Alison Creamer's Real Estate Blog

New home sales fell 4.3% in August to a 5.5M unit rate, about as expected. The median home price fell from $228.7k to $224.5k, which is down 0.2% from a year ago. Median price series are distorted by the weakness in subprimes, because the lowest priced houses are not turning over very quickly, which means the mix is skewed toward larger, more expensive homes. The Case-Schiller 20-city composite index, which is quality weighted, was down 3.9% year-over-year in July. Lanar Homes, which took an $848mm write off last quarter on declining real estate values, sited price declines in the existing homes market as a significant contributing factor to their current difficulties.

All subcomponents of sales were lower in August. Condo sales were down 8.0%, significantly more than single-homes, which fell 3.8%. Sales fell in all 4 regions, with the biggest decline of 9.8% in the West. The months’ supply of homes for sale rose to 10.0, a record for the total homes series, which starts in 1992. The months’ supply of single-family homes rose to 9.8 months, the highest since February 1988, when it was at 10.2.

Separately, the Conference Board’s consumer confidence index fell a little more than 5 points in September, from 105.6 to 99.8. The present situation index fell from 130.1 to 121.7, while expectations were down less, falling from 89.2 to 85.2. Consumers, well aware and quite worried about recent dislocations in the financial market, apparently expect the situation will resolve quickly.

Bottom line: A 5 point drop in consumer confidence may be big enough to translate into a behavioral decline in retail sales, although retailers, which reported weaker sales in August, have posted better weekly numbers in September. The economic fallout from another significant downdraft in home sales may be a tougher bullet to dodge. There are already close to a hundred thousand newly unemployed mortgage company employees looking for work on top of several hundred thousand unemployed residential construction workers. Housing is weakening further due to the significant tightening of mortgage credit standards in August. Data like this should shift perceptions about the Feds decision to cut rates by 50 bps last week from worries about inflation too worries that more cuts might be needed to prop up the economy.

Chris Low and

Lindsey M. Piegza

Hi !!!!

Well its Labor Day weekend and Im off to an open house. Im trying in this crazy market to work work work. Im currently accepting new buyers so if you know someon pass them my information, or better yet let me call them directly.

Heres my newest listing 3540 Dandelion it is on the market for 221,900. So cute you have to see it !