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Recovery Hopes Surge On Record New Home Sales
...Just the wrong kind of record. At just 250,000, this was the lowest annualized new home sales number ever. So on one hand you have a TV clown tell you the housing market bottomed in August 2008, on the other you have a pathological tax cheat Welcoming all to the Recovery, and on the mutated third hand (thank you Fukushima), reality continues to indicate that the biggest depression in history persists without abating.
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Splat....
Uh, no, you don't splat till you hit bottom....
not so fast
Naples Rises From Florida Housing Swamp as Wealthy Buyers Returnhttp://bloom.bg/eXvFRn
(the only thing missing from the article is the dude with the sandwich board at a busy intersection trying to sell is million dollar home at half off
more like 'boink'
head hitting the roof: a.k.a THE TOP
growing a 3rd hand is a bitch
apparently it's quite easy now in Tokyo...
On the Treasure coast, you can buy a median home for 50-70% off the 2005 highs. Honestly you can buy them (existing homes) well below replacement, not a bad buying opportunity with the baby boomers retiring. Now if they could just find buyers for their northern homes...
Go ahead fill your boots...
The only way real estate makes sense is if your fixed rate mortgage is hyper-inflated away while your property taxes are flat...
Edit: The other possible way is do a move sideways, assuming you have a large amount of equity, replace your existing digs with something that will meet your future needs. Forget about any capital gains etc...
HOA fees in some formerly exclusive areas in Miami have risen 200% to 300% due to all the empty units in multi unit high rises (fixed costs on large buildings suck and tend not to discern as to whether the building is 90% or 40% occupied), and they weren't cheap originally.
So, not only can you not get hurricane insurance, but take the $7,000 that you were paying in HOA fees yearly before and at least double them, and then, oh yeah, add another $23,000 a year in property taxes.
Carrying costs of $30,000 yearly in just taxes and HOA fees for a oceanfront (or view) condominium that has a new real value 50% less than it did 4 years ago? It's all good.
Good point, HOA fees and the like will not deflate...
You're shitting me. $23K in property taxes? That would be reason enough not to buy a condo in FLA.
You'd really love California then as may new developments here include standard property taxes, HOA, and something called Mello-Roos, named after the two state bureaucrat assholes that drafted the legislation in 1982:
"A Mello-Roos District is an area where a special property tax on real estate, in addition to the normal property tax, is imposed on those real property owners within a Community Facilities District. These districts seek public financing through the sale of bonds for the purpose of financing public improvements and services. These services may include streets, water, sewage and drainage, electricity, infrastructure, schools, parks and police protection to newly developing areas. The tax paid is used to make the payments of principal and interest on the bonds."
Makes you wonder the purpose of property taxes when Mello-Roos covers all the public utility infrastructure normally provided by the city. Seems to me it's just an end-run around CA State Proposition 13 (passed in 1978) which limited property taxes increases from year-to-year. Since they couldn't raise the rate they just came up with a new "tax" by requiring all real property owners within the district to sign on as payers for the bond that had been sold to finance the city's ongoing operations. Ta-da! No more maximum property tax restriction!
A couple of years ago I was considering buying a new home near Sacramento that included all three of these payments. The P&I on the mortgage would have been about $1,500 with an additional $700/month in tax and HOA dues. Suffice it to say, we did not buy.
The BEST part was that there was no assurance made the additional payment would go away, even if the 30-year bond was eventually paid off entirely. And the HOA fees were projected to increase by 3~5% per year!
More here:
http://en.wikipedia.org/wiki/Mello-Roos
Have there been any legal challenges to Mello-Roos Districts yet?
As you are aware, just because the state does something doesn't imply it can or will withstand judicial scrutiny.
That is total bullshit.
Roger on the bullshit. One of the reasons we stayed away. We saw it for what it was.
I have no idea what can be done, if anything, though. To be honest, this state is so far past the point of no return, I'm not sure if it's even worth fighting anymore.
