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Market Surges After Existing Home Sales Drop, Print At 4.81MM On Expectations Of 4.80MM

Tyler Durden's picture




 

More lies from the discredited, conflicted and data manipulating NAR which for some stunning reason continues to move the market, even more paradoxically after the existing home sales number came at 4.81 million on expectations of 4.80 million: if there ever was a Gargantuan beat of expectations, this is it. But courtesy of a prior downward revision which took down the April number from 5.05 million to 5.00 million, the decline was 3.8% instead of the expected 5.0%. Total housing inventory at the end of May fell 1.0 percent to 3.72 million existing homes available for sale, which represents a 9.3-month supply4 at the current sales pace, up from a 9.0-month supply in April. Somehow this sends futures up nearly half a percent. And from the master of mendacity, the one and only Larry Yun, the weakness was due to "Spiking gasoline
prices along with widespread severe weather hurt house shopping in
April, leading to soft figures for actual closings in May." Obviously there is never a simple explanation for deteriorating economic data such as people don't actually have money...

NAR lies continue:

Existing-home sales were down in May as temporary factors and
financing problems weighed on the market, according to the National
Association of Realtors®.

Existing-home sales1,
which are completed transactions that include single-family, townhomes,
condominiums and co-ops, fell 3.8 percent to a seasonally adjusted
annual rate of 4.81 million in May from a downwardly revised 5.00
million in April, and are 15.3 percent below a 5.68 million pace in May
2010 when sales were surging to beat the deadline for the home buyer tax
credit.

Lawrence Yun,
NAR chief economist, said temporary factors held back the market in
May, as implied from prior data on contract signings. “Spiking gasoline
prices along with widespread severe weather hurt house shopping in
April, leading to soft figures for actual closings in May
,” he said.
“Current housing market activity indicates a very slow pace of broader
economic activity, but recent reversals in oil prices are likely to
mitigate the impact going forward. The pace of sales activity in the
second half of the year is expected to be stronger than the first half,
and will be much stronger than the second half of last year.”

Yun said the market also is being constrained by the lending
community. “Even with recent economic softness, this is a disappointing
performance with home sales being held back by overly restrictive loan
underwriting standards,” he said. “There’s been a pendulum swing from
very loose standards which led to the housing boom to unnecessarily
restrictive practices as an overreaction to the housing correction –
this overreaction is clearly holding back the recovery.”

There were notable regional differences in home sales. “A large
decline in Midwestern existing-home sales can be attributed partly to
the flooding and other severe weather patterns that occurred, but this
also implies a temporary nature of soft market activity,” Yun explained.

The national median existing-home price2 for all housing types was $166,500 in May, down 4.6 percent from May 2010. Distressed homes3
– typically sold at a discount of about 20 percent – accounted for 31
percent of sales in May, down from 37 percent in April; they were 31
percent in May 2010.

“The price decline could be diminishing, as buyers recognize great
bargain prices and the highest affordability conditions in 40 years;
this will help mitigate further price drops,” Yun said.

“Home prices are rising or very stable in local markets with improved
employment conditions, such as in North Dakota, Alaska, Washington,
D.C., and many parts of Texas,” Yun noted.

Much more bullshit at the soure.

 

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Tue, 06/21/2011 - 10:13 | 1388800 bankrupt JPM bu...
bankrupt JPM buy silver's picture

Average foreclosed home in US that sells hasnt made a payment in 2 years now.

Change?  YES WE CAN!

www.silvergoldsilver.blogspot.com

Tue, 06/21/2011 - 10:41 | 1388895 trillion_dollar...
trillion_dollar_deficit's picture

My landlord is in the process of being foreclosed on. I havent paid rent going on three months now. Stories like this excite me since I could theoretically live rent free for the next two yrs.

Tue, 06/21/2011 - 10:45 | 1388922 Jeff Lebowski
Jeff Lebowski's picture

I havent paid rent going on three months now.

+

My landlord is in the process of being foreclosed on.

Any correlation?

Tue, 06/21/2011 - 10:57 | 1388958 trillion_dollar...
trillion_dollar_deficit's picture

None.

He wasnt paying the mortgage with my rent money, so it went into foreclosure process. I then stopped paying rent. Waiting for an auction date now.

