Go figure: New home sales down, but appliance sales up
Competition from foreclosure homes continues to take a big chunk out of national new home sales, which fell unexpectedly in May to an annual seasonally adjusted rate of 342,000.
Sales dropped a hair from April, snuffing out the expectation that improving weather in May is supposed to stimulate new home construction in much of the country.
Year over year, new home sales dropped by a third. You can blame the housing glut. Builders sold hundreds of thousands, if not millions, of unnecessary homes from 2004 to 2007. That surplus has boomeranged on them brutally.
With such a dismal housing report, it's interesting that production of "durable goods" like washing machines, stoves and computers rose in May.
Maybe Americans figure that if they can't afford to change houses, they might as well enjoy the latest stainless steel refrigerator.
A new home report tailored to Tampa Bay comes out in mid July. You'll read it here first.
(Un)Real Estate offers a peek at the housing market usually reserved for insiders. While it focuses on the Tampa Bay area, it won't neglect dipping
into the rest of Florida and beyond. Its goal? Simple: To help you keep a roof over your head without losing your shirt.
"Go figure: New home sales down, but appliance sales up"
Perhaps the reason is that New Home values are still much higher than appliances. :)
Posted by: Fuzzy Bear | June 24, 2009 at 03:15 PM
Could be from all the realtors baking cookies during open houses.. I wonder if the've done a study on aroma scented candle sales too? Seriously, most likely it's from the the gubment stimulus "Cash for Cookers" program.
Posted by: Paradigm Shift | June 24, 2009 at 07:42 PM
I can understand computers sales being up. Businesses (especially real estate related businesses) have not upgraded computers for the past three years because of the economy. In my case I just bought three replacement computers for our office and need to replace four more. Our old machines are just too slow and worn out. Our title company is considerably busier so we are upgrading equipment.
Posted by: Ronnie | June 25, 2009 at 08:22 AM
The following quote will spark some interest.
"NEW YORK (Reuters) - The U.S. urban commercial real estate markets probably will not recover until 2017, the head analyst of commercial mortgages for Deutsche Bank Securities (DBKGn.DE: Quote, Profile, Research, Stock Buzz) said on Monday."
Posted by: Fuzzy Bear | June 25, 2009 at 02:13 PM
Fuzzy -
I wonder what they define as "recover". Does that mean valuations mirroring the levels before the correction (i.e. circa 2006)?
Posted by: Grant | June 25, 2009 at 03:45 PM
It's not so hard to figure out: The people getting foreclosed remove the appliances when the vacate the house, so the banks and other investors who are left with the houses to sell have to replace them in order to get the house sold.
Posted by: Martha | June 26, 2009 at 08:09 AM
Martha, that is true. Of the houses I have purchased and rehabed I have had to replace the appliances. But I also think that people are keeping their homes and making changes to them, like remodeling and buying new appliances.
Posted by: Ronnie | June 26, 2009 at 08:30 AM