New Home Sales

New home sales drop to a record low adjusted annual rate of 308K. All of the government's housing stabilizing measures are now a disaster, as existing home sales inventory surges to nearly 9 months, not counting the shadow inventory, which is more than double.The plunge is in all regions except the West, where the pick up was from 77K to 93k. When is the last time anyone mentioned green shoots again? And the computers ignore it all as nobody remember how to sell anymore. In fact, we expect a green market within 10 minutes as king SPARC shows all who is master.

The housing sector just went back from critical to comatose - U.S. new-home sales plunged in January, setting a record low and erasing all gains made in the market during the past year. Well, if new homes can't sell now with all the current bells and whistles, they pretty much never will. One idea - lower prices. Oh wait, that would go against the first directive of the Federal Reserve. Equities still a little shell shocked, and unable to fathom that the double dip is now official.

December new homes sales come in at 342,000, down 7.6% from in November, and a resounding miss of expectations of 366,000. The double dip is here.

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?

Green shoots spinning in their grave - 12 percent of homeowners with a mortgage are behind on their payments or in foreclosure. Half of all adjustable-rate loans to borrowers with shaky credit were past due or in foreclosure. And we still have to see the Option ARM hurricane. California, Nevada, Arizona and Florida accounted for 46 percent of new foreclosures in the country.

New home sales tumble over -10% month over month to 309,000, on an expectation of a -2% drop. Market rips. Logical? Who cares. When horrendous news is fantastic news we advise everyone to pull their money out of the market for one reason - it is terminally broken.

In the meantime, a brief look at the real housing picture, and why anyone may soon be able to afford a Palm Beach waterfront house.

New home sales tumble over -10% month over month to 309,000, on an expectation of a -2% drop. Market rips. Logical? Who cares. When horrendous news is fantastic news we advise everyone to pull their money out of the market for one reason - it is terminally broken.

In the meantime, a brief look at the real housing picture, and why anyone may soon be able to afford a Palm Beach waterfront house.

"New home sales drop to lowest level on record", down 14.7% from 388,000 in November (revised)