Housing Crisis Over?

11:28 am EST July 27th, 2009 | News | 19 Comments

The annual rate of US new home sales jumped 11% in June, government figures have shown, a further indication that the housing sector is over the worst.

The Commerce Department said sales hit a seasonally-adjusted annual rate of 384,000 in June, against an upwardly-adjusted rate of 346,000 in May.

June’s sales figure was the strongest pace seen since November 2008.

However, the median sale price was $206,200 (£125,000), down 5.8% from May and 12% lower than a year ago.

Topic: Economy

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19 Responses to “Housing Crisis Over?”

Indeed says:

July 27, 2009 at 11:31 am

Housing Crisis Over?

No. Not by a longshot.
Gabriel McKee says:

July 27, 2009 at 11:34 am

Good lord no. Housing sales always pick up in the summer months. Have we reached the bottom? Who knows. I hope so.
SaveFarris says:

July 27, 2009 at 11:37 am

Not quite.

“We’ve turned the corner!”
Oliver Willis says:

July 27, 2009 at 11:38 am

“We’ve turned the corner!”
Yeah, thats pretty sad when Bush said that both as he was tanking the economy and sending people to die for no reason in Iraq.
Miracle Max says:

July 27, 2009 at 11:56 am

Sadly, no.

http://www.ritholtz.com/blog/2009/07/new-home-sales-fall-213/
Jamey says:

July 27, 2009 at 12:16 pm

Yeah, employment is a lagging indicator, so everyone’s buying houses in anticipation of that big paycheck that’s in the mail. Also. /rolls eyes

Stocks cratered, what, 9 years and 9 mos ago? And how long have stock prices remained stagnant (vis-a-vis inflation)? Yet the housing bubble that dwarfed the ’90s stock bubble is set to reinflate after only ten quarters? For reference: Last time housing imploded, ’89, prices fell for nearly three years and took the better part of a further five years just to stabilize prices. (’92-’97/’98). We’re still in for another round or two of mortgage resets, attending defaults, and the possibility that even a moderate rise in the cost of money.

So, no, a month or two of rising demand, no matter how furiously RE cheerleaders pump them, likely means little more than that people who had dug in their heels at 2005-2006 prices finally listened to reason, dropped their prices, and sold–and prices for new homes followed based on comps.
SaveFarris says:

July 27, 2009 at 12:25 pm

The Buck-Passer-in-Chief strikes again!

Remember that whole thing we did in January? That means Barack’s in charge, and he’s responsible. No excuses.
Dennis says:

July 27, 2009 at 12:32 pm

This is the thread that should be titled “File This Away”.

Much more so than the prior one.
PD100 says:

July 27, 2009 at 12:38 pm

Nice round of ill informed retorts that just float there, like a turd in a punchbowl. “Look at me!! I’m a conservative!!”

Don’t let us get in the way of your handgun assisted suicides, guys..
Dennis says:

July 27, 2009 at 12:44 pm

Nice round of ill informed retorts that just float there, like a turd in a punchbowl. “Look at me!! I’m a conservative!!”

Well, before we pull the trigger, PD100, why don’t you inform us? Tell us how the housing crisis is over. You can say the worst is over, but tell me how the crisis is over as the headline suggests?

Maybe this is a teachable moment.
justadood says:

July 27, 2009 at 12:45 pm

Prices might be plateau-ing for a while, but Banks still have a *lot* of inventory on their hands that at present they cannot unload. So either prices need to ‘correct’ some more, or banksters need to start loosening up their lending…

….Fat chance that, and risk the buzzkill of wasted bonuses?

No, we’re not out of this by a long shot….and might not yet even have seen the *real* bottom.

And No, Farris…Obama doesn’t own this one quite yet. The forces that set this avalanche in motion are all Dubya’s boys.

It’s Obama’s finger in the dike, but Dubya opened the dams….
Dennis says:

July 27, 2009 at 12:50 pm

When will Obama own it then, justadood?
PD100 says:

July 27, 2009 at 1:41 pm

“Maybe this is a teachable moment.”

Given the vapors generated by the Dow’s performance barely one month after the inaguration, not likely. Even in a homeschool setting.
Oliver Willis says:

July 27, 2009 at 1:55 pm

And I asked a question. I didn’t say its over. What I have said is that I think that thanks to Obama’s policies the economy will recover and while it won’t boom as it did under Clinton it will once again show Dems to be far better economic stewards than Republicans.

President Obama is now in control of our economic policies but 8 years of wanton neglect by the GOP can’t be cleaned up in just 7 months time.
philsimms says:

July 27, 2009 at 2:44 pm

I wouldn’t put too much stock in that number. It’s a load of bullshit.

Sales of new one-family houses in June 2009 were at a seasonally adjusted annual rate of 384,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 11.0 percent (±13.2%)* above the revised May rate of 346,000, but is 21.3 percent (±11.4%) below the June 2008 estimate of 488,000.

Thus, we in fact know that Sales fell from last year. They were down 21.3%, a number greater than the margin of error.

The monthly data, on the other hand, is not statistically significant. Therefore we DO NOT KNOW what the change was from last month, as the margin of error is greater than the reported data point.
SaveFarris says:

July 27, 2009 at 3:08 pm

Just for comparison’s sake, Bush was getting the full credit/blame for the economy four months in. This paragraph seems especially appropriate:

There’s some chance that voters are in a mood to assign blame. Some polls indicate that Americans are gloomier than ever about whether the country is on the right track. Fortunately for the ~~Bush~~[Obama] administration not many of them blame the new guy. But, now that he’s offered himself as the economy’s savior, say some ~~Republicans~~[Blue Dogs], he has potentially opened himself up for a big hit if six months from now people still feel the country isn’t going in the right direction. If and when that time comes, there’s not a lot a president can do to affect the economy other than pass another ~~tax cut~~[debt-crippling stimulus]. Voters won’t want to hear that the guy who claimed to be their savior doesn’t have any more tricks in his bag.
Indeed says:

July 27, 2009 at 3:28 pm

And I asked a question. I didn’t say its over.

OK, but I was reminded of this:

http://www.thedailyshow.com/watch/wed-september-13-2006/the-question-mark
Frank DiSalle says:

July 27, 2009 at 4:19 pm

Here comes the Numbers Game I predicted: “That .71 percent increase in seltzer sales is the first uptick since the 2nd quarter of 2000, a sure sign that Obama Economic Plan is working.”
We’ll hear more and more of those, while people work two and three jobs, if they can find them. Entry level salaries will drop, prices will go up, and the press will do everything they can to cover for Pres Obama .
Wilbur says:

July 28, 2009 at 1:23 am

“That .71 percent increase in seltzer sales is the first uptick since the 2nd quarter of 2000, a sure sign that Obama Economic Plan is working.”

I think it’s way too early to tell if Obamanomics is working, but those of you who were screaming “failure” at Obama because his inauguration didn’t immediately eliminate the housing slump and send the stock market soaring need to follow your logic where it leads or admit you’re full of it.

I exempt you from that, Frank. I know that your screams of “failure” are not based on transient economic phenomena but on charming just-so stories from Bastiat, Alcuin of York, Plotinus and other leading lights of contemporary economic thought.