Hey, I think 1963 was a brilliant year in many respects. The Beatles released their first album, James Bond premiered in Dr. No, the Mercury Program concluded successfully with Gordo Cooper’s multi-orbit flight, the University of Alabama integrated, and the Dodgers swept the World Series from the New York Yankees. And also, I was born in 1963, so I have some fondness for that year in particular.
Unfortunately, our housing market seems to have caught 1963 nostalgia. The number of houses sold in the US hit a 47-year low, coming in 14% lower than the previous year:
Buyers purchased the fewest number of new homes last year on records going back 47 years.
Sales for all of 2010 totaled 321,000, a drop of 14.4 percent from the 375,000 homes sold in 2009, the Commerce Department said Wednesday. It was the fifth consecutive year that sales have declined after hitting record highs for the five previous years when the housing market was booming. …
Still, economists say it could be years before sales rise to a healthy rate of 600,000 units a year.
Yesterday, the pushback on the idea of a housing value double-dip was that the sales of new houses bounced upward in December from November by 17.5%. However, the annualized sales rate for December still only amounted to a pace for 329,000 units, which would still be a 12% drop from 2009. Or, as Ian Shepherdson of High Frequency Economics put it, “10 percent of next-to-nothing is still next-to-nothing.”
Now economists predict falling house values through the first half of 2011, and see no real upward momentum in sales. There is simply too much inventory and not enough qualified buyers to generate any bounce in 2011. As a result, construction and secondary industries will continue to struggle this year.
Until we start creating jobs, this won’t change — not in the first half of 2011, and not in 2012 or any time in the foreseeable future.