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New Home Sales Post Modest Improvement From Record Low, Houses For Sale At Lowest Since August 1967

Tyler Durden's picture





 

According to the census department, new home sales printed at 300,000 in March (annualized; actual number sold was a whopping 29,000, of which 59% were not even built yet), a modest beat of  expectations of 280,000. The February number was revised from 250K to 270K. Therefore this was a 11.1% increase from what were virtually record lows. Refuting the better than expected headline, the underlying data was not too pretty: "The median sales price of new houses sold in March 2011 was $213,800; the average sales price was $246,800. The seasonally adjusted estimate of new houses for sale at the end of March was 183,000. This represents a supply of 7.3 months at the current sales rate" compared to 8.2 months in February. Additionally there was 1,000 or less house sold between $400,000 and $499.999, 1,000 or less houses sold between $500,000 and $749,000 and (Z) or less than 500 units sold under $750,000. And the kicker: the number of houses for sale at the end of March, 182,000 was the lowest since 1967. Welcome to the (recoveryless) recovery.

Full report

 


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Mon, 04/25/2011 - 10:15 | Link to Comment Cassandra Syndrome
Cassandra Syndrome's picture

Summer of Love 2 Bitchez!!!

Mon, 04/25/2011 - 11:05 | Link to Comment duo
duo's picture

Summer of moving back in with relatives.  Houses will either hold 3 generations, or 3 families (like some on my mother-in-laws neighborhood).  I'm starting to see 4 and 5 cars in driveways.

Mon, 04/25/2011 - 13:39 | Link to Comment Laddie
Laddie's picture

I've noticed several cars and other vehicles in driveways and MANY people living in single family homes, that and the RANCHERA music BLASTING, could signify a trend that investors should GO LONG on.

Mon, 04/25/2011 - 10:16 | Link to Comment Dr. No
Dr. No's picture

Please dont let this be the bottom (again).....I have been waiting until I can buy a rental home with cash.  Need single family homes to keep dropping.  Would like to see single family sub $100k.  I know TBTF doesnt like this price, but that is where my market price is at.

Mon, 04/25/2011 - 10:24 | Link to Comment Bazooka
Bazooka's picture

An you'll still be under water at $100k because prices will go to cash basis (no mortages available because deflation ravage credit away); so your house will be $10k.....a truly WTF moment.

Mon, 04/25/2011 - 10:35 | Link to Comment FEDbuster
FEDbuster's picture

Or QE 235 will result in the printing of the first US $1 Trillion dollar bill, and the house will be worth $15 trillion dollars.  The Bernank has vowed no deflationary depression on his watch, so Zimbabwe economics will rule the day.

Mon, 04/25/2011 - 14:08 | Link to Comment Harlequin001
Harlequin001's picture

but that $15 trillion will likely be worth around...$10K today, so just wait a while...

It will still go to cash...

Mon, 04/25/2011 - 10:23 | Link to Comment FEDbuster
FEDbuster's picture

Come to AZ.  You can buy 3bed/2baths all day long for under $100K.  Some friends of mine just bought one for $61K (needs 5-10K of cosmetic fix up), they will get $850./mo. for rent.  We are way below cost of construction for home prices, the market is totally FUBAR due to banksters.

Mon, 04/25/2011 - 11:47 | Link to Comment MachoMan
MachoMan's picture

This is what average prices are in Arkansas heh...  I'm waiting to buy the dip, but it doesn't appear we're going to have as much...  in fact, the lower end of the curve has been increasing in price I think...  but, anything over $175k is likely going to sit on the market for a while...  and, best case scenario, the seller will be asked to pay all the buyer's closing costs given the buyer doesn't have a pot to piss in.

Mon, 04/25/2011 - 10:50 | Link to Comment ParaZite
ParaZite's picture

If you want a home you can buy for cash... how about lovely Detroit City? One dollar a house... you can be your own slum lord!

Mon, 04/25/2011 - 12:00 | Link to Comment Jeff Lebowski
Jeff Lebowski's picture

Schadenfreude

You want the average middle class home owner to continue taking a hit to help you make a profit?

Mon, 04/25/2011 - 10:15 | Link to Comment Hephasteus
Hephasteus's picture

Shit hole earth fails to attract new ponzi participants.

