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So Much For Housing Optimism: Existing Home Sales Miss, Drop To Lowest Since November, Order Cancellations Surge

Tyler Durden's picture




 

Remember that surprisingly strong home starts data from yesterday which drove the market by 100 DJIA points higher yesterday? Neither do we. According to the NAR, June existing home sales once again declined, this time to 4.77MM from 4.81MM, the lowest since November, and well below the expected rise to 4.90MM. This number was 8.8% below June 2010's 5.23MM. Total inventory increased by 3.3% to 3.77 million units, or 9.5 months of supply at the current sales rate up from 9.1 in May. The biggest question mark is the surge in order cancellations which soared from 4% in May to an unprecedented 16% in June. That's one in five home transactions being cancelled in the middle of the deal. Here is Larry Yun's explanation for this shocking development: "The underlying reason for elevated cancellations is unclear." So let's get this straight whenever the number is better than expected it is always due to the economic recovery. When it is worse, it is "unclear." Thanks Larry. Now go back to fudging data please.

More from the traditionally irrelevant and discredited NAR:

Yun cited other factors in the sales performance. “Pending home sales were down in April but up in May, so we may be seeing some of that mix in closed sales for June. However, economic uncertainty and the federal budget debacle may be causing hesitation among some consumers or lenders.”

The national median existing-home price2 for all housing types was $184,300 in June, up 0.8 percent from June 2010. Distressed homes3 – foreclosures and short sales generally sold at deep discounts – accounted for 30 percent of sales in June, compared with 31 percent in May and 32 percent in June 2010.

NAR President Ron Phipps, broker-president of Phipps Realty in Warwick, R.I., said home sales should be higher. “With record high housing affordability conditions thus far in 2011, we’d normally expect to see stronger home sales,” he said. “Even with job creation below expectations, excessively tight loan standards are keeping many buyers from completing deals. Although proposals being considered in Washington could effectively put more restrictions on lending, some banking executives have hinted that credit may return to more normal, safe standards in the not-too-distant future, but the tardiness of this process is holding back the recovery.”

All-cash transactions accounted for 29 percent of sales in June; they were 30 percent in May and 24 percent in June 2010; investors account for the bulk of cash purchases.

First-time buyers purchased 31 percent of homes in June, down from 36 percent in May; they were 43 percent in June 2010 when the tax credit was in place. Investors accounted for 19 percent of purchase activity in June, unchanged from May; they were 13 percent in June 2010.

Single-family home sales were unchanged at a seasonally adjusted annual rate of 4.24 million in June, but are 7.4 percent below a 4.58 million pace in June 2010. The median existing single-family home price was $184,600 in June, up 0.6 percent from a year ago.

Existing condominium and co-op sales fell 7.0 percent to a seasonally adjusted annual rate of 530,000 in June from 570,000 in May, and are 18.0 percent below the 646,000-unit level a year ago. The median existing condo price5 was $182,300 in June, up 1.8 percent from June 2010.

More made up "facts" can be found here.

 

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Wed, 07/20/2011 - 10:12 | 1473523 Cassandra Syndrome
Cassandra Syndrome's picture

But, but, but... bitchez

Wed, 07/20/2011 - 10:14 | 1473530 Clueless Economist
Clueless Economist's picture

Is this a good thing? 

Wed, 07/20/2011 - 10:36 | 1473603 wang
wang's picture

but but a Bloomberg Best analyst said this is a very good thing as it is looking backwards and signifies the bottom.  Marge Brennan the forever optimistic anchorette shows you can take the person out of CNBS but you can't take the CNBS out of the person as she interviews  LOL Brian Wesbury among whose many claims to fame were is 08 calls of no recession here...

 

Marge then follows up with a cheerful look at the Gang of Sellouts debt compromise with nary a mention of last nights vote in the house.

 

Wed, 07/20/2011 - 11:22 | 1473813 eureka
eureka's picture

Ref. "Bloomberg" - and cross-Ref. "whenever the number is better than expected it is always due to the economic recovery. When it is worse, it is "unclear" -

Whenever numbers go down, all blowhorn sounds bites ubiquitously say UNEXPEDTEDLY.

Yes, folks, all things are expected to only go up - in the unreal and illogical world of market pumping and absolute commitment to naked bullshitting. 

In Zero-Truth-HomeLand markets don't "climb walls of worry" - they pump for the dumb - who not only don't expect, but don't know, any reality - but only what the screen on the wall tells them. Mirror, mirror on the wall, who's the fairest of them all?

Denial, denial, denial - thy name is usa.

Wed, 07/20/2011 - 11:58 | 1474018 wang
wang's picture

brilliant we need to get these guys to come up with a new translator for econmic CNBS 

 

 

http://www.whoohoo.co.uk/speak

 

 

Wed, 07/20/2011 - 11:24 | 1473819 DonutBoy
DonutBoy's picture

Ha!  That's funny.  You can get the same backwards looking optimism having fallen 50 floors from the roof of a 100 story building.

Wed, 07/20/2011 - 10:57 | 1473692 Smiddywesson
Smiddywesson's picture

Yes, it's evidence of SOR2 (Summer of Recovery Part II), now run along and buy some stocks.

Wed, 07/20/2011 - 12:12 | 1474086 digitalhermit
digitalhermit's picture

More like SORE - Same Old Rape Experience from the TPTB...

Wed, 07/20/2011 - 11:41 | 1473707 Smiddywesson
Smiddywesson's picture

duplicate

Wed, 07/20/2011 - 10:14 | 1473532 Vergeltung
Vergeltung's picture

lol

 

Wed, 07/20/2011 - 10:27 | 1473580 Thisson
Thisson's picture

Just wait till next month when this month's 18,000 new jobs created number gets revised downward....lmao

Wed, 07/20/2011 - 11:17 | 1473789 Cpl Hicks
Cpl Hicks's picture

You mean it could get worse?!?!?

