Anticipation about the Commerce Department’s housing figures–released today–ran high all week. Some had hoped the data would show the housing decline was turning around; most expected it wouldn’t.

Investors were so confident the home sales results would be bad that the dollar fell Thursday against the euro for the fifth consecutive day–its longest period of decline since October, Bloomberg reported.

And sadly, the naysayers were correct. According to the Commerce Department, new home sales not only fell from last month but hit their lowest point in 12 years (12 years!). New home sales have plummeted 34.4 percent over the last 12 months.

All across the country–except for the West, where sales increased 4 percent–home sales declined last month. In the Northeast, they fell 19.3 percent; the Midwest saw a 27.6 percent drop and sales fell 6.4 percent in the South. The median sales price of new homes also dropped.

The news is the latest in a string of disappointing year-end results:

• The Commerce Department reported Thursday that durable goods orders were less than had been forecast in November, The Chicago Tribune reported.

• That paper–and others–also felt the pangs of the housing decline as it continued to drag ad revenue down. The Tribune Company, which owns the Chicago Tribune, recently reported
  a 40 percent decline in November real estate classified ad revenues.

• The New York Times reported yesterday that housing has also affected statewide growth, hampering states like Nevada and Florida, which had the slowest annual growth since the decade started.

• U.S. mortgage applications have dropped to the lowest level of 2007, according to the Washington-based Mortgage Bankers Association.

Even the typically lucrative Christmas shopping season fell flat. The National Retail Federation has forecast November and December
holiday sales will be up 4 percent from last year–growing at the
slowest pace since 2002.

However, as consumers trudge to stores to exchange returns, take advantage of year-end sales and use their gift cards (which don’t count as a purchase until they are redeemed), retailers could make as much as $60 billion, according to CNNMoney.com. Half of that is expected to be gift card-related.

A stronger-than-expected shopping season could offer a vote of confidence for the U.S. economy–and act as another indication that we aren’t headed into a recession, as many have feared.

Or would it just indicate that tapped-out consumers, frustrated by their shrinking home values and the abundance of bad foreclosure, finance and economic news, just feel so hopeless that they no longer care about adding to their debt? If you owe thousands, does adding the cost of a few new outfits even seem to matter–and is that what’s giving spending a boost?

Do high consumer spending results indicate a solid economy–or a population that’s given up? What do you think?

Two separate studies published this week–one about U.K. house prices and another about prices in the U.S.–painted a bleaker seasonal picture of both markets than many economists would have liked.

In December, U.K. house prices dropped again–for the third month in a row–according to Hometrack, a residential research company based in London. Hometrack also said houses are now sitting on the market longer than ever: an average of eight weeks.

However, Hometrack’s monthly report did contain one good piece of year-end news: Overall in 2007, U.K. home prices were up 3 percent.

True, that’s because prices were hefty in the first half of the year, but at least the U.K.–while seeing a moderate rise in foreclosures, according to Morningstar–isn’t posting the highest foreclosure rate in six decades. (The U.S., according to The Financial Times, hasn’t seen its current foreclosure rate since the Depression.)

The Commerce Department reported in late November that the median new home sales price in October 2007 was $217,800–down 8.6 percent from September’s $238,400. The most recent Standard & Poor’s/Case-Shiller home price index,
released today, said U.S. home prices had dropped for the 10th
consecutive month in October.

Eleven of the 20 metropolitan areas measured in the index recorded their largest monthly
decline on record in October, according to S&P/Case-Shiller.

Housing demand appears to have dropped, too: The Commerce Department’s seasonally adjusted estimate of new houses for sale at the end of October was 516,000–an 8.5 month supply.

Does this mean both the U.K. and U.S. housing markets are in serious trouble in 2008–a week before the year even begins?

Maybe. Maybe not. Many are predicting that the U.K.–which has already been served the dangerous economic cocktail of rapidly rising home prices, low interest rates and increasing consumer debt–is starting to show a housing market slowdown similar to the early stages of the U.S. decline, Morningstar reports. People relying on the massive equity their homes have amassed during the boom may be in trouble as home prices and values taper off.

Some–such as Bloomberg News–are reporting the U.S. situation also looks grim. Economists Bloomberg surveyed felt soon-to-be-released November new home sales figures would show homes sold at an annual rate of 718,000 in November, a decline from October’s 728,000 rate.

And yet, that new home sale and price data –due from the Commerce Department on Friday–could show a slight improvement in the housing market. We’re also still waiting for the final results from the holiday shopping season to see how consumer spending fared.

Both spending and housing will have an unquestionable impact on the economy.  Is a recession in our near future, as many have feared? Or are we on the road to recovery? What do you think?

We want to hear your take–share your thoughts and opinions by posting them on our blog.

As the year draws to a close, many members of the housing industry–developers, brokers, real estate agents–are crafting their budgets for 2008.

Property managers are no exception. And, according to U.S. Census Bureau information, keeping costs down might soon be even more of a pressing concern for residential property managers.

