Wikinvest Wire

It just keeps getting worse for homebuilders

Monday, January 28, 2008

The Census Bureau reported that homebuilders slashed new home prices by ten percent in December but sales volume fell by five percent anyway - to the lowest level in 12 years.
Another change of scale was nearly required for the chart above as home sales plunged from a downwardly revised, seasonally adjusted, annualized rate of 634,000 in November to just 604,000 in December, far below the consensus estimate of 650,000.

From year-ago levels, new home sales have plunged 41 percent, however, since cancellations are not included in the data, these figures overstate the health of the homebuilding sector as cancellations continue to increase.

The lower sales total contributed to a higher inventory of unsold homes that now stands at a 26-year high, rising from 9.4 months of supply in November to 9.7 months.

The median price plunged by 10 percent on a year-over-year basis, from $244,700 in December of 2006 to $219,200 last month, the largest annual decline since 1970.

The news just keeps getting worse for homebuilders.

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Anonymous said...

you should have changed the scale, I can barely see that little blue thing all the way to the right :)

Anonymous said...

Agree with jdw... can we see the graph with the left y axis at zero?

Tim said...

By popular demand...

Anonymous said...

This is great....I hope it gets MUCH MUCH worse...greedy freakin bastards. They need to go into the ground and hard.

Anonymous said...

Could you also include the "cancellations" into the data? Or at least could you do a best guess estimate?


Tim said...

I don't know that cancellation data is available anywhere. Anyone? If it is, a chart with the monthly cancellation rate along with median prices would be good.

Alice Cook said...

It is a great chart, but I wonder if you could push it back a few years, say to 1995. I suspect that 2007 new home sales are quite high when compared to the previous decade. As bad as 2007 seems, things are likely to get worse, before housing construction returns to long run trend

Alice Cook


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