Wed, 07/20/2011 - 10:12 | 1473526 Xibalba
Xibalba's picture

lemme guess....Markets rally on renewed QE3 hopes now? 

Wed, 07/20/2011 - 10:16 | 1473543 Clueless Economist
Clueless Economist's picture

Lawrence Yun not only fudges the data, but he is a closet fudge-packer.

Wed, 07/20/2011 - 10:19 | 1473549 snowball777
snowball777's picture

You're the packee?

Wed, 07/20/2011 - 10:25 | 1473569 vast-dom
vast-dom's picture

He's the fudge.

Wed, 07/20/2011 - 10:31 | 1473589 Arius
Arius's picture

bring back David Lereah ... the eternal optimist

Wed, 07/20/2011 - 10:33 | 1473596 francis_sawyer
francis_sawyer's picture

Maybe... But he takes great pride in his work...

http://mistupid.com/pictures/images/fudge.jpg

 

Wed, 07/20/2011 - 11:01 | 1473693 Boston
Boston's picture

Larry Yun is a clown.  Here's what I wrote to him in an email back in 2008, after he described the housing market as a glass that's half full:

Larry,

"Some markets have seen a doubling in home sales from a year ago, while others are seeing contract signings cut in half"  

WHAT????  How, after these past two years, can you still imply that that glass might possibly be half full?????  (notice your choice of the words "some" and "others").  What you're doing is not much different from saying that--on sinking ship with 100 passengers where only two survived--"some survived and others died".  You're shamelessly misrepresenting the big picture, irresponsibly talking down the scope of the actual disaster.  As you should know (presumably), the data strongly suggest that we're witnessing what's rapidly becoming the biggest housing bust since the Great Depression, and yet, you feel the need to state that there are markets in the US that are not imploding!?  OK, you may be correct on this point--but that's the least important conclusion!!!

After two years of humiliating, quarter after quarter, downward revisions, the public should trust your predictions less than those coming from Bozo the Clown.  Like any other professional (and I'm being generous here) who fails miserably, why can't you just resign, and let the NAR bring aboard someone who even remotely knows what he (or she) is doing?  At the very least, please stop spewing your pathetically inaccurate projections and misleading analyses.

He actually replied with some nonsense about my not knowing what I'm talking about!  Keep in mind this was 2008.

For anyone interested in contacting Larry today, here's his email:

LYun@realtors.org

For anyone interested in sharing their thoughts with Ron Phipps, also a clown, here's his email:

ron@phippsrealty.com

 

Wed, 07/20/2011 - 11:06 | 1473750 Smiddywesson
Smiddywesson's picture

It may be worse than just a corrupt liar spewing nonsense.  They may actually believe their nonsense.  The quote I liked best was:

NAR President Ron Phipps, broker-president of Phipps Realty in Warwick, R.I., said home sales should be higher. “With record high housing affordability conditions thus far in 2011, we’d normally expect to see stronger home sales,” he said. “Even with job creation below expectations, excessively tight loan standards are keeping many buyers from completing deals.

This is equivalent to Ben Bernanke says we don't really know why the economy isn't reviving.  Phipps' views the world from his Warwick RI real estate broker's perspective.  It is not that he is selling overpriced financial death traps during the Greatest Depression, it's the lack of easy credit, presumably due to evil bankers.  It never occurred to Phipps that banks won't lend because it is stupid to buy a house today.  The smart people who need housing are sitting on the fence like buzzards waiting for a deal.

Wed, 07/20/2011 - 11:20 | 1473802 trav7777
trav7777's picture

bottom line, way too many houses, not enough income.  Simple.

These idiots don't seem to understand that construction growth outstripped demand and the margin was a gigantic speculative bubble.

Prices are set at the margins by slack capacity.

And yet these fuckin HBs continue to go out and build...just insane.  There are those in middle age right now who remember very clearly the 20/80 lending rule and other DTI hard-and-fasts.  These could only be relaxed during a one-way price trend.

Buying a house right now is a gamble against your entire down payment with what in return?  You have to really sit down with an accountant and compare the NPV of the cashflows of owning (with the MID tax break) and renting.  Even if renting is a lower NPV, compare the VaR.

The housing market now is a classic case of where expected value analysis must be performed. 

Wed, 07/20/2011 - 11:25 | 1473826 TruthInSunshine
TruthInSunshine's picture

+1

Wed, 07/20/2011 - 11:30 | 1473846 equity_momo
equity_momo's picture

Im in the process of moving. I can afford to buy a house clear or i can put that fiat into gold and rent and wait. Generally though the rentals within my budget are awful and yet oddly the houses to buy in budget are great. I know prices will get cheaper but what would your advice and the average ZH reader do?  I do believe you are born short housing , so im short.  I just dont know what will happen to property taxes and insurance - well i know theyll go up but how much...

Oddly , land in many decent areas is still relatively very expensive. The dream of building your own home works out twice as expensive as buying from a realistic seller ,  once you factor in land , architects , utilities etc.

Wed, 07/20/2011 - 11:50 | 1473970 Smiddywesson
Smiddywesson's picture

I can afford to buy a house clear

If you believe they are destroying the currency, and that we have reached the point of no return, then the answer is easy.  Save your down payment, and put the rest into PMs.  When inflation goes vertical, buy the house and pay it off in funny money later.  The time you sit waiting for the inevitable crash in the USD will get you a better price on a house because prices are unlikely to rise.  You get the house AND a big nest egg.

PS:  Hyperinflation happens fast.  You have to be prequalified and you have to keep looking at available inventory so you can buy when events tell you it is time.

Wed, 07/20/2011 - 12:13 | 1474092 equity_momo
equity_momo's picture

Smiddy , i agree but get this : im self employed and cannot get a loan.  I wont go into nominal figures but im only after a modest sized house in a rural but relatively affluent area. Ideally i wanted to put down 80% and mortgage just 20% leaving me about 40% value of that purchase in liquid savings (ie i have 120% of the purchase price now)  I explained this to the mortgage provider - i have a few years worth of savings after any purchase.

