Housing Dimensions Blog
New home sales reportedly spiked in October. Huh?
Builder stocks spiked right after the Census Bureau release Wednesday morning, and we are sure that many believe we are in a strong housing market again because of the headlines. On Fox Business, I explained what is actually going on. We discussed:
- The data quirk behind the simultaneous release of plunging September sales followed by a return to a more normal trend in October
- 444,000 sales being just more than half of normal new home sales
- The missing entry-level buyer
- My anticipation for low homeownership due to the tremendous disincentives to lend to the credit-challenged borrower
As a kid, I remember the Apollo lunar module losing all communication for about one hour as it orbited around the back of the moon. We all held our breath for that hour, waiting to hear that all was okay.*
That is what happens with the housing market each winter. Sales slow during the holiday season and don’t pick back up until the sun shines. That sun shines brightest first in Arizona and Florida, which is where we will be turning our attention in January as the first indicator of 2014’s housing market.
The Cool Fall
But should they?
Every time I attend a conference I learn something. Last month, legendary Inland Empire investor Bruce Norris held a charity event for 500 people with a number of top analysts. He estimated that at least $1 billion of Southern California residential real estate investment capital was in the room. These investors are anxious about new home construction and, surprisingly, were the most interested in hearing me speak about the future supply of new homes.
The highlight for me was the time I got to spend at dinner with Debra Still, CEO of Pulte Mortgage and outgoing Chairwoman of the Mortgage Banker Association. I haven't met anyone who articulates the mortgage industry issues as well as she does.
Below are a few links to the event.