May rate of 346,000, but is 21.3 percent (±11.4%) below the June 2008 estimate of
488,000.The median sales price of new houses sold in June 2009 was $206,200; the average sales price was $276,900. The
seasonally adjusted estimate of new houses for sale at the end of June was 281,000. This represents a supply of 8.8 months at the current sales rate.
Calculated Risk notes New Home Sales increase in June, Highest since November 2008. (note the margin of error in the actual report on the month-to-month).
Calculated Risk has coined a new term, The Distressing Gap to quantify and graph the scale of new home sales vs. existing homes.
I believe this gap was caused by distressed sales - in many areas home builders cannot compete with REO sales, and this has pushed down new home sales while keeping existing home sales activity elevated.
Ritholtz, at The Big Picture is the naysayer and points to the massive tax incentives:
The $8,000 Fed tax credit (1st time buyers) and a $10,000 California tax credit (new homes only) likely helped out in NHS this month. Falling prices are also contributing to sales activity of the sector, which represents about 15% of the overall housing market.
and twists the spin his way with noting new home sales are down 21.3% for the year.
Myself, I am simply a lurker, you can decide how to read these statistics. But I do find CR's "distressed" graph the most interesting, especially with a projected 3.2 million foreclosures this year.
Bloomberg has the MSM cheerleading rah, rah article.
Is it enough to create jobs?
That is the most relevant question. Sure, it may be an improvement from last month. But, as Ritholtz points out, was it artificially inflated by subsidies and low low prices.
What happens when subsidies run out? Only time will tell.
But again it is certainly not enough to create jobs in real estate sector. And where is the demand for new homes? The drivers for housing demand are missing: employment and confidence.
Same goes for GDP growth: Is it enough to create jobs? If not then this "recovery" talk is just academic.
RebelCapitalist.com - Financial Information for the Rest of Us.
well for myself, this "debate" is easy
For my focus has always been on major policy, structural problems deep at the root of today's economy, which regardless of cycles, are pushing more and more people out of the middle class and over a very long haul are reducing the economy power of the U.S.
That said, on the keyword "recovery", I think this is being seriously abused. One can call a bottom, one can say the cliff diving has stopped but even if one has > 1.5% GDP growth, I really question using the keyword recovery when the middle class is not brought along with it and/or keyword "jobless" is used in conjunction. To me, "jobless" recovery means no recovery but that is due to the first paragraph and a firm belief that long term, the middle class is the economy, is the real strength which puts the U.S. as #1 and also is required to even have a Democracy or any form.
So, with that....CR really is "on" the housing markets and has been for years, but Ritholtz has been also.
I am beginning to suspect, as noted yesterday in midtowng's post, affirmed by the Atlanta Fed., this cycle may have anomalies which are not lending well to using past indicators as historical predictors.
I think CR's post on "distressed graph" is trying to dig around in this same arena, looking for divergent indicators as suspect.
But ya know, for us, who the f&*k cares about Wall Street if you're about to go homeless, can't get any job and can't make rent? Who cares if one cannot retire? ya know what I mean?
Quote of the Day
Ritholtz, who drives me nuts because he grabs stuff and doesn't link to it, has a quote of the day:
what was that about scale?