They didnt want to know.

That tells me all i need to know about the housing market. Its frustrating. But there it is. I have to buy free and clear and have a vastly reduced amount of PMs or i just rent in an overpriced hole.  I do not want to compromise and move into a cheap , dense , neighbourhood so it looks like i have to find a very distressed seller.

Wed, 07/20/2011 - 12:27 | 1474150 trav7777
trav7777's picture

this is easy...compare the cash flows, then compare expected VaR.

You have to do some outcome cases where you say, ok, home goes down by 10%, what are the odds, home goes up by 10% what are those odds, to see what your expected outcome is.

I think the probability of price increases are low.  The odds that they stay flat are higher and the odds that they go down are higher still.  Compare that versus your expectation on PMs, the cash flow difference, etc.  You may still reason that buying is a good idea.  Or you might not.

Wed, 07/20/2011 - 12:37 | 1474202 equity_momo
equity_momo's picture

Sensible but i have a feeling we are in unparrelleled waters. There are alot of variables in this analysis - 10 to 15 years ago it was straight forward with fewer variables (we would probably be comparing stocks with housing rather than PMs with housing) but now i cannot compute how Gold will act in a hyperinflationary depression or in a deflationary systemic collapse. I have a firm handle that the dow-gold ratio goes much much much lower in either scenario (from 8 currently to say 2) therefore i have to believe housing follows stocks closer than gold.

I think ive answered my own question : if i could find a nice rental that was priced right , i would move in immediately. Ive sacrificed alot to get into this position , i guess i have to sacrifice more by living in overpriced rentals a bit longer.

Anyone have a nice rental at the right price an hours drive from Denver?

Wed, 07/20/2011 - 11:19 | 1473798 equity_momo
equity_momo's picture

Id rather waste my free time here than sending those couple of clueless cunts an email.

Wed, 07/20/2011 - 10:13 | 1473527 snowball777
snowball777's picture

I didn't think the NAR was capable of reporting a decline.

Wed, 07/20/2011 - 10:15 | 1473536 Larry Darrell
Larry Darrell's picture

they just have to spin it

This was unexpected.  Must be transitory. Etc.

Wed, 07/20/2011 - 10:24 | 1473558 Cognitive Dissonance
Cognitive Dissonance's picture

Missed it by >that< much.

Could have missed it by   >    that    <   much.

#Winning by #Spinning

Wed, 07/20/2011 - 11:02 | 1473730 wisefool
wisefool's picture

It can report a decline if Americans are not patriotic enough. This is their radio campaign in my area. True American patriots are willing to go up to their ears in debt on a McMansion to increase the GDP and save the country.

No joke, they are really running those (paraphrased) ads on the radio in my area.

Wed, 07/20/2011 - 11:22 | 1473807 trav7777
trav7777's picture

the miniplenty will soon rectify these numbers via the minitruth and you go to Room 101

Wed, 07/20/2011 - 20:35 | 1475732 StychoKiller
StychoKiller's picture

How much rent does miniplenty charge per month for Room 101?  I know lots of people that should visit the rumpus room...

Wed, 07/20/2011 - 10:14 | 1473529 Stoploss
Stoploss's picture

Heh, he ,he. I can literally smell the bullshit coming off the monitor.

Wed, 07/20/2011 - 10:14 | 1473533 slaughterer
slaughterer's picture

Once it reaches 4.0 million we will be safely inside QE3 territory.

Wed, 07/20/2011 - 10:14 | 1473534 SheepDog-One
SheepDog-One's picture

DANG and Case/Schills just said 'No housing double dip'!

Well I guess in a way they were telling the truth, cant have a double dip when we never got out of the first one.

Wed, 07/20/2011 - 10:29 | 1473587 Fred Hayek
Fred Hayek's picture

As Reggie Middleton at Boom Bust Blog has pointed out, the Case Shiller index is a woefully incomplete measure of the housing market.  It specifically excludes condominium sales and any sales out of foreclosure. 

Charts that Middleton presented showed that the Case Shiller index pretty consistently lagged 6 mos. or so behind overall market price changes. 

 

Wed, 07/20/2011 - 10:45 | 1473638 wang
wang's picture

do you have a link to those charts or does one have to subscibe to his newsletter

Wed, 07/20/2011 - 11:13 | 1473779 DaddyO
DaddyO's picture

 

Ty this...

http://boombustblog.com/subscribe

DaddyO

Wed, 07/20/2011 - 10:48 | 1473650 Rainman
Rainman's picture

This " underwater " chart tells most of the story for the future...14 million mortgages under water, with nearly half under water by 30+%

http://www.doctorhousingbubble.com/wp-content/uploads/2011/07/underwater-mortgages.png

Wed, 07/20/2011 - 11:24 | 1473820 trav7777
trav7777's picture

nevermind the vacant supply overhang.  There are many millions of homes that are unsaleable for anything but a loss.

Who breaks for the exits first and starts the stampede?  That's got to be the fear here.  Anybody says fuckit and pulls the ripcord, the avalanche starts.  The market will clear but it will be a very brutal few years while it does.

Wed, 07/20/2011 - 12:20 | 1474121 TruthInSunshine
TruthInSunshine's picture

I  agree with everything you've said, Trav.

Another massive factor coming down the pike is that the overhang of homes that's recognized officially is dramatically understated, due to the complex title, MERS, robosigning issues, and ALSO due to the fact that banks now servicing mortgages or proclaiming to hold the underlying note DO NOT WANT to foreclose, as they would damage their value or impair their solvency (by being forced to realize a loss) and/or they can't prove bona fide ownership and/or the value of the not is PERMAMENTLY impaired (i.e. they will never, ever NOT lose money on the asset at this point, no matter how long they wait) and they will literally give the house away to the government or any entity.

