BoomBustBlog Demonstrated Today's News Last Month by Using Facts: the Housing Market is Headed Down

I've been telling readers and subscribers that the housing market has a
considerable amount to fall before we reach income parity and equilibrium in supply and demand. With income
currently falling along with rising underwriting standards, that point
is actually being pushed even farther into the (event) horizon! We are
now at a point where interested parties would be remiss in not pursuing
blogs (both in addition to and instead of the mainstream media) to get
the nitty gritty analysis on a wide variety of topics. With that being
said, I have finally decided to bite the bullet and expand BoomBustBlog by
accepting partners in a bid to grow the
business. Lethargic media and financial concerns, look out, here comes
the BLOGS!!! I am open to ideas and suggestions. Interested parties may contact me here.

From
the WSJ.com: Home Resales Drop

The latest data on the housing market underscored its fragility and
showed that a glut of homes for sale and a wave of foreclosures and
fire sales are holding down housing prices...

Sales of existing homes fell 0.6% in February from a month earlier to a
seasonally adjusted annual rate of 5.02 million, the National
Association of Realtors said...

The median price for an existing home was $165,100 in February, down
1.8% from February 2009, the Realtors said. Distressed homes, generally
sold at discount, accounted for 35% of sales last month.

A separate report Tuesday from Federal Housing Finance Agency showed
that house prices fell 0.6% in January and December's numbers were
softer than previously reported. The FHFA index -- which tracks the
prices of the same houses over time, but only those sold to or
guaranteed by Fannie Mae, Freddie Mac or the Federal Home Loan Banks --
is 13.2% below its April 2007 peak.

Inventories of existing homes increased 9.5% at the end of the month
to 3.59 million available for sale, the Realtors said. That represented a
8.6-month supply at the current sales pace, compared with a 7.8-month
supply in January.

 Of course this isn't news at all to the Green Shoots disbelieving
BoomBustBlog subscriber. Excerpts from previous posts over the last
quarter that ran in direct contravention of both mainstream media and
sell side analyst reports are below:

 The chart below illustrates the seasonal ebbs of month to month price
changes.  On a month to month basis, we see hills in the spring and
summer and valleys in the fall and winter. During the onset of the
bursting of the (first) bubble, this cycle was compressed, but was still
there. and lasted throughout the bubble. With the onset of the
government stimulus (ex. housing credits and MBS market manipulation),
the peaks were significantly exacerbated. Now we are entering into the
winter months again, and guess what's happening, as has happened nearly
every winter cycle before. The only difference is that this dip is
extraordinarily steep! I would also like to add that the month to month
price changes coincide exactly with the S&P 500 move downward and
upward for 2008 and 2009, to the MONTH! What a coincidence, huh? If this
relationship holds,,,, well you see what direction the month to month
lines are going and how steep they are, don't you?

 

As you can see, the residential housing uptrend is now apparently over,
and we are resuming the downward decent.

Let's look at the improvement in delinquencies and losses as compared
to home prices in the grand scheme of things, a birds-eye view so to
speak...

For data heaving presentations and analysis, feel free to click the
links below.

Reality
Check for Bank Investors, Mortgage Investors and Home Buyers (March
10th)

It's
Official: The US Housing Downturn Has Resumed in Earnest (March
2nd)

It's
HELOC Deja Vu,All Over Again (January 19th)

A
Fundamantal Investor's Peek into the Alt-A Market (Jan 14, 2010)

Deflation,
Inflation or Stagflation - You Be the Judge! (January 12th)

If
Anybody Bothered to Take a Close Look at the Latest Housing Numbers...

(December 30th, 2009)

Housing
sales and prices come in lower than estimated! What??? (December
24th)

Residential
Lending Credit Losses Worsen as Unsustainable Government Support
Proves... Unsustainable (December 21st)

The
Truth! The Truth? Banker's Can't Handle the Truth!!!

On
the Latest Housing Numbers (November 24th)

Comments

[wake the roach]

Yep, and its about to blow up in the worlds biggest property bubble, Australia... Time to sell them "strong" ozzy dollars because the recession we avoided is about to come back to bite us on our ignorant butts. But maybe not, I'm sure its nothing another round of stimulus cannot kick down the road. 

Oh, and I just read your inflation, deflation or stagflation article. I have a theory that I believe explains these forces  but I would be interested to hear your thoughts Reggie. You can find it in the ZH general discussion forum under the title, What is money? It a bit "out there" for most peoples taste but I would appreciate an expert opinion ;-)