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The Real Story Behind the June Housing Starts and Prices
USA Today reports the medium home price in California was up 7%:
The median home price in California jumped 7% last month from May, as life began to return to the long-sluggish market for high-end homes, a tracking firm said Thursday.
and Calculated Risk reports that housing starts were up:
Privately-owned housing starts in June were at a seasonally adjusted annual rate of 582,000. This is 3.6 percent (±11.3%)* above the revised May estimate of 562,000, but is 46.0 percent (±4.3%) below the June 2008 rate of 1,078,000.
Good news all around, unless one looks for the rest of the story. Notice the housing starts change was a range of from -7.7% to +14.9%. Hard to find much certainty in that. Housing starts might be up -- Then, again they might be down. As far as the medium home price goes, remember that "those who know" have been forecasting that bigger houses were entering foreclosure so that the median home price is expected to rise from that alone - and that's bad, not good. Mark Hanson also adds:
Remember, volume precedes price. Mid-to-high end sellers remain unrealistic about the values of their properties — likely because so many owe so much more than the homes are worth. But those with equity that are ok with the past 20-years of price appreciation or who know that they can steal a home in another area are accepting offers this selling season far below list prices. Others are opting for short-sales to which the banks are warming up. With rates down and prices down finally, two years of pent up demand in the mid-to-high end market is manifesting in more transactions. This is having the effect of pushing up median prices.
In short: Don't get too excited about housing yet...
View the original article at:
http://www.swampreport.com/economy/house-starts-and-prices-up-in-june/
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I wonder when someone reports a number as "3.6 percent (±11.3%)" do they mean -7.7% to +14.9% as Tyler implies, or 3.19% to 4.01% (3.6±11.3%)?
-Eric
as i understand it (and if anyone can verify), the $10k credit in CA is only applicable to new homes, which has spurred more building there - phenomenally ridiculous given the sheer size of the inventory over-hang.
MSM continues to report this as a run-of-the-mill recession, hence the "celebration" in housing starts.
going long in this market because you believe its rigged, when the fundamentals are deteriorating is like playing russian roulette - its just plain stupid. if you cant figure out a way to place positions that wont lose you too much if they go against you, then STAY IN CASH.
I sold this friday, and I'm going to keep cash till august 17. I dont think its safe to get into this so called predicted run the comming weeks. It is also to close to the predicted crisis agenda where they predicted this rise 6 months ago, and also the following deep crash. And as unemployment is still getting up and will hit a new all time high in august/september and also the bad interception of the bank earnings and the CIT mess... it's comming down in 2 to 4 weeks.
If i'm wrong, i'll miss 10% on average, but if i'm right i'll be getting in at super low prices with a full whallet.
As with all range formulas the 90% confidence formula is usually used ---for those who like to crunch numbers and use the various formulas go to pages 590-605 (formula tables).
As for housing----dont even for a minute believe anything positive that gets put out wether its numbers or words--the residential/apt industry is toast.
http://www.census.gov/prod/2008pubs/h150-07.pdf
Arizona Housing is So CONFUSING
Here in AZ. REO homes are getting 5 to 20 bids each and selling 10% to 20% over list price. The inventory of homes for sale is drying up because the banks are not forclosing on homes that are behind on payments. I know people who havn't made any payments in over a year and still living in the homes. So what next? Do the banks continue to slowly trickle homes on to the market for the next 15 years? This may stabilize prices but drags the agony of low prices on for many more years. Maybe this will allow them time to debase the value of the U.S dollar and artificially reinflate the prices?
You have to put a buy stop order on the lowest (highest)point of day on one of the inverse funds, and give a little breathing room. so you'd be buying a short of sand p breaks below 930 monday.
San Francisco Bay Area outlook - Banks are holding onto their foreclosures and letting them trickle out into the market because they are getting multiple offers on the ones they do put out. That keeps prices firm. Why make an offer on a short sale (which takes 3-4 months to close) when the REOS are priced much lower and short sales will eventually become REOs. Of course, then you are overbidding them (which lets everyone believe prices are going up!) Who would have guessed that the inventory of available homes would dry up?! Buyers are waiting for these foreclosures, then pouncing on them. One condo got 11 offers!! FHA buyers (3-1/2% down) are out of the running when this happens. Investors are gobbling these up.
Thoughts from a Realtor.
I am not in the market right now, don't need the ulcer and the learning curve costs too much . I think I am slightly above average in the smarts department and most of you leave me in the dust. Some general observations, if program trading is more than 50 percent of the market, to what end are the program traders trading each other. I think they have to be conciously trading prices up. Alot of the main stream media is recently telling us that buy and hold is dead, it's all about trading. Personally speaking, they want ( need )me in the market. Because the system needs more "dead money" (i think that is the correct poker term).
The more description term for what the system needs is more "marks" or "chumps."
The "rally" is a deliberate attempt by Goldman and the investment banks, with the blessing of Treasury and the FED, to lure "retail" investors back into the market. So that the "chumps" can be fleeced once again when the time is right. (i.e. when Goldman's profits can only be sustained by going short)
P/E will tell the tale in the end because institutions
will trigger autopilot dumps based on P/E evaluations
as it becomes clear P/E 130 is going to remain on the
as reported numbers two weeks from now. Beyond that
however the Sept time frame is when Y-Y numbers begin to
evaluate vs last year's apocalypse and many of those
numbers will be legitimate improvements. P/E will be
as it will be and government stats will also be as they
will be (and for those, too many civil servants will be
involved for a conspiracy to work), but regardless of all
that even GS can't bury dinosaurs. Oil is priced near its
2007 average price at far less demand and it will spike
and choke off any real recovery. There is nothing anyone
can do about this.
The high-end home sellers capitulated and started dropping their prices to meet whatever the bid was. This is why you see an increase in prices. This is a false green shoot. It just means there is more home prices falling, but just in a different segment of the market. There is a lot more price compression going on, and a lot more wealth destruction occurring.
The market going forward is giong to be a lot like April/May. This means a lot of manipulation and breakouts to the upside on shitty fundamentals.
I lost a lot of money during May-June doing exactly that, shorting on the fundamentals but this time I'm prepared. I'll be more than happy to go long, but take profits when you can. This is the mentality you need to survive this fucked up market.
ditto
For sure, a very good sign that we are in the 4th Qtr. in this latest game of bullsh*t. The right-minded bears (like myself) get their butts kicked, throw in the towel and run to the other side, hoping to "experience" the fleeting joys of victory in a rigged game.
As in 2007-2008, this will end badly and worse.
That Abyss is damn deep too... Pun intended.
its when the all bears have surrendered that the market will shows its other side again. In the last 2 months, first we saw albert edwards cited coppock for making his bull case, then MWAG with the GS call, and now Roubini is embroiled with CNBC and Bloomberg on whether the following statements he made at the conference means the recession will be over by year-end - "recession will last 24 months, I see light at end of tunnel and its not an on-coming train" statements. Watch out in next 3 months for the mother of all bubble in risky assets as every mother's son jumps in, and then watch as it crashes into the abyss by year-end.
The mkt is broken, and now it broke me, I'm almost flat broke shorting on fundamentals.
read IBD instead
Inflammatory Bowel Disease?
I feel your pain. I went broke fading this thing with technicals. Gann, Elliot, basic momentum divergences....I got hosed on all of it.
I wish this mattered. But is doesn't. Until it does. My guess is sometime october /november 2009.
hope it matters too, but i think August/September we'll see the three horsemen riding into town. Or, at least option activity on the VIX is showing call activity at 40-45