In just the first 6 months of this year, 1.7 million new foreclosures entered the pipeline, but that number should have been 2.7 million dwellings (take you guess as to the reasons why - see above).

Foreclosure Glut Pushes Filings Into 2012

By Jeanine Skowronski

NEW YORK -- Approximately 1.7 million properties entered some stage of foreclosure during the first six months of 2011, according to RealtyTrac, a group that monitors the foreclosure market.

However, that figure is artificially depressed, thanks to persistent paperwork problems with mortgage servicers and a sluggish housing market. The numbers, RealtyTrac says, should actually be much higher.

 

"We estimate that as many as 1 million foreclosure actions that should have taken place in 2011 will now happen in 2012, or perhaps even later," James Saccacio, CEO of RealtyTrac, said. "This casts an ominous shadow over the housing market, where recovery is unlikely to happen until the current and forthcoming inventory of distressed properties can be whittled down to a manageable number."


Wed, 07/20/2011 - 13:11 | 1474313 trav7777
trav7777's picture

everything about the housing market is crisis control.  They have to hope they can trickle this into the market so that the downturn is slow and less-noticed.

Wed, 07/20/2011 - 10:15 | 1473535 Robslob
Robslob's picture

I do not think algos read headlines at all...the just use daytrader vol to pump market...so manageable yet unrefined...

Wed, 07/20/2011 - 10:16 | 1473538 the not so migh...
the not so mighty maximiza's picture

even if they dropped pricing 20% more,  real estate will not get out of this funk.

Wed, 07/20/2011 - 10:18 | 1473547 HelluvaEngineer
HelluvaEngineer's picture

heh, wait until financing is no longer available

Wed, 07/20/2011 - 10:20 | 1473548 Long-John-Silver
Long-John-Silver's picture

Why buy the house when the government lets you squat in it for free?

Social Justice Bitchez!

Wed, 07/20/2011 - 10:28 | 1473583 Thisson
Thisson's picture

Maybe, but if it drops 80% I'm a buyer.

Wed, 07/20/2011 - 10:54 | 1473673 TruthInSunshine
TruthInSunshine's picture

I would wait for at least a 90% reduction.

Fools have been rushing in, mostly cash investors, looking to rent. As much as a full 50% of existing home sales have been either foreclosures or short sales.

I do wish them well and hope the non-primary residence property taxes, insurance, maintenance and other costs don't sink their expectations.

Property taxes and other heavy carrying costs associated with real estate is the anti-dividend.

Wed, 07/20/2011 - 11:12 | 1473772 Smiddywesson
Smiddywesson's picture

Very well said.  However, whether the buy point is at an 80% reduction, or a 90% reduction won't be determined by us, it will be determined by the death of the currency.  When inflation picks up speed, real estate is going to look real good.  Buy a casa, and pay it off with confetti.

Wed, 07/20/2011 - 11:25 | 1473824 trav7777
trav7777's picture

No, it won't.  If you can get the taxes paid, sure.  But this is a different era than previous ones.  The Party slaps a sticker on the front door and it's a bagel.

Wed, 07/20/2011 - 10:17 | 1473545 snowball777
snowball777's picture

"With record high housing affordability conditions..."


“Even with job creation below expectations, excessively tight loan standards are keeping many buyers..."

 

That they can say this with a straight face speaks volumes to their training regimen, but how can these both be true at the same time?

You keep using that word (affordable)...I do not think it means what you think it means.

Wed, 07/20/2011 - 10:39 | 1473621 Bob
Bob's picture

That non sequitur really stood out.  Freaking idiots.

Wed, 07/20/2011 - 10:46 | 1473641 earnulf
earnulf's picture

Inconcievable!

Wed, 07/20/2011 - 10:21 | 1473551 Bard
Bard's picture

Well my question is complety out of topic but... Do you think that 0,925 silver coins could be considered as an investment in silver? Im wondering because im able to buy coins for approximately 60PLN each where just silver in them is 26g = 90PLN. (they are not bullion but collectors and people who sells them are aware of silver prices).

Wed, 07/20/2011 - 10:23 | 1473566 Robot Traders Mom
Robot Traders Mom's picture

Baxter, you know I don't speak Spanish!

Wed, 07/20/2011 - 12:36 | 1474196 r101958
r101958's picture

Yes, because they still contain a verifiable amount of silver. Pre 1964 US coins are easily identified and their silver content well known.

Wed, 07/20/2011 - 10:21 | 1473554 BeerWhisperer
BeerWhisperer's picture

Some if qualifiers for the programming:

if value of economic data = Miss, insert .01% drop in the markets until 2:00 pm and then rally on heat wave cuasing bottled water sales to soar.

if value of economic data = hit target or beat insert 3.00% increase in markets until 3:30 and release some bad news to cool down markets.

 

Wed, 07/20/2011 - 10:21 | 1473555 oogs66
oogs66's picture

i have never understood why housing starts is useful....it seems particularly bad for housing when it goes up as sales go down...and the builders haven't shown any better reading of the market than anyone else....

Wed, 07/20/2011 - 10:35 | 1473600 Fred Hayek
Fred Hayek's picture

Actually, here in Massachusetts, they showed a fair bit of discipline coming into the bursting of the bubble.  We were probably helped by the very bad real estate market of 1991-1992.  We have a client who had a condominium project approved in a very desirable suburb in late 2005 and he never moved a shovel of dirt because he saw that the market was turning.

Wed, 07/20/2011 - 10:40 | 1473606 Fred Hayek
Fred Hayek's picture

Inadvertant duplicate, sorry.

Wed, 07/20/2011 - 10:41 | 1473620 Fred Hayek
Fred Hayek's picture

Inadvertant duplicate again.  Sorry.

Wed, 07/20/2011 - 10:21 | 1473556 Caviar Emptor
Caviar Emptor's picture

All the developments out of Washington are merely adding to Biflation: cut anticipated retirement benefits (social sec, medicare, pensions), but provide lots of 'liquidity' to Wall Street (QE lite billions daily still ongoing, more stimulus to come) and banks (BAC needs $50 billion? No prob) and corporate welfare here there and everywhere (through tax subsidies). 

