Monday, February 27, 2012

Calculated Risk: New Home Sales: 2011 Still the Worst Year, "Distressing Gap" remains very wide

Calculated Risk: New Home Sales: 2011 Still the Worst Year, "Distressing Gap" remains very wide
"Even with the upward revisions to new home sales in October, November and December, 2011 was the worst year for new home sales since the Census Bureau started tracking sales in 1963. The three worst years were 2011, 2010, and 2009 with sales of 304, 323 and 375 thousand respectively."
People keep trying to talk up the market by finding a single statistic here or there that looks like it is going up. But the unavoidable fact is that the new housing market is getting worse, year by year.


Anonymous said...

All those HOA-burdened homes and no one wants to buy them?

New home sales said...

Very sad to hear that three consecutive years are worst for new home sales. Hope that it will not continue again for this year also.

Anonymous said...

"Dilbert" cartoonist Scott Adams recently wrote on his blog:

Apple uses its extraordinary design and engineering talents to reinvent entire industries. I think the housing market will experience a similar transformation as soon as some smart company creates home designs that make sense in today's world. Imagine how stimulated the economy would be if everyone who could afford a more expensive home really, really, really wanted one. That's a big change from now. Moving to a new home is such a hassle that you won't bother if all you hope to gain is an extra guest room or bigger closets.
A home's value is, for the most part, determined by its location and square footage. Sometimes the home's age and its view enter into the price. But mostly it's about size.
An important part of the home design would involve figuring out ways to reduce or eliminate ongoing operating and maintenance costs. Ideally, you'd want to avoid any Homeowners Association Fees...

Obviously, Mr. Adams is unaware that the homes value is determined by the sense of community and conformity to rules that can only be offered by a homeowners association.

That the number of HOAs has grown from a few hundred in the 1960s to about 300,000 today is evidence that HOAs have "passed the market test." What is needed to increase home sales is more HOAs, since it is obvious HOAs are what consumers want.

But with only 20% of homes governed by an HOA, the remaining 80% are undesirable; and the owners of those homes will not be able to find a buyer, prolonging the current economic crisis.