I got news for you - the Baby Boomers are broke or enough of them are/will be broke so they won't be buying those Florida retirement homes. I would stay away from any investment strategy that relies on the untapped wealth of the Baby Boomers.
Yeah, here in SouthEast Florida too: http://weblogs.sun-sentinel.com/business/realestate/housekeys/blog/2011/...
But note that they did change the way sales are reported.
Hmmm....
Pete
Hey everybody:
Since you can't send the Tylers prostitutes, why not send them some cash for all their hard work. hit that Paypal button!
Seriously, our fearless Tylers have not left their keyboards because of all the trainwrecks out there, so send $20 or so today. It won't hurt and you know you want to.
Its either that or the red pill.
I took both pills and washed em down with a shot of diesel. My tummy hurts.
I don't even give to NPR, but for you I shelled out $30.00.
when can I expect my tote bag and bumper sticker ;-)
Cindy - just a suggestion, but maybe ZH can post an anonymous method of contributing. I happen to know from experience that many people with means and resources cherish their privacy.
Cindy
How about getting a drop box.
New home sales lower because
Crap; it's snowing again in the N.E.
Cramer's advice is financial cyanida.
Caveat emptor.
Caveat viewer.
Caveat Empire
Beware of empires - especially financial empires.
"Caveat Empire"...FTW
Anyone who regularly listens to Cramer should be taken out by natural selection.
You don't still think that natural selection is allowed, do you?
DID HE TELL YOU THAT HIS COMMENTS ARE HIS PERSONAL VIEWS ONLY and you SHOULD NOT make investments on those comments?
DID I TELL YOU BTFD a fwe days ago???
Pongee pit death awaits those who buy on GS "conviction buy" recommendations.
Its a GS convicted "Buy"
You are so mean!!
HE IS NOT AS SMART IS HE IS TRYING TO APPEAR to be but he is an OK DUDE!!
*error* he's an asshole. to paraphase an old saw: "ya don't have to be an asshole to be at CNBS....but it helps"
i've said it all along. this is the greatest depression.
No, the next time the world forgets what's real money and allows (central) bankers to control "money" via fiat, will probably be worse than this depression. That is assuming we don't all wind up in the next stone age.
And to think I used to be an optimist...
This is great news. Disinflationary! More QE, please!
Undisinflationary!
QE-3 slam dunk !
line up the cheerleaders !
YES!! FINALLY people on this blog understand!!
BEN---QE3 PLEASE, JUST DO IT!
Which is funny, because QE3 would further depress home prices, because home prices are a function of monthly payments. If the sheeple's gasoline/food costs go up by 50% due to QE3 that's less money left over to make the monthly mortgage payment.
No you are not correct~~~
With QE3 everything will be JUST FINE!!
And people will be living happily forever and ever!!
DID YOU KNOW anythign about finance and economics?! HAVE YOU BEEN A PROFESSOR AT PLACES LIKE PRINCETON???
Shhhh...use your indoor voice.
I wonder what the Great Chairsatan will have to say about this. I suppose QE3 is a certainty now...
Great Chairsatan = enemy of the world
Did anyone see Biggest Loser last night?
I don't recall Obama speaking last night.
He meant Ben. I know the competition is pretty tight, so I could see where you would make that error.
awesome! so now the Realtors can scream "BTFD" too.
They've been screaming that for a couple years now. I pity the fools that jumped on the free government money. They're only going to get more underwater over the next year.
"There has never been a better time to buy a home than right now" said Lawrence Yun, NAR chief economist, as he tied a rope with a rock attached to it around his neck and prepared to leap off a bridge.
I wonder how many buyers are still high on their $8K tax credit...
Let me guess....the criminal syndicate known as Wall Street is on the verge of upgrading.....home builders?
of course they are. This number can't get much lower... right? I want to see how NAR spins this.
i'm just wondering why any new homes are being built at all. is there a shortage of homes?