And the middle class meat grinder will grind on

Wed, 07/20/2011 - 10:50 | 1473637 John Law Lives
John Law Lives's picture

<<<   And the middle class meat grinder will grind on   >>>

You got that right.

Anemic job creation... Dismal interest earnings from fixed income securities (CDs, money market accounts, savings accounts etc.)...   Nearly 45 million on Food Stamps... High food and energy costs... Soaring health care and tuition costs... and TBTF banks want another round of QE.  Gee, I wonder who has the ear of our politicians.

Wed, 07/20/2011 - 10:48 | 1473649 unununium
unununium's picture

Exactamundo.

This is an austerity program, nothing more or less.

America is special.  We get the best show the uberclass has to offer, so it comes off clean.  Not all messy like in Greece.

Wed, 07/20/2011 - 10:52 | 1473672 Bob
Bob's picture

The best--here in the US of A--is being saved for last.  Note the "Gang of Six" proposal includes "sale of government assets" to reduce the deficit. 

Wed, 07/20/2011 - 10:22 | 1473559 Defenestrate
Defenestrate's picture

Cancellations?? Hmmmm.

Could it be that the vultures circling the mortgage interest deduction are making it a little hard to figure out what the hell your monthly payment will be?

Wed, 07/20/2011 - 10:28 | 1473584 holdbuysell
holdbuysell's picture

Seems to me that if this deduction were eliminated, many 'fully-bought' home-owners on the margin would end up defaulting on their mortgages as their taxes go higher, leaving not enough money for monthly expenses.

Wed, 07/20/2011 - 10:22 | 1473560 youngman
youngman's picture

So the banks are not making the money of fees here....brokers are not making their commissions...appraisers...title insurance companies....its quite a drop in the GDP.....and they are only raising the debt 2.5 trillion.....or is that just for this 6 months....got gold

Wed, 07/20/2011 - 10:27 | 1473577 Sudden Debt
Sudden Debt's picture

WHO CARES!

They can always build more houses right?

And why not get all Chinese on them? You build 1, blow up 2.

SUPPLY DEMAND COMMU STYLE!

Wed, 07/20/2011 - 10:27 | 1473579 HITMAN56
HITMAN56's picture

I gave bbg TV a shot...b/c of the no commercials when streaming thing...they are now running the News Corp story...although thats important doesnt seem to be driving markets here

Wed, 07/20/2011 - 10:52 | 1473670 wang
wang's picture

bbg is still the best out there but their radio is way better except when they simulcast Marge (they may as well just simulcast CNBS) - anyway all of Fox's competitors are going for the jugular as if it is relevant that  a minor subsidiary in merry old england got caught doing something unethical.    How about Steve Liesman's reporting on the fed  is that ethical? Or pisssani's vicotry for the Bulls  and who can forget their greenshoots nonsense.

Wed, 07/20/2011 - 10:55 | 1473681 HITMAN56
HITMAN56's picture

agree bbg TV is the best available...arrangement should be made for a Liesman v. Santelli steel cage match...odds?

Wed, 07/20/2011 - 12:38 | 1474206 r101958
r101958's picture

But still biased towards the never ending growth paradigm.

Wed, 07/20/2011 - 10:28 | 1473581 Todd Horlbeck
Todd Horlbeck's picture

The good news is that in Japan real estate prices fell for two decades, and we're already five years into our decline.

Wed, 07/20/2011 - 10:28 | 1473586 Gordon Freeman
Gordon Freeman's picture

Does anyone actually believe even the 4.77M number?!?  That is just wildly preposterous!  

The NAR is just a trade organization for syphilitic pimps and whores...

Wed, 07/20/2011 - 11:30 | 1473843 Waterfallsparkles
Waterfallsparkles's picture

NAR (The National Association of Realtors) compiles the data using the Mutiple List Systems throught the United States.

Wed, 07/20/2011 - 12:02 | 1474016 Problem Is
Problem Is's picture

NAR has already been forced to admit they overstate sales numbers by 10% or more in 2010 alone...

NAR has admitted revisons are neccessary in all their "data" 2008 to 2011, but have been stalling... read here... and here...

NAR = Douche bag propaganda whore sales bitchez...

Wed, 07/20/2011 - 10:33 | 1473588 virgilcaine
virgilcaine's picture

The great paper shuffle grinds to a halt. All the make work that was associated with it. lolz

Wed, 07/20/2011 - 10:36 | 1473594 TruthInSunshine
TruthInSunshine's picture

In this unprecedented time of central bank and government interventionism and media propaganda when it comes to all things economic and markets, if you don't care for the weather, just wait a day.

Long term forecasts and projected conditions change by the day, if not hour.

No wonder why so many truly successful large AUM guys have returned investor capital and "retired' over the last year. The robots are now swapping shares of LULU and NFLX with each other, and I'm sure this will all end as well as the LTCM experiment did (only on a vastly larger, global scale, this time).

#global economic depression w/ government induced-sugar high bear market rally, ft winning.

Wed, 07/20/2011 - 10:34 | 1473598 ThirdCoastSurfer
ThirdCoastSurfer's picture

Is it a sign of a economy shift when the trend for New Homes Sales is up but the trend for Existing Home Sales is down, or is this just a reflection that given the choice at a comparable price new is better?  If the former, then is this the first sign of a real break between who can afford what, or if the latter, then how will existing homes ever recover without another step down in prices? 

Wed, 07/20/2011 - 11:21 | 1473806 nscholten
nscholten's picture

Some people just want a new house like a new car.  There will always be a market for new, aside from market collapse.  Western Washington has a fairly strong new housing market.  Not everybody is looking at a house as an investment as they shouldn't be.  It is a fucking roof over your head and a place to reside, raise a family etc.

