2007 Existing Home Sales Down 13% From '06

Sales of existing homes in 2007 totalled under 5.7 million units, down 12.8% from 2006 results, according to preliminary figures released by the National Association of Realtors. The seasonally adjusted annualized sales rate for existing homes in December didn't quite reach 4.9 million units, down 22% from the pace in December, 2006; the single family sales rate for the month slipped 21.6% to about 4.3 million units per year.
At December's sales rate, there were 9.6 months worth of unsold existing homes already on the morning. That's 45.8% higher than the inventory rate in the last month of 2006.
The median sales price for an existing home in 2007 was $218,900, down 1.4% from $221,900 in 2006. That's the first yearly drop in median sales price since NAR started collecting stats in 1968; some sources say it is the first time such a thing has happened since the Great Depression.
For anxiety fans, that's the second major economic indicator that's dipped to levels not seen since the Joad family was active; the US saving rate recently dipped into negative territory, which hadn't happened since 1933.

And you thought Cloverfield was scary...

From the Irvine Housing Blog, the story of a homeowner who was able to pull nearly $900,000 in home equity loans and refinancing using a property worth less than $400,000.

Harvard Sees Soft Remodeling Outlook

The Leading Indicator for Remodeling Activity published by Harvard's Joint Center for Housing Studies expects slight declines in remodeling activities through the third quarter of 2008..
The LIRA projects a 1.6% dip in the first quarter of this year, a 0.9% downturn in the second, and a 2.6% decline in the third.
“An expanding economy has helped cushion the remodeling market,” says Kermit Baker, director of the Joint Center's Remodeling Futures Program. “Absent a more serious national downturn, remodeling activity is expected to see only modest declines in 2008.”

2007 Starts Down by 25%

Housing starts for 2007 ended the year down 24.8% at 1.35 million units, with single family starts down 28.8% to 105 million units, according to the most recent figures from the Census Bureau. It was the largest year-over-year drop since 1980.
Starts in December began at a seasonally adjusted annualized rate of just under 1.09 million units, down 7.4% from November and down a third from December, 2006's pace. Single family starts were down 36% year-to-year and down 2.9% from November to a 794,000-unit pace.
The seasonally adjusted annualized rate for building permits in December dipped 34.4% from December, 2006, to 1.07 million permits. Single family permits fell 41.4% year-over-year to an annualized rate of just 692,000 units.
For the entire year 2007, there were just under 1.4 million permits issued, down more than one quarter from the 2006 final tally. Single family permits dipped 29.4% to 973,100 units.

Construction Salaries Inch Up in December, But So Does Inflation

Hourly earnings for construction increased 5.1% in December compared to the same month last year, according to figures released today by the Bureau of Labor Statistics. Construction workers earned an average of $21.56 per hour during the month, up 1.2% from November. That is the equivalent of $10.15 in 1982 dollars.
Weekly salaries for construction workers averaged a 4.1% increase year-over-year to $822.91, ($387.51 in 1982 dollars) down 0.7% from November.
By way of comparison, hourly salaries were up 4.1% to an average of $17.77 for all workers year over year, and weekly salaries up 4.7% to an average $605.96.
Inflation continued to inch upwards in 2007, according to the BLS, rising 4.1% during 2007. December's increase, though was just 0.3%, down from 0.8% in November.

Higher Prices Enhance Sales

The Indianapolis Star reports that a study by the California Institute of Technology finds that in a wine-tasting study, changes in the price of the wine changed the actual pleasure experienced by the drinkers, according to MRI results. The higher the price, the more the drinkers enjoyed the wine, even though the falsely labeled "higher priced" vintage was a lower-priced one already sampled.
Could this effect carry over to other products?

Some Stories to Ponder

The New York Times weighs the evidence that a consumer spending slowdown is underway.

Citigroup could be writing down $24 billion in losses due to the mortgage crisis, and is reaching out to a controversial Saudi moneyman, according to CNBC.

Fortune explains how taxpayers are going to help Bank of America buy Countrywide Mortgage, the nation's largest mortgage lender.

You Can Find Damn Near Everything at a Home Center

Steve Flaig had been adopted as a child and works at a Lowe's store in Plainfield Township, MI. He found his natural birth mother in December after months of searching, working at the same store.

Construction Unemployment Hits 9.4% in December

Unemployment for construction workers hit 9.4% in December, with about 968,000 out of work in the industry, according to the most recent figures from the Bureau of Labor Statistics. The construction unemployment rate had been 6.9% in December, 2006.
For the overall economy, unemployment jumped to 5.0%, with some 7.7 million out of work. Just 18,000 new jobs were added during the month, the smallest total in two years, and well below most experts' consensus.
Average hourly earnings nationally in December were $17.71, up 0.4% from November, and up 3.7% from December, 2006. December's average weekly earnings were up 0.4% from the previous month to $598.60, a 3.4% increase from the same month in the previous year.

Blast From the Past

If you've got a hankering for the days when kitchen cabinets were steel and appliances were avocado, visit RetroRenovation, the newest addition on our Sites to See.

November Residential Construction Spending Down 18%

The Census Bureau pegs residential construction spending for November at $484.9 billion, down 17.8% from the same month in 2006. The figure was 2.5% under October levels.

November Existing Home Sales Dip 20%

Sales of existing homes in November fell 20% from the same month last year to a seasonally adjusted annualized rate of 5 million units, according to the National Association of Realtors. Single family existing home sales dipped 19.9% in the month from November, 2006, to a rate of 4.4 million units.
Median sales price for an existing home in November was $210,200, 3.3% below levels for November of the year before.
Going into 2008, this probably sums up the situation as well as anything.