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16 Year Low In Housing Inventory On Record 1,939,197 Foreclosures

Tyler Durden's picture




 

CNBC eagerly quotes the Census bureau today in claiming that housing inventories have reached a 16 year low:

The seasonally adjusted estimate of new houses for sale at the end
of July was 271,000. This represents a supply of 7.5months at the
current sales rate.

That is certainly one way of looking at the data. Another way is to demonstrate that there is an absolute flood of record, excess inventory waiting to be unleashed on the market:

Maybe CNBC and the Census bureaus are trying just a little too hard to recreate the truth?

h/t fish gone bad

 

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Wed, 08/26/2009 - 14:56 | 48959 curbyourrisk
curbyourrisk's picture

tick tick tick tick tick

 

 

 

BOOOOM!!!!

Wed, 08/26/2009 - 14:59 | 48961 ghostfaceinvestah
ghostfaceinvestah's picture

1. This is new home inventory, not existing homes.

2. The homebuilders were a bit smarter this time and stopped building.

3. Uncompleted condo buildings are often not listed as new home inventory.

And yes, foreclosures are reaching records.  You should post this as a story, check out the graph.  You might have to register, but it is free.

http://www.americanbanker.com/issues/174_164/postponing_the_day_of_recko...

http://www.americanbanker.com/media/newspics/082609Defer.jpg

Wed, 08/26/2009 - 15:08 | 48975 Anonymous
Anonymous's picture

I presume the 'Home repossessed' line has plateaued as a result of banks not wishing to become more deeply involved in the business of property management.

One must wonder what will happen to the mortgage scene once the MBS purchasing portion of QE winds down early next year.

Bullet the blue sky. One trillion! Two trillion!

Wed, 08/26/2009 - 16:10 | 49048 Señor Tranche
Señor Tranche's picture

Also the deterioration of homes sitting unoccupied needs to be taken into account.  Surely there are many (I have seen some) properties that have become uninhabitable and more expensive to repair than tear down and rebuild.  This needs to be subtracted from inventory. 

Wed, 08/26/2009 - 17:33 | 49227 zenith1
zenith1's picture

pd are buying
massive amounts of citi and other zombie banks...
but they in fact

Wed, 08/26/2009 - 15:05 | 48972 TumblingDice
TumblingDice's picture

Our politicians are nothing more than cheap prostitutes.

Wed, 08/26/2009 - 15:18 | 48985 Sqworl
Sqworl's picture

I don't know what country your from, but my politicos in US are the highest paid Ho''s...lol

Wed, 08/26/2009 - 18:29 | 49315 Cindy_Dies_In_T...
Cindy_Dies_In_The_End's picture

Dude that got me thinkin' you could totally make him look like one of those Greys (space aliens with the big saucer eyes, tiny neck).

 

spooky.

Wed, 08/26/2009 - 22:42 | 49440 jake (not verified)
jake's picture

I used to think deals like this were a layup. An easy flip or rent out with instant positive cash flow. I'm so glad the pesimist in me said it's going lower..... You gotta feel bad (with a smirk on face) for the sap who bought at 1mm
good articles; good articles 4 slow news day ..http://www..
hat tip: finance news & finance opinions

Wed, 08/26/2009 - 15:19 | 48988 AnonymousMonetarist
AnonymousMonetarist's picture

Cheap?

Wed, 08/26/2009 - 15:27 | 49003 TumblingDice
TumblingDice's picture

I meant cheap not in nominal terms but in terms of the ROI.

Wed, 08/26/2009 - 18:54 | 49338 Anonymous
Anonymous's picture

The banks get billions on the penny.

Wed, 08/26/2009 - 15:20 | 48991 lizzy36
lizzy36's picture

I had a better term in mind but Tyler censored an earlier comment of mine related to vaseline so i have to be careful. 

Wed, 08/26/2009 - 15:46 | 49022 waterdog
waterdog's picture

That is because vaseline suggests men on men. Use K-Y next time. It suggests everyone on everyone.