Wed, 07/20/2011 - 11:49 | 1473961 ThirdCoastSurfer
ThirdCoastSurfer's picture

Good point. 

Wed, 07/20/2011 - 10:35 | 1473599 I am Jobe
I am Jobe's picture

Everything in housing was peachy yesterday. Yeap the Lies continues.

Wed, 07/20/2011 - 10:35 | 1473601 Stoploss
Stoploss's picture

Day 2 of dollar wants to pop, and euro wants to drop.

Wed, 07/20/2011 - 10:35 | 1473602 Monedas
Monedas's picture

The cost of living index for the homeless is going up ! Track the price of Seven-Eleven chili dogs ! Monedas 2011 Good job Mark Belling and Mark Steyn ! Rush is baaaaack !

Wed, 07/20/2011 - 10:36 | 1473604 Everybodys All ...
Everybodys All American's picture

Does bad data really matter anymore?

Wed, 07/20/2011 - 10:36 | 1473608 Monedas
Monedas's picture

The cost of living index for the homeless is going up ! Track the price of Seven-Eleven chili dogs ! Monedas 2011 Good job Mark Belling and Mark Steyn ! Rush is baaaaack !

Wed, 07/20/2011 - 10:38 | 1473611 Strike Back
Strike Back's picture

Beautiful chart, can point out, almost to a T, QE1 and 2. 

I love it when people say, "well housing prices have gone down so far, they can't go much lower."  Completely irrational, immature, magical thinking.  Especially when they are buying a fucking overpriced condo in D.C. as an investment.

Wed, 07/20/2011 - 12:02 | 1474035 Smiddywesson
Smiddywesson's picture

I love it when people say, "well housing prices have gone down so far, they can't go much lower." 

The public doesn't think in terms of nominal and real valuations.  This is the tool of the banking thieves.  The public also thinks that what always happened to fiat currencies in the past can't happen to the USD in their lifetimes.

Wed, 07/20/2011 - 10:37 | 1473613 monopoly
monopoly's picture

I guess those at Borders that were buying a home cancelled. :(((

Wed, 07/20/2011 - 10:39 | 1473624 Seasmoke
Seasmoke's picture

wow thats a bit scary, that we thought the same thing at the same time

Wed, 07/20/2011 - 10:38 | 1473614 Seasmoke
Seasmoke's picture

im sure all the Borders employees just cancelled their orders for a new home in September, doesnt matter that most probably couldnt afford a house even on their full time Borders salary

Wed, 07/20/2011 - 10:38 | 1473615 -Michelle-
-Michelle-'s picture

Why buy the house when you can squat in one for free?

Wed, 07/20/2011 - 10:38 | 1473618 I am Jobe
I am Jobe's picture

20 Signs That The Fabric Of American Society Is Coming Apart At The Seams

http://endoftheamericandream.com/archives/20-signs-that-the-fabric-of-american-society-is-coming-apart-at-the-seams

 

Wed, 07/20/2011 - 13:20 | 1474333 trav7777
trav7777's picture

they should correctly identify the diversity in those 20 signs.  The KO mobs and the mass beatings came from one particular group, as well as all the Atlanta cheating and crime.  In fact, over half of the violent crime nationally (which thankfully continues to decline) is attributable to one group, which we hear daily crocodile tears over incarceration rates for

Wed, 07/20/2011 - 10:40 | 1473626 Silver Dreamer
Silver Dreamer's picture

When this finally ends, 99% of the mortgages will be owned by the government.

Wed, 07/20/2011 - 10:47 | 1473648 plocequ1
plocequ1's picture

Are you in that 1%?

Wed, 07/20/2011 - 10:42 | 1473631 I am Jobe
I am Jobe's picture

The Fundamental Flaws of Capitalism – Why We Never Learn: Joseph E. Stiglitz

http://www.economywatch.com/economy-business-and-finance-news/the-fundam...

Wed, 07/20/2011 - 11:05 | 1473745 gwar5
gwar5's picture

Stiglitz is another proud socialist IMF banker, like DSK, who knows full well that the fundamental flaw of capitalism is oligarch banksters like him pushing crony capitalism and socialism for sovereigns like crack cocaine and letting fiat currency and fractional reserve banking do the rest.  

Fait accompli. Stiglitz said privately in 2009 that US unemployment was going to run 10% for years and years. Of course, he can never say it out loud in too many venues because he is also an Obama economic advisor.

Wed, 07/20/2011 - 10:45 | 1473639 plocequ1
plocequ1's picture

Who cares. Apple doesn't build houses. Rally on.

Wed, 07/20/2011 - 10:51 | 1473667 unununium
unununium's picture

Melissa Lee said this morning that AAPL is its own asset class, and people are under-invested in it.

Gold watched silently.

Wed, 07/20/2011 - 10:48 | 1473651 Idiot Savant
Idiot Savant's picture

“Even with job creation below expectations, excessively tight loan standards are keeping many buyers from completing deals. Although proposals being considered in Washington could effectively put more restrictions on lending, some banking executives have hinted that credit may return to more normal, safe standards in the not-too-distant future, but the tardiness of this process is holding back the recovery.”

Are you fkn kidding me? Standards have tightened a bit, but we're still a long way from old-school, twenty percent down, standards. As far as credit returning to "normal, safe standards", does he mean the lax standards (no money down, interest only, liar loans, exploding ARMS, etc.) that caused this mess?

If this guy said this with a straight face, he really ought to run for public office.

Wed, 07/20/2011 - 10:49 | 1473655 MaxFrost
MaxFrost's picture

I've been following housing pretty closely (renting since 2007, looking to buy after another 30% drop) and I've seen a ton of cancellations over the past six months - a realtor I've been working with (one of the few good ones) told me why. The banks know prices are going down, and they're not appraising a lot of homes at their sale price. For example, if you work out a deal with a seller and you agree to pay $500k for a house, say you'll put down 20% down payment (100 grand for the math challenged). The bank comes along and appraises the house at $440 - so if you still want to buy it, you'll have to put down an extra $60k out of your own pocket. Sale cancelled.

