http://mrmortgage.ml-implode.com/2008/10/27/no-spin-sept-new-home-sales-report/

Still, either way I am glad to see you listen to your critics.

“HOME SALES TUMBLED IN SEPT posting one of their largest one month drops in a year”

Yet last friday, Mr. Mortgage’s lead in to this story said:

“The spin is insane. HOME SALES CRASHED IN SEPT”

Could it be that despite my “spewing” as he called it, when sales go up year over year that is not “CRASHING”? Hmmmmm….

Also, Mr. Mortgage, you pose the silly question, “How in the world can inventories fall when sales fall 9.6%?” Declining sales figures, even if no listings are pulled are entirely mathematically possible. Why don’t you build yourself a simple spreadsheet to prove it to yourself since the math is so hard for you to grasp?

That is not true at all. Mr. Mortgage cuts past the spin and as I proved out, the September they were comparing against was the lowest monthly sales since 1988. September 2007 then was an anomaly, and should not be compared against.

All things considered this blog is slow, mainly because people are more interested in making money than reading bad news. Good news at this time is just not in the cards. Worse, the bad news is going to come out a week or two before Christmas when we start measuring closings after the crap hit the fan on wall street.

We might not get good news for 6 month, a year or longer. California is going into the crapper fast. In addition to loss of jobs in the home building market, let’s see what else we have….

“In terms of jobs, the five largest sectors in California are trade, transportation, and utilities; government; professional and business services; education and health services; and leisure and hospitality.

In terms of output, the five largest sectors are financial services, followed by trade, transportation, and utilities; education and health services; government; and manufacturing.”

Ok so in terms of jobs, trade is number one. Container stats for September.

Port of Long Beach, down 15.2%
http://www.polb.com/economics/stats/latest_teus.asp
Port of Los Angeles down 6.69%
http://www.portoflosangeles.org/maritime/stats.asp

So in a global recession, we are likely to get hit hard on the trade front. These numbers were before the crap hit the fan. One longshorman was telling me if it is like this now, he is not going to want to see what January is going to be like. So that is our number one employer, trade.

Number one for output, financial services. I think we all know where that is headed except for payday loans.

Anyone want to guess what sales tax revenue is like right now? The government is going to have to cut spending, state, county, local. Everybody is going to be cutting and slashing. Things are not going to get better anytime soon. We are going through serious withdrawals and this is going to take time to work through. This is not going to help real estate sales.

And when we hit bottom, it is not going to be a sharp V. The data is starting to indicate that first time home buyers are the few who even qualify. Existing home owners can’t upgrade because they don’t have positive equity, and a foreclosure locks them out of affordable mortgages for 3+ years.

When a forclosure sells, it doesn’t create a new homebuyer, the money simply goes to the bank, who sold at a loss. Like Mr. Morgage says, organic sales are the most important, and they are at their lowest level in recorded history.