Tue, 06/21/2011 - 11:12 | 1389013 MachoMan
MachoMan's picture

Heh...  if the landlord can't pay the bank, he can't pay you for breach of your lease...  even after the auction, they'll still have to oust you in accordance with local law...  here, it's like trying to pry off a seed tick.

In the end, can't get blood from a turnip...

Hopefully you don't get third party'd in to the foreclosure lawsuit...  worst case scenario, you'd probably have to pay back rent into the registry of the court...  (remember, you are getting something of value in exchange for nothing)...  might get hit with attorneys fees, but I'd hope not if you cooperated...  might even be able to settle/vacate, which would save them a shit ton of work/fees and could give possession to whoever buys at auction...  just a thought.

The neat part is, you can probably find a place down the road that's abandoned and can be rented on the cheap...  rinse, repeat...

Tue, 06/21/2011 - 11:23 | 1389050 trillion_dollar...
trillion_dollar_deficit's picture

The wife's an attorney, so she's up on all legalities. My state gives tennants 90 days after the auction date to vacate the premises. Its a new law passed in 2008 to protect people in my situation from getting forced out overnight. We have to pay the new owner rent for those 90 days though. So, the longer the auction date held off, the more free rent.   

Tue, 06/21/2011 - 12:08 | 1389206 DOT
DOT's picture

How's her tax law ? 

If your current landlord forebears, you will probably be asked( required  )to pay tax on the imputed income.

Tue, 06/21/2011 - 10:56 | 1388954 kalasend
kalasend's picture

mofo's got no shame

Tue, 06/21/2011 - 12:13 | 1389221 Roger O. Thornhill
Roger O. Thornhill's picture

Lawrence Yun - the NAR's hack economist - is literally wrong, everytime. Why anyone even listen to this hack's fairy tales is the real story here.

His predecessor David Lereah wrote a book about not missing the housing boom is 2005 - just amazing.

For some good laughs go and watch Yun's predecessor getting mocked.

http://youtu.be/-89orGT8pP8

Tue, 06/21/2011 - 10:17 | 1388801 etrader
etrader's picture

Its just the usual HFT game on the ES when they flush the depth.

Nanex (via ftalpha) had a note on the silly game.

"At lower depth levels, it becomes much easier for someone to move the eMini price suddenly — at the reduced level you only need to buy or sell about 1,000 contracts to run through 3 to 4 levels of the book immediately.

That causes an explosion of quotes and trades on the related ETFs, equities and options — the level of data nearly always causes saturation and delays — from cqs to direct feeds."

http://ftalphaville.ft.com/blog/2011/06/16/595866/no-leaks-just-algo-tra...

Tue, 06/21/2011 - 10:11 | 1388808 Xibalba
Xibalba's picture

Barak Bush

Tue, 06/21/2011 - 10:34 | 1388872 BlackholeDivestment
BlackholeDivestment's picture

...you are out of order.

                           Bush Hussein

                          King of Babylon             

                     ...now that's contempt.

Tue, 06/21/2011 - 10:12 | 1388811 Caviar Emptor
Caviar Emptor's picture

We're celebrating bailouts today! 

In just the last 2 days Greece receives it's tranche and the US bails itself with positive news on raising the debt ceiling. 

It's a win-win-win-win-win!! !!

Tue, 06/21/2011 - 10:12 | 1388814 gwar5
gwar5's picture

The stock market better surge, or there will be no hopium left at all. Ben is a one trick pony.

Tue, 06/21/2011 - 10:16 | 1388829 Caviar Emptor
Caviar Emptor's picture

Always was. Always will be. It's good to have an old faithful

Tue, 06/21/2011 - 10:14 | 1388818 alien-IQ
alien-IQ's picture

Due to the high gas prices many would be home buyers were unable to afford the fuel for their cars therefore were unable to make it out to the closing of their new 500k McMansion....However...we do have this lovely bridge you can buy from the comfort of your own living room...

Tue, 06/21/2011 - 10:18 | 1388820 lizzy36
lizzy36's picture

second derivative something.....green shoots.......LEH2.0......bailout #12......QE6......AND JUST BTFD.

Tue, 06/21/2011 - 10:18 | 1388836 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Algo Zombies from Hell part 6!

