The big number is tomorrow, the drop in new home sales, post dopey homebuyer tax credit which pulled 2 million purchases forward, that’s 2 million less first time homebuyers to move on new housing in the months ahead…
…The National Association of Realtors said sales fell 2.2 percent month over month to an annual rate of 5.66 million units from an upwardly revised 5.79 million-unit pace in April.
Analysts polled by Reuters expected May sales to rise 5.5 percent to a 6.12 million-unit pace from the previously reported 5.77 million units in April….
…After reviewing the data, the S&P/Case-Shiller Home Price Index Committee believes that, for the present, the unadjusted series is a more reliable indicator and, thus, reports should focus on the year-over-year changes where seasonal shifts are not a factor. Additionally, if monthly changes are considered, the unadjusted series should be used….
this is unlike any other housing drop, in terms of severity and government intervention, so any series cannot capture where prices are going..
…On an unadjusted basis, prices dropped 0.9 percent in February, worse than the estimated 0.3 percent decline and following a 0.4 percent downturn in January….
…The report suggests more price erosion is possible before prices start rising on a sustained basis, S&P said. The price improvement can be attributed to momentum from the federal homebuyer tax credits, which expire on April 30, and prices could be pressured further by foreclosure sales….
More on falling prices from First Logic via Calculated Risk:
…On a month-over-month basis, the national average home price index fell by 2.0 percent in February 2010 compared to January 2010, which was steeper than the previous one-month decline of 1.6 percent from December to January…
Best financials analyst on the street Meredith Whitney’s latest comments on financials and housing via CNBC:
Beleaguered banking giant Goldman Sachs has lost much of the edge it had over competitors due to the recent government charges and is a stock investors should avoid, analyst Meredith Whitney told CNBC.
…(GS) faces a future in which its brand has been tainted and it will lose business to small competitors, said Whitney, who doesn’t have a “buy” rating on Goldman or any of the other big banks…
…The company’s stock should trade around book value, Whitney added, which would place the price just above $120….
Reasserts the double dip in housing-
…On other issues, Whitney called proposed new financial reform regulations “squishy” but said the result will be banks shrinking their balance sheets and consumers forced to seek predatory lenders for credit.
She also renewed her prediction that the housing market would see a double dip as more inventory is forced back onto the market.