Sign of the Double Dip Coming?

So I took a look at the New Home Sales number that was released today by the Census Bureau. Since seasonal adjustments just often adds noise to the number due to statistical machinations that take place, I looked at the seasonally unadjusted number. I also took a look at the year over year change in new homes sales as my own way of seasonally adjusting (as it is usually cold every January, for example). What I see does not look good, it looks like we may be starting another leg down. The first chart graphs actual monthly new home sales since 1964:




In the graph above you can clearly see the magnitude of the bubble, which was forming for about a decade before it popped. You also can see how we had a bit of a rebound, or bottoming, but now are at new lows. Now take a look at the following graph of the year over year change in new home sales, over the last 10 years.



Here you can really see the magnitude of the bubble bursting, with a few years of double digit declines in transactions, as well as the rapid bottoming in 2009. Unfortunately, it looks like New Home Sales have once again started to rapidly fall on a year over year basis, which is especially disconcerting since we all remember how bad January 2009 felt.

This is really not a good sign and unfortunately none of the schmucks in power are doing anyting meaningful about this. It's all about pet projects for them (healthcare, cap and trade) even though the reality of a double dip may be staring them in the face.