Tue, 06/21/2011 - 10:18 | 1388825 monopoly
monopoly's picture

And many are just beginning to not pay their mortgage. Owner of a small business who is a friend is stopping payments on his house in July. Paid $270,000 for his house, took out a second, recent apprasial at $120.000. Time to give it back to AIG, the honest banker. Rigghhtt.

Tue, 06/21/2011 - 10:18 | 1388837 snowball777
snowball777's picture

Sore loser who still has a house; how long is he planning to squat there for free?

Tue, 06/21/2011 - 11:14 | 1389018 MachoMan
MachoMan's picture

Pretty much...  although, at least he leveraged up to try and produce rather than simply to consume...  (giving him the benefit of the doubt on his business startup).

Tue, 06/21/2011 - 10:19 | 1388830 snowball777
snowball777's picture

Mr. Yun, the weather has been fine here...and so has the Case/Shiller report. The price of gas will have more effect on the ability of those on the edge to continue making their payments. Best of luck with that!

Tue, 06/21/2011 - 10:16 | 1388832 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

It's bullish because Obamarang has more suckers to throw fresh hot sticky cash at!

Tue, 06/21/2011 - 10:17 | 1388833 AbandonShip
AbandonShip's picture

damn those numbers are highly suspicious.   They juuuuuust beat the expectations by -->this<-- much.  Yun should be removed from his post.  Weather and gas? Did he borrow Bernocchio's field manual?

Tue, 06/21/2011 - 10:17 | 1388834 Caviar Emptor
Caviar Emptor's picture

Shopping Macht Frei 

Tue, 06/21/2011 - 10:21 | 1388835 monopoly
monopoly's picture

Question all. Are we paying for Mrs. Obama's trip for her daughters, nicece, nephew and her mother. What the hell is that all about? We are freaking broke and are paying for her trip.

Tue, 06/21/2011 - 11:56 | 1389163 ebworthen
ebworthen's picture

But of course we are.  Don't they deserve a Safari?  Just think of the stories they can tell at the inner-city elementary schools and the pictures, oh, the pictures. 

Tue, 06/21/2011 - 10:22 | 1388842 Hedgetard55
Hedgetard55's picture

This is just the second half of yesterday's double POMO hitting the markets.  :~)

Tue, 06/21/2011 - 10:23 | 1388843 Paralympic Equity
Paralympic Equity's picture

I don't even try to understand this market anymore, It's the worst feeling for a trader, when you know you are right, but the market thinks different.

Now the market jumped on ISDA saying that AIB in fact defaulted.

Tue, 06/21/2011 - 11:49 | 1389125 LongBalls
LongBalls's picture

Agreed. I pulled my money off the table for now. Up is down and down is up. Tomorrow up will be up and down will be down. Frustrating! BTFD in PM's I will go!

Tue, 06/21/2011 - 10:23 | 1388844 JohnnieWalker
JohnnieWalker's picture

As long as the middle class get squeezed on all sides, the savings period for a home purchase in the US will probably mirror that of Beijing, China where it now takes 57 years of saving for the average resident to cover the cost of an apartment purchase.

Tue, 06/21/2011 - 10:23 | 1388846 JohnnieWalker
JohnnieWalker's picture

As long as the middle class get squeezed on all sides, the savings period for a home purchase in the US will probably mirror that of Beijing, China where it now takes 57 years of saving for the average resident to cover the cost of an apartment purchase.

Tue, 06/21/2011 - 10:22 | 1388852 SheepDog-One
SheepDog-One's picture

'House shopping'...AHH HA HA HAAAA! Hey honey what do you want to do today? Well, we could go 'shopping' for a new house, but gasoline is SO expensive I dont think we can afford to drive!

Tue, 06/21/2011 - 10:54 | 1388940 Josh Randall
Josh Randall's picture

Exactly - these kind of BS explanations only play to the LIESMAN's of the world

Tue, 06/21/2011 - 10:26 | 1388853 ATM
ATM's picture

High gas prices are his excuse? The average driver uses about 750 gallons per year. $4 gas v $3 gas is the reason this fuck think people are not buying homes?

If $750/yr is the difference between owning and renting than of course lending requirements have swung too far!

