The Quadruple Dip: Housing Starts, Permits Drop, Miss Expectations; Houses Under Construction At New Record Low

Tyler Durden's picture

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GOSPLAN HERO's picture

Total collapse, comrades.

SheepDog-One's picture

I wonder how they spin this as bullish at CNBC, oh yea I remember 'housing is irrelevant in new no-constitution US'....FEMA forced labor camps, bitchez.

Overflow-admin's picture

LMAO! Now I understand what these little bastards were preparing.

Bodhi's picture

All your base are negative equity.

carbonmutant's picture

Wassamatta, You from Indiana?

oogs66's picture

Last month's starts were revised up, so clearly these numbers will be revised up!  So all is good.

AUD's picture

Ha! & gold down! If that's not the bond speculators pumping for some central bank 'relief' I'm the monkey's uncle.

oh_bama's picture

Are you an AMERICAN?

Housing below HIGHLY HYPED UP EXPECTATIONS DUE TO

  • JAPAN
  • GREECE
  • WEATHER
  • RADIATION
  • OBAMA BEN LADEN!!

 

MisterMousePotato's picture

If the number was one-half, I wouldn't get it. I mean, I can understand the rationale for, right this moment, buying gold. Equally, I can understand the rationale for, right this moment, selling gold. Ditto silver and a lot of other things. I mean, who knows? (At least short-term.)

But build a house? When there's a glut of them? Read yesterday that 1 out of 12 houses (8%) in California are vacant. But someone's gonna build another? Why? What are they thinking? Who is doing this?

John Bigboote's picture

Must...have...growth...or you are fired.

SwingForce's picture

Right, and trust a home builder with your deposit while you wait another 6 months while the economy shrivels further? Wake up one day and the builder left town and nobody at the sales trailer? NFW.

DeadFred's picture

I'm guessing you're looking at the upscale private builder market. If you work for Goldman and just got your $2 million dollar bonus for shearing sheep are you going to buy someone's hand-me-down repo? The best deal is not what you're after, you want talking points at the office party and ooohs and aaahs from the trophy wife. Building your own will get you those. I haven't seen a big track development go up in years, but those at the top of the food chain are doing quite well. If you do build your dream house now you can top notch craftmen for decent rates.

writingsonthewall's picture

It's true - a picture tells a thousand words - just look at that graph - looks like the 'edge of the rockies'

TheTmfreak's picture

BTFD!!!!!! And then rent them out...

Terminus C's picture

I wouldn't touch housing with a ten foot pole...  You don't even know if you won the house you bought.

That and total collaps is coming.

Conrad Murray's picture

4 days til the rapture. 6PM bitches!

Lieutenant Dan's picture

Did you spend your life savings to spread the word?

ParaZite's picture

We and my godless friends are having a party 4 days from now, to celebrate all the assholes who will leave this Earth and populate Heaven. I can only hope that "god" in his infintile wisdom will take the Muslims and Jews with the Christians... then all the crazyies will be gone! Drunken pagan orgy to follow the party. Hell if it really happens, I might even stick my d*ck in the mashed potatoes!

Dr. Richard Head's picture

Our evening began in ParaZite's comfortable study in his New York townhouse where the candle light was just right, the HiFi was in the background, and the wine was delicious...

What's the secret ParaZite?

Naturally I'll say it's the wine.

Mmm, it does go well with the chicken.
Delicious again ParaZite!

ParaZite's picture

We and my godless friends are having a party 4 days from now, to celebrate all the assholes who will leave this Earth and populate Heaven. I can only hope that "god" in his infintile wisdom will take the Muslims and Jews with the Christians... then all the crazyies will be gone! Drunken pagan orgy to follow the party. Hell if it really happens, I might even stick my d*ck in the mashed potatoes!

redarrow's picture

Save your breath. No sense talking to people who think their god is the true god and have been waiting for him like 2011 years. I would say good riddance, let all the believers and their strict inerpretation of religion go. I would rather not pray and yet live a peaceful life.

mayhem_korner's picture

 I would rather not pray and yet live a peaceful life.

Can't be done.

The Bible stands as the document most persecuted by those who haven't read it.

redarrow's picture

Read up Hindu and Buddist history. In the history of the world more wars have been fought by Christians and Muslims than other religions combined. Like to still pray much at the Church?

mayhem_korner's picture

What's your point?

Tell me what is meant in the Scriptures by the phrase "Peace be with you."  Hint: it has nothing to do with an absence of violence.  Jesus spoke those same words to a group he also told would be persecuted and martyred (which they were).

So divorce yourself from the secular notion of peace being the antithesis of violence.

You criticize what you don't know.

Bananamerican's picture

" I would rather not pray and yet live a peaceful life."

the last words out of your mouth in this life will be a prayer....

ElvisDog's picture

Did I miss a memo or something?

