It seems that the financial crisis arrived last month at a time when new home sales were finally kicking into gear.
Seasonally adjusted new home sales contracts jumped unexpectedly by 2.7% last month, the Commerce Department said today. But it’s likely that many of those contracts were signed before Lehman Brothers collapsed on September 15 and credit markets seized up.
We’ll have to wait until next month to really get a sense of how that impacted builder sales. It’s clear that builders were cutting prices dramatically and buyers were taking advantage of the discounts. The median new home price fell 9% in September from a year earlier.
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.