Rent appears to be contributing less to new apartment budgets: The median asking price for all new privately financed, nonsubsidized, unfurnished rental units in buildings with five units or more in the first quarter of the year was roughly $102 lower than the asking price in the previous quarter, the latest Census rental data showed.

There has been speculation that, as foreclosures rise and home mortgages become harder to get because of tighter lending restrictions, renting will be on the rise in the U.S.

However, if oil and energy prices keep increasing and rent falls in 2008, many property managers may find themselves looking to make the most out of every allotted budget dollar–and cut costs wherever possible.

A few suggestions:

• Get the Word Out Wisely. Promoting your property can be challenge when coupled with maintaining and managing it–which is why property managers often find purchasing combined print and Internet ads can save time and reach a solid amount of potential renters.

An August 2007 study by Watertown, Mass.-based marketing firm iProspect found 39 percent of Internet users make a purchase after being driven to Web sites from off-site marketing–print ads and word-of-mouth are the two largest influencers.

Although several national newspapers have recently reported their online and print real estate classifieds aren’t selling well, managers may reap benefits from listing rental properties.

Or, at least, that’s For Rent Media Solutions’ take. For Rent runs the ForRent.com listings Web site and recently launched a print version of its rental guide.

The latest edition includes a region in North Central/Northwest Indiana and Southwest Michigan.

"ForRent.com-The Magazine merges print apartment listings with its Internet listing on ForRent.com," says Anita Williams, ForRent.com-The Magazine regional manager. "Since the magazine’s introduction in eight other markets, property managers in these areas have seen phone leads increase by an average of 315 percent, according to our LEADS Management System."

• Cut Costs. Save the World. Many property managers are finding that reducing energy usage can be good for the environment–and for their building’s budget.

Consider seeking out events like the roundtable that New York-based US Energy Group, which offers a number of products to control, manage and monitor building energy usage, held for property managers in late November.

Participants discussed ways to reduce energy use and–of course–save money. Covering topics like water usage, HVAC savings and government incentives, the two-hour event brought energy experts and property managers together in Great Neck, N.Y.

• Be Smart About Taxes. Global accounting, tax and business advisory organization Grant Thornton International’s Construction, Real Estate and Hospitality Industry Group recently released some tax tips to help property managers prep for 2008.

Among the highlights: Grant Thornton suggests reviewing your deferred compensation plans in light of complex new rules that will affect plans resulting in a compensation deferral. The rules, which should take effect at the end of this year, can speed up taxation to recipients–along with interest and penalties–if violated.

The company also advises property managers to conduct a property tax review to see if any opportunities to lower property tax valuations on real property exist and to make sure all real property is separate from the personal property tax base.

It’s worth the time: Potential tax–and other–savings could last for years.

Yesterday’s news contained an item about a Chicago-area company that had just completed the first phase of its housing auction series. The properties up for bid included single-family homes, unused land, apartments–more types of housing than you might expect.

Although the word "auction" may conjure up images of a 4-H club–or bankruptcy, some of today’s housing auctions involve neither.

Of course, RealtyTrac announced today that U.S. home foreclosures had risen 68 percent in November from a year earlier, according to Bloomberg; and so there clearly are bankruptcy-related auctions. (So many, in fact, that one company has launched an auction Web site to handle the sale of pre-foreclosure, post-foreclosure and bank-owned properties.)

But auctions also can be a way to unload extra condo units in a mostly-sold building, unused land and other items that aren’t wrapped up in financial turmoil.

Developers around the country have used auctions recently to unload property for a variety of reasons.

• Buena Vista Custom Homes sold 141 homes–generating a total of $65 million–in an auction held last weekend at the Oregon Convention Center. Roughly 2,209 attendees came to bid on the 240 homes, according to the Oregonian.

Buena Vista set reserve prices to mirror cost; the company says 96 percent of the homes sold were sold under the reserve price–as low as $195,000 for a 3 bedroom 2 1/2 bath home in Sandy, Oregon to $510,000 for a 5,073 square foot 4 bedroom 3 bath home in Happy Valley, Oregon.

Homes offered at auction ranged from 1,113 to 5,073 square feet and were located in some of the areas of highest demand around the Portland metropolitan area.

Buena Vista also is donating a portion of each home sold–more than $250,000–to 19 area charities.

• Before last year, most homes that had been seized due to mortgage defaults in the Mesa, Ariz.-area were sold at trustee auctions at the Maricopa County courthouse, the Arizona Republic reports. But now, because the value of many of those properties has dropped–and yet a significant amount is still owed on them–buyer interest has waned.

The solution: Auction firm Hudson & Marshall recently held an auction in Mesa which the Republic is calling the potential start of a new trend. Homes in the auction, which had been repossessed by large U.S. lenders, ranged in value from $100,000 to $600,000. And yet, more than 75 percent of the properties sold for prices from $75,000 to $465,000.

