Buying & Selling: Grim Housing News

The last two days have seen some bad news on the real estate front that may dampen Ben Bernanke's cautious optimism.

First came the news that home sales fell in 40 states, with median home prices dropping as much as 50 percent:

The National Association of Realtors said the states with the biggest declines in sales from October through December compared with the same period in 2005 were: Nevada, down 36.1 percent; Florida, down 30.8 percent; Arizona, down 26.9 percent; and California, down 21.3 percent. In all, the Realtors said sales declined in 40 states, six states showed gains and one state, Utah, had no change in activity in the final three months of last year. There was not enough information from Idaho, New Hampshire and Vermont to make a comparison...
In all, median home prices fell in 49 percent of the 149 metropolitan areas surveyed, the largest percentage of areas showing price declines in the 27-year history of the Realtors' price survey.

Although the Lereah attempted to spin this as the "low point" of the housing slump, he can't even hide the fact that his own house is declining in value, so how can we take him seriously with anything else?

Now today comes the news that the brutally cold weather has helped push new home starts to their lowest level in ten years. Of course, the weather can't solely account for the results, as it's the latest example in the overall decline in new home buyers:

But housing starts fell steadily last year as the market was buffeted by rising interest rates and slowing demand following years of spectacular growth which unleashed a speculative frenzy in some cities.

Bernanke may need to be checking a lot more carefully to ensure that said "spillover" isn't leaking out of the cracks and fissures by the gallon.

Posted at February 16, 2007 12:15 PM

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The last two days have seen some bad news on the real estate front that may dampen Ben Bernanke's cautious optimism. First came the news that home sales fell in 40 states, with median home prices dropping as much as 50 percent: The National Association of Realtors said the states with the biggest declines in sales from October through December compared with the same period in 2005 were: Nevada, down 36.1 percent; Florida, down 30.8 percent; Arizona, down 26.9 percent; and California, down 21.3 percent. In all, the Realtors said sales declined in 40 states, six states showed gains and one state, Utah, had no change in activity in the final three months of last year. There was not enough information from Idaho, New Hampshire and Vermont to make a comparison... In all, median home prices fell in 49 percent of the 149 metropolitan areas surveyed, the largest percentage of areas showing price declines in the 27-year history of the Realtors' price survey. Although the Lereah attempted to spin this as the "low point" of the housing slump, he can't even hide the fact that his own house is declining in value, so how can we take him seriously with anything else? Now today comes the news that the brutally cold weather has helped push new home starts to their lowest level in ten years. Of course, the weather can't solely account for the results, as it's the latest example in the overall decline in new home buyers: But housing starts fell steadily last year as the market was buffeted by rising interest rates and slowing demand following years of spectacular growth which unleashed a speculative frenzy in some cities. Bernanke may need to be checking a lot more carefully to ensure that said "spillover" isn't leaking out of the cracks and fissures by the gallon.