NYT: Sales of New Homes Stay Strong in October, Setting Record

Sales of New Homes Stay Strong in October, Setting Record
By VIKAS BAJAJ
Published: November 29, 2005


Sales of new homes surged to a record in October, the government reported today, bucking recent reports of a slowdown in the roaring housing market.

New home sales jumped 13 percent last month, to an annual pace of 1.42 million, and selling prices increased modestly, the Commerce Department said. The report comes a day after the National Association of Realtors said existing home sales fell 2.7 percent last month and inventories rose to their highest levels in more than two years.

The positive housing news was accompanied today by two reports that showed a sharp rise in consumer confidence this month and higher orders for big-ticket goods like planes in October.

New home sales, which account for about 15 percent of the overall housing market, tend to increase and decrease more erratically from month to month than the far bigger base of existing home sales. Also, the Commerce Department records sales when contracts are signed, rather than when transactions are closed as the Realtors association does for existing home sales.

Economists had expected new home sales to dip to 1.2 million, according to a survey by Bloomberg News, and analysts cautioned that last month's surge might not be an indicator of a larger trend. Experts noted that the median sales price - half the homes sold for more and half for less - of $231,300 was up just 1.6 percent from September and 0.9 percent from October 2004....


http://www.nytimes.com/2005/11/29/business/29cnd-econ.html?ei=5094&en=0d78ac20ec7a2ef5&hp=&ex=1133326800&adxnnl=1&partner=homepage&adxnnlx=1133309396-SZM7SO9M9TO35zRFEnIwXA

exsisting home sales for the same period is down 2.7%, which as the article points out accounts for 85% of the housing market.

If I have to read one more story about how "GREAT" the housing market is, I'm going to scream. Here in California, the average home price is around $450K ... but there's always the lottery, I guess.

I saw a brief piece on MSM earlier today debunking these figures.

There is apparently a 56 percentage point plus or minus error (no I am not making this up) in the reported figures for new home sales.

And the survey results came from just a handful of builders.

Essentially the figures showing economic growth here are crap.