New Homes Sales Plummet More Than Expected

[Realistbear]

http://www.usatoday.com/money/economy/hous...new-homes_x.htm

New-home sales fall for first time since February

Posted 7/27/2006 10:14 AM ET

WASHINGTON (Reuters) — Sales of new homes fell more than expected in June to a seasonally adjusted annual rate of 1.131 million and the median home price fell for the second month in a row, the government reported Thursday, as the U.S. housing market showed more signs of cooling.

But durable goods were up by 3.1% and Ben may discount the housing market when looking at the next IR move. There is a lot of uncertainty in the market.

[AwaitingFairPrices]

http://www.usatoday.com/money/economy/hous...new-homes_x.htm

New-home sales fall for first time since February

Posted 7/27/2006 10:14 AM ET

WASHINGTON (Reuters) — Sales of new homes fell more than expected in June to a seasonally adjusted annual rate of 1.131 million and the median home price fell for the second month in a row, the government reported Thursday, as the U.S. housing market showed more signs of cooling.

But durable goods were up by 3.1% and Ben may discount the housing market when looking at the next IR move. There is a lot of uncertainty in the market.

RB,

I regularly visit some of the International Property Agent websites (UK based) selling the holiday villas, lifestyle properties etc, but I've not noticed any prices going down for new developments etc. Any thoughts on this?

AFP

[Lionel Richtea]

http://www.usatoday.com/money/economy/hous...new-homes_x.htm

New-home sales fall for first time since February

Posted 7/27/2006 10:14 AM ET

WASHINGTON (Reuters) — Sales of new homes fell more than expected in June to a seasonally adjusted annual rate of 1.131 million and the median home price fell for the second month in a row, the government reported Thursday, as the U.S. housing market showed more signs of cooling.

But durable goods were up by 3.1% and Ben may discount the housing market when looking at the next IR move. There is a lot of uncertainty in the market.

Christ - the US again.

How are things going in Azerbaijan. Realistbear?

[Realistbear]

RB,

I regularly visit some of the International Property Agent websites (UK based) selling the holiday villas, lifestyle properties etc, but I've not noticed any prices going down for new developments etc. Any thoughts on this?

AFP

They may be "Brit priced." If you go to a local EA in Florida for example you may find the discounts are there.

http://www.orlandosentinel.com/orl-mhomes2...-home-headlines

http://www.realestatejournal.com/buysell/m...060725-wsj.html

The big worry is that sales will fall so sharply that it could send shockwaves through the entire economy, much as the bursting of the stock market bubble in 2000 contributed to the 2001 recession.

Christ - the US again.

How are things going in Azerbaijan. Realistbear?

The US market influences the UK and EU markets directly. Obscure markets such as the one you cite have no effect. For those old enough to have lived through the last 3 HPCs they know that the US and UK went up and down intandem. The same kind of inflation and reckless borrowing is present in both the US and UK and neither market can sustain current levels in a slowing economy and tightening IR environment. For the UK, the pattern has been a short 6 month lag from the US conditions. Not long now.

[Lionel Richtea]

They may be "Brit priced." If you go to a local EA in Florida for example you may find the discounts are there.

http://www.orlandosentinel.com/orl-mhomes2...-home-headlines

http://www.realestatejournal.com/buysell/m...060725-wsj.html

The big worry is that sales will fall so sharply that it could send shockwaves through the entire economy, much as the bursting of the stock market bubble in 2000 contributed to the 2001 recession.

The US market influences the UK and EU markets directly. Obscure markets such as the one you cite have no effect. For those old enough to have lived through the last 3 HPCs they know that the US and UK went up and down intandem. The same kind of inflation and reckless borrowing is present in both the US and UK and neither market can sustain current levels in a slowing economy and tightening IR environment. For the UK, the pattern has been a short 6 month lag from the US conditions. Not long now.

Nonsense. And simplistic nonsense at that. The US market is driven by many factors that are not shared with the UK market and has been affected by macro changes such as the establishment of Fannie and Freddie that do not affec the UK market. Completely different dynamic.

I would also abjure that US buyers have more of an influence than Azerbaijanis and their former USSR ilk in the UK international (ie London) market.

[Realistbear]

Nonsense. And simplistic nonsense at that. The US market is driven by many factors that are not shared with the UK market and has been affected by macro changes such as the establishment of Fannie and Freddie that do not affec the UK market. Completely different dynamic.

I would also abjure that US buyers have more of an influence than Azerbaijanis and their former USSR ilk in the UK international (ie London) market.

Nonsense? Maybe, but then again maybe not:

http://news.independent.co.uk/business/com...icle1199377.ece

Hamish McRae: How a US house price correction could come home to roost on this side of the Atlantic

Published: 27 July 2006

It is the little signs that give you an early warning that something important may be happening. In this case it is the matter of US house prices, for, as here in the UK and in some other markets, it has been a housing boom that has helped support consumption growth. Now, it seems, the boom is over...../

Here in the UK we were bustling along with consumption growing between 3 per cent and 5 per cent a year from 1996 through to 2005, but now that is down to about 1.5 per cent a year. And of course while what we do is not material to the world economy, what the Americans do is. You can do the sums.

The US accounts for about 30 per cent of world GDP

and closer to 40 per cent of incremental demand. Consumption is equivalent to 70 per cent of US GDP. So if it slows from its average of about 4 per cent a year to say 1.5 per cent, that could knock one-third off the world's incremental growth next year.

[Lionel Richtea]

Nonsense? Maybe, but then again maybe not:

http://news.independent.co.uk/business/com...icle1199377.ece

Hamish McRae: How a US house price correction could come home to roost on this side of the Atlantic

Published: 27 July 2006

It is the little signs that give you an early warning that something important may be happening. In this case it is the matter of US house prices, for, as here in the UK and in some other markets, it has been a housing boom that has helped support consumption growth. Now, it seems, the boom is over...../

Here in the UK we were bustling along with consumption growing between 3 per cent and 5 per cent a year from 1996 through to 2005, but now that is down to about 1.5 per cent a year. And of course while what we do is not material to the world economy, what the Americans do is. You can do the sums.

The US accounts for about 30 per cent of world GDP

and closer to 40 per cent of incremental demand. Consumption is equivalent to 70 per cent of US GDP. So if it slows from its average of about 4 per cent a year to say 1.5 per cent, that could knock one-third off the world's incremental growth next year.

The guy's got to write something... no matter how irrelevant. It's his job.

What is the basis for his smug yet vague:

It is the little signs that give you an early warning that something important may be happening. In this case it is the matter of US house prices, for, as here in the UK and in some other markets, it has been a housing boom that has helped support consumption growth. Now, it seems, the boom is over.

Which boom is over: housing, or consumption, or both? Is his article pertinent to consumption forecasting or house price forecasting, neither or both? Which sums should I do? How much of the world's growth is UK growth? What is the timeframe / lag? Why is the house price growth to consumption beta not consistent? If it isn't, and there is bugger alll covariance, what is the point of mentioning it? So many questions, such a small and arbitrary quote.

And the most important question of all: why did you post this quote and why the hell is is relevant to anything? Highlighting an obtuse pile of random macroeconomic pants like this surely just muddies the issue.