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The Housing Double Dip Is Here: December New Home Sales Down 7.6% From November, Miss Expectations

Tyler Durden's picture




 

From Bloomberg:

Sales of new homes in the U.S.
unexpectedly dropped in December, signaling a government tax
credit may no longer be helping shore up demand.

Purchases declined 7.6 percent to an annual pace of
342,000, the fewest since March, the Commerce Department said
today in Washington. For all of 2009, sales dropped 23 percent
to 374,000, the lowest level since records began in 1963.

Sales were projected to climb to a 366,000 annual pace from
an originally reported 355,000 rate in November, according to
the median estimate in a Bloomberg survey of 70 economists.
Forecasts ranged from 340,000 to 399,000. The government revised
November’s reading to 370,000.

The benefits from yet another government demand push-forward contraption expire: the cost: hundreds of billions in new debt.

 

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Wed, 01/27/2010 - 11:43 | 207629 Anonymous
Anonymous's picture

no home buyer credit

Wed, 01/27/2010 - 11:46 | 207637 Missing_Link
Missing_Link's picture

It's never the end when you can extend and pretend.

Wed, 01/27/2010 - 11:48 | 207639 Internet Tough Guy
Internet Tough Guy's picture

Next headline: Barney Frank proposes raising tax credit to $16000 to stimulate housing recovery.

Wed, 01/27/2010 - 11:57 | 207674 Anonymouse
Anonymouse's picture

Double down baby!

Wed, 01/27/2010 - 11:53 | 207658 Anonymous
Anonymous's picture

Why not give away houses Barney ?

Wed, 01/27/2010 - 11:53 | 207659 Anonymous
Anonymous's picture

Why not give away houses Barney ?

Wed, 01/27/2010 - 11:54 | 207666 jobless_recover...
jobless_recoveriless_BS's picture

They need this "worse than expected" numbers to justify QE v2.0. Isn't it funny that these "bad" housing numbers came right before FED meeting, where they would discuss exit strategies and what to do about the MBS purchase program that is going to expire at the end of March?

Wed, 01/27/2010 - 12:01 | 207684 Anonymous
Anonymous's picture

you have to know how to parse washington talk....
they are planning exit strategy from qe 1.0 so
that they can figure out an entrance strategy
into 2.0....

Wed, 01/27/2010 - 11:58 | 207678 Anonymous
Anonymous's picture

When will the financial terrorists who destroyed the American Dream of Home Ownership be held accountable?

We will have no recovery until the debt is removed from the system and rule of law is restored

These were not reckless or risky loans, but a criminal enterprise where lenders, credit rating agencies and investment banks all participated.

Decades of prudent, proven, REGULATED, safe and sound lending guidelines were abandoned in order to encourage loan originators and borrowers to commit fraud.

http://www.fdic.gov/regulations/laws/rules/2000-8630.html#fdic2000append...

C. Loan documentation. An institution should establish and maintain loan documentation practices that:

1. Enable the institution to make an informed lending decision and to assess risk, as necessary, on an ongoing basis;

2. Identify the purpose of a loan and the source of repayment, and assess the ability of the borrower to repay the indebtedness in a timely manner;

I was forced to close my mortgage and real estate offices because it was clear that anyone who purchased during the bubble years would be financially devastated if NOT destroyed for doing so. 35% of all loans in my market were Option ARMs F-ing ridiculous

http://www.michaelblomquist.com/images/Feinstein.pdf

Just look at the comments by the insiders in support of nontraditional mortgages: Liar loans, subprime, Option ARMs, 100% financing, etc.

http://www.fdic.gov/regulations/laws/federal/2005/05comguide.html

Here were my comments

http://www.fdic.gov/regulations/laws/federal/2005/05c20guide.pdf

Wed, 01/27/2010 - 12:11 | 207716 ElvisDog
ElvisDog's picture

The only comment I have is "Well, duh".

Wed, 01/27/2010 - 12:33 | 207744 A Man without Q...
A Man without Qualities's picture

Anyone can see the vacant houses that the banks are not even attempting to sell, so why buy now?  Better to wait for new incentives, cheaper housing and lower mortgage rates, all of which will come if people are patient...

Once the illusion of needing to move quickly to get the property (which leads people to make one of the biggest financial decisions of their life far too rashly) has gone, it takes many years to come back.

