housing market gets a lump of coal for christmas

The big financial news today of course was the unexpectedly bleak report on the housing market - check out this AP article by Martin Crutsinger.

WASHINGTON — Sales of new homes plunged in November by the largest amount in nearly 12 years, the most dramatic evidence yet that the booming housing market is starting to cool off.

The Commerce Department reported Friday that sales of new single-family homes fell 11.3 percent last month to a seasonally adjusted annual rate of 1.245 million units.

Analysts had been expecting a drop of 8.7 percent, given that sales in October had jumped unexpectedly to an all-time high. But many said the size of the decline was a clear indication that the five-year boom in housing has peaked.

In addition to the big plunge in sales, the median price of a new home dropped 4.1 percent from the October level to $225,200. That was up only 0.3 percent from November 2004, representing a marked slowdown from what been double-digit price gains.

I own my own home, and I'm glad I do; IMO, it just doesn't pay to rent, at least in the area of Chicago I am in. But I'm damn glad I'm not a condo flipper in this environment.