Larry Yun - what a douchebag. Of course he knows this...

Wed, 07/20/2011 - 10:53 | 1473677 unununium
unununium's picture

Solution, buy a bank-owned condo.  Betcha their story changes.

Wed, 07/20/2011 - 11:03 | 1473735 Seasmoke
Seasmoke's picture

+500,000

Wed, 07/20/2011 - 10:57 | 1473696 nscholten
nscholten's picture

That what the banks should have been doing in 2007.  What the fuck do you and your " good realtor" think they should do?  Appaise it for what ever the fuck the buyer wants?  Fucking stupid and your realtor friend is fucking stupid too.  For the economically challanged the fucking bank is the one that owns or has the lean on the house or piece of real estate.

 

lets say you are the bank.  Why don't you and your stupid realtor look at it that way.  Do you want to loan someone $400,000 dollars on a asset that is depreciating and could soon be worth $375,000.  That is how we got in this fucking mess!!

Wed, 07/20/2011 - 11:14 | 1473780 Idiot Savant
Idiot Savant's picture

Junked for the hateful response. Max didn't imply that banks are wrong for doing this; he is merely providing an explanation for all the cancellations.

Wed, 07/20/2011 - 11:24 | 1473823 nscholten
nscholten's picture

your name say it all.  Go cry to your mom.

Wed, 07/20/2011 - 11:56 | 1474007 Idiot Savant
Idiot Savant's picture

This is coming from a guy that thinks "alot" is a word, and uses will instead of we'll. Please try again c-sucker.

Wed, 07/20/2011 - 11:14 | 1473781 Tuco Benedicto ...
Tuco Benedicto Pacifico Juan Maria Ramirez's picture

Have you thought about a personal exercise program!?

 

Tuco Benedicto Pacifico Juan Maria Ramirez

Wed, 07/20/2011 - 12:15 | 1474101 spartan117
spartan117's picture

An easy way to resolve this is to force the banks to release all that shadow inventory.  That will help prices find market equilibrium.  But taxpayers continue to bail out these banks, allowing them to hold onto properties at a loss much longer.  People are wising up to paying over assessed value, which is the reason why sales are slumping.  Doesn't take a genius to figure all this out.

Wed, 07/20/2011 - 12:11 | 1474085 spartan117
spartan117's picture

Max,

Had that happen to a friend as well.  You are absolutely correct.  Banks know prices are coming down because they are holding onto a crap-load of shadow inventory.  They also know how many homes are close to foreclosure as home owners are not making payments on their mortgages. 

Wed, 07/20/2011 - 10:49 | 1473656 gwar5
gwar5's picture

I'm kinda glad the pricks and liars use weasel words and rose-colored glasses when they editorialize the data.

It's better than white hats and black hats for separating the good from the bad.

Wed, 07/20/2011 - 10:49 | 1473658 anony
anony's picture

Larry is a fudge packer.

Wed, 07/20/2011 - 10:51 | 1473668 nscholten
nscholten's picture

Phoenix area had record sales in June.  Granted prices are still declining slightly except in certain areas where there are multiple offers.  Rental inventory is low with mulit-family occupancy well above 90% on apartment complexes; seeing alot of 94% to 96%.  New multi-family units are under construction. 

Look at this point the banks will release inventory when prices are stable or rising.  This is going to take another 4 to 7 years so month month data is not going to be the "zerohedge" collapse all are looking for.  Shit will just start another fucking war if we have too.

Wed, 07/20/2011 - 10:53 | 1473676 wang
wang's picture

record sales  - compared to???

Wed, 07/20/2011 - 10:59 | 1473711 nscholten
nscholten's picture

Ever.  Just the number...over 11,000 in one month

Wed, 07/20/2011 - 12:28 | 1474158 spartan117
spartan117's picture

Sales up, prices collapse.

http://www.mybudget360.com/desert-heat-melts-arizona-home-prices-phoenix...

Look at your median home prices.  Sales are doing well because prices are tanking.  You are down 70% from the highs. 

Wed, 07/20/2011 - 10:56 | 1473687 the not so migh...
the not so mighty maximiza's picture

a house vacant for 7 years in pheonix?  you will need a shovel to get rid of the mold.

Wed, 07/20/2011 - 10:59 | 1473718 nscholten
nscholten's picture

Ah ok... your point?

Wed, 07/20/2011 - 11:02 | 1473721 the not so migh...
the not so mighty maximiza's picture

banks will not be able to hold vacent houses for 7 years in stealth inventory.

Wed, 07/20/2011 - 11:03 | 1473733 nscholten
nscholten's picture

Bullsit.  How many years have they ben holding already??  Alocal bank in Wahsington state was taken over by the feds and gave the new bank 8 years to clear out the inventory.

Wed, 07/20/2011 - 11:06 | 1473749 nscholten
nscholten's picture

I was a real estate developer by trade.  Why do you think CRE hasn't collapsed.  It is because the banks can't take the product back and sell it.  We had a project and didn't meet equity so I asked the bank what they were going to do?  What do you think he said??  NOTHING!

Wed, 07/20/2011 - 11:37 | 1473894 the not so migh...
the not so mighty maximiza's picture

He told you "nothing" but I would not belive him.

Wed, 07/20/2011 - 11:07 | 1473756 Rainman
Rainman's picture

..mold in Phoenix ?? you need the shovel to get rid of the dead cockroaches.

Wed, 07/20/2011 - 11:07 | 1473754 Tuco Benedicto ...
Tuco Benedicto Pacifico Juan Maria Ramirez's picture

And a war would be good for the economy!?  Take that to myth busters!