I wouldn't be surprised if population was actually in severe decline.

Mon, 04/25/2011 - 10:21 | Link to Comment Dr. Porkchop
Dr. Porkchop's picture

ha.. I guess if advanced life were discovered on another planet, the TBTF zombie banks would be trying to figure out how to qualify them for ARMs and how to capture their alien finance regulators.

Mon, 04/25/2011 - 10:20 | Link to Comment Hephasteus
Hephasteus's picture

No. They'd be trying to figure out to pretend they were everyones friend. While brutally damaging a small portion of the population off in a secret out of the way shit hole. It's their chicken fucking method of operation.

Mon, 04/25/2011 - 10:21 | Link to Comment banksterhater
banksterhater's picture

If the market is so strong, why are 4 MILLION FORECLOSURES NOT BEING PROCESSED? Because squatters add $60 Billion annually to consumer spending?

Mon, 04/25/2011 - 10:27 | Link to Comment Rogerwilco
Rogerwilco's picture

A sale would realize and record the actual value of the property versus the fictional number now on the bank's balance sheet. Some banks (WFC, cough, BAC) don't want that to happen.

Mon, 04/25/2011 - 10:19 | Link to Comment FEDbuster
FEDbuster's picture

The 182K homes for sale must be a number for new homes only.  No one is building new homes, so that number should decline even more.  The exsisting homes for sale (including foreclosures) is the number to watch.  Shadow inventory of homes that are vacant, but not for sale yet is an important number, too.  With over a million foreclosures last year and the expectation of a million more this year, the supply of homes for sale should be steady or growing for years to come.

Mon, 04/25/2011 - 10:22 | Link to Comment Bazooka
Bazooka's picture

If price of house goes to cash prices...that's when the bottom will be.

An average American has what.$2,000 in their bank...so at cash prices (because credit is no longer available for mortgages; aka DEFLATION); then you can imagine how low it will be...can you say 10 cents on the dollar to current prices?

That means today's $280k house will be worth $28k.

WTF!!

Mon, 04/25/2011 - 10:30 | Link to Comment TruthInSunshine
TruthInSunshine's picture

An average American has what.$2,000 in their bank...

 

I do believe the average American has a negative net real worth. I seem to recall that less than 20% of Americans have significant savings (not counting housing values, so mark that lower, probably).

Throw in government-induced debt obligations, and the level of negative net worthlessness soars.

SNAP cards, Credit Cards, UE Insurance, Disability Insurance, Social Security, Medicare & Circuses, baby!

Mon, 04/25/2011 - 10:26 | Link to Comment Dr. No
Dr. No's picture

huh.  In my post above I was waiting for cash prices in the sub$100k.  But per your analysis, I think Ill wait a bit longer.  As you stated, the bottom will be cash price.  More and more people are not mortgage worthy per the Dodd-Frank guidelines.  Additionally, budget cuts will force the hands of the GSEs.  Hopefully the days of the 30-yr mortgage are ending.  Next, I hope student loans die so that I can perhaps afford tuition for my young step son.

Mon, 04/25/2011 - 10:29 | Link to Comment banksterhater
banksterhater's picture

Plus the max jumbo loan is going back to $625K ish -that will hurt higher end.

Mon, 04/25/2011 - 12:12 | Link to Comment malek
malek's picture

They're going to extend that anyway...

Mon, 04/25/2011 - 12:17 | Link to Comment NotApplicable
NotApplicable's picture

Dodd-Frank is designed to kill the private mortgage business, not the mortgage business in general, which of course, is Frank's favorite creation, the Fannie/Freddie/VA/HUD/etc...

Just 3.5% down, steady job, minimally decent credit is all you need.

I wouldn't get into the cash market for anything less than 70% off current prices, but instead, ride the Bernank Put with a Barney Frank loan. It's all about recognizing future purchasing power. Also, if you retain enough real (i.e. non-fiat) savings to retire the note, you'll not have to worry about being a debt slave.

Short of some future storm troopers busting into your home claiming the note gives them ownership, I'd say it's a win-win, as you're profiting from currency depreciation, while holding insurance to cover the debt service (paying yourself the premium to boot).