DeadFred's picture

Google Harold Camping. There may be others. We can talk about it more on the 22nd since I think we'll all still be here (anyone know a good hedging strategy?). I think the true end of the world is scheduled for October 15th. We'll talk more about that on the 16th.

TheTmfreak's picture

Well we'll see about a "total collapse" I don't believe it won't go down so "quickly." And if you believe it is going down why wouldn't you own property then? If it goes down its not like you're losing anything, and if it doesn't... well...

If nobody will touch housing, who is going to provide housing? The government, the banksters, and the "super rich"? I don't want housing from any of those. I'm sure others wouldn't either.

With every long there is a short. For every renter there is an owner. Everyone doesn't want to own, everyone wants to rent. That means you gotta have owners. You can easily buy a house nowadays (that was foreclosed) and charge 3 or 4 times the mortgage payment in rent (that is of course if you didn't buy it with cash).

Ahwooga's picture

For every renter there is an owner, but for every owner is there a renter?

TheTmfreak's picture

Nope.

However I have been renting long enough to realize how many people are trying to rent.

One thing against owning homes, that goes towards what you're saying, because of such high renting prices alot more people are doing the unspeakable.. *gasp* having roommates!

Ahwooga's picture

In Australia they were having open houses for new rentals with up to 40 people showing up for each listing. Obviously its a bit different to the situation in the US but the property market still struggles to shift sales. I think it says more about the overinflated rents optimistic (read: desperate) homeowners expect to receive than the number of tenants out there. It all points to the same thing though, res prop is screwed almost the world over.

writingsonthewall's picture

Classic mistake - imposing your own narrow experiences on the wider economy.

There will only be renters while there are jobs to allow them to rent - no job, no rent, no house.

Even rich landlords can only sustain a short period of 'no rent' - and you might find that all of a sudden, Americans start living like 'immigrants' and start shacking up 10 to a 2 bed semi - to save money.

Then you have a glut of supply - price crash again.....very, very slow to recover. In addition you have house builders who must build (they have nothing else to do) - alternatively they shut down, create more unemployment and even less renters.

 

It's Marxist overproduction - it's not changed and the 'solution' is asset devaluation. Pumping money into the system merely delays and prolongs the depreciation which is due.

 

Sorry this is news to you - but it's being going on for over 100 years. Surely you got 'the memo' about it?

TheTmfreak's picture

You don't think I already know this? Also my experiences are unique because the housing market isn't proped up by the "wider economy" as you put it. (at least not as directly). Again, I live in Northern Virginia. Have you not seen the news reports about the only place to have high wages and increased housing costs? As long as the federal government exists the way it does (I'm sorry this isn't going away anytime soon) this will continue to be the case. At least in the case that there will be plenty of people to rent around here.

However this assumption of mass unemployment I think is unfounded. Not to mention this belief that government safety nets are going to disappear over night is unfounded. (At least in the near term)

I already said that people are shacking up with other people, I'm an example of that. However, 10 to a 2 bed is quite a bit away from now, won't happen over night, but even then I still think it is reasonable to suggest that gouging prices for rent will continue for some while, before those prices begin to come down. (at least unless the US government allows the financial systems to collapse, which we know isn't going to happen at least while they have the power to prevent it).

I'm not even implying it is a sure thing, however, unless you own the housing, you pay rent to someone. More people want to rent than own than ever before. Until "everyone loses their jobs" which you guys are way over the top bullish on, that will be the environment we live in. The only thing that can bring "landlords" down is taxes and government costs. While I think they'll go up in the near term, I think that will peak out and drop before "everyone loses their jobs" happens. Now if you're talking about owning houses by a mortgage and renting, thats a different story as well. If i did own a house to rent, I'd only do it if i could pay it off with cash.

Ned Zeppelin's picture

There continues to be a market for new homes for the simple reason that you can't move the unsold house in Las Vegas to New Jersey.  And if the homebuilders are willing to price new to match existing home prices there is competition for the sale.  Bigger issue now is availability of mortgages to quaified buyers, and to a lesser but very real extent, AD&C loans to fund new home construction.  Rents surging actually help the imbalance by helping support prices.

 

But for now the outlook remains pretty bleak.

Ned Zeppelin's picture

There continues to be a market for new homes for the simple reason that you can't move the unsold house in Las Vegas to New Jersey.  And if the homebuilders are willing to price new to match existing home prices there is competition for the sale.  Bigger issue now is availability of mortgages to quaified buyers, and to a lesser but very real extent, AD&C loans to fund new home construction.  Rents surging actually help the imbalance by helping support prices.

 

But for now the outlook remains pretty bleak.

bronzie's picture

"for every owner there is a renter"

this statement is true but incomplete

the complete statement is this:

"for every owner there is a renter AT THE RIGHT PRICE (monthly rent)"

with 22% national unemployment on average and the average masking the fact that the young generations (typical renters leaving the parent's house, getting married, etc) are suffering from unemployment that is far higher than 22%, who exactly is going to rent these housing units at the current rental rate?

no paycheck - no rent payment

TheTmfreak's picture

There will be light at the end of the tunnel. I'd rather own land than not.

