How low can you go?
The new home sale numbers came out today, and to no one's surprise, they were uglier than ever. Sales of new single family homes fell by 8.3% last month, according to Commerce Dept. data, the lowest level in seven years.
Year-to-year, new home sales were 21.2% lower than the level in August of 2006, according to The Wall Street Journal (subscription required).
Oh dear. So much for bottom calling. The housing sector has dragged on the U.S. economy for six straight quarters now, and shows no signs of getting any lighter.
The WSJ's Economics Blog got the reaction of a handful of economists. The language is grim.
"Hideous" Ian Shepherdson of High Frequency Economics said. "Housing is nowhere near the bottom; neither is its wider impact."
"Abysmal," said Joshua Shapiro of MFR, Inc. "None of this bodes well for near-term conditions, and prices will need to fall further to help clear the market."
The data "Suggests that it will be well into 2010 before the new homes category stabilizes," says Joseph Brusuelas of IDEAglobal
"Gloomy," reports David Resler, of Nomura Securities. "It's difficult to draw much that's positive."
"Not good," writes Richard Iley, BNP Paribas. "Sales are falling faster than inventories despite aggressive price cuts. With the full impact of the credit crunch yet to be felt, deflation accelerating and many mortgages rates up, not down, much worse is still to come."
So no bottom in sight then, according to the boys with the fancy calculators. Can the vocabulary of these numbers guys keep up with what's certainly in store for the future? Stay tuned!
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Reader Comments (Page 1 of 1)
9-27-2007 @ 10:17PM
Frank said...
When prices fall, typically, they do not fall alone. Instead, they come plunging down along with businesses, junk bonds, hedge funds, stocks, careers, property values, retirement plans and credits of all sorts. People become worried about the quality…that is, the real value…of their assets.
9-28-2007 @ 5:36AM
mazi rami said...
hope it gets better