Mon, 04/25/2011 - 14:55 | Link to Comment patb
patb's picture

Dodd-Frank is designed to help the balance sheets of the Big I Banks.

 

By continuing jumbo mortgages, it will keep the values up on the Jumbo POS's they are holding on their balance sheets.

Trust me if there was money in Jumbo mortgages, Wall street would be on it.  That mortgages are now Fannie/FHA/Fed

then it means the Banks are moving that risk slowly and steadily to the Federal Reserve and tax payers.

 

It takes a while for the Fed to collate 4 Trillion in crappy paper, so it's happening slowly.

Mon, 04/25/2011 - 10:25 | Link to Comment ZippyBananaPants
ZippyBananaPants's picture


Sales of new single-family houses in March 2011 were at a seasonally adjusted annual rate of 300,000, according to

estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development.

This is 11.1 percent (±21.7%)* above the revised February rate of 270,000, but is 21.9 percent (±10.3%) below the

March 2010 estimate of 384,000.

 

 

I love the plus or minus of 21.7%.  Such accuracy!!

Mon, 04/25/2011 - 10:28 | Link to Comment Hephasteus
Hephasteus's picture

Precision machinery. You get that when you buy IBM.

Mon, 04/25/2011 - 10:37 | Link to Comment Dr. Porkchop
Dr. Porkchop's picture

..but run the Jeopardy! app and watch it go!

Mon, 04/25/2011 - 10:27 | Link to Comment banksterhater
banksterhater's picture

7.3 months supply of NEW homes is still high. How many of these will be cancelled due to contingencies/lack of financing? And this is the definition:

"A house is considered for sale when a permit to build has been issued in permit-issuing places or work has begun on the footings or foundation in nonpermit areas and a sales contract has not been signed nor a deposit accepted."

Mon, 04/25/2011 - 11:33 | Link to Comment ghostfaceinvestah
ghostfaceinvestah's picture

Many purchases will be cancelled due to financing - last week FHA insurance fees went up which will put a few more buyers out of the market.

Mon, 04/25/2011 - 10:32 | Link to Comment banksterhater
banksterhater's picture

(dup)

Mon, 04/25/2011 - 10:30 | Link to Comment Hondo
Hondo's picture

The low level of homes for sale especially in the higher end makes perfect sense.  Those still in their homes and making monthly payments know they are under water and would have to come to the table with a freezer of cash to get out.....they aren't going to move period.....the other side of that is that there are a reduced and limited number of people who can in fact qualify for the higher end home both from a cash flow and cash for down payment point of view.

Mon, 04/25/2011 - 10:35 | Link to Comment TruthInSunshine
TruthInSunshine's picture

To which The Bernank replies, "I am Shiva, Destroyer of Worlds."

Mon, 04/25/2011 - 10:38 | Link to Comment Gimp
Gimp's picture

The housing numbers were put together by our favorite minister of propaganda - "Bagdad Bob"

Watch interview: http://www.youtube.com/watch?v=s27Oq5ot0ZI

Mon, 04/25/2011 - 10:38 | Link to Comment Gimp
Gimp's picture

The housing numbers were put together by our favorite minister of propaganda - "Bagdad Bob"

Watch interview: http://www.youtube.com/watch?v=s27Oq5ot0ZI

Mon, 04/25/2011 - 10:38 | Link to Comment Blankman
Blankman's picture

The shadow inventory is always overlooked.  This is very pertinent to the info at hand as there are many homes out there (bank owned) that the bank has not put on the market.  

Mon, 04/25/2011 - 10:46 | Link to Comment TruthInSunshine
TruthInSunshine's picture

2 million 'once or twice dropped homes' not listed for sale (intentionally), bitchez.

Mon, 04/25/2011 - 13:25 | Link to Comment thames222
thames222's picture

absolutely...my mom finds out about the shadows as soon as they're on the market, she's flipped a couple in the past few years and made some sweet cash.

 

www.forecastfortomorrow.com

Mon, 04/25/2011 - 10:56 | Link to Comment Dejean Splicer
Dejean Splicer's picture

I'm going to rush out and sell my metals so I can buy some investment properties.

