Existing Home Sales Come As Expected At 4.13 Million, Distressed Home Sales Rise, One Year Of Home Inventory

Tyler Durden's picture

Nothing good in the home sales front: per the NAR: "Existing-home sales, which are completed transactions that include single-family, townhomes, condominiums and co-ops, increased 7.6 percent to a seasonally adjusted annual rate of 4.13 million in August from an upwardly revised 3.84 million in July, but remain 19.0 percent below the 5.10 million-unit pace in August 2009." Expectations were for a SAAR of 4.1 million so basically the number came very much inline, yet the computers go apeshit. And here is good ole' Larry Yun's spin on things: "The housing market is trying to recover on its own power without the
home buyer tax credit. Despite very attractive affordability conditions,
a housing market recovery will likely be slow and gradual because of
lingering economic uncertainty." Some other observations: "The national median existing-home price for all housing types was $178,600 in August, up 0.8 percent from a year ago. Distressed homes rose to 34 percent of sales in August from 32 percent in July; they were 31 percent in August 2009." And yet the most important metric is the months supply: "Total housing inventory at the end of August slipped 0.6 percent to 3.98
million existing homes available for sale, which represents an
11.6-month supply
at the current sales pace, down from a 12.5-month supply in July." So yes, there is a year's supply of existing homes. And this does not account for the shadow inventory.

Summary of single-home prices for August 2010 and 2009.

Full NAR release.

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Bill Lumbergh's picture

All you need to know is expectations were beat so BUY BUY BUY...if the reverse were true then QE2 would be back in the mix so BUY BUY BUY.

aint no fortunate son's picture

That existing inventory number doesn't include the big ramp in homes that have been placed into mortgage modification programs, of which there have been huge numbers since the first of the year. Most of them will re-default in the not so distant future.

Id fight Gandhi's picture

Who's been buyin the homebuilders? I still don't get that.

NotApplicable's picture

They got all of their taxes back from the IRS. What's not to like?

Segestan's picture

All of this masks the real problem..... http://www.census.gov/population/www/popclockus.html

COMPONENT SETTINGS FOR SEPTEMBER 2010 One birth every.................................. 7 seconds One death every.................................. 13 seconds One international migrant (net) every............ 36 seconds Net gain of one person every..................... 11 seconds
firstdivision's picture

Reading the LEI release I had a good laugh at this

The positive contributors – beginning with the largest positive

contributor – were the interest rate spread, real money supply*, average weekly manufacturing hours,

building permits, stock prices, index of consumer expectations, and manufacturers’ new orders


Sudden Debt's picture

This is the difference with Europe.

When the prices of houses go down, we stopped selling and now the prices are back up again.

In America, 1 lemming sells a house and they ALL start selling houses!


Boilermaker's picture

Oh yes, Europe, the benchmark of proper economic management.

NotApplicable's picture

They even managed to top the failure of the US sub-prime market with the genius invention of foreign currency mortgages.

Nothing quite like having your house leveraged in the forex market to make for easy sleeping at night.

Vampyroteuthis infernalis's picture

Sudden debt, before this f*cking houseing bubble, most Americans could afford a house and very few Europeans could. When the bubble pops, average joe in the US has to sell. In Euroope, average joe could not afford a house in the first place. No need to panic if not in economic straights.

Vampyroteuthis infernalis's picture

I am American and proud of it. We may go through this crisis, but we will come out a stronger people in the end. Europeans will go back to doing what they do best, killing each other in wars.

Sudden Debt's picture

Actually it are American soldiers that are being shipped in body bags all over the world and not the Europeans.

So if you think you're insulting our soldiers, you're insulting American soldiers.


Boilermaker's picture

Yep, Eurotrash alert.  The moral policemen of the world.  Incidently, the largest creators of death and destruction by a country mile for about 1000 years.

I work with Europeans (and am married to one) and this perception of poor American education is a crock of shit.  The Euros are, of course, full of themselves for absolutely no reason whatsoever.

There isn't a European anywhere who isn't more than willing an anxious to tell your thier ignorant opinion and present it as a fact.

Vampyroteuthis infernalis's picture

At this point in time, we American's are the dumb asses fighting pointless wars. But maybe it is time we talk about past European wars like WWII, WWI, Napoleanic Wars, 30-Years War, and an endless amount of struggles in between. If I am not correct, 25 % of Germany's citizens were wiped out in the 30-years war. Here is a link for you.


Europeans hold the head up high that they are not the warlike people now. You just are full of self righteous bullshit. Look at the skeletons in your closet.

Sudden Debt's picture

Where do you get you info from? The bottom of a carton of milk? :)



patience...'s picture

Screw housing, until we get back to substantial manufacturing were toast anyways.

frugalman's picture

Manufactured housing is the key, laddie.  Chicks wear hotter outfits in trailer parks too..

Herne the Hunter's picture

Don't forget that last month's mortgage rate was at an all-time low.