New homes are for people fleeing Japan?
i've thought that...
instead of a potato famine they have a....clean water, air and food famine....
where would a japanese diaspora end up?
No shortage of homes; just a shortage of other jobs for builders to do. Also, many have already invested in permits, land, electric hookups, etc. A house that might sell for a loss may be better for them than getting no return on their previous investments.
Question: why would anyone in their right mind build a new house when we're swimming in inventory?
Answer: Nobody wants to enter the MERS infected swamp trying to get a clear title...
(sorry for the fat-fingered junk....just meant to reply).
T.E.I.N. everyone!
Hit junk again and it will remove it.
Hint: if you hit 'junk' again, it goes away.
Maybe because a new house would have a clear title?
and bitchen new radioactive drywall from china
would you like me to answer that?
I wondered that too. But then again, it is consistent with other aspects of our modern society. Home builders build homes. Car builders build cars. Once a small business grows out of sole proprietorship, they succumb to the number one objective of a business: to stay in business. A guy who runs a lemonade stand packs up shop when business doesn’t exist. A living breathing larger business entity will try to stay in business, despite what the market signals. GM? AIG? take your pick of these zombie businesses who mortgages themselves to the rafters just to keep the lights on one more day. Home Builders are no different. The small guys have stopped. But the developers keep developing because that is what they do.
excellent analysis. unfortunately, exactly right. also why gubbmint will always increase. more indications of why total collapse is the only "solution", i.e. what will cause any changes. well, never say "never" or "only" but you get my idea
Gov will always increase since Bureaucrats are promoted when they manage bigger budgets and more people. A regional manager will always ask for more money, more staff since this is the sure way to promotion. Lean departments? rare. This was underscored when I went through security at the second airport (not the international) in my city. I am very serious when I say there were more TSA agents than passengers. I can only imagine how happy the TSA manager was, bigger budget, more machines, bigger office.
Upgrades for the new normal?
But does it have a three car garage and granite counter tops?
I don't see the center island kitchen and custom ThermoSpa. No go. In any case, that Survivorman list is a bit long -- how to pay for it all ? Without a HELOC, no go.
[Upgrades...]---hedgeless_horseman
I like how you think ;)
If you put in 2 wells do you need 2 separate water tables to drill into? Two thousand gallons of underground propane will make a rather nice bomb. I'd make sure they are buried a great distance away from living areas. Solar and wood will last longer and are safer if you have the room to grow a wood lot and the sun (solation) for PV.
Plus no need for FBI dressed up as delivery men coming by to fill your diesel and propane tanks.
wondering if states will give two well drilling permits at one time. i guess if you have a lot of acreage they might. i know i had to drill a new well and my state made me cap an old one and they took back that permit when issuing me a new one. also it was only for domestic water use. meaning you can't water your garden with this water. i suppose people use it for outside applications. but this was on 2 acreages, and i would think the state would allow watering grass and gardens and trees. so it is not a given that even with two wells you are going to be able to use the water, watering.
I would think for most folks (non agra business) it would make more sense to have 1 well and a substantial water storage tank system - say 10,000 gallons or so. That way if the well isn't fuctioning you have several months to a year to get things fixed. If off the grid sustainability were an issue, I'd buy a spare water pump before I'd drill two wells, they can get mighty expensive if you have to go deep and through a lotta rock. A 10k gallon water tank, would likely cost a lot less than a backup well.
A well and a lake,now there is a nice bit of property. You don't have to mow a lake.
A new house makes sense if it is energy efficient, i.e. it has the ability to go partially off grid. Last time I looked, this is not what is being built...instead we are getting more crappy designs, albeit, somewhat higher efficiency but larger sizes so the energy required is flat....
Give me well integrated solar panels for electricity and/or hot water over a goddam granite counter top any day....
My father, an old time carpenter, told me a few years back, most of the technology in home building is intended to increase production productivity. Cheaper materials, engineered so one low skilled worker can install in a couple of hours to replace a journyman who would take a day. Sure there are some energy technologies being added, but take a look at that fiber board. It has some metal facing on it to reflect heat, but overall the board was made cheaper so it could be unloaded from the truck by a teenager.
