Sunday, March 26, 2006

House Cooling

"If you 'take out' all the warm weather days, Pensacola would be Fargo."
"New Home Sales Plummet," reads the headline across Friday's news wires and in the New York Times. New U.S. Commerce Department data show "that sales of new homes nationwide plunged 10.5% in February, about five times the drop analysts predicted." It's the steepest drop in 9 years.

"[T]he number of properties on the market rose," too. Bloomberg News takes this as "evidence the national housing market is cooling after a five-year boom. * * * The size of the monthly decline was the biggest since April 1997."

"Land of the Open House" is the title of a related article in yesterday's Los Angeles Times. The subject is how the housing bubble has burst in the quaint valley town of Merced, California. Homes for sale there have soared by a factor of 20 compared with last year, and prices have plummeted. In Merced, "a house will fetch 20% less today than it did last summer."

The Gulf Coast isn't immune. As we mentioned just last week, Leslie Conn of the Pensacola News Journal found in Gulf Breeze "Flooded Market, Dried up Dreams." She wrote:

Last week, the Pensacola Association of Realtors listed 5,642 properties for sale -- a five-year high and nearly four times more than the 1,487 homes listed in March 2005. As surplus has mushroomed, selling prices slowly are beginning to drop, witnessed by the many "Reduced" signs that are being added to the "For Sale" signs throughout the two-county area.

Some real estate brokers, like a fellow named Bill Sheffield in today's PNJ, are urging us to wear blinders so they can put an optimistic spin on the facts. Employing the same slick tone he probably uses while showing a 'handyman special' Sheffield writes, "If you take out all waterfront homes, properties for sale on Pensacola Beach and Perdido Key, and new homes for sale there are just over 2,800 homes for sale."

What? "Take out" all waterfront properties" in Pensacola and there's no housing glut?

Yeah, that's probably true. And if you "take out" all the warm weather days, Pensacola would be Fargo.

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