Wed, 01/27/2010 - 14:16 | 207915 curbyourrisk
curbyourrisk's picture

As much as it pains me there is only ONE solution to the housing crisis, atleast according to me.

 

Claw back all the mortgage payments every homeowner has made since January 1, 2000.  Take that money and apply it directly to the principal of the outstanding mortgage.  This would effectively reduce the amount of debt outstanding and reduce the amount owed going forward.  Rework the mortgages as of January 1, 2010 and start anew.  Yes, this hurts the banks, but who the fuck cares they screwed the pooch to begin with.  This would undoubtedly put MOST people back above water, would mostlikely create an instant FLOOR in housing prices and would actually STIMULTATE the ECONOMY since people could come out from under the debt that is holding spending down. 

Yes...principal forgiveness.  AND if the banks don't like it, they do not have to accept the terms of the proposal, but they must immediately foreclose on any property where the homeowners is more than 60 days in arrears, and mark the property to market...accordingly.

Yeah....math hurts.....deal with it banks.

Wed, 01/27/2010 - 16:46 | 208214 Anonymous
Anonymous's picture

Your idea sounds great, but that would be too good to be true.

Despite the fact that the US does not save as much as Japan which is probably worse, what makes the govt think that they are not facing a japanese-style recession?
I'd like to know from you guys what you think that should be done in Japan to get it out of the 20-year downward spiral?

Wed, 01/27/2010 - 16:19 | 208170 Anonymous
Anonymous's picture

Based on new home sales only, this is very misleading, take a look at all home sales over all highest volume since 2006. Look at the big picture.

Wed, 01/27/2010 - 16:56 | 208233 Brak82
Brak82's picture

Well i guess this shouldnt surprise anyone.

Wouldnt call it double dip though, there wasnt any real up to dip from.... (please correct my english, im learning by trial and error)

Wed, 01/27/2010 - 18:27 | 208366 Anonymous
Anonymous's picture

It's not a double dip, it's the fact that banks are refusing to put their REOs on the market so that way they can create an artificial spike in housing prices: Constrict supply while demand is high because of the government incentives.

Wed, 01/27/2010 - 19:02 | 208411 Anonymous
Anonymous's picture

How many new homes are there on market? The answer is 273,000 as of Dec 2009.
How many new homes were on the market a year ago? It was far higher at 350,000 as of Dec 2008.

I can tell you if there are fewer homes on the market, you will most likely have fewer homes sold. That alone is not a good metric.

Actually, the number of new homes sold in Dec 2009 was down by far less than the number of homes on the market was. This is a very bullish sign. The fair comparison is to use a dimensionless number. The inventory is hugely below where it was in Dec 2008. One should look at the ratio of homes sold vs. homes on the market.

In fact, new homes on the market are selling at a rate that is 38% higher than it was a year ago. There is a vast underbuilding the the past 12 months-- similar to in the 1990's. Home prices are beginning to rise strongly in some areas.

Wed, 01/27/2010 - 20:58 | 208505 colorfulbliss
colorfulbliss's picture

Holy shit...Did you just return from a CNBC seminar?

Wed, 01/27/2010 - 23:11 | 208657 Anonymous
Anonymous's picture

Hey Anon 208411

That's some mighty tasty Kool-Aid.

At the 2009 annual sales rate, it translates in sales of 1025 homes per day. Therefore, on any given day there were several hundred homes in inventory for any one sold.

You are witnessing the UNSINKABLE AMERICAN CONSUMER- it hit an iceberg 2 years ago.

The tragedy is the Captain is still calling for more coal in the boilers.

Wed, 01/27/2010 - 23:18 | 208671 Kayman
Kayman's picture

Hey Anon 208411

With 2009 new home sales of 374,000, this translates into sales of 1025 homes per day. Therefore, there were several hundred homes in inventory and available for any given individual home sale. More inventory does NOT translate in to more sales ! There is at least an EIGHT MONTH SUPPLY of new homes right now.

Your argument does not hold water.

Speaking of water, you are witnessing the UNSINKABLE AMERICAN CONSUMER- hit an iceberg a couple of years ago.

The TRAGEDY/COMEDY is the Captain is still calling for more coal in the flooded boilers.

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