Slight of hand.
+84 (Lumber)
I am aware of the the trend to commoditized housing... We got the biggest bio-degradable bubble in the history of the world, most of the crap that has been built in the past 10 years will resemble Tombstone AZ in 15 years...
I was trying to be as generous to the current building practices as I could reasonably be....
Bio-bubble. you are right. Houses are disposable these days. There is good reason new houses have a premium over houses 10 yrs old. Houses built during the bubble have a 15 yr design life.
If that is true, I would expect a lot of defaults on 30yr mortgages over the next several years.
It is...and there will be. One caveat though. those owners that have fixed mortgages *and* have earnings that will inversely track with the declining dollar will do fine...that covers about 5% of the population :)
I predict Phoenix, Las Vegas to become wastelands....
+1
A lot of the new houses built around my area are "Section 8 McMansions." Huge houses with vinyl siding that looks like it belongs in the projects.
It's called denial, and it's not just a river in Egypt.
I know builders pulling permits right now on spec builds because they 'hope' and some even 'expect' that things will be as not-so-sucky as last spring (which did see a bump over 2009, government crack cocaine induced and what have you).
Must have been the snow, rain, fog, humidity, etc.
C'mon Tyler, don't you get it. Last month's data was revised UP so clearly this is not a bad number it is just bad data that fails to reflect the strength of the recovery, so stocks can ignore it!
Obscured by snow.
I'm seriously considering opening a demolition company. The millions of homes that will be bulldozed in the coming years will be astounding. LOL - at this rate the tear down value for the copper and raw materials inside will be worth more than the RE the home sits on.
I suspect anything of value will have been looted long before the demolition crew get on site.
Count me in, let me know when you start-up. But instead of going through all the trouble of trying to make your company succeed...
1. Start the company.
2. Screw everything up.
3. Get a bailout.
4. Manage your own bailout under no supervision.
5. Restructure company.
6. Company fails again.
7. Get a bailout...
Oh wait a minute, this could never happen in real life. God luck with your company, though.
ARE YOU KIDDING ME?
YOU can do this only if you are KOSHER!! BUT ARE YOU?
Washington DC is a good place to start.
Bulldozers are expensive and need gas. Just hire some unemployed people and give them tools there are plenty of them around.
That scenario only works when you're not competing against the government for unemployment benefits/welfare... Why the hell would anyone not rather sit at home for any more than I would pay them for demo work?
So they can get paid for exercise instead of paying for a gym membership?
And the 99 weekers time is up.
Besides, taking anger out by busting things up is carthartic. You can perhaps get a grant for therapeutic remedy of stress.
The copper and anything of value has been long ago stolen from most every vacant home.
Meanwhile, the President of a realty firm out in the San Francisco Bay Area says "“If you start looking around in any fine neighborhood in California, about a quarter of homeowners are not making payments,” says Perry.
Maybe he meant 25% of homes on market in that segment. Even so, that's still a lot. If it is really among all upper end homes, then that should be HEADLINE news. More http://bit.ly/eIkg5d
one step closer to the top: bullish ZH headline.
Gold up! 1438
Yes...a big move may be imminent..
Silver establishing support at 36.5....
increased demand for faucets
Looks to be a strong move... $1439.60
Silver... $36.64
Print Ben, Print!
Silver through 36.80 too.
Up, up, and away. Holy hell.
Triple mega dip¡¡¡¡¡¡¡
Is that an ice cream?
that's me and the wife sunday morning
i blame the snow...i mean the earthquake...i mean the radiation....i mean the dead fish
you forgot the 3 wars and the new oil slick
if we ever got any good news ever again the market would crash instantly
climbing the proverbial wall of worry to infinity and beyond
Don't forget the U.S bailouts, fraud, injustice, lack of accountability, ponzi finance, Euro bailout, inflation, poverty, famine, unemployment, food stamps, housing plunge, rebellion...