HarryWanger's picture

Exactly. Mortgage rates have been unbelievably low now for 3 months or so. Hasn't done a thing for housing. This thing has a long way to go to work itself out.

SheepDog-One's picture

'Shadow inventory' is what, at least 4X the advertised Gubment numbers like everything else?

Herne the Hunter's picture

Oh yeah BDI down from it's August mini-boom. <2500 bitchazz

cnbcsucks's picture

Who the hell is doing all of this buying?  I guess it's never too early for end of quarter window dressing.  Apparently, there are still 3 fund managers left that haven't bought AAPL and INTC.


Id fight Gandhi's picture

Apple is coming up on shorting time. Gone vertical for three weeks now.

HarryWanger's picture

Don't forget AMZN either. AAPL has gone up 25% in 20 days. That's insane for a company with the 3rd largest market cap in THE WORLD!

Everyday it goes up and the same analysts come out and up their estimates to keep the game going. Funny, sad and true all at once. Full disclosure - I own AAPL. Bought it for a day trade at 240 and keep trailing it on the way up. It never goes down!

cnbcsucks's picture

Awesome...but keep an eye on that stop.  You don't want to get "flashed out" at 210 and have it be 265, 30 seconds later.  Not that a thing like that would ever happen, of course...


Id fight Gandhi's picture

Netflix too.yeah I know these are all gems blah blah, but the dominos fall together when the time comes.

Some long term out of the money puts might be best.

Apple is such a large cap right now it's upside will be limited. They've already priced in a blow out quarter at 291 right now.

HarryWanger's picture

I'm just stunned by some of these high flyers like AMZN, PCLN, NFLX - unreal! It's just a matter of time before the rug gets pulled.

Think about this, Apple has added about $45 billion in market cap just in the last 20 days! 

StychoKiller's picture

Desperate "investors" do desperate things.  How high does the P/E have to get before folks come to their senses?

Cognitive Dissonance's picture

The Toll Tell

"Monthly Payments $99"

Where do I sign? Can I get more than one? :>)


Very nice WB7.

Sudden Debt's picture

Why not take 3, the dog also needs a place to sleep :)

Cognitive Dissonance's picture


"As seen on TV"

So to fend off default, it sounds like I need a HFT parrot. Hilarious. :>)

BTW nice bird. Can you give it to Goldman?

StychoKiller's picture

After finding out that there's a crapton of property titles with mud all over them, I gotta wonder just who all the insane people are that are currently buying into housing right now.  Before closing, I would make damn sure that the title insurer has some serious cash set aside for bogus titles being found.  It's either that or make sure that the house in question has not changed hands in the last 10 years or so.

EscapeKey's picture

So, these leading economic indicators, which were THOROUGHLY ignored when they painted a bad picture, are now used to pump the market when they're good.

Unbelievable fucking lies. This will come crashing down.

Wall Street lessened its losses after the Conference Board reported its index of leading economic indicators rose 0.3% in August.



bankonzhongguo's picture

I go for a 20 minute walk every night with my wife in Merced County, CA.  We walk by an estimated 600 homes on our changing routes.  As a game we count the number of homes left vacant (ownership unknown - but waist high weeds in the yard, no residents, no utilities, etc.)  Then we count the number of homes with RE signs in the yards.  It shakes down as:  10% of all properties are vacant - around 60.  Of the whole 600 homes there are only 7 RE signs in the yard.  None are "for sale by owner" - they are all big offices.  And these include the short-sales not just OREO.

All in, the local inventory is at least around 10% of total, of which only 10% of those are being actively marketed.  The average time on market seems to be 30-60 days.  Everyone is upside down as most homes were built between 2005 and 2007.  You can sense the quiet desperation of other families awaiting their NOD or trustee sale - so the foreclosure pipeline is full.

Like politics, real estate is local.  I urge everyone to walk their neighborhood and talk to your neighbors for a dose of reality.

Max Hunter's picture

A couple of weeks ago, me and my girlfriend went to the park. It's about a 1 min drive through a residential area. I would say about 3 miles max. We saw about 23 houses for sale. Didn't count the empty ones.  I'm certain we did not pass 230 (more like 150) houses so I can confirm your observation that at least 10% of homes are empty or for sale. I think it's more like 15-20% of homes in trouble of forclosure.

Also, the ones for sale are more than likely being repossessed as the "keys in lieu" program to get 2% of mortage value if you walk away, requires that the house be on the market for at least 60 days.

sethco's picture

gotta hold that 1130 line in the sand. bogus.

HelluvaEngineer's picture

Ha!  As usual, those dumb enough to chase get slaughtered this morning.

sbenard's picture

We must remember that anything that comes from the NAR is going to be laced with spin.

Plan accordingly!

goldmiddelfinger's picture

Shadow inventory:

"Adding all of these together, we come up with a total of roughly 6.97 million residences which are almost certainly going to be thrown onto the resale market as distressed properties at some point in the not-too-distant future."



Mad Mad Woman's picture

And in the shadow inventory there is at least another year's supply of homes.   Depressing.