New Home Sales Crater; Disney Unveils Posh Plans

The pace of existing home sales slacked off after the federal tax credit expired at the end of April, but it's the sale of new houses that have truly taken a tumble.

Dees Stribling, Contributing Editor

The pace of existing home sales slacked off after the federal tax credit expired at the end of April, but it’s the sale of new houses that have truly taken a tumble.

Indeed, many buyers seem to have made a mad dash to get the papers inked before the end of April. According to the U.S. Census Bureau, new homes sold at an annualized rate of 300,000 units in May, a 32.7 percent drop from the previous month.

 That was a significantly bigger drop from the rate of about 400,000 projected by most economists. In April, the annualized rate was 446,000, which represented an increase of 14.7 percent compared with March. It also represents a decrease from the May 2009 estimate of 367,000, a decline of 18.3 percent.  Wednesday’s glum news followed the disclosure that existing home sales slipped 2.2 percent from April to May.

The Mouse to Develop Posh Homes

Not every player in the new-home game is discouraged, however. Certainly not Walt Disney Co., which unveiled plans on Wednesday to develop vacation homes at its Walt Disney World resort in central Florida. Not just any vacation homes, either, but properties intended aimed at a distinctly upscale clientele—say Scrooge McDuck or Flintheart Glomgold.

Dubbed Golden Oak, the development will include single-family homes priced at between $1.5 and $8 million (pictured). Fewer than 30 sites will be available for sale this year, the company expects that there will be about 450 residences at full build-out. Designed by Disney’s Imagineers, the gated community will feature Disney’s well-known, unrelenting attention to detail in every hedge and pathway. Also on tap is a planned 445-room Four Seasons resort that residents will have access to.

Disney plans to have fairly tight control of the look of the properties, at least initially. Options include Mediterranean, Tuscan, Spanish Revival, Venetian, Italianate, Dutch Colonial and Island Colonial on lots from a quarter-acre to three-quarters of an acre, and buyers must use a homebuilder selected by Golden Oaks.

CEOs Look to Increase Hiring During 2H10

The Business Roundtable released its second-quarter CEO Economic Outlook Survey on Wednesday, and the report revealed a surprisingly upbeat mood in the nation’s C-suites. Some 39 percent of the CEOs surveyed expected to increase hiring in the next six months, which is the highest such figure since the second quarter of 2007. Only 17 percent expected to fire more people, and 43 percent expected no change in staffing levels.

Fully half of the CEO respondents said there would be no change in capital spending through to the end of this year, but 43 percent said they planned to spend more. Only a few said there would be less.

Wall Street had a nearly flat and ultimately mixed day on Wednesday. The Dow Jones Industrial Average gained a microscopic 4.92 points, or 0.05 percent, but the S&P 500 and the Nasdaq declined 0.3 percent and 0.33 percent, respectively.