Those Chilean miners are still the feel-good story everyone is happy about?
"Downside risks persist, warranting the continuation of exceptional measures to support the economy. In the long run, inflation risks remain subdued. In light of these data, the FRB has decided to apply the funds received from the sale of the Maiden Lane Porfolio at a proffit, to execute permanent open market operations designed to promote increased employment and financial stability".
QE ad nauseam...
Unless the Fed wants to put about 50 trillion on it's balance sheets, QE(n+1) will do jack.
50 tril of new monoply money won't do jack either
Depression? That's such a harsh word Mr. Durden, perhaps you should consider walking back and selecting something more appropriate to describe our ongoing recovery. We'll forgive the mistake in this instance, but any repeat of this language might garner the attention of authorities ever vigilant for domestic terrorists.
Must be the weather . Yeap, blame it on Mother Nature. WTF, billions of dollars later and this is the crap we get. I could have done it for less.
yea, but could you have done it for MORE?
Certainly all 'better n expected' Im sure, and Kudlow will probably say within the hour 'WHEW at least the financial devastation is not as bad as the americans total devastation of their lives'.
coupled with neutron beams, gunfire and bombs falling, I'm feeling rather bullish. Isn't that the way it works now? Disaster is positive?
http://www.youtube.com/watch?v=UUXBCdt5IPg
The headline was to keep the hopium crowd happy whilst really being ZH cutting sarcasm.
The volume of sales is low and the price keeps dropping. Until volume picks up and prices start to rise we haven't hit bottom. Basic market theory. BTW, Is this report inflationary too?
What else is to be expected when we find out things like Detroit's population has decrease by 25% .
http://www.upi.com/Top_News/US/2011/03/23/Detroit-population-lowest-sinc...
The last 3 decades and Fed presses have squeezes all of the blood out of the American consumer and it all ended in 2008 after they did not to prevent the fraudsters from luring people into buying homes that had 100% inflated markups because of easy credit. Now they are left with debt, declining wages and eroding job opportunities. People are buckling down and learning to live within their means again and Americans will eventually return to that famous 10% savings rate that allowed for natural credit expansion through saved capital.
In the meantime they can look forward to higher prices in the shit they absolutely need until Ben allows the markets to collapse again. Americans may start feeling the recovery when those homes priced at $220,000 can be gotten for $125,000. In order for America to recover the Banking institutions must collapse.
Ben will not have a say in the collapse. There was so much damage done by Wall Street, It's like Ben pissing on Fukishima to cool the reactors. We're not talking measely billions here.
John,
Exactly. Spot on. No need to calculate PEs, talk about stimulus, fret about jobs...the problem is in the banks. It always has been, still is, and shall continue to reside there until Ben Bernanke is removed from office, his presses turned off, and bank shares are marked to the true value of their assets.
Until then, capital will not form in a banking system that is as corrupt as ours is...capital other than Bernanke bucks, of course. We will see this truth coming soon to our Treasury bill market soon...and it will eventually overcome the banking cartel. And there will be great difficulties in the wake, hardship...but it is THE ONLY WAY OUT OF THIS MESS!
Bernankicide has known all along that the banks are cosmic black holes in which all dissappears.
This is one of the primary reasons he allowed them to mark assets to fantasy, plowed them with digital fiat, and gave them a new working model, ala the Fed Spread, to generate revenue, as the old banking model of generating revenue was broken.
The problem Bernankicide has is that doing all that he has carried and still carries incredibly damaging shocks to the economy, as we've seen with commodity markets and malinvestment in equity markets, while the jobs data, home sales data, and many other critical parts of the economy deteriorate (in large part because Bernankicide is interfing with price equilibrium and price discovery; his interference distorts prices and supply/demand curves).
So, sooner or later, Bernankicide or someone who holds veto over him will have to decide between the banks and the rest of the economy. He can't save both.
