Sales and a 'sloppy bottom'

Statistical press releases are clogging my in-box today so let's see what the bean counters have to say:

• New-home sales statewide "continued to move along at a lackluster pace," reports the California Building Industry Assn. (Love that understated prose.) Their monthly report for August, jointly produced with Costa Mesa-based Hanley Wood Market Intelligence, showed a 39% sales drop from August 2007, but at least it wasn't the 57% drop seen in the July-over-July figures.
• REAL Trends tracked September residential closings in the West as up more than 27% from September 2007. They had been down about 6% in August 2008 from the same month a year ago. Nationally, sales rose 1.9% in September from a year ago, which they sum up as "more evidence of a 'sloppy bottom,' a term coined by Realogy CEO Richard Smith."

-- Lauren Beale

Thoughts? Comments?

Photo credit: Irfan Khan / Los Angeles Times

Comments

[MyLessThanPrimeBeef]

It's not so much a sloppy bottom but false causality. Prices are going down, that's the only sure thing. Forget about trying to read the inventory numbers, the seasonality factor, etc.

I know it's tempting but there is really not that a strong connection in this environment. I mean, inventory could be going down and yet prices will still drop. Are we to connect, for example, the Dow's dropping of thousands of points recently to the emergence of a winning candidate (Obama) and say that that is the market's reaction and verdict? That the market is saying that particular candidate is bad for the market? I know some people might do that anyway, and that's their perogerative.

And are we to connect the current disaster solely to the latest presiding president, as disasterous as he has been, when a smart guy like Soros has already said that we are at the end of a 60 year cycle?

Logic has its limitations. You have to go with your intution. And in this case, it's enough to know it's going down.

[SidelinedBuyer]

Off topic but good article from CNBC about how banks are holding off on the Hope for Homeowners program (and on foreclosures and short sales) because they think they might get a better deal from the recent bailout legislation:

http://www.cnbc.com/id/27200773

[lancho fieri]

"Sloppy bottom" is what my two year-old had after six hours on a Greyhound bus to Modesto. "Free-fall," on the other hand...

[John McCord]

For the last two years the real estate "crash" has mostly revolved around the "sub prime" and "adjustable rate" resets. This segment will continue for at least another year.

What hasn't been realized yet is the market "crash" of this month will now affect the high end market that has been mostly insulated in the past. With the trillions of dollars in stock value lost, the high end and super high end properties will be under pressure to be sold of as well. One ten million dollar home will have the same impact on a financial institution as 50 200k homes.