New home sales take surprise tumble

[brooklynite]

Source: MSNBC

WASHINGTON - Sales of new homes dropped unexpectedly last month as the effects of a soon-to-expire tax credit for first-time owners started to wane.

The Commerce Department says sales fell 3.6 percent to a seasonally adjusted annual rate of 402,000 from a downwardly revised 417,000 in August. Economists surveyed by Thomson Reuters had expected a pace of 440,000.

It was the first decline since March. Sales in September were down 7.8 percent from a year ago.

The median sales price of $204,800 was off 9.1 percent from $225,200 a year earlier, but up 2.5 percent from August's level of $199,900.

Read more: http://www.msnbc.msn.com/id/33505013/ns/business-real_estate/

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Fox News commentators criticize the Administration's economic policies in three...two...one...

[xchrom]

1. well -- here we go. nt

[Tansy_Gold]

2. Who's surprised? Not anyone with half a brain who's been

following this catastrophe since its inception.


Certainly not

Tansy Gold

[imdjh]

3. Here's what I don't get. Absent illegal or unwanted immigration, shouldn't our population stabilize?

And while there will be people who want to buy a new house, the old ones will presumably be abandoned and eventually replaced, at some point having a full time industry of new subdivisions would seem to be a thing of the past. Would it not?

Right now, we have excess inventory of resale homes as well as new homes. Where is there demand for new subdivisions, and is it real demand? Or is it an emotional demand driven by the belief that there will be another run up and shut out in the real estate market?

There should be no new subdivisions being built right now. There should be no major population shifts except back to the cities. Our home building model should be to be tearing down permanent poverty zones and replacing them with live/work zones. Our business and employment model should be adapting to the new technologies, not simply moving those new technologies into antiquated business models. There should be no massive cube farms where people leave their computer equipt homes to go sit in a computer equipt cubicle.

You want to fight "global warming"? Stop worrying about snowmobiles and waverunners, and start some serious social and governmental pressure on corporations to stop playing 9-5 in the Box.

[Laelth]

4. The banks aren't lending.

For most of us it's impossible to buy a house if a bank will not extend credit. This, I suspect, is the crux of the problem.

:dem:

-Laelth

[Craftsman]

5. Banks are lending, I and my wife bought a home in July with a mortgage

[Robb]

6. Only partly.

Banks have slowed down lending, and are cutting back on lines of credit. The question we should all ask is why?

Why would banks take such obvious steps to drive away credit card customers, for example? Why reduce everyone's lines of credit? Short of a few over-the-limit fees, why would reducing a line of credit help them in even the slightly-long run?

I think it's because they see the system cracking. People are defaulting on mortgages, lines of credit, loans, credit cards... and the trend must be for that to increase. Otherwise there's no sense in banks backing down on lending.

OT: I don't know a single serious person who is surprised that the market is re-folding. The tax credit bump was the only thing holding it afloat these past months.

The "money," so to speak, is not on a recovery at this moment. :(

[angstlessk]

7. I would think first time buyers would purchase existing homes more

than new homes. All that home stock out there due to foreclosure is not surprising that new homes are not being built.

[brentspeak]

8. More "surprised" economists

[slackmaster]

9. Who could possibly have seen that coming?

:dunce:

[Capn Sunshine]

10. and yet the median home price is rising

that indicates some kind of balance between supply and demand, one would think.

[notesdev]

11. No it doesn't

it means foreclosures are moving upmarket - the median sales price is quoted so often because it is the easiest stat to misrepresent as being positive