Wed, 08/26/2009 - 16:00 | 49038 Anonymous
Anonymous's picture

Hehehe

Wed, 08/26/2009 - 17:28 | 49213 Takingbets
Takingbets's picture

Holly crap I dident know that! I gave my brother a jar of vaseline and some surgical gloves as a gag gift last christmas!!! Now I feel bad for giving that to him.

Thu, 08/27/2009 - 05:30 | 49716 Spartacus
Spartacus's picture

Tyler, our guiding spirit, should let us have some fun. The "vaseline" post was one of the best I have seen for a long time. I am serious. Those "two lines" summed up a chapter in world economy. You see Stiglitch said that capitalism has failed in US of A. He took many lines to explian it.Economists would take pages to give numbers and historical data to convey the message.

Lizzy did the same job in two sentences. Brilliant,it was.Thank you. I am planning to rob a bank and retire. That is the only way left it seems.

Wed, 08/26/2009 - 17:07 | 49147 Bob Dobbs
Bob Dobbs's picture

Our politicians are goddamed expensive prostitutes!

Wed, 08/26/2009 - 19:58 | 49423 Dogfather
Dogfather's picture

We mustn't insult prostitutes like that...

Wed, 08/26/2009 - 20:56 | 49491 Bob Dobbs
Bob Dobbs's picture

Sorry!  Hat tip to the old pro's!

Wed, 08/26/2009 - 20:38 | 49471 Anonymous
Anonymous's picture

at least there are SOME honest prostitutes, can't say the same for politicians.

Wed, 08/26/2009 - 15:28 | 49007 Anonymous
Anonymous's picture

GE: imagination at work on the balance sheet.

Wed, 08/26/2009 - 16:09 | 49047 Sqworl
Sqworl's picture

Best post today!!!  lol  + million.

Wed, 08/26/2009 - 15:37 | 49014 Anonymous
Anonymous's picture

GE, we bring evil to life....

Thu, 08/27/2009 - 05:50 | 49717 Hephasteus
Hephasteus's picture

LOL

Wed, 08/26/2009 - 15:03 | 48968 Anonymous
Anonymous's picture

I'm so sick of hearing people on CNBC pump everything to sound good. When is this economy gonna blow up so these people stop lying? WHENNNNNNNNNNNNNNN

Wed, 08/26/2009 - 15:19 | 48990 Anonymous
Anonymous's picture

In all fairness, I wouldn't make a blanket statement equating CNBC with 'lying'. The lens of perception is fully in your hands. Your psychology is your responsibility.

Besides, one must be wise enough to acknowledge the difference between 'the truth' and 'the whole truth'.

Wed, 08/26/2009 - 16:22 | 49064 economicmorphine
economicmorphine's picture

C'mon.  Seriously?   It's not like we don't have a pattern of behavior to fall back on.  Your attempt at sounding intellectual is laughable.

Wed, 08/26/2009 - 16:50 | 49093 Anonymous
Anonymous's picture

Good point. The CNBCtards are definitely dumb enough to believe what they're saying.

Wed, 08/26/2009 - 17:09 | 49152 Bob Dobbs
Bob Dobbs's picture

So help you God.

Thu, 08/27/2009 - 00:52 | 49665 dnarby
dnarby's picture

So help you BOB.

BOB!

...And you call yourself a Sub-Genius!  Turn in your frop! (smacks Bob)

Wed, 08/26/2009 - 15:44 | 49020 Anonymous
Anonymous's picture

CNBC has a conflict of interest. They gain viewers and sponsors when the market goes up not down. It's that simple.

Wed, 08/26/2009 - 15:08 | 48976 windhorse2000
windhorse2000's picture

Geee lizzy, timmy told me it was necessary to keep politics out of monetary policy.  Yikeeees!!!!

Wed, 08/26/2009 - 15:15 | 48983 Anonymous
Anonymous's picture

Why is it that people ony buy new houses in the north east?

