New home sales data for December missed consensus expectations. Hanley Wood chief economist Jonathan Smoke notes that seasonality and constrained inventory of new single-family homes for sale weighed on 2013's last benchmark. His spot check of traffic and contract activity in a number of markets in early January continue to show uneven, outlier performance in some markets, and a jury's-not-in-yet status on many others. Have a look, too, at Calculated Risk's Bill McBride take on the data point for his longview perspective.
Size Matters:New York Times contributor Jim Rendon's piece, "In Housing, Big Is Back (Not Counting the Extras)," shows ways that data points can mislead. For a home builder to infer that larger square footage homes faded from demand, and have come roaring back would be a mistake. What Rendon's piece begins to get at, but doesn't adequately follow through on is that 2013's demand pool consisted mostly of two kinds of buyers--investor groups buying distressed properties for cash, and affluent, non-contingency buyers deciding that since there was a floor under prices, it was time to spring for the dream home. So, the fallacy would be to say that there's no market for smaller square footage new homes. That is precisely where the market will find its true footing once home builders can get their first-time buyer, entry level mojo going.
What's old is new again features prominently in this Wall Street Journal piece by Dale Hrabi, "Looking for an Old New House." The take-away here is that more people in the ability-to-pay-and-get-financing-if-they-need-it category demand 1). livability as expressed in contemporary featuring and connectedness, and 2) an exit plan, which is supported by a home that fits a classic, road-tested design. Net, net, we see traction for contemporary exteriors, warmed over by classical regional touches, especially as younger buyers eschew their fathers' and mothers' homestead appearance.
Correction in the works: Stay tuned to coverage of the financial market machinations to get a sense of where there's push and pull on capital investment strategies amid questions as to the impact of a slowdown in Chinese economic demand and ongoing Federal Reserve monetary accommodation tuning.
And, as part of your Spring Selling Season fitness regimen, check out Jason Forrest's challenge for all sales associates to learn to "dig deep."