I doubt that I will be able to rent my investment property because the Banks/FED-proxiest have allowed all their deadbeat mortgage holders the right to live for free in their underwater boxes. IN FUCKING PERPETUITY!

Maybe I'll rethink the sale of the hard assets.

Mon, 04/25/2011 - 10:58 | Link to Comment MsCreant
MsCreant's picture

My house was destroyed early April. I had it paid off. I will probably get a check for the whole deal from the insurance company. I have been looking at houses and all that goes with that. I called my bank, they are not loaning money to anyone for a mortgage. They don't care that I have paid off one house and three cars over the years with them. They don't care that I am employed. I told this to my realator to which she responded that all the financing is different on each deal, every time. She says that sales are going up in our area, but that each financing deal is different, like a reinvention of the wheel, and it changes daily. What worked yesterday will not work today.

When my banker turned me down, I asked her if it was because of Robosigning and the problems with the titles. She was not sure what I meant and asked me to tell her more. I spilt the whole thing quickly, including the empty boxes that were sold into the market as investment products. I blew her mind. She said she had not heard of all I was telling her but she knew the truth of it when I said it because it matches things that they had been told. She told me that they stopped doing mortgages, but that they had not told them why. I told her about Zerohedge and 4closure fraud.

It's getting rough out here on the ground. I wish I had a house to bunker down in right now. I feel so exposed living in motel rooms, going to work.

Peace ya'll.

Mon, 04/25/2011 - 11:11 | Link to Comment Rogerwilco
Rogerwilco's picture

People working at banks are not very bright by and large. A couple of weeks ago I closed my business and personal accounts at WFC and moved the money to a local credit union. While at Wells Fargo, the branch flunkey asked the obvious question, "Why are you closing these accounts?". I handed him a copy of the news article detailing the $350B, ten year, drug money laundering scandal, and WFC's slap-on- the-wrist fine. He looked at the headline, his face turned red, and he said none of it was true! When I asked him why Wells Fargo paid the fine, he became angry and ended the meeting. I left with a smile on my face.

Mon, 04/25/2011 - 11:34 | Link to Comment Oligarchs Gone Wild
Oligarchs Gone Wild's picture

These are two of my favorite comments in many months.  The impact of educating ponzi midlevel benefactors of their own blind participation in the continued fleecing of the productive. 

The sunshine is getting brighter and brighter. 

May there be many more ah ha moments from the exponential affects of these inception moments.

Thanks ZH.

Mon, 04/25/2011 - 12:01 | Link to Comment Diogenes
Diogenes's picture

Banks have always been known for paying low salaries. Which tells you all you need to know about bank employees talent for savvy financial decisions.

Mon, 04/25/2011 - 13:27 | Link to Comment Laddie
Laddie's picture

Did same with JPMC and they didn't even ASK why, the Mexican lady didn't even look at me.

 

Mon, 04/25/2011 - 11:48 | Link to Comment nmewn
nmewn's picture

MsC,

I assume the loss was from the bad weather we Floridians had come though first part of the month?...we lost power here for a couple days (tornadoes)...nothing like your loss of course...could be a blessing in disguise though...maybe downsize if you think it was more debt/house than you needed/desired...just thinkin out loud there, life, lemons & lemonade and all...hang in there kid.

Mon, 04/25/2011 - 17:41 | Link to Comment Jendrzejczyk
Jendrzejczyk's picture

Alright , I don't know where to start.

Sounds silly and stupid, but I've been worried about you and wondered where you went (as I think often about many of the missing lately...Merehuman I hope you're doing OK).

WTF happened, husband alright?... all the minutest details you care to share are needed.

If you can rebuild on the same land and need help, let us know. I'll bring a crew out and wire the new place up at no charge.

I could use a little karma recharge and will help in any way possible.

Mon, 04/25/2011 - 19:52 | Link to Comment Bringin It
Bringin It's picture

MsCreant - sorry to read about the home.  I hope you are doing OK.

Mon, 04/25/2011 - 18:35 | Link to Comment Village Idiot
Village Idiot's picture

Tyler I'd be curioius to know how much the numbers for sale and refi activity were influenced by the the new mortgage originator comp plans that went into effect on april 1st. Any loan applications originated prior to the 1st were allowed unrestricted compensation on the sale or refinance of residential re. I know there was a push to get applications and contracts dated prior to the 1st. To what degree this may have skewed the numbers I'm not sure.