Holy Mother of God.....this is what it's come to I guess. Pure, unadulterated stupidity is what passes for reason.

Perhaps this nob should think for a second. Why would anyone buy a house right now when prices are dropping every day? Why would anyone buy as prices drop? Why would anyone with half a brain buy now with a shadow inventory sitting there waiting to hit the market at any time?

This shithead passes off flodds as a reason? Hey dipshit didn't those floods reduce the volume of vacant houses while also increasing demand for new homes in those areas?

He should use the socialist economic that destruction of property is good for the economy! Think of all the new jobs building all those new homes that aren't necessary. who cares about destroyed wealth, we've got new houses to build with someone elses money!

Tue, 06/21/2011 - 10:42 | 1388900 smithcreek
smithcreek's picture

I don't have the energy anymore to rant, so I'll just say ditto.

Tue, 06/21/2011 - 10:44 | 1388906 Libertarian777
Libertarian777's picture

Hey if I take out a 2/2000 year arm and can get a $3million McMansion for that $750!

Tue, 06/21/2011 - 11:13 | 1389030 r101958
r101958's picture

'Pure, unadulterated skullduggery' is probably a better term.

Tue, 06/21/2011 - 10:22 | 1388854 digalert
digalert's picture

"weakness was due to Spiking gasoline prices" ?

Someone struggling with gas prices probably shouldn't be looking at buying a home.

Tue, 06/21/2011 - 10:28 | 1388860 snowball777
snowball777's picture

Precisely, "Honey, it looks great and we wouldn't even have to replace the counters because they're already granite, but...oh...it's more than a gallon away...oh, well".

Tue, 06/21/2011 - 10:29 | 1388874 alien-IQ
alien-IQ's picture

they now have such little regard for the intelligence of the average investor that they don't even bother to carefully craft the lies. they just throw any bullshit out there assuming it will all stick....It's insulting really.

Tue, 06/21/2011 - 11:20 | 1389040 MachoMan
MachoMan's picture

I saw a house hunters or first house or one of those shows the other day...  the couple was contemplating purchasing a house for $210k.  They offered $195k and asked the seller to pay for $7k of closing costs...  the seller countered with $211k and would pay $7k in closing costs...  they refused because they "could not afford it."  Really?  If you can't afford that price difference, then your default risk should be at maximum level given you literally have no margin for error...  crazy...

crap like this all the time...  buyers trying to renegotiate right before closing...  you name it...  crazy...

Tue, 06/21/2011 - 10:23 | 1388856 RobotTrader
RobotTrader's picture

Looks like the market has turned today, I'm going long.

Short sellers must take their bacon right away, its like pulling teeth out of a crocodile.  Wait too long and you will get your hand bitten off.

Even the crappy gold stocks are moving up after getting utterly brutalized by 30% - 50%.

Tue, 06/21/2011 - 10:25 | 1388862 snowball777
snowball777's picture

You're a day late.

Fuck your buy-side jedi mind-trick...the force is weak with you.

Tue, 06/21/2011 - 10:31 | 1388867 etrader
etrader's picture

Is that the Robo compression ES short signal  now they had the Gap orders ;-)

Tue, 06/21/2011 - 10:27 | 1388868 alien-IQ
alien-IQ's picture

you will be reversing that position before the day is over.

/ES gaped up 7 points at the open, then spiked on bad housing numbers.

This isn't a reversal, it's a trap.

Tue, 06/21/2011 - 10:31 | 1388880 statlawyer
statlawyer's picture

nasdaq leading the market higher... bullish lol

Tue, 06/21/2011 - 10:31 | 1388883 Cdad
Cdad's picture

So you are chasing two consecutive, low volume, engineered gap up days...after weeks worth of brutal economic data...ahead of Truth arriving on the continent of Europe.  Really?

Ummm...you should probably have a chat with your risk manager.

Tue, 06/21/2011 - 10:46 | 1388912 buzzsaw99
buzzsaw99's picture

this market is like a willow. the branches bend in the wind but the rot runs deep and will not stand the test of time.

