Thursday, February 26, 2009

New Home Sales Drop To Worst Level Ever, Market Spikes

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.

Thanks to the economic collape and likely impacted by the aftershock of the Madoff scandal, prices in Lee County Florida (adjacent to Palm Beach) have plumetted by 59% over the past year, with a median home price of $94,900 in January 2009 compared to $234,000 in January 2008.

Curiously even as sales transactions have picked up (758 purchases in 2009 versus 338 in 2008), the average price has kept on plummeting, reflecting the predicament of the inventory oversupply, which we have written about previously, which has over 12 months of supply currently in inventory.
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Agent #777 said...

I love your volume and quality of posts. However, Palm Beach and Lake County are two different markets. Not that they both won't go down, but Lee County modest housing was perhaps the most overbuilt sector in Florida along with Miami condos. The price drop has been stunning - but it still does not mean it is over.