 

Tuco Benedicto Pacifico Juan Maria Ramirez

Wed, 07/20/2011 - 11:27 | 1473825 Woodyg
Woodyg's picture

Currently banks can claim 1. The value if the mortgage 2. The monthly mortgage that was never received 3. Late fees that were never received - all as Receivables - even though the house is EMPTY and the banks WILL NEVER get those payments. The banks ONLY take the loss when the house sells - usually for less than the note, much less the missed pmts and fees. Take those monies off the books and the banks are Bankrupt - so the banks can't sell those houses - except a very few at a time in order to offset any profits.

Wed, 07/20/2011 - 10:54 | 1473679 sheeple2012
sheeple2012's picture

they just had ass clown Brian Westbury on Bloomberg radio, blamed it on the tornadoes in south and midwest, LOL

Wed, 07/20/2011 - 11:00 | 1473719 papaswamp
papaswamp's picture

ah ha!!! the weather! Always the safety comment. Next week it will be the excessive heat....

Wed, 07/20/2011 - 10:54 | 1473680 Blithering ORSA
Blithering ORSA's picture

How does this track w/ Consumer Durables?  When you stop to think about it, housing after the bubble is pretty much behaving the way a consumer durable would.  A few, really well-built and designed ones will be classics and pay huge investment dividends.  Most of them, by-and-large will lose tons of value after 15 years of fair wear and tear. 

Wed, 07/20/2011 - 10:59 | 1473714 Tuco Benedicto ...
Tuco Benedicto Pacifico Juan Maria Ramirez's picture

Ha,ha.  Well put T. D.!

 

Tuco Benedicto Pacifico Juan Maria Ramirez

Wed, 07/20/2011 - 10:58 | 1473702 BaBaBouy
BaBaBouy's picture

PREDICTION ... Feck a nice suit,

Eventually, 10 Ozs of Gold will buy you a nice house.

Wed, 07/20/2011 - 11:05 | 1473742 francis_sawyer
francis_sawyer's picture

& the government will charge you 20 ozs of gold a year for the pleasure of living in it... 

Wed, 07/20/2011 - 12:13 | 1474094 Esso
Esso's picture

That's the problem. I wouldn't take property now if you gave it to me.

Goobermunt just raised the tax assessment on my property 20% for no reason other than they want more money, money, money. Hit my neighbor for 100% because he added a garage.

You won't win this game. Goob wants all the houses.

Wed, 07/20/2011 - 11:26 | 1473829 Tuco Benedicto ...
Tuco Benedicto Pacifico Juan Maria Ramirez's picture

Or 150 ounces of silver.   -- Tuco

Wed, 07/20/2011 - 10:58 | 1473704 MFL8240
MFL8240's picture

Blame it on Bush, this group of jackoffs in the media will spin that story.

Wed, 07/20/2011 - 11:01 | 1473727 spongeBOB
spongeBOB's picture

I think this makes sense. Deals are getting canceled because eventhough people are willing to make offers (contingent on getting financing) the banks are rejecting a large percentage of the applicants. Also appraisals are coming below offers on many of the homes due to the number of "short Sales". In my area, sales of existing townhomes are in the dumps. One reason is many brand new townhomes are getting built, some of those developements were started in 2007, but the prices are 25% -30% less and those are selling pretty good which is killing the sale of older homes.

Wed, 07/20/2011 - 11:05 | 1473743 djsmps
djsmps's picture

I was hoping for some negative news to goose the market into positive territory.

Wed, 07/20/2011 - 11:05 | 1473744 spongeBOB
spongeBOB's picture

BAC is up > 4% on the news....

Wed, 07/20/2011 - 11:26 | 1473755 Waterfallsparkles
Waterfallsparkles's picture

The reason for the cancellation's are two fold.

1. The Appraisal is lower than the sale price.

With the Appraisal lower than the sale price the Buyer has to come up with more cash or the Seller has to reduce their price.  Or a combination of both.  Sellers are reluctant to lower the price being they sold the house for more.  The Buyer more than likely cannot come up with more cash or does not want to pay more than the Appraisal.

The Banks now control the Appraisal process and they in my opinion are under Appraising the Houses just to make the Buyer come up with more Money.  This increases the Equity on the Loan for the Bank.

The Banks Foreclosures are damaging Comperable's for normal sales.

2.  The Banks will not give a Loan to anyone that is not absolutely stellar.  Credit is being damaged by having a Credit Card Balance too close to the limit.  You could lose 30 credit points just because of a Credit Card too close to is Credit Limit.

Wed, 07/20/2011 - 11:40 | 1473855 spongeBOB
spongeBOB's picture

If you are a buyer, why would you pay more than the appraised value and start with negative equity right off the bat, specially when you keep hearing there is another 20% decline coming in the next couple of years?

Wed, 07/20/2011 - 11:43 | 1473931 Waterfallsparkles
Waterfallsparkles's picture

That is exactly what Buyers think.  Yet, remember that the Appraisal Process is being controlled by the Banks.  In my opinion they are intentionally under Appraising propertys to build in more equity for the loan.

Also keep in mind that if the Appraisal comes in at the Sale Price the Lender has the right to lower the amount of the Appraisal before it is issued.

Wed, 07/20/2011 - 11:46 | 1473940 Waterfallsparkles
Waterfallsparkles's picture

Also, keep in mind that if the Banks cause a Cancelation of a normal sale, that it creates another potential Buyer for one of THEIR Foreclosure Sales.

Wed, 07/20/2011 - 12:22 | 1474130 Smiddywesson
Smiddywesson's picture

+1  Great insight

Wed, 07/20/2011 - 12:33 | 1474177 spartan117
spartan117's picture

Why would banks lower the appraised value  ever?  They make more money on interest if they keep prices up.  That also increases comp which allows them to list their inventory at higher prices. 

Wed, 07/20/2011 - 11:39 | 1473875 spongeBOB
spongeBOB's picture

....

Wed, 07/20/2011 - 11:38 | 1473880 spongeBOB
spongeBOB's picture

....

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