Homebuilders: Contract cancellation rates are approaching 'normal' for first time since 2005

[w¡n9Nµ7 §£@¥€r 123]

From Calculated Risk:

"Our contract cancellation rate of 24% for the second quarter is at a more normalized level, the likes of which we have not reported since the third quarter of 2005,"

Ara K. Hovnanian, President and CEO Hovnanian Enterprises, June 2, 2000

The surge in cancellation rates was an important story after the bubble burst. Now it appears cancellation rates might be returning to more normal levels.

The following graph shows the average cancellation rates for some selected homebuilders.

...

There appears to be a seasonal pattern (fewer cancellations in Q1), but most of the builders are reporting the lowest cancellation rates since the bubble burst.

The cancellation rate could rise again if mortgage rates move higher, but this is a little bit of good news for the builders.

[one...two...tree 2,762]

Thank God...I mean, BS! More propaganda from the Left! Obama's destroying this country and make us all commies!

[w¡n9Nµ7 §£@¥€r 123]

Thank God...

Not so fast. Let's see how long this lasts.

It's still very early.

[one...two...tree 2,762]

Thank God...

Not so fast. Let's see how long this lasts.

It's still very early.

Teabag in hand...ready for the signal.

[Pinocchio Liberal 268]

Until Acorn starts spending some of that 8 billion, on shakin down the banks again!

[Immigrant2009 0]

I think by summer of next year, thing might come back to normal, thats why my feeling. I think the bleeding has stopped and recovery has started but to make the level like we were in 2003-2005 will take 2-3 year when the stock market comes back fully.

What do you think?

[웃 910]

I can't believe Obama fixed this problem in just a few months in office.

[w¡n9Nµ7 §£@¥€r 123]

... to make the level like we were in 2003-2005 will take 2-3 year when the stock market comes back fully.

If you're referring to contract cancelation rates and sales volume, I'm inclined to agree.

But if you're referring to price, no. Prices will have to remain low. In the last two RE downturns, nominal prices stagnated anywhere from 5 to 7 years after hitting bottom before the ascent began again. Of course, if nominal prices stagnate while inflation eats away at your dollar.... well, you know what that means.

[Pinocchio Liberal 268]

I think by summer of next year, thing might come back to normal, thats why my feeling. I think the bleeding has stopped and recovery has started but to make the level like we were in 2003-2005 will take 2-3 year when the stock market comes back fully.

What do you think?

Gotta love those FEELINS! Were goin another leg down my freind.

[dzjohn 0]

I think by summer of next year, thing might come back to normal, thats why my feeling. I think the bleeding has stopped and recovery has started but to make the level like we were in 2003-2005 will take 2-3 year when the stock market comes back fully.

What do you think?

Gotta love those FEELINS! Were goin another leg down my freind.

we really shouldn't discount the present level of prowess in the hands of Peter Sutherland today...which now includes China, so this downturn is "different" than all others historically, in that an American is co-director of Tri-Lateral Commision, The World Trade Organization and Goldman Sachs, simultaneously...another first includes a "hotline" betwen The Chairs of The U.S. Federal Reserve and The Bank of China...however, the "other leg" you reference may include a last squeeze of mortgage equity, via unemployment over the summer of 2009, then the ACORN TARP mystery group will turn on the faucet for manufacturing and housing.

Course then there was the National Presidents of The Chamber of Commerce along with The Real Estate Commission both tauting the bottom was reached in January 2008....oppphhh, what a lotta shoe leather to eat, and a complete loss of trust

"...never more, never more" - EA Poe