Average New House Price Drops To Lowest Since 2003

Tyler Durden's picture

Today's new annualized home sales print was 307k, below expectations of 315k (yet oddly better than last month's downward revised which moved from 313k to 303k, wink wink nudge nudge Census bureau). This is not to be confused with the actual number of houses sold which came at a whopping 25k, and the third month in a row in which under 500 homes sold in the over $750,000 category. Yet the most notable data point was the average new house sale price which dropped to $242,300. This is the lowest price since 2003! Something tells us that an MBS LSAP is pretty much guaranteed at this point.

Average New House Sale:

Number of houses in the $750,000 category:

And why the actual sales print was very much irrelevant:

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AbelCatalyst's picture

I had a ticker come accross from CNBC that said, "Home sales are up! click here for market reaction."  It's like we live in two entirely different worlds!  Kind of wish I was in the other one - so happy and positive and rich and free (until reality set in, of course!)...  In the end there is only one actual world - choose wisely!!

doomandbloom's picture

Agent Smith: Then we have a deal?
Cypher: I don't wanna remember nothing. Nothing, you understand? And I wanna be rich. You know, someone important … like an actor.
Agent Smith: Whatever you want, Mr. Reagan.

------
the red pill is intense...

Conrad Murray's picture

Life it seems will fade away
Drifting further every day
Getting lost within myself
Nothing matters, no one else

I Got Worms's picture

Need the end (of the banking cartel) to set me free...

Harlequin001's picture

and the average wage is what, $50,000 pa.

Let me know when it gets down to around $100K...

eureka's picture

The Median HOUSEHOLD INCOME is - not $50,000, but just $47,000.

INDIVIDUAL MEDIAN INCOME is  $23,500.

Average Income is a mis-informative construct - because the enormous incomes of, not the upper 1%, but the upper 1 per Million "lifts" the average number up, disguiding the fact that 50,000,000 US citizens are on minimum scale salaries making less than $14,000 per year. Another 25 million is unemployed.

Since one can only borrow ca. 4 times one's gross salary, the US Median Income accomodative Median New Home Price would have to be nowhere over $60,000.

Las Vegas masterplan home builders built for an average $35 per Sq Ft even in 2006, the last and grinding down housing "boom" year, bringing the cost of a small 1800 Sq Ft New Home to $63,000.

As a consequence of above metrics - if a New Home in 2012 is desired to raise New Home Sales, it must be sized and priced far smaller'and cheaper.

Unless US citizens demand an end to both outsourcing and offshoring, future US generations will live in small, cheap and highly condensed multi-family housing units.

Only a renaissance of US manufacturing will alter these facts. Will the US people rise and make that happen?

 

Bicycle Repairman's picture

Consider these things:

1.  Demographics i.e. boomers selling for years

2.  Interest rates will be increasing at some point in the mid-term future

3.  Property taxes will continue to rise.

4.  The suburban housing model is dead.

5.  Wages are going to be reduced substantially.

6.  The propping up of home values in the face of the above.

Therefore, housing is nowhere near a bottom and will not be for a generation.

 

Spastica Rex's picture

The Matrix: a guidebook to the present, in allegorical form.

4realmoney's picture

Marc Faber was screaming back in February that now is the time to reinvest into housing: http://djia.tv/marc-faber/marc-faber-on-cnbc-fast-money-2_28_11-buy-hous...

PaperBear's picture

Anyone think it will hold here ? I don’t, it’s going lower.

Carlyle Groupie's picture

+- 5% of this print. This is bottom on residential, commercial is a whole different ball of earwax.

AngryGerman's picture

agree on total number, disagree on price. there's still room at the bottom (residential only).

dwdollar's picture

I'll believe housing prices are close to bottom when the private sector is back in control of the housing market.

AngryGerman's picture

"...when the private sector is back in control..."

lol, that'll never happen again

Carlyle Groupie's picture

Take a quick read.

http://realestate.msn.com/article.aspx?cp-documentid=25434829

HUD just changed the rules on section 8 allowing them into prime properties.

Spastica Rex's picture

But - smart people keep saying that we've hit the bottom - at some point they have to be right. At that point, we'll all recognize how smart they are.

s2man's picture

"Don't go around predicting the end of the world. It only happens once".  Seems to apply to calling housing bottom, too.

