New Home Sales Jump, But Beware

Posted by: Peter Coy on April 26, 2006

Don’t be too impressed by today’s Census Bureau report that new home sales in March rose 13.8% from February. First of all, these numbers fluctuate wildly. Sales had fallen 10.9% in February, so this increase just puts us back on trend. Second, if it’s price you care about, the market looks considerably weaker. The median price of new homes sold in March, $224,200, was down 2.2% from a year earlier, the worst yearly performance since January 2003.

Reader Comments

Pamela

April 26, 2006 1:08 PM

Sorry, but it is rather impressive given the negative media coverage of the Real Estate market today. I live in the Tampa Bay area and our community is still strong. The media and "economic experts" have been consistantly surprised by the strength in the numbers. I retired from nursing over twelve years ago investing in Real estate and was blessed to be with my children as infants. Thank God the experts are clueless.

Dave

April 28, 2006 1:17 AM

My favorite version of this bogus report was printed with this great eye grabber headline:

"Stunning 13.8% increase in new home sales
Median prices down year-over-year first time since Dec. 2003"

You can read down in the text of the story at

http://www.marketwatch.com/News/Story/Story.aspx?guid=%7BB9C41293%2D88B8%2D4091%2D9A2E%2DAB483696AF5E%7D&siteid=mktw&dist

until you get to this little gem:

"While sales were reported up nearly 14%, the margin of error was 15%"

Hmmmmm.... STUNNING ... we can say well... sales were up. . . MAYBE. The margin of error was so large we actually don't know if sales were up. (We do know that prices dropped) I think it should be a crime for journalists to report medians without including the margin of error or standard deviation.

pamela

May 1, 2006 5:22 PM

Frankly, I am impressed with the sales numbers,construction spending, and the economy as a whole. What is not imprssive is the economic expert opinions and forecasts all you folks seem to consistantly get wrong. Have you people tried coffee...Wake up!!!!!!

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About

BusinessWeek editors Chris Palmeri, Prashant Gopal and Peter Coy chronicle the highs and lows of the housing and mortgage markets on their Hot Property blog. In print and online, the Hot Property team first wrote about the potential downside of lenders pushing riskier, "option ARM" mortgages and the rise in mortgage fraud back in 2005—well ahead of many other media outlets. In 2008, Hot Property bloggers finished #1 in a ranking of the world's top 100 "most powerful property people" by the British real estate website Global edge. Hot Property was named among the 25 most influential real estate blogs of 2007 by Inman News.

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