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September New Home Sales Drop 3.6% From Up 1% Previously, Miss Rosy Expectations

Tyler Durden's picture


The overhang of the Cash For Clunkers effect is starting to shift to all sectors of the economy, with New Home Sales being the latest victim: sales decreased 3.6% to a 402,000 annual pace, lower
than the median forecast of economists, which was 440,000. The actual number came in below even the lowest expectations of 412,000. Additionally, the median price of a new home dropped 9.1 percent
from September 2008. When is the last time anyone heard a CNBC anchor talk about green shoots again?

More detail from Bloomberg:

The decrease in sales was led by an 11 percent drop in the
West and a 10 percent decrease in the South. Purchases in the
Midwest jumped 34 percent and were unchanged in the Northeast.

Builders had 251,000 houses on the market last month, the
fewest since November 1982. It would take 7.5 months to sell all
homes at the current sales pace, the same as in August.

Sales of new homes, which make up less than 10 percent of
the market, are tabulated when a contract is signed and may
therefore begin cooling weeks before the Nov. 30 deadline by
which buyers must close a transaction to be eligible for the tax

As sector after sector roll to reasonable trendlines, expect many more negative surprises, at least until such time as the administration realizes that the US consumer isn't going anywhere in a hurry and announces the latest brilliant (and educational) bail out scheme: Kash for Kindles to justify soon to be quadruple digit earnings multiples.


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Wed, 10/28/2009 - 10:26 | Link to Comment Dixie Normous
Dixie Normous's picture

The asshat CNBS had on following this number said he expects it to be revised, UPWARD.

Funny you mention Kash for Kindles, I think buyers of AMZN believe it and start buying everytime the futures tick down.

Wed, 10/28/2009 - 10:29 | Link to Comment Anonymous
Wed, 10/28/2009 - 10:31 | Link to Comment Rainman
Rainman's picture

Shiller says there are regional housing bubbles. Guess it's the Midwest and Northeast.

Wed, 10/28/2009 - 10:32 | Link to Comment OrganicGeorge
Wed, 10/28/2009 - 10:35 | Link to Comment Daedal
Daedal's picture

I'm beginning to get the notion that Tyler has a short position on AMZN.



Wed, 10/28/2009 - 10:43 | Link to Comment Dixie Normous
Dixie Normous's picture

I doubt it. One, because "Tyler" isn't just one person. Two, just because someone thinks the AMZN story is fucking hilarious doesn't mean you stand in front of the freight train.

Wed, 10/28/2009 - 10:38 | Link to Comment lizzy36
lizzy36's picture

pisani told me "not to worry" no correction since the rally has started has been greater than 4%.

finally figured out what is driving kindle sales.  the new model reads aloud to you.  the perfect american book. 

Wed, 10/28/2009 - 11:07 | Link to Comment Miles Kendig
Miles Kendig's picture

You know.. Lizzy, I.. you know.. tried to explain this you know.. deal a week or you know.. so  ago.. You know?

Wed, 10/28/2009 - 11:11 | Link to Comment lizzy36
lizzy36's picture

I know, but i am not that bright.

How u doing?

Wed, 10/28/2009 - 13:15 | Link to Comment Miles Kendig
Miles Kendig's picture

Had a momentary reprieve in the land of the legal plus I just love southern Oregon.  Best three days in the past three + years.  Thank you for being you Lizzy.

Wed, 10/28/2009 - 11:48 | Link to Comment deadhead
deadhead's picture

the perfect american book


i don't have a kindle but if people magazine, national enquirer, entertainment weekly, et al can be downloaded, it may be a game changer lol!


Wed, 10/28/2009 - 10:39 | Link to Comment Bearish Spirits
Bearish Spirits's picture

Interesting that August's number was also revised downward, by almost 3%.  I'm sure this 'will provide more proof that we need the housing credit extended.'

Wed, 10/28/2009 - 10:41 | Link to Comment Anonymous
Wed, 10/28/2009 - 10:45 | Link to Comment lsbumblebee
lsbumblebee's picture

These numbers are obviously incorrect. Cramer said that housing bottomed last June.

Wed, 10/28/2009 - 10:48 | Link to Comment Anonymous
Wed, 10/28/2009 - 11:52 | Link to Comment Dixie Normous
Dixie Normous's picture

I don't know for sure because the 3 financial networks I immediately surfed didn't say anything, but I assume it was the GS lower GDP call.

Wed, 10/28/2009 - 11:00 | Link to Comment Gilgamesh
Gilgamesh's picture

SPX perfect bounce off the 50DMA (again), if not already noted elsewhere:

Wed, 10/28/2009 - 11:02 | Link to Comment Assetman
Assetman's picture

Hey, but housing prices increased sequentially.  Instead of seeing a -13.4% drop, we only saw a -12.8% year over year drop in prices this time around.

See?  Things are getting sarcastically better...

Wed, 10/28/2009 - 12:11 | Link to Comment TraderMark
TraderMark's picture

"getting less worse"

"still bad... but at a slower rate"


3 months ago, the market would be up 4% on these numbers.


Wed, 10/28/2009 - 11:10 | Link to Comment Miles Kendig
Miles Kendig's picture

Just think of all those empty sub divisions out there that are being held off the market... 7 1/2 months, heh.

Wed, 10/28/2009 - 11:42 | Link to Comment HEHEHE
HEHEHE's picture

The sad thing is that you know that the released number is going to be revised lower next month.  So much for pulling foward demand with that $8K tax credit.  Now in order to pull forward the demand you'll need to up it to $16K. 

Wed, 10/28/2009 - 13:59 | Link to Comment ElvisDog
ElvisDog's picture

Hah, this is too easy. The "green shoots" headline is "Midwest new home sales up 34% exceeding estimates"

Wed, 10/28/2009 - 14:00 | Link to Comment Mark Beck
Mark Beck's picture

I guess I am really not sure want aspect of cash for clunkers you are talking about. Yes, the first time home buyer credit + FHA certainly have pulled ahead sales to a point, but most would agree that the local housing bubbles are based more on speculation on distressed properties. Also, the timing of housing purchases is somewhat confused, due to the inability to accurately price real estate at this time. 

The housing bubble I estimate will correct down to CS SA-COMP10 = 140.

Trying to prop up a deleveraging asset class price correction must be seen for what it is: Supreme folly.

Wed, 10/28/2009 - 14:13 | Link to Comment CharlesBronson
Wed, 10/28/2009 - 17:03 | Link to Comment gookempucky
gookempucky's picture

Its raining house's---------

By the way-----being from KC -----there were no new homes sold-----havent seen a basement dug for last 15 months unless you count those 3 in Parkville -one sold-2 left--hey thats up 33%--I feel much better know.

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