Rosenberg Explains Why Not One New Home Priced Over $750,000 Sold In July
by ilene - August 26th, 2010 10:15 am
Rosenberg Explains Why Not One New Home Priced Over $750,000 Sold In July
Courtesy of Tyler Durden
The most damning words on the recent horrendous housing data come from David Rosenberg: and since he has long been spot on in his macro observations, the 15% or so in additional price losses anticipated, will make this depression a truly memorable one (we will investigate not only the surging supply side of the housing equation, but the plunging demand side in a later post), and will leave the Fed with absolutely no choice other than the nuclear option: "If the truth be told, if we are talking about reversing all the bubble appreciation that began a decade ago, then we are talking about another 15% downside from here. The excess inventory data alone tell us that this has a realistic chance of occurring…The high-end market, in particular, is under tremendous pressure. In fact, it is becoming non-existent. Guess how many homes prices above $750k managed to sell in July. Answer — zero, nada, rien; and for the second month in a row."
From today’s Breakfast With Rosie
Once again, the consensus was fooled. It was looking for 330k on new home sales for July and instead they sank to a record low of 276k units at an annual rate. And, just to add insult to injury, June was revised down, to 315k from 330k. Just as resales undercut the 2009 depressed low by 15%, new home sales have done so by 19%. Imagine that even with mortgage rates down 100 basis points in the past year to historic lows, not to mention at least eight different government programs to spur homeownership, home sales have undercut the recession lows by double-digits.
This is what we have been saying for some time, in the aftermath of a credit bubble burst and a massive asset deflation, trauma has set in. The rupture to confidence and spending from our central bankers’ and policymakers’ willingness to allow the prior credit cycle to go parabolic has come at a heavy price in terms of future economic performance. Attitudes towards discretionary spending, credit and housing have been altered, likely for a generation.
The scars have apparently not healed from the horrific experience with defaults, delinquencies and deleveraging of the past two years — talk about a horror flick in 3D. The number…
ZANDI: DON’T BELIEVE THE HOUSING DATA
by ilene - April 26th, 2010 1:11 pm
ZANDI: DON’T BELIEVE THE HOUSING DATA
Courtesy of The Pragmatic Capitalist
Mark Zandi of Moody’s says the recent strength in housing data is almost entirely due to seasonal factors and government intervention. Zandi says housing data is likely to dip again after the April data is released:
Source: Bloomberg TV
MORE ON THE HOUSING DATA….
by ilene - October 23rd, 2009 5:15 pm
MORE ON THE HOUSING DATA….
Courtesy of The Pragmatic Capitalist
Mark Hanson delves even deeper into the housing data. It’s very hard to make an argument that sheds his superb analysis in anything other than a bearish light:
Year-to-date 2009 sales are 20k FEWER than 2008, one of the worst years on record. And we spent hundreds of billions to achieve these results.
From 30k feet, this is your housing recovery. What would have sales been without spending hundreds of billions on pulling out and forward demand from first time homeowners and investors?
Remember, organic move-up/across/down buyers have always led the market. First timers and investors have always been the weakest segments and cannot carry the market for long. This highlights the most important factor plaguing the housing market — epidemic negative equity prohibiting the typical homeowner from selling and re-buying. Epidemic negative equity is only fixed by ‘years’.
The tax credit extended the 2009 purch season a month (green) but as you can see from the MoM drop, seasonality reigns supreme. When this last push to get in before tax credit sunset, it sets the market up or a cash-for-clunkers effect over the near-term. If the credit is extended, it simply takes the pressure off and allows buyers to shop vs panic buy. Either way, the fundamentally weak housing market will show itself over the near term.
Lastly, in today’s release Lawrence Yun commented on the falling prices saying that…
“The national median existing-home price3 for all housing types was $174,900 in September, which is 8.5 percent lower than September 2008. Distressed properties continue to downwardly distort the median price because they generally sell at a discount relative to traditional homes in the same area.”
But distressed sales were the lowest of the year at 29% from 31% last month due to HAMP and the lack of foreclosure inventory. Therefore, the median is actually being skewed higher as more orginic and short sales went off towards the end of the season.
“Early information from a large annual consumer study to be released November 13, the 2009 National Association of Realtors® Profile of Home Buyers and Sellers, shows that first-time home buyers accounted for more than 45 percent of home sales during the past year. A separate practitioner survey shows that distressed homes accounted for 29 percent of transactions in September.“
Some of the best real estate analysis around. Thanks Mark!
Source: www.mhanson.com
THE MANIC MARKET
by ilene - August 19th, 2009 2:50 am
THE MANIC MARKET
Courtesy of The Pragmatic Capitalist
- An impressive 1% move in the major indices today, no? No. The NYSE volume of 634mm shares (real-time) at 3:15PM almost looks like a misprint. Either everyone is on vacation or there is absolutely no conviction in today’s rally.
- The first time housing data misses estimates in the last few months and the media immediately spins it as a positive. Convenient.
- Are stocks simply moving higher in anticipation of the SEC’s final ruling on short sales changes? Naked shorts are definitely scrambling again….
- Am I the only one that reads the weekly consumer sales data? This week’s figures were nothing short of atrocious.
- The recent GDP data in Europe sure got people excited. Don’t be fooled, Europe isn’t recovering any time soon.
- Is copper telling me that my entire secular bear market thesis is wrong?
- The collapse of the beta trade didn’t last long. Like a bi-polar monkey on meth the momentum junkies jumped right back into the boat today: