Another month, another sequential drop in the Case Shiller NSA index – the one the index creators themselves say should be used, not the Seasonally Adjusted data used by most commentators eager to find the best data. At a sequential decline of -0.08% in January, this was the third drop in a row – the longest consecutive period of sequential declines since March 2012 – and post a year over year increase of 13.24%, down from 13.38% in December, and the lowest since September 2013. Clearly, the pricing gains across the country are slowing.
Amusingly, not even the Seasonally Adjusted data showed the complete “weather-free” data many were hoping for, because while sequentially the 20 City Composite Index beat on a squential basis at 0.85%, above expectations of 0.6%, the Year over Year increase of 13.24% missed expectations of 13.42% and was down from 13.38% last month.
Case Shiller Home Price Index Declines For Third Month A Row: Longest Negative Stretch Since March 2012
Consumer Confidence Jumps To 6-Year High (Led By Surge In Hope)
The ‘recovery’ has reached a new cyclical high in consumer confidence. Despite the economic growth sapping, recovery dampening, Fed tapering, consumers have not been more exuberant since January 2008. Of course, the jump to new highs is all about the future – the Present Situation index dropped while the “Expectations” index jumped 7 points to 83.5 – its highest in 6 months.
Sales of new U.S. single-family homes fell more than expected and hit a five-month low in February, pointing to continued weakness in the housing market.
U.S. housing starts fall, but permits rebound Reuters
US new home sales likely fell in February Associated Press
Weak U.S. inflation, housing data point to sluggish growth Reuters
Existing home sales stay in winter slump USA TODAY
Weather restrains U.S. private hiring, services sector growth Reuters
The Commerce Department said on Tuesday that sales fell 3.3 percent to a seasonally adjusted annual rate of 440,000 units, the lowest level since last September.
January’s sales were revised down to a 455,000-unit pace from the previously reported 468,000-unit rate.
Economists polled by Reuters had forecast new home sales at a 445,000-unit pace in February. New home sales fell 1.1 percent compared with February 2013.
Last month’s drop brought new home sales in line with other data such as home resales and building activity that have offered a downbeat picture of the housing market.
Some of the housing slowdown has been blamed on an unusually cold and snowy winter. But the sector, the main channel through which the Federal Reserve has sought to stimulate the economy via monthly bond purchases, lost momentum last summer following a run-up in mortgage rates.
A dwindling supply of homes for sale and soaring house prices have also weighed. But a recovery is expected later this year as household formation accelerates after abruptly slowing in 2013.
Last month, sales in the Northeast tumbled 32.4 percent, the biggest decline since October 2012, indicating severe weather continued to hurt activity. Sales fell 1.5 percent in the South, which experienced harsh weather. They surged 36.7 percent in the Midwest, but fell 15.9 percent in the West.
Though the supply of new houses on the market hit the highest level since December 2010, inventory remains low. At February’s sales pace it would take 5.2 months to clear the supply of houses on the market.
That was up from 5.0 months in January and the most since last September. A supply of 6.0 months is normally considered a healthy balance between supply and demand.
The median price of a new home last month fell 1.2 percent from February 2013. It was the biggest drop since June 2012.
A massive renovation to Two Bunch Palms resort and bustling boutique spa and hotel buzz in Desert Hot Springs is paying off.
The city’s hotel tax revenue — otherwise known as transient occupancy tax — was up 33.8 percent in the second quarter of the 2013-14 fiscal year which includes October, November and December. It was the largest percentage gain of any valley city.
“We were definitely busier in the last quarter of 2013 compared to the year before, November and December specifically,” said John Trudeau, general manger for Two Bunch Palms. “And that trend has continued into the first quarter of 2014.”
Transient occupancy tax collections were up 8.4 percent valley-wide for the last three months of 2013, as hotels, resorts, inns and vacation rentals brought in more than $11.1 million for Coachella Valley cities.
Indio posted a dip in TOT during the last three months of 2013, down 9.2 percent. Cathedral City remains the weakest city for the region’s tourism economy, collecting $251,795 in transient occupancy tax, though this is likely to turn around with the renovation of the 285-room Desert Princess. The hotel will undergo a top-to-bottom redo, starting in May.
Tourism activity in 2014 has all indications of showing good results. Palm Springs TOT collections in January were up 23.6 percent compared to the same month last year. And the Greater Palm Springs Convention and Visitors Bureau reported its room-night bookings for convention sales in 2014 are already at 81 percent of the 2014 goal.
“Overall, we are all having a stronger year than last year,” remarked Bruce Abney, general manager for the El Morocco Inn and Spa in Desert Hot Springs. “But as you know, we have been pretty successful with marketing using our billboards and the Spa Tour to keep our name in front of folks.”