Bicycle Repairman's picture

The USA is entering its full on Soviet phase, so don't epect a return to the private sector any time soon.

Smiddywesson's picture

There can be no bottom in housing prices until there is marked improvement in jobs, wages, and inflation.  Until then, everyone is trying to downsize in everything.  Inflation in things you need, coupled with a lack of jobs and lower incomes, leads to deflation in things you own.  We are not even close to a bottom in housing prices.  You've not seen the worse yet.

TruthInSunshine's picture

+1

 

I and a few others have been wondering what planet the ANAL-CYSTS live on (we already known that The National Association of Realtors & National Mortgage Brokers Association will say anything to prevent another sheeple from realizing the sad state of the housing market depression).

The FOUNDATION for increased home sales is J-O-B-S, wages & benefits.

As long as jobs, wages & benefits (after all, benefits are reall just another form of wages; insurance co-pay went up 20%? That's at least 4% loss of income on a weighted scale) continue to stagnate, or worse yet, decline, there can and will be no housing 'recovery.'

The super-trend now is for 5 senior citizens who don't know each other to buy a used home at a 50% off price and share rent there (there was a story about this in a national MSM-Sheeple magazine two days ago).

Clark Bent's picture

It is going lower. The market is devoid of buyers and the banks are foreclosing at a feverish pace on people they are inducing into default with promises of lower interest and reduced. There is nothing on the horizon that indicates the situation is going to change and the banks stubbornly refuse to let the market clear so that values can be priced by the market. Further, banks won't lend to anyone but those with the very best credit, and the steady decline means (1) downpayments decline because home buyers can't get a return on the houses they sell, and (2) declines mean that the collateral is more likely to decrease in value perhaps leaving the lender unseucred for a portion. With high unemployment they become targets for bankrutpcy write-downs wherver they are unsecured. There just does not seem to be anything positive upon which to assume that prices have stabilized. I predice we see average decline of another 25% in 2012, with more to come unless we get some new political leadership. 

Mentaliusanything's picture

considering a World wide ressession is coming I would think owning a millstone around your neck would not be a smart move if you need to move. capish

Mattress Money's picture

Im waiting till 3 oz of gold can buy a house in tampa or vegas

mayhem_korner's picture

 

 

I'm waiting till 3 oz of gold can buy Vegas.  :D

LawsofPhysics's picture

I can understand tampa, but vegas.  I guess he is interested in starving in the desert.  Hell, water is going to be a real problem for these folks.

wisefool's picture

Problem Solved. Whether it is a problem or not it is the next regulatory-trading-taxing framework to be set up. The MSM is good for somethings, it telegraphs what the busybody PTB are upto. It always starts with benevolence. Matt Damon (poor mans brad pitt) was on "this week with chritine amapour" (most watch US weekly political talk show) to talk about his cause in africa to create fresh water infrastructure. heart warming stories about little girls who can not go to school because they spend all their time collecting fresh water. (read: phase 1, "gods work")

http://abcnews.go.com/Politics/matt-damons-clean-water-mission/story?id=15036160#.TtO2fWNC80I

Phase 2 will be some type of police action to put the right type of leaders in to enforce new paridgm, that has little to do with the premise. But accomplishing the goal brigning awareness to the masses of "gods work".

And the shift from benevolence to something else becomes complete when you get the control framework back to the the "affluent" west in the form of a trading platform (see Enron. see Carbon trade). Hey atleast it creates jobs. And when that does or does not play out in our crony capitolistic system, it is implemented as a taking/taxing. Never forget Paul Krugman was an advisor to Enron.

Phase 3. You'll have some subsistance farmer in the land of a 1000 lakes (minnesota) forced by the government to pay the same for fresh water as the sunbelters living in brand new construction in Vegas. Our Minessotan gets 7 months of winter, 5 months of mosquitos, but hey, if matt damon wants to pay the same price for water in his sunny mansion in SoCal, then it must be alright! Think of the girls in africa who can't go to school because they spend all their time hauling water!

Smiddywesson's picture

I can understand tampa, but vegas. I guess he is interested in starving in the desert. Hell, water is going to be a real problem for these folks.