EDIT: Some may wonder why lender commissions would affect RE purchase contracts.  Several reasons, but the biggest contributor would probably be that most large RE companies have financing arms that can contribute rather significatly to the bottom line.  In a post DONK environment that contribution has been reduced.  Get that contract/loan application signed no later than March 31, people!!  We'll see what happens for the month of April. May be statistically insignificant.

Mon, 04/25/2011 - 11:19 | Link to Comment jkruffin
jkruffin's picture

The paper trade is about to collapse the entire ponzi scheme into rubble.  Silver is the first sign there are major problems brewing....look at all the people standing on the PANIC sell button...its just a matter of moments before it begins in earnest.

Mon, 04/25/2011 - 11:28 | Link to Comment Dez Rodgee
Dez Rodgee's picture

Cash price.  That's BS short of some markets like Detroit.  Just went house shopping this weekend in Charleston, SC, good homes are coming off the market quickly.  These were houses in the 250k-400k range.  They are bought by homeowners getting a mortgage and not paying cash.  So either Charleston, SC is the only place in America growing or things are not as bad as they seem in desirable states.

Mon, 04/25/2011 - 11:38 | Link to Comment the grateful un...
the grateful unemployed's picture

a lot of homeowners have taken to renting their homes. in SoCa you see more for rent sighs, than for sale signs. there is some activity in the foothills, where the uber wealthy are carving out plots in the brushy hillsides, but the median home just isn't changing hands.

Mon, 04/25/2011 - 11:42 | Link to Comment AC_Doctor
AC_Doctor's picture

Looks like the Fed making inflation by printing money is not doing jack squat for the housing sector or the consumer. 

Mon, 04/25/2011 - 11:56 | Link to Comment Oligarchs Gone Wild
Oligarchs Gone Wild's picture

All that money printed in an attempt to reverse the deflationary gravity of the housing and financial collapse all while trying to "stimulate" another bubble like "green energy" and "carbon trading".

Fail. 

Just can kicking trying to prevent the inevitable.

 

Mon, 04/25/2011 - 12:37 | Link to Comment the grateful un...
the grateful unemployed's picture

if they would let prices fall and end ZIRP then activity would pick up in a meaningful way. but if you maintain zirp the moneyed interests will step in and buy these homes, and that would just make the market worse. when mortgage rates are lower than corporate borrowing rates we'll have some meaningful recovery.

Mon, 04/25/2011 - 11:42 | Link to Comment HedgeFundLIVE
HedgeFundLIVE's picture

Last week’s Economic data at best argues that we are not tumbling back into a recession. But it feels like we are very vulnerable. The Job Market is months away from being flooded with job applicants out of college and graduate school. The housing market is still saturated with little movement. The most disturbing problem the country is facing is oil prices. How many times will America have to live through these violent moves in oil before we truly take alternative energy more seriously?

http://www.hedgefundlive.com/blog/monday-stock-market-expectations-42511-%e2%80%93-so-go-the-knicks-so-goes-the-market

Mon, 04/25/2011 - 12:36 | Link to Comment PulauHantu29
PulauHantu29's picture

WSJ:107 months of inventory...that's almost 9 years of empty houses sitting there with strategic defaults soaring:

107: How many months it would take to sell banks’ current and shadow inventory of foreclosed homes.

Banks’ vast pile of foreclosed homes doesn’t appear to be diminishing. That’s a troubling sign for the future of the housing market.

Back in April, this column tallied up all the foreclosed homes sitting in banks’ inventory, as well as the “shadow” inventory of homes in the foreclosure process or on which owners had missed at least two mortgage payments. At the time, we reported that at the current rate of sales, it would take 103 months to unload it all.

Over the past six months, that number has actually risen. Banks managed to pare down the shadow inventory, but largely by taking possession of foreclosed homes. As of September, they owned nearly 994,000 foreclosed homes, up 21% from a year earlier. The shadow inventory stood at 5.2 million homes, down 7% from a year earlier. Grand total: 107 months of inventory.

http://blogs.wsj.com/economics/2010/10/3...