The home buyers got a deal–but in truth, the large banks who would probably rather recoup some costs by unloading foreclosed homes–rather than paying for and dealing with their upkeep–did, too.

And yet, in some very depressed home markets, buyer interest–no matter how great the deal–may just be too low to support an auction system.

In California–which saw some of the biggest home value jumps before the bust and some of the biggest falls after–just 17 of the 1,336 homes in foreclosure offered up for auction in Modesto, Merced and Stockton last month actually sold, according to the San Jose Mercury News.

To buy a new home, unless you’re a first-time homebuyer, you have to maintain some belief that you can sell your current residence.

And in places like West Virginia–in which some areas are seeing homes sit on the market almost two months more than last year, according to the Times West Virginian–and California, that’s an iffy prospect these days. Home shopping may not seem like a good idea, no matter how big the deals are.

But, for developers with unsold portions or deals that fell through as financing got harder to come by, auctions can be a way to bid yourself back to being in the black.

Jerry Howard, chief executive of the National Association of Home Builders, told CNNMoney.com last week that overbuilding was a key reason for the current housing decline–and he’s not kidding.

At the end of October, there were 191,000 finished homes hanging out on the market, 14 percent more than last year, according to government data.

The number swells to 500,000 if you include new homes about to be built. That gives us a housing supply of more than eight months–and a declining home price.

As the housing supply grew, demand shrunk, and new home median price fell a record 13 percent in October.

And what about the plan announced two weeks ago to rescue Americans in mortgage trouble? It’s been touted for keeping a large crop of homes from being foreclosed upon and added to the housing inventory–but many say it won’t be enough to spur sales of homes that are already just sitting there.

"At best, [the plan] may stop some of the hemorrhaging of the housing market, but it doesn’t necessarily turn things around,” Nicolas Retsinas, director of Harvard University’s Joint Center for Housing Studies in Cambridge, Mass. told Bloomberg. "The fundamental problem with housing is oversupply.”

Because of the excessive supply, CNNMoney.com reports that many of the big publicly traded builders–like Lennar, which announced at the end of last month it would sell 11,000 properties to Morgan Stanley for 40 percent of the value–have seen their homes’ value decline.

However, while Howard says price drops may continue, he doesn’t expect homes to sell for 50 or 60 percent of their asking price.

That’s good news for the industry. But how can we reduce the housing supply without slashing prices–which would further drag down already weak U.S. home values?

• Developers Can Lower Cost Without Lowering Price. According to Jon Boyd, president of the National Association of Exclusive Buyer Agents, developers want the recorded price of each home they sell to remain as high as they can get it because they have more just like it on the market to sell. They are, of course, thinking about the big picture–they have to.

CNNMoney.com suggests buyers can gain from that need by asking for money for closing costs and other home buying expenses like condo association fees and even mortgage payments.

The cost of buying a home will seem lower to them–but the home’s selling price won’t seem lower to the company that built it. Developers can structure deals to include those added-value extras, which might woo some of the hesitant buyers who are waiting for the big deals they think are coming in the months ahead.

Developers concerned about potentially outlandish requests, take note: If you’re trying to move inventory without cursing what’s left, make sure buyers know that Fannie Mae and Freddie Mac have set limits about how many incentives can be included in deals. Getting greedy can reduce the amount they can borrow–and ultimately, could block them from buying at all.

• Agents Can Work on Selling Pre-Existing Homes. It may take time for new home sales to pick up. But last week, the National Association of Realtors’ announced that its Pending Home Sale Index had risen slightly in October.

Could it be an overly optimistic take–or a sign that things may finally be turning around? NAR thinks so.

"Now that mortgage conditions have improved, some postponed activity should turn up in existing-home sales over the next couple of months, and I expect sales at fairly stable to slightly higher levels," NAR Chief Economist Lawrence Yun said.

Looking to capitalize on the new-home feel when selling existing homes? Add new siding or a deck to the outside of the house. The 2007 Remodeling Cost vs. Value Report, produced by Hanley Wood, LLC in cooperation with REALTOR Magazine, found exterior upgrades were the highest national percentage of costs recouped this year.

Whatever we do to reduce the housing supply, it’s important to remember not to get overexcited and overbuild when the market picks up again.

In the Netherlands, the Central Planning Bureau (CPB) has studied the prices of the Dutch housing supply for 35 years. Its findings are telling–there, a 10 percent home price increase in a year only increases new home building by 0.4 percent.

In the U.S., a 10 percent price jump causes new home construction to rise 40 percent–100 times more than in the Netherlands, according to Netherlands Info Services.

Just ask Karen Ward, chief UK economist at HSBC, who has studied housing.

‘In my research I didn’t find a genuine balance between supply and demand in the property market," Ward told the Observer "A lot of the demand has been speculative, driven by people expecting big capital gains on their properties. As people realize the rapid gains they were expecting aren’t going to materialize, a lot of that demand will drop off."

Sounds familiar. Let’s just hope that next time, we can control the supply of U.S.homes before it drops.