Wed, 08/26/2009 - 16:12 | 49052 Deficient Market
Deficient Market's picture

Isn't that where the Hamptons are?

Wed, 08/26/2009 - 15:18 | 48986 Anonymous
Anonymous's picture

i'm as bearish as the next guy, but the fact that the people that frequent this site are hoping for an implosion so they can feel vindicated is sickening.

Wed, 08/26/2009 - 15:30 | 49009 TumblingDice
TumblingDice's picture

hope is for pussies...we deduce.

Wed, 08/26/2009 - 16:22 | 49063 hack3434
hack3434's picture

+1

Thu, 08/27/2009 - 01:27 | 49677 i.knoknot
i.knoknot's picture

+100

Wed, 08/26/2009 - 15:32 | 49010 Anonymous
Anonymous's picture

I thing what happens to the people that frequent this site is that we are sickened by the cleptocracy and would like it to lose power and REAL solutions to the structural and immediate problems to be implemented.

Wed, 08/26/2009 - 15:34 | 49012 Anonymous
Anonymous's picture

I'm not hoping for an implosion so I can feel vindicated.

I'm hoping for an implosion so I can cash in on my UUP and VNQ puts.

Wed, 08/26/2009 - 15:53 | 49029 Anonymous
Anonymous's picture

It's the economics of cognitive blurring, something which occurs when there is a desire for social justice, but it devolves into schadenfreude.

It's becoming a real public health issue, and Dr. Bunsen Honeydew and I are feverishly seeking an increase in budgetary funding to nip it in the bud.

Wed, 08/26/2009 - 19:38 | 49393 assembler
assembler's picture

Ha!

Wed, 08/26/2009 - 16:03 | 49042 Anonymous
Anonymous's picture

Who's hoping for "vindication"? I'm one of the non-suckers that called b.s. on the housing market in 2006 and refused to buy.

I'm waiting to buy a house at a fair price, and I'm waiting to see the idiots who bought at inflated values get wiped out.

If you think that's sickening, then may I suggest the kiddie pool for you?

Wed, 08/26/2009 - 16:11 | 49051 Deficient Market
Deficient Market's picture

It's got nothing to do with vindication, I for one would really hope my bearish view is proven wrong. It's just that the way things are going now, it's like taking a drunk up to the penthouse balcony in order to save him from falling from the first floor. The sooner he's off the elevator, the greater his chances of survival once he inevitably does fall.

I guess another hope would be to go slow enough for him to get sober in time, but that requires an enormous skill at balancing everything across the board, instead of some pure deflation vs. pure inflation view of economics. Right now this elevator's moving up awfully fast...

Wed, 08/26/2009 - 16:17 | 49056 economicmorphine
economicmorphine's picture

Why do you give a flying fuck what we think?  Worry about yourself, Anonymous and we'll worry about ourselves, okay?

Wed, 08/26/2009 - 16:24 | 49069 Anonymous
Anonymous's picture

There is nothing wrong with that. What is wrong is the bailout for wall street.

Wed, 08/26/2009 - 15:23 | 48994 Anonymous
Anonymous's picture

And that is how the games is played. Limit supply by suppressing foreclosures to keep prices as high as possible. Trickle out the foreclosures until inflation takes hold and you end up with as little book loss as possible.

Wed, 08/26/2009 - 15:26 | 48999 Anonymous
Anonymous's picture

To #48968:
"When is the economy gonna blow up...?"

The economy wont blow up. At this point moral hazard is the "New normal." The Govt wont allow firms that should fail, to fail. You can count AIG, C, GE, BAC, definitely GS, MS, etc. as firms that should've gone under last October. For the market to go free fall, something unexpected would have to catch the policy makers by surprise. Since the US Govt is shareholders and now has inside information to all the above, there shouldn't be any surprises.