Whats the worst case scenario? You can't pay mortgage payments, or taxes? Take the fucking land. Oh wait I torched it, go fuck yourself. (to the bank/local gov).

I don't have nearly as pessimistic view of owning property apparently. At least on a VERY small level, comparitively. I'd rather have something when shit hits the fan, than nothing.

Terminus C's picture

My comment was more a reference to robo signing and MERS.  Why would you buy if you can't guarantee that you actually own?  This is where the total collapse is coming from... imo.

 

TheTmfreak's picture

Now, I own no properties or houses (yet), so excuse my ignorance of the situation, but does this still apply to those who pay with cash rather than having a mortgage? I understand that those who have a mortgage on their house (they don't even close to owning the house) can't find out who owns it, but those who pay with cash (fiat) money?

traderjoe's picture

It has to do with the title to the house - not the method of payment for purchase.

TheTmfreak's picture

Well yeah I got that, but are you telling me that when you go "buy" the house, with cash, that they don't give you the title/deed to the home? I'd assume that if you owed money on it to the bank they keep the title until its payed off, much like a car. Or is that not right?

Jendrzejczyk's picture

It has more to do with the bank/previous owners' ability to transfer clean title to you.

If their documents are screwed up or lost, or nobody knows who really owns the property because it had been securitized into a thousand little pieces, then how could you possibly be sure you are getting a clean title.

DeadFred's picture

Like buying something off Craigslist, if it turns out to be stolen property and the real owner claims it you're screwed. Still who here thinks the bank-owned government won't come up with a way to fix this? It only take one law and the problem is solved. Avoid the issue completely by going for a property owned by a little old lady who has had clean title for years. Her house has a pretty low price tag as well.

TheTmfreak's picture

Well the only thing I'm looking at it, is perhaps in about 5 years buying a plot of land and building my own house, so I might be fine.

 

I think what you say about the "snapping of the fingers" fixing the problem. And i think it is more likely that they'll snap the fingers in the benefit of those buying the homes rather than "people coming out of the woodwork to claim it." But then again thats REALLY optimistic. Those coming out of the woodwork could be the big banks...

smlbizman's picture

i live in baltimore county....i have 4 new home developments in the process....1 is by st. johns property with a 1,000 condos and senior apts this is located on the new road RT. 43...the others 2 on wampler rd 1 of these is 2 yrs old with 4 homes up, 1 started but stopped,  the other devolp. has poured the walls, all in 21220..the other is on red line road{21162} the red line road is over a yr. old with 2-3 houses up , not sure if sold or models...in the rt. 43 area this was done at the peak with millions of feet of warehouse with millions of vacant feet. there is not one sign on these projects of who is providing the financing....i remember reading about a federal grant program expiring this past jan, that allowed a very wide use of this money to improve areas as locals seem proper.

 

i feel like i am living in the china ghost town...i know there can not be one private investor that would think this is a great time to stick millions in the ground for housing at this time, however if the good ol' usa is backing well... 

omi's picture

But who would disagree that this is an actual improvement, as we all know, there were way too many houses built in the first place. This is what should happen anyways to even start talking about possibility of recovery.

assumptionblindness's picture

I would disagree.  New home construction would have to CEASE for 2-years or longer in order for the market to clear a significant enough amount of the inventory (shadow included) that is out there.

Also, the word 'recovery' should never be mentioned with respect to the current or future (10-20 years) real estate market.  For those who speak of 'recovery' I would ask, "are you talking about recovery to the 2007 levels or recovery to the 1980 levels?  The only thing that we can hope for is stabilization, not recovery, in the real estate markets.   

earnyermoney's picture

Reggie has posted many times on this topic. He estimates we are 6 - 7 years away from clearing current inventory.

Dr. Richard Head's picture

The conundrum is this - in order for a recovery to take hold, housing prices would have to revert to the mean and would have to lower in price still quite a bit more.  The problem is that these "assets" sitting on the banks liability side of the sheet (even thouh they are being claimed as assets) would have to be marked down regardless of "mark to myth" rules.  This would be a burden on many balance sheets and would reveal insolvency. 

The Fed does not want to happen which is why housing prices are being artificially supported.  The Fed/Congress will not let this adjustment take place as indicated through the various quantitative pleasing going on for the banks. 

Yes, no more new houses are needed, but the stalling of new construction is because of the excess inventory sitting there due to banks not wanting to mark their loses and those in the know are squatting.  This inventory has not yet been cleared and again the Fed/Banksters are standing in the way.

The collapse in this market will unwind orderly until it doesn't.  I think Peter Schiff's talk of another 20-30% drop in pricing will be swift wen it takes hold.

Then again, what do I know.  i am just a Dick Head.