[mEDITate-OR:
miss the real meaning of the "Distressing Gap"...
In the first article:
The phrase "Distressing Gap" was coined by Calculated Risk.
And Jim @ CR created a new graph that shows it to U.S.
Jim's point was, and is, that NEW homes create construction jobs...
sales of existing home do not.
While it is also true that "foreclosures" have created a home improvement wave...
if you look at AZ nurseries you will see almost complete devastation.
In the second article CR provides U.S. with a chart almost as striking as the DGap one.
What it shows U.S. is the level of new home sales against those from 2002.
And, that chart shows U.S., dramatically, the "dead zone" vs today.
While we see the same thing in a linear chart...
THIS one shows you the scale of the change.
So..., while the new home sales surge is wonderful news...
you NEED to see it..., against the deal zone years...
We - you and U.S. - have a LONG way to go...
Please note:
IF you go to the original articles, you can SEE the larger version of these charts.
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Friday, April 23, 2010
by CalculatedRisk on 4/23/2010 01:00:00 PM
First a comment on the seasonal adjustment ... on a Not Seasonally Adjusted (NSA) basis, the Census Bureau reported there were 38,000 new homes sold in March. That is up from 31,000 in March 2009.
Some (or all) of the increase was due to a one time event - the tax credit that expires in April. The Census Bureau doesn't know the number of homes sold due to the tax credit, so they report the Seasonally Adjusted Annual Rate (SAAR) assuming this is the underlying rate of sales. It isn't.
The April new home sales headline number will be distorted too, but the key is the actual underlying sales rate is much lower.
Note: remember the tax credit shows up in the new home sales numbers when the contract is signed (March and April), and in the existing home sales numbers when the transactions are closed (April through June).
The following graph shows existing home sales (left axis) and new home sales (right axis) through March.
Some (or all) of the increase was due to a one time event - the tax credit that expires in April. The Census Bureau doesn't know the number of homes sold due to the tax credit, so they report the Seasonally Adjusted Annual Rate (SAAR) assuming this is the underlying rate of sales. It isn't.
The April new home sales headline number will be distorted too, but the key is the actual underlying sales rate is much lower.
Note: remember the tax credit shows up in the new home sales numbers when the contract is signed (March and April), and in the existing home sales numbers when the transactions are closed (April through June).
The following graph shows existing home sales (left axis) and new home sales (right axis) through March.
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Friday, April 23, 2010
The Census Bureau reports New Home Sales in March were at a seasonally adjusted annual rate (SAAR) of 411 thousand. This is an increase from the revised rate of 324 thousand in February (revised from 308 thousand).
The first graph shows monthly new home sales (NSA - Not Seasonally Adjusted).
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