What Do the Home Sales Numbers Mean - Trend is Your Friend

Hi. Contact me today me for your real estate (and basic mortgage) questions.

Remember, Ill help you get it done...

First Off. I want to lead out with some significant market news:
DOW breaks above 12K mark briefly on two consecutive days. Stocks flirted yesterday with a close above 12000.

We are now flirting with the 12000 mark again today. Many of us believe it's only a matter of time before we put this mark in the rear view mirror as we move inevitably towards a much bigger number.

Could yesterday's New Home Sales report have something to do with the day's overall upbeat feel in the market?

REPORT DATA: The status for December 2010 New Home Sales was UP at 329000 units - a +17.5% improvement vs. November's UNCHANGED status at 280000 units.

It's important to remember that New Home Sales numbers are based upon contracts signed and not on actual closed sales.

Existing homes sales numbers are based upon actual closed transactions, and since Existing Home Sales account for almost all of the home sales reported in the Silver City New
Mexico area, they are more important statistics for us to pay attention to.

Still this equates to a 6.9 months supply of New Home Inventory, a surprising improvement over November's almost 9 months supply of new homes. Nice number there for certain. Players like D.R. Horton (DHI), Lennar (LEN), and Pulte (PHM) all got a boost in the market on the positive news.

Homebuilders have made a fantastic recovery. from being off 50% (based upon stock and index price) as a group, the group now trades off by less than 2% from 2008

December Pending Home Sales (Existing) was reported a few minutes back and is a mixed bag from this perspective. Pending Home Sales for December 2010 were UP 2% over November's numbers. This equates to a 4.2% DECLINE year over year.

It's possible that interest rates which threatened a break out in December got a few fence sitters "Off" their seats. IMO, rising rates (at least the fear of) added momentum to the number of accepted signed contracts during the month.

Contracts signed for Pending Home Sales were expected to be up 1% so the 2% spin seems an improvement. Unfortunately these numbers always seem to be adjusted down the road and it is hard to know how accurate any "first published" numbers really are.

The NE showed an average increase at 1.8%, BUT the WEST was very weak with the number of contracts signed for existing homes DOWN 13.2% in the same period.

******** IMAGE ABOVE: You "don't need no stinking" hot tub when you can walk to the Hot Springs on the Gila River below the house. Small parcel of Land (.6 acre+/-) with unfinished cabin near Gila Cliff Dwellings. Has electric, phone available, more... Gila Hot Springs New Mexico. Broker owned. Needs well and septic. As is-where is. General Warranty Deed. No other warranties or guarantees made.

In case you forgot... Please Contact me today me for your real estate questions and needs.