Economy Watch: August New Home Sales Unchanged

For new home sales in August, it was more of the same. The annualized rate was unchanged from a sickly July rate of about 288,000, according to the U.S. Department of Commerce.

September 27, 2010
Dees Stribling, Contributing Editor

Courtesy Flickr Creative Commons user omniNate

For new home sales in August, it was more of the same. The annualized rate was unchanged from a sickly July rate of about 288,000, according to the U.S. Department of Commerce. In May of this year, the rate was 282,000, making that month the worst month for sales since Commerce started keeping such records during the Kennedy administration.

Then again, the market had help in being that low, mainly in the form of the expiration of the housing tax credit. Presumably, the period during the life span of the credit “borrowed” buyers from later months as they rushed to take advantage of the subsidy.

Compared with August 2009, new home sales this August were down 28.9 percent. To get a sense of just how much bubble popped in the late 2000s, one has to go back to the bubble’s peak, which was July 2005. New sale sales are down 79.3 percent since that long-ago month, with no telling just how much buyers’ regret all those properties sold five years ago represent.

Dubai Office Market Has a Hangover, Too

According to a report released late last week by Jones Lang LaSalle, the Dubai office market is a case of good news, bad news–with the bad news swamping the good. In recent years, the emirate has had a lot of office space absorption, which is the good news. What market wouldn’t be happy with 14 million square feet of leasing just in the last two and a half years (end 2007 to mid-2010), which is what Dubai has experienced?

Unfortunately, “despite this strong demand, excessive levels of new supply have resulted in an oversupply of office stock,” the report noted, with a bit of understatement. The total amount of office supply in Dubai ballooned by 140 percent during the same two and a half years, or about twice as much as was being absorbed.

Remarkably, the report also explains that “these market conditions are not unique to Dubai: Other emerging markets such as Shanghai, Singapore and Moscow have all experienced similar conditions, which include an oversupply scenario and high vacancy rates.” In Dubai’s case, and very likely in those other markets, some buildings won’t be able to “attract any tenants in the foreseeable future.”

Recession Over? Americans Think Not

The recession officially ended in June 2009, if the office in question is the National Bureau of Economic Research. On the other hand, nearly three-quarters of Americans disagree with that assessment, according to a poll released over the weekend by CNN/Opinion Research Corp.–74 percent, in fact. Only a quarter, exactly 25 percent, say the recession is over.

The poll also asked how effective President Obama’s various economic policy measures have been, and the results are a statistical tie. Some 47 percent of respondents say the policies have or will benefit the economy, while 48 percent say they have not or will not. CNN/Opinion Research Corp. based these findings on 1,010 Americans surveyed by telephone Sept. 21-23.

Main Street might not be sanguine about the economy, but for the moment Wall Street is. On Friday the Dow Jones Industrial Average gained 197.84 percent, or 1.86 percent, while the S&P 500 was up 2.12 percent and the Nasdaq advanced 2.33 percent.