Doesn't sound to me there will be a "good" time to buy a house for several more years...at least. Why buy a depreciating asset and lose money?

Mon, 04/25/2011 - 13:17 | Link to Comment ThirdCoastSurfer
ThirdCoastSurfer's picture

Does recovery from a natural disaster count as a new home "sale"?

Plus, as has been reported, investors continue to purchase about 25% of existing home sales but it is unclear if they would be so inclined to buy or order "new".

Most importantly, when you talk about average and median the historical average is 19% below the median but has moved to just 13% which indicates the sale of higher priced homes above the median is increasing, or those below is declining, or both. No one is talking about what the long term indication of this shift portends. The nattering nay-bombs talk about how wages need to increase or home prices need to decrease and calculations are used to show that home prices continue to decrease but you can't judge a book by the cover. Just because the average continues to drop from $246,800 doesn't mean that those priced below aren't actually increasing. 

As I continue to harp, we are on the road to Mexico where unemployment in March was just 4.61% and homeownership is 84%! God help you though if you're below the median in Mexico!

http://www.census.gov/const/uspriceann.pdf

http://www.allbusiness.com/finance/1016522-1.html

Mon, 04/25/2011 - 13:18 | Link to Comment Laddie
Laddie's picture

Supply and Demand. Several years ago the US Census projected a billion population for what was once known as AMERICA by the end of this century. Recent demographic analyses would appear to hasten that date by some decades.

What is clear is that the new and improved America, courtesy of the 1965 Immigration change, is  a vastly different place from the 1950 and 1960 America. This "America" is unrecognizable from the nation that was the World Power.

 

The billion or more "Americans" will of course need housing, so LONG TERM it looks real good for housing and so forth.

Of course Amish can no longer find affordable land for agriculture so they are trying other JOBS.

Curious how the Sierra Club and all these GREEN GREEN GREEN types NEVER mention immigration's impact on the environment of America.

This government elected a NEW PEOPLE, that is what former Forbes editor and CBS Marketwatch writer Peter Brimelow stated.

 

So go long on housing, real estate, the BILLIONS have to have a hut.

I hope your children and grandchildren enjoy this NEW and VIBRANT America as NBC stated on their report the coming White MINORITY.

Thank goodness for H1-Bs and all the rest of the visas. Affirmative Action, SBA discrimination against White guys since 1980, btw, not to mention government set-asides.

Ah the future looks great.

How about those Zetas in 240 American cities?

 

Mon, 04/25/2011 - 13:21 | Link to Comment tomster0126
tomster0126's picture

Prices have been increasing a bit this year in the Bay Area, it's nice to see homeowners with some room to breathe.  i wouldn't worry about the real estate market in the long run, green architecture is going to be the next wave and bring a lot of capital to our nation.

 

www.forecastfortomorrow.com

Mon, 04/25/2011 - 13:48 | Link to Comment Segestan
Segestan's picture

Not only are these low numbers still bloated BS , the US has doubled the population since 1967. Still more sugar coated crap.

Mon, 04/25/2011 - 16:59 | Link to Comment rsnoble
rsnoble's picture

I need to hurry up and finish the upstairs quarters.  Of course i've already discovered in the past that if you have extra space someone in a bad situation,often a relative, ends up in it and it's hell getting them out.  So that's why I converted the studio apartment in the barn to a machine shop and the  upstairs will be a pit group,tv, bar and bathroom.  Everything I need so I don't have to come downstairs for days.  And if anyone ever moves in again........they'll either have a job or a good looking wife.

Tue, 05/31/2011 - 05:32 | Link to Comment aoter
aoter's picture

When my banker turned me down, I asked her if it was because of Robosigning and the problems with the titles. She was not sure what I meant and asked me to tell her more. I spilt the whole 640-460 test thing quickly, including the empty boxes that were sold into the market as investment products.642-681 test I blew her mind. She said she had not heard of all I was telling her but she knew the truth of it when I said it because it matches things that they had been told. She told me that they stopped 310-200 test doing mortgages, but that they had not told them why. I told her about Zerohedge and 4closure fraud.

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