Average New House Price Drops To Lowest Since 2003

[Huey P. Long]

Today's new annualized home sales print was 307k, below expectations of 315k (yet oddly better than last month's downward revised which moved from 313k to 303k, wink wink nudge nudge Census bureau). This is not to be confused with the actual number of houses sold which came at a whopping 25k, and the third month in a row in which under 500 homes sold in the over $750,000 category. Yet the most notable data point was the average new house sale price which dropped to $242,300. This is the lowest price since 2003! Something tells us that an MBS LSAP is pretty much guaranteed at this point.





http://www.zerohedge.com/news/average-new-house-price-drops-lowest-2003

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Its going lower,expectidly, imo.

[Old and In the Way]

1. That new home sales graph is interesting.

The Bush administration was doing everything possible to make home sales/refi's the centerpiece of their domestic economic policies for the 2004 re-election. They made that bubble possible because the 2002/2003 taxcuts did nothing for real economic growth. Making mortgage money available to anyone gave the economy a boost and gave people a false sense of security as their property values/credit lines increased dramatically. That couldn't last forever, but, who cares? It got them re-elected. So now we have both a crappy economy and the steady evaporation of real property values.

[DCBob]

2. Which is closer to reality than the peak value in 2007.

Those bogus values were based on a gigantic real estate ponzi scheme orchestrated by wall street and the banksters and enabled by the Bush admin.

[frazzled]

3. And sadly, it's probably a necessary correction

Housing prices were rising at a much faster rate than incomes (especially in certain areas of the country).

We sold a house in 2004 (job move to another state) that we'd bought in 1999. It seemed ridiculously too much money to spend in back 99 (though we had little choice: we needed to purchase a home), and we thought, it will never go higher because real estate is so overvalued right now. Well, we were wrong. And when we sold the house five years later we made a tidy profit. That was the good news. The bad news was that we put all that equity into the new residence we bought in the new city, which also seemed overvalued. Indeed, 7 years later our place is probably worth a fair amount less than we paid. The only good news is that we're not underwater, having put all the equity from the previous house into a down-payment for the new one. But we would have been better off putting half that money into even a low-yielding money market account or something. As it is, we lost probably half of the "funny money" we got from the inflated price in 2004.

[Huey P. Long]

4. Kick for 'green shoots' and deadbeat, too much housers.