Housing industry report surprises Wall Street
First, new house construction staged a rally in May after three straight months in the doldrums.
Then, economists were surprised Monday when the Commerce Department announced that sales of new single-family homes increased by 4.6 percent last month. They had been forecasting a slowdown in the face of rising mortgage rates.
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http://heraldtribune.com/apps/pbcs.dll/article?AID=/20060627/BUSINESS/606270343
Then, economists were surprised Monday when the Commerce Department announced that sales of new single-family homes increased by 4.6 percent last month. They had been forecasting a slowdown in the face of rising mortgage rates.
Read the rest of the article here:
http://heraldtribune.com/apps/pbcs.dll/article?AID=/20060627/BUSINESS/606270343
posted by Marc Rasmussen at
7:23 AM
2 Comments:
Marc,
Based on the numbers you posted from the Sarasota MLS, there have been 1,477 single family houses sold between Jan. 1 thru June 25 of 2006. There are another 478 pending, so let's just assume that they all close. That gives us 1,955 singly family homes sold during the first 6 months.
If you take 1,955 and divide by 6 months you get an average of 326 homes sold per month for the first 6 months of 2006.
With 4,437 homes currently listed in the MLS, it would take almost 14 months at the current rate to absorb all those homes on the market. And these numbers do not include FSBOs that are for sale either.
During the peak of the RE market last summer I recall that absorption rate being somewhere closer to 3-4 months.
What's your take on this ?
"During the peak of the RE market last summer I recall that absorption rate being somewhere closer to 3-4 months."
Actually the peak was in the first half of 2005. It really started to slow down around July/August. You are correct, the absorption rate was around 3 months.
It will simply take longer for homes to sell now. Once the overpriced properties are taken off the market or have a price adjustment the absorption rates will look better.
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