True, but that condition is likely to change too.  There are a lot of very bright people working on fusion.  When that puzzle is unlocked, and it is likely to be soon, we will have clean, cheap, energy and all the water we can squander.  It will be a game changer for anybody lucky enough to survive the coming wars.

grey7beard's picture

If you move to Tampa, screw the gold, have plenty of lead.

 

 

economicfreefall's picture

http://www.youtube.com/watch?v=pZxa0-IXl_U&feature=player_embedded

 

The Kuala Lumpur War Crimes Tribunal found former British prime minister Tony Blair and his American counterpart George W. Bush guilty and will lobby for them to be charged internationally for war crimes. Good luck with that. Nevertheless it's a noble decision and deserves attention. Hopefully these criminals and many alike will get their fair verdict in the future.

Vergeltung's picture

that's some funny schitt right there. has about as much credibility/strength as a trial held in RoboTrader's Mom's basement.

how naive.

Azannoth's picture

So even at record low prices the housing sales are record low, 2+2=4, prices are going Lower much lower

AngryGerman's picture

you should compare it to the number of tent sales, that'll show you!!

hedgeless_horseman's picture

RE/MAX, bitchezzz!!!!

Year on year, number of Realtors nationwide declined -5.49%.  Most are independant contractors, and therefore do not qualify for unemployment benefits, or appear on BLS statistics.

http://www.realtor.org/wps/wcm/connect/aa817f8048eaa432aa58ee2e39654e23/10-2011.pdf?MOD=AJPERES&CACHEID=aa817f8048eaa432aa58ee2e39654e23

slaughterer's picture

I am getting a T-Shirt printed:

"MBS LSAP 2012!  Hell yeah!"

FL_Conservative's picture

What good does MBS LSAP do when so many people have no fucking job to borrow against????????????????   That defies ANY logic whatsoever.

homer8043's picture

Manipulated statistically insignificant bounces along a depression level base. Basically no change and no hope in the housing market.

Snakeeyes's picture

But look at the median new home sales chart. Only back to early 2009 levels. Although that still stinks.

http://confoundedinterest.wordpress.com/2011/11/28/new-home-sales-rise-1-3-but-still-lingers-around-300k-per-year/

 

High Plains Drifter's picture

don't worry about it. its just a weather related problem.....nothing to see here folks. just move along please......

EasterBunny's picture

but, when reading the CNBC article about the same thing, one is left feeling positive....

http://www.cnbc.com/id/45462471

Pity CNBC don't also post the US new home sales graph from above. 307 000 houses is much lower than the last few decades. It would be interesting to know what 307 000 is as an estimate percentage of all homes vs the percentage of all homes of say 1982, the previous low era. I would expect there are many more homes in the US today than there were in 1982.

 

slaughterer's picture

Two or three "Fast Money" traders were going long last week saying the "news is not as bad as the media makes you think."  Guess they should know. /sarc

Everybodys All American's picture

There is not a week that goes by when they are not bullish.

TruthInSunshine's picture

Every unicorn & rainbow housing sector analyst predicted one year ago that we'd be well into the 600,000+ annual new home sales water mark by now.

The only water mark getting higher is the underwater one.

500,000 annual new home sales is a depression.

300,000 is a mega depression.

No job or making less than you did at your last one, AND your underwater on your current home and/or have bad credit? No tickey, no laundry.

mayhem_korner's picture

 

 

I've found with CNBC that if it doesn't have the word "soar" in the headline, it's really bad news.  And if it does, it has a half-life of 45 minutes.

Jena's picture

When I hear CNBS'ers say the word "soar" I think of them talking about herpes.  Sort of like a drinking game, only if I played it that way I wouldn't have a liver.

BandGap's picture

Man, how can anyone look at the graph at the top of the page (not the posted article) and see a positive? And the way things appear we are not yet at the bottom.

I'm an optimistic person, but at what point does the real picture have to be presented as the real picture instead of this hope and change bullshit? 

The economic pressure has spread from lower incomes deep into the middle classes.  At some point the bullshit will explode. This morning the local station had a discussion with people on the street (middle class) about Christmas expectations (giving and receiving).  Not like anything I have heard in my lifetime, people are starting to see the light.  The silver lining is people should start being thankful for what they have rather than what they can get with a credit card and pepper spray.... 

LongBallsShortBrains's picture

Is it time to buy yet?

/sarc

slaughterer's picture

Lets see if European markets sell off into the close today.  Seems like the DAX might.