Duh: You are smarter than an economist

        Most of the reports today of a drop in new home sales include the footnote that “economists were surprised.”  Well, there’s a news bulletin for you.  Aren’t these the same guys who stood mute as the whole economic mess unfolded, and then made livings out of unhelpful after-the-fact analyses?

        According to reports, these geniuses expected the new home sales figure for December to be about 44,000 homes more than the reported 342,000.  Oops...again.

        I was an English major; therefore, almost by definition, numbers are not my strong suit.  But you don’t

need to know your multiplication tables to understand that a continuing rush of foreclosures, an unprecedented percentage of homeowners “under water” (mortgages greater than the values of their homes) and a double-digit national unemployment figure are, together, a huge drag on new home purchases.  The new-home builders are obviously way smarter than the economists (the more so for not listening to them).

        Sure, back in the days when price was almost irrelevant in buying a home in a rapidly rising market, most people wanted that new house smell.  It is a rush to be able to select your color scheme, appliances and flooring.  But that was then, and this is now:  Millions of homeowners so desperate to unload their homes before they face foreclosure that you could probably gut and refinish a 20-year old home to your desires and still have some money left over, compared with what you’d pay for a comparable new home.

        In this economy, a tremendous bargain smells a lot better than a new home.