Tue, 06/21/2011 - 11:01 | 1388984 The Axe
The Axe's picture

i agree Robot  you post is late....shorting aapl using a july vert. spread....320/115 puts.... stocks are parabolic also short 1000 CRM

Tue, 06/21/2011 - 11:05 | 1388985 The Axe
The Axe's picture

i agree Robot  you post is late....shorting aapl using a july vert. spread....320/115 puts.... stocks are parabolic also short 1000 CRM

Tue, 06/21/2011 - 15:36 | 1389899 lieutenantjohnchard
lieutenantjohnchard's picture

as mentioned yesterday robottrader is the ultimate dumb money indicator. yesterday he was all in short. today he's going long. at the top a while back he mocked the bears only to see the market pull back 100 s&p (500) points.

Tue, 06/21/2011 - 10:27 | 1388858 Cdad
Cdad's picture

Volume will be worse today than yesterday.  There is no confidence in the market.  

Tue, 06/21/2011 - 10:24 | 1388859 Cassandra Syndrome
Cassandra Syndrome's picture

Its more evidence for QE3. Thats all they want, an excuse to park their funds in equities. Most mutual and pension funds don't do PMs, where else can the money flow to? Even bonds look risky at the moment, commodities are only good for QE3, its a normalcy bias and pray for QE3 with these fund managers. There is nowhere else to go.

Of course they are too blind and blinkered to see the damage QE3 and further bailouts to insolvent institutes and countries are doing in the real economy. But thats the nature of today's financial system.

Tue, 06/21/2011 - 10:34 | 1388875 Seasmoke
Seasmoke's picture

so every time they revise downward off their fraudulent last month figure, its a positive ?

Tue, 06/21/2011 - 10:30 | 1388877 Caveman93
Caveman93's picture

“The price decline could be diminishing, as buyers recognize great bargain prices and the highest affordability conditions in 40 years; this will help mitigate further price drops,” Yun said.

This statement is a friggin joke! Just because something is a bargain does not automatically mean there is a DEMAND!

Tue, 06/21/2011 - 10:56 | 1388967 alien-IQ
alien-IQ's picture

it should be worth noting that when home prices really began taking a beating that could not be ignored they stopped referring to it as "declining home prices" and started using the term "rising affordability index".

Orwell would be proud...or disgusted... I'm really not sure.

Tue, 06/21/2011 - 10:37 | 1388882 slewie the pi-rat
slewie the pi-rat's picture

money?  i think it's going thru the gated ceiling.  giant sucking sound thru the concertina wire...

in related AM news from various plantationz:  DJ Online Broker Says No Dodd-Frank Link To Ceasing Gold, Silver CFDs  (lack of interest in the products = why)

and from The Tripoli Post, some noooz of the EU finimini/for'nimini flock clustering around the moQ's frozen assets:  EU looks at frozen Libyan funds to aid rebels

(Aljazeera.net) - European Union (EU) foreign ministers have agreed to look into the possibility of using frozen Libyan funds to assist rebels opposing Libyan leader Muammar Al Qathafi.

A statement agreed on by EU ministers meeting in Luxembourg on Monday said the bloc acknowledged the urgent financial needs of the rebel transitional council in Libya.

Libya's cash-strapped rebel authority said on Sunday it expected to start replenishing its empty coffers this week with the first batch of money promised by its foreign allies.

The rebels need more than $3bn to cover salaries and other needs in the next six months and have won promises of financial assistance from its western and Arab supporters.

However, based in the eastern coastal city of Benghazi, rebels say they have yet to receive any cash from abroad and have been increasingly bitter in their criticism of western nations.

In an interview with Reuters, Libya's rebel oil chief Ali Tarhouni lashed out at the West on Saturday, accusing it of failing to keep its promises to deliver aid.

relax, revolutionary muslim brotherhood BiCheZ:  the check is in the ice sculpture...

Tue, 06/21/2011 - 10:41 | 1388897 monopoly
monopoly's picture

At some point these miners will turn since gold will not move down to 1,400 as I expected.

Tue, 06/21/2011 - 10:46 | 1388913 wombats
wombats's picture

There sure does seem to be an awful lot of "temporary" setbacks happening.

Tue, 06/21/2011 - 10:47 | 1388917 PaperBear
PaperBear's picture

Meander paper silver price can now start inching higher.

Just as long as it doesn't go up too fast, I want to buy physical silver cheaply for as long as possible.