It's a matter of time before conditions force that decision.
Americans will return to that 10 percent savings rate, but what is 10 percent of minimum wage. Can you even save food stamps?
I agree--perhaps "selective recovery continues" would be better....
USA Recovery....
Shortest joke I ever heard.
I refuse to comply with anything from any bank, FED, or govt official from here on out, I consider all events going forward 'self defense'.
Ball-z.
Excellent!
Time for CNBC to revive a term they haven't used in a while. Watch for them to start saying that the "affordability index" is rising...which is, of course, very bullish.
Bullish: The number wasn't zero.
One of my favorites is... "activity" is seen rising.
going to 180
Care for Apple Pie with your McMansion?
APPL pIe...
The lowest new home sales number since the Commerce Department began keeping records in 1963. February year over year prices dropped 8.9%. I guess that Ben Bernanke's prediction, over a year ago, that housing would be a " a helpful driver of national economic growth" was quite a bit off.
When the foundation of capitalism is confidence, what would you like him to say?
The foundation of capitalism is to destroy any signs of a middle class
Freedom and confidence (trust) are the foundations of capitalism. Yet each of these bedrocks of our economic system are slowly being eroded by inept government coinciding with rigged markets and laws in favor of the oligarchs of our society. These "priviledged few" are amassing great fortunes at the expense of the middle class. The common people, who built this country, are slowly being downsized as their costs of living are being inflated beyond the ability to sustain themselves independently (thus 44 million people on food stamps). We are close to an inflection point where eventually the dynasts will come to the conclusion that the middle class is not essential to their financial agenda. As long as the bourgeoisie and the proletariat remain placated with their "Soma" and American Idol, the system will remain the same and polarization of our economy will accelerate.
I'm sorry, got on a rant... In answer to your question, I would like him to say, " As of this day, I hereby resign as Chairman of the FRB and would like to apologize for my transgressions against the American people..."
Well said old stick, yet even were it so, still it would not stop...
While I agree that Bernanke has the perverted notion (or his actions and lies suggest he does) that the foundation of capitalism is 'confidence,' I actually argue that it's actually set upon supply and demand, which is something the Bernankincide doesn't understand, as he has so completely thwarted price discovery and supply/demand equations, or that he doesn't care about.
Capitalism is not a CONfindence game. And telling lies won't bring it about or strengthen it, but do it harm.
Note that he did not assign a direction...
Housing will continue to drive things, right over a fucking cliff....
Bullish. Increased spending on propaganda by nearly bankrupt print media to "this the best time to buy a home" articles. Bullish
How can you use the term "depression" when just yesterday you were using "stagflation"?
Stagflation when measured in fiat. Depression when measured in gold?
Keep in mind that "Charlie don't surf" and "unemployed people and people on food stamps don't buy homes".
+100 Bingo No jobs = more foreclosures = less home sales = no jobs = more foreclosures. Rinse,repeat ad infinitium.
Bail out main street, cash goes to Wall St.
Bail out Wall St., cash stays on Wall St.
Ben Bernanke & Hank Paulson redefine the economic efficiencies of capitalism by choosing to bail out Wall St and cut out the middle man(main street).
i think our government, working in concert with msm, is on an all-out blitz to portray the ecconomy as improving so they can get through the current budgeting cycle before taxpayers realize whats happening
Don't worry about. Neuberger Berman says everything is fine:
March 21st - We are relieved to hear of progress in dealing with Japan’s nuclear crisis and continue to track events there carefully. Meanwhile, the sentiment of global political uncertainty grows stronger with the allied intervention in Libya and the prolonged crisis conditions in the Persian Gulf. Still, while we recognize that there will be near and mid-term shocks to the system, we believe that these factors are unlikely to derail the current economic expansion. Japan is no longer a key driver of global growth, and Libya has already curtailed oil production. Other risks remain, including unrest in Bahrain, food and commodity inflation and sovereign debt.