Therefore, if you are waiting for a sequel to 9-10/08, you will be waiting in vain. I am not a permabull nor am I myopic to the challenges we face. Our elites have taken a page from the Bank of Japan and prolonged the inevitable. Unless we get an unexpected political shock, it will take years, maybe decades to get out this. I'm not predicting uber-deflation, more like consistently weak growth with bouts of cyclical downturns.

In a contrarian play to shock you all: U$ is King.

Wed, 08/26/2009 - 16:01 | 49039 Anonymous
Anonymous's picture

I agree with your last statement, so long as QE actually is put to a stop. If they do, as a Goldman Sachs chief economist suggested yesterday, add another $2 Trillion of QE at the next sign of distress, then I might have to give up that ghost. I have a feeling the bond market will make itself known.

"Constant change is here to stay."

Wed, 08/26/2009 - 18:33 | 49320 Cindy_Dies_In_T...
Cindy_Dies_In_The_End's picture

Nah, they can't keep peddling like this for years like Japan. Karl Denninger explains this in detail, so I would google it.

Thu, 08/27/2009 - 03:48 | 49707 Hephasteus
Hephasteus's picture

You'll never understand why Japan had it's downturn until you watch "The Money Masters".

I'm telling you. It's like looking into magic cheat book and then looking at what the bullshit answers liars give.

 

 

Wed, 08/26/2009 - 15:27 | 49002 Anonymous
Anonymous's picture

And that is how the games is played. Limit supply by suppressing foreclosures to keep prices as high as possible. Trickle out the foreclosures until inflation takes hold and you end up with as little book loss as possible. Dump it all at once, cause a landslide, more foreclosures, and lose a bundle.

Them bankers ain't as dumb as they look.

Wed, 08/26/2009 - 16:10 | 49049 Anonymous
Anonymous's picture

Ah, but there are problems there... big ones:

For one, housing prices are not determined by scarcity -- they are determined by interest rates.

And the other problem of course would be betting on inflation in the midst of the greatest credit conflagration in history.

The bankers *do* have a plan. But bankers, at least most of the ones I know, really suck at macroeconomics.

Wed, 08/26/2009 - 16:13 | 49054 Thoreau
Thoreau's picture

I concur 100%. That so-called current inventory is just the visible tip of the iceberg. Of course, this can only occur if insolvent banks are "allowed" to remain under capitalized.

Wed, 08/26/2009 - 17:02 | 49134 Argos
Argos's picture

That game plan has worked for years for DeBeers.  They are sitting on mountains of diamonds that if sold tomorrow would be worthless.  So, there they sit.  Of course you don't have to pay property tax and repair the roof on diamonds!

Wed, 08/26/2009 - 17:58 | 49272 HelluvaEngineer
HelluvaEngineer's picture

True, plus diamonds aren't made of organic material.  I'm hearing many stories about recently purchased foreclosures that were full of toxic mold.  You can't turn the power off to houses for very long.

Wed, 08/26/2009 - 18:51 | 49335 E Thomas St.
E Thomas St.'s picture

Some of them are.

Thu, 08/27/2009 - 00:56 | 49669 dnarby
dnarby's picture

Not to mention you can't collect property tax from diamonds!

THAT is going to really F things up...

Wed, 08/26/2009 - 15:28 | 49005 Anonymous
Anonymous's picture

Just wait till Fall, Winter, and Spring reports. There will be no one to buys home. The Summer months is where the majority of home sell comes from because kids are out of school. This make it a less stressful event for the entire family.

There will be tons of foreclosures in the coming months. Unemployment checks is running out and more people will be homeless.

Wed, 08/26/2009 - 15:28 | 49006 Anonymous
Anonymous's picture

I dunno if its so much "hoping for an implosion" as the knowledge that the longer this goes on, the worse the implosion is going to be.

Wed, 08/26/2009 - 15:49 | 49026 JohnKing
JohnKing's picture

That's it.

 

The common man can take a hit and get back up with some dignity and rebuild but it looks like even a dignified response will be ruled out by the priviliged few who are pillaging without restraint. The road back to a healthy economy gets longer everyday.