Tue, 06/21/2011 - 10:50 | 1388926 Eireann go Brach
Eireann go Brach's picture

Someone should round house kick this guy right in the mouth with a lead boot so he does not have the ability to speak again! As for NAR, they are probably the most useless group of human beings in this country.."sure grandma, it is a great time to buy, lets get you into that home down by the river that you cannot afford"

Tue, 06/21/2011 - 10:51 | 1388928 mayhem_korner
mayhem_korner's picture

“Home prices are rising or very stable in local markets with improved employment conditions, such as in North Dakota, Alaska, Washington, D.C., and many parts of Texas,” Yun noted.

NC and AK = no one lives there

D.C. = propped up by gubmint

TX = only real thing around

If NAR "seasonally" adjusted for all-time low interest rates and the 1/3 decline in prices since '06, these values are worse than abysmal.  There is no money (other than what's servicing debt and buying commodities like food), no confidence, and no interest in taking on debt.

Why do these fools state this is going to turn around?

Tue, 06/21/2011 - 10:50 | 1388938 docj
docj's picture

widespread severe weather

Snow - the go-to blame for everything from a crappy economy to crabgrass in your lawn.

Tue, 06/21/2011 - 11:01 | 1388988 Village Smithy
Village Smithy's picture

As long as the HFT's are moving the market in the direction that Ben wants his memo to the SEC will be "Do not investigate." If they begin to go short on a regular basis we can expect immediate action.

Tue, 06/21/2011 - 11:20 | 1389041 dcb
dcb's picture

am I the only person who uses speed lines. sure there are differences, in charting, but as ifar as I can see we just hit the top of the speed line, exqactly where you'd stop your short, and now you'd enter it.

Tue, 06/21/2011 - 11:48 | 1389108 Village Smithy
Village Smithy's picture

I use the speed line at the Piggly Wiggly, is that what you mean? Seriously though, I have been trying to short SPY all morning at at every level there is a pause and then it accelerates right through. Just like Nanex's description of the how the HFT's are working us over. This is so f*&%ed.

Tue, 06/21/2011 - 11:16 | 1389044 dcb
dcb's picture

am I the only person who uses speed lines. sure there are differences, in charting, but as ifar as I can see we just hit the top of the speed line, exqactly where you'd stop your short, and now you'd enter it.

Tue, 06/21/2011 - 11:25 | 1389051 PaperBear
PaperBear's picture

I trust that ZH will let it be known when the rate of underwater mortgaged residential property exceeds 100%. I am sure we can't be far from it.

Dipping into home equity like an ATM will never return, not in my lifetime at least.

Tue, 06/21/2011 - 11:35 | 1389080 PaperBear
PaperBear's picture

Here comes an intra-day high of $37/oz for silver to end the recent sideways movement.

Tue, 06/21/2011 - 11:57 | 1389143 glenlloyd
glenlloyd's picture

bargains....now that is a good one!

Tue, 06/21/2011 - 11:59 | 1389157 Carl Spackler
Carl Spackler's picture

The mainstream media, the most gullible of the gullible, falls for the same b.s. all the time..."it was the weather and gas prices."

NO, it was a failure of BID to meet ASK, also known as price discovery.

Price discovery doesn't stop because of the weather or temporary gas price volatility. It stops because the long term expectations of sellers continue to diverge from the long-term capabilities of buyers.

Ergo, the bid/ask spread stays remains widened across various markets.

 

 

 

Tue, 06/21/2011 - 12:02 | 1389173 Zer0henge
Zer0henge's picture

What a steaming pile of puffed up blowfish #$%@

Tue, 06/21/2011 - 12:39 | 1389186 ebworthen
ebworthen's picture

 

Yes, those well healed folks in Detroit just couldn't afford the gas to drive up and down the Mississippi in their new GM's and Chrysler's looking at old farm houses hundreds of miles away; that must be it.

 

Tue, 06/21/2011 - 12:13 | 1389220 US Uncut
US Uncut's picture

And WHY is the DOW soaring???? I just don't get it. 

Tue, 06/21/2011 - 12:31 | 1389265 oldman
oldman's picture

Does anyone have a chart on the prices of Japanese residential real estate over the past 100 years? The similarities between the collapse of an earlier 'imperialist' nation-state and ours might be interesting.

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