January 26, 2011
U.S. New Home Sales: Down 7.6% In December (YOY), 14.2% in 2010
The pace of new single-family home sales in the U.S. jumped 17.5 percent from a revised 280,000 annual rate in November 2010 to 329,000 in December but remains 7.6 percent below the 356,000 rate in December 2009.
An estimated 321,000 new single-family homes were sold throughout the U.S. in 2010, down 14.2 percent from an estimated 375,000 in 2009 and the lowest level in 47 years.
UPDATE: A few points we shouldn't have missed, preliminary U.S. sales (versus pace) in December 2010 were estimated to be 22,000 (give or take 8 percent), the lowest December on record since 1966.
In the West, December sales were up 40 percent from 5,000 in 2009 to 7,000 (give or take 14 percent) in 2010 while total sales for the year fell 16 percent from 87,000 in 2009 to 73,000 in 2010.
First Published: January 26, 2011 9:15 AM
Comments from "Plugged In" Readers
"Sales of new single-family houses in December 2010 were at a seasonally adjusted annual rate of 329,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 17.5 percent (±17.7%)* above the revised November rate of 280,000, but is 7.6 percent (±17.0%)* below the December 2009 estimate of 356,000."
Note first that this 329,000 is the Seasonally Adjusted Annualized Rate. Secondly the margin of error is +/- 17.7%. As noted by the asterisk:
"* 90% confidence interval includes zero. The Census Bureau does not have sufficient statistical evidence to conclude that the actual change is different from zero."
Additionally, they note that the preliminary estimate is revised on average by 7%.
The actual Non-Seasonally Adjusted preliminary figure shown at the bottom of Table 1 is 22,000 homes for Dec 2010.
According to CR, this is the worst December ever recorded coming in just below the 23,000 for December 1966.
Posted by: tc_sf at January 26, 2011 9:39 AM
Contrast the reality with Bloomberg's headline:
U.S. Sales of New Homes Rose Five-Times Higher Than Expected in December
Wow!! Home sales are 5 times higher than expected? No the "seasonally adjusted" estimated increase was 5 times higher than it was expected to be. Case Shiller made it clear in their last press release the SA numbers are completely out of whack, yet that's all Bloomberg reports, and not a single YOY stat: just comments about more evidence of a recovery, when YOY is down.
This is why sites like socketsite and CR are imperative to see through the BS.
Posted by: tipster at January 26, 2011 9:43 AM
This looks bad because new home sales are typically a leading indicator of the economy doing well, as Calculated Risk usually says.
One claim I saw was that building a new home creates 3 jobs for a year and produces $90K in taxes.
Posted by: sfrenegade at January 26, 2011 10:35 AM
I'll throw in zerohedge as another site that helps cut the BS.
Posted by: lyqwyd at January 26, 2011 11:37 AM
It's pretty simple. The only way out of this mess is for more demand (buyers) than supply (houses). But, where are we going to find all these buyers? With the majority of people's credit shot, and unemployment at around 10% it looks like it'll take at a minimum 10 years for see some light at the end of this tunnel.
Posted by: welbilt bread machine at January 27, 2011 10:49 AM
Again from CR, and note this is existing not new home sales,
...I've been discussing the National Association of Realtors (NAR) existing home sales data with several analysts. ... I think the NAR started over estimating sales in 2006 or 2007 ... and the errors have increased since then ... I expect the NAR will revise down sales for these years in the not too distant future ...
The NAR is planning on releasing revisions for the past three years (2008 through 2010) on February 23rd along with the January existing home sales report. Many housing analysts expect these revisions to be significant - and to be down. Assuming the revisions are down, this will also reduce the "distressing gap" between existing and new home sales. "
Posted by: tc_sf at January 28, 2011 12:39 PM
Nice strategy : overestimate sales during the run-up, producing very optimistic trends. Then quietly downwardly revise the stats so you're positioned to produce more optimistic trends when the recovery gets underway. I wonder how YoY stats will be adjusted.
Posted by: The Milkshake of Despair at January 28, 2011 1:07 PM