If the psycho-banks had been allowed to fail, the local, sane banks would have filled the gap for Main Street, instead the psycho-banks and their partners in government are literally destroying Main Street.

A fast collapse is much preferable to an extended, corrupt decline, I would call it a green shoot.

Thu, 08/27/2009 - 05:57 | 49718 Hephasteus
Hephasteus's picture

Oh come on they DID EXACTLY the same thing they did in the 20's. I mean come on. EXACTLY. You don't think it wasn't intentional do you?

Wed, 08/26/2009 - 15:29 | 49008 Anonymous
Anonymous's picture

As of 1528 the gang seems not to have figured out that the bid orders have to be directed at the DJT.

Wed, 08/26/2009 - 15:44 | 49019 Project Mayhem
Project Mayhem's picture

CNBS is paid to lie

Wed, 08/26/2009 - 15:47 | 49025 D.O.D.
D.O.D.'s picture

Hey good call on today's 1 pt move, what's your crystal ball say for tomorrow?

Wed, 08/26/2009 - 17:30 | 49216 zenith1
zenith1's picture

it sure is

Wed, 08/26/2009 - 15:47 | 49023 Sancho Ponzi
Sancho Ponzi's picture

The normal ratio of home price to household income is between 2 and 3. If wages remain flat, housing needs to fall at least another 25%. Bernanke only has one way out - inflation.

 

Wed, 08/26/2009 - 15:53 | 49030 buzzsaw99
buzzsaw99's picture

GE is a bunch of fascist pricks. DIE MOFOs!!!

Wed, 08/26/2009 - 15:55 | 49032 Sqworl
Sqworl's picture

Off topic...Cash for Clunkers generates 700K new car sales total 30M...70% for Japan..WTF is wrong with this investment???  Can't wait to see what H1N1 shots will cost us!! 

Wed, 08/26/2009 - 18:36 | 49324 Cindy_Dies_In_T...
Cindy_Dies_In_The_End's picture

It might cost your life. Don't vaccinate on the first round. Self quarantine.

Thu, 08/27/2009 - 00:13 | 49651 Miles Kendig
Miles Kendig's picture

Yes indeed.  Besides I would rather be at home that at a short staffed hospital.  Avoid hospitals during flu season... like the plague.

Wed, 08/26/2009 - 15:55 | 49034 Anonymous
Anonymous's picture

monthly down trend line in XHB comes in near 16...21-month moving average is at 15.93

Wed, 08/26/2009 - 16:04 | 49043 max2205
max2205's picture

Thursday should be more volatile than usual.  This is eighter a bull trap or a melt up.  how's that for a prediction.....straddles?

Wed, 08/26/2009 - 16:06 | 49045 Anonymous
Anonymous's picture

I sampled Multi unit homes sold in 2007 in the LA area today. I found that 31 out of 100 are in some form of default,trustee sale or bank owned. I was looking for a way to identify multi unit homes headed to trustee sale. I am a little surprised to see this so high. All of these had to have 20% down. Better get used to ugly.

Wed, 08/26/2009 - 16:11 | 49050 RobotTrader
RobotTrader's picture

New RobotTrader story posted

 

http://www.zerohedge.com/article/daytrading-darlings

 

Wed, 08/26/2009 - 16:16 | 49055 economicmorphine
economicmorphine's picture

The CNBC link only looks at new home sales.  It doesn't consider existing homes, for which inventory is at RECORD HIGHS.  I don't know if they're really this stupid, or if they are merely pumping. Either way, I'm glad they're out there spreading misinformation, and I'm glad that some of the people I trade against are acting on it.

Wed, 08/26/2009 - 16:20 | 49060 Anonymous
Anonymous's picture

Does anyone think Obama will actually end the $8000 tax credit for new home buyers this year?

