Oops! U.S. New Home Sales Drop 33% in May, to Record Low

[Talyssa]

http://www.nytimes.com/2010/06/24/business/economy/24home.html

"?That new home sales would decline in May following the expiration of the home buyers credit is not at all surprising,? said Dan Greenhaus, chief economic strategist for Miller Tabak, in a research note. ?However, we would be lying if we said the size of the drop was not shocking.?"

And what have we learned about the "throw money at it, maybe it will go away" strategy for housing market down cycles?

 

[irvinehomeowner]

The thing about this is that credit doesn't really do much for higher priced markets (like in SoCal).

While it may spur some people who are on the fence or lower range buyers... it's a drop in the bucket compared to the cash flow savings from low interest rates. Raise the rates and we'll see how much the sales figures go lower.

 

[Talyssa]

well, that's nationwide of course but I think there are plenty of people in so cal who are penny wise and pound foolish - the people who drove up the bubble haven't all moved away or anything.  I feel like I heard a lot of people talk about that new home credit.    I don't think it was as big of a factor but it did make people feel like they wanted to push thier purchases through right away.  And now we're due for maybe 2 months where people who didn't buy step back and see if htey wouldn't rather wait for a phase 3 location, or something like that.    Probably added a bit of 'froth' to march and april even here.    Could probably do analysis on sales numbers to see.

 

[irvinehomeowner]

Locally... we still have the Ahnuld credit... so there is still some incentive for the fringe buyers.