Wed, 08/26/2009 - 19:50 | 49413 Anonymous
Anonymous's picture

Doubtful. Isn't there speculation that they're going to double it to $16k next year?

Thu, 08/27/2009 - 00:14 | 49653 Miles Kendig
Miles Kendig's picture

And extend it to second homes in Aspen, The Hamptons & Palm Beach/Island

Wed, 08/26/2009 - 16:23 | 49061 Sancho Ponzi
Sancho Ponzi's picture

Once Bernanke buys up all the toxic MBS junk there won't be any more foreclosures. Problem solved!

Wed, 08/26/2009 - 16:24 | 49067 Sqworl
Sqworl's picture

Lenny Dykstra Is Living In His Car...I wonder if his former homes are on the list???  He also spends time living in hotel lobbies, im sure those are in forclosure!

Wed, 08/26/2009 - 16:38 | 49080 Anonymous
Anonymous's picture

CNBC - Can Never Be Correct

Wed, 08/26/2009 - 16:43 | 49086 walküre
walküre's picture

New home inventory is down because the builders are either bankrupt or can't get financing to start any projects.

Based on this news today the markets should have taken a dump. If new home inventory was up it would actually mean that there's a construction and lending activity recovery.

Never in my adult life have I heard so much bullshit and fantasy stories.

CNBC is a bad version of the scifi channel.

Wed, 08/26/2009 - 17:11 | 49158 walküre
walküre's picture

Inventory means nothing.

What are the sales yoy?

Wed, 08/26/2009 - 17:22 | 49196 TraderMark
TraderMark's picture

Posted chart of new home sales over 50 year time span shows the "recovery" of July would place us in the lowers 98th percentile.

But enough about looking under the hood - pop the champagne corks. Green shoots

 

http://www.fundmymutualfund.com/2009/08/july-new-home-sales-up-96-break-...

Wed, 08/26/2009 - 17:28 | 49211 zenith1
zenith1's picture

economy going down tubes

Wed, 08/26/2009 - 22:42 | 49436 jake (not verified)
jake's picture

I suppose we will just end up slowly being squeezed to support this scheme and inflation (in the US) is going to become a problem since the dollar can only take so much punishment.

good articles; good articles 4 slow news day ..http://www..
hat tip: finance news & finance opinions

Wed, 08/26/2009 - 20:13 | 49443 Anonymous
Anonymous's picture

If the banks refuse to foreclose, think about all the free-loaders who are living in a house rent free. No rent or mortgage payment, equals a lot of cash for other crap.

Banks are also offering waivers and loan amendments for businesses in lieu of foreclosure..

Face it, the government is backstopping everything related to the banking industry, and the market has figured this out. The government can continue this program till inflation finally kicks and reinflates the asset values, or so the thought goes.

Wed, 08/26/2009 - 20:58 | 49492 Anonymous
Anonymous's picture

Actually. some of us really are hoping for a complete collapse. There are many reasons for this. Some know that the longer we wait before the inevitable collapse comes, the worse it will be. Some want the guilty to get their comeuppance. Some want to get some REAL bargains in property and other assets. Some desperately want to believe that there is some fairness in the Universe and that good people win and bad people lose. Some are bored and are looking for the excitement of a society in shambles with death, destruction, mayhem and anarchy on every corner. Some see the coming pain and suffering for the likes of Goldman Sachs and the "banksters" as a substitute for peeing on a "merciful and loving god with a mysterious Master Plan" that involves putting five year old children through horribly painful cancer. And some are just a-holes.

Bring it on.

Wed, 08/26/2009 - 22:28 | 49574 Hephasteus
Hephasteus's picture

Collapse it make room for something better.

Wed, 08/26/2009 - 22:46 | 49592 PD Quig
PD Quig's picture

49492: a (wo?)man after my own heart. If we're destined to march through hell (oh, and we are, baby), let's get the caissons rolling. I want to be here to fight through it with my children and grandchildren. It's the very least my generation owes to them.

Do NOT follow this link or you will be banned from the site!