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Existing home sales signal rebound that is real
While housing starts was a disappointing little report the report on existing home sales for February is more re-assuring.
Why?
Housing data ebb and flow; they are fraught with unexpected highs and low. In the winter I like to say that the housing reports are less sector reports than they are weather reports. So what should this one –or housing starts - be any different?
First of all it is not about the monthly number which after an upward revision to January sales shows a decline instead of an increase. It is about more broadly conceived trends. The breadth of the strength and the strength itself is impressive. Sales while still weak by historic standards are lifting strongly from their lows and doing so across all regions.
Housing is still a very crippled sector it is beset with many impediments to growth. But what makes this report most impressive is the advance in prices which tends to be more regular in their seasonality and less subject to the whim of weather. Sales trends are impressive but prices trends are more so.
Nationwide, both average and median prices rose in February. These are not seasonally adjusted so the price increase to which I refer is over 12-months. Both average and median prices last rose together in November 2010. Before then there was a series of month when the special government subsidy programs were in place to spur housing when prices took some special, but unsustained lift. Indeed, in November of 2010 the lift in average and median prices turned out to be a one-off experience, but because of more powerful trends this instance has the ring of sustainability..
This time average and median prices are being lifted by rising average and median prices in the South and in the West. In the Northeast and Midwest both average and median prices remain lower year-on-year. But for all regions the change in year-over-year housing prices improved in February from January. In the Northeast median prices shifted from a drop of 4.5% to a drop of only 1.9% Yr-over-year. In the Midwest prices fell by a bare 0.5% yr/yr after dropping yr/yr by 4.3% in January. The fact that the trend to improved pricing is nationwide is heartening.
And there has been no magic wand that has been waved over the sector. Prices are improving despite a still-hostile environment. Distress sales still made up 34% of all sales in February just a tick below the 35% level of January. Foreclosures were 20% of sales (compared to 22% last month) and short sales were 14% (compared to 13% last month). Speculators are active with investors making up 23% of sales, the same proportion as last month. All-cash sales rose to 33% from 31%. This reading is slightly above the 12-month average. In February contract failures were high at 31% while their recent average has been closer to 16%. Despite such impediments prices improved year-on--year.
Housing affordability remains very high but the joke of the series is that those loans are only for those who can qualify for them. I refer to this an a Republican monetary policy since if you are not underwater on your mortgage, still have a good job, can make your current house payments and have maintained a high credit score you can be eligible for a lower mortgage rate. In classical economic fashion the rich get richer. But those of you who are desperate for financing relief or purchase help are largely left disappointed.
Low rates have not spurred the housing sector because the low rates are not widely accessible. That is one fallacy of low rates. Rates may be low but average credit scores are even lower, turning many a prospective homebuyer into that kid at the candy store window with no money in his pocket just able to look.
But housing is improving despite all the various distortions. Much of it is led by investors. Cash sales are very important. First time buyers are at 32% of the market compared to 33% last month and an average participation of 37% over the last year.
There will be a lot of cynicism about this report but it its signals jibe with those from the job market. Something is truly stirring; and if you will not believe sales trends then believe price trends. Money on the barrelhead is a very good economic signal. One third of the buyers are parting with cold hard cash to make acquisitions. The rebound is for real.
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My wife thought that was funny.
way to elevate you game doofus.
thats what i tried to tell Tsar Pointless....it was funny
is your wife an 8YO lesbian ?
I'm gay Dasa, so come to NYC and this faggot will beat your fucking head into a bloody pulp, you piece of shit. Eat me cunt...
Classy.
and funny
Well, to an eight-year-old, perhaps.
Do you resemble that remark, Seasmoke?
yes i was gay and a faggot when i was 8YO and then i grew out of it
Sales declined, but that shows strength? Wait, what? So the optimism is all about prices going up? OK, what is the % increase in housing prices relative to the % increase in gas, oil, energy, health care, GOLD, etc. year over year? Could it be house prices showed a blip of an increase in Feb because they are still priced in Federal Reserve custom-skullfucked dollars?
Wake me up when housing starts popping so I can go back to work...nods off...
Just wondering-did he get the figures from the NAR? Their proclamations are suspect at best.
Robert Brusca Ph.D. has been an economist on Wall Street since 1977. He has been a Division Chief at the NY Fed, a Fed-watcher at a major NY commercial bank and Chief Economist at major international securities firm. He is now an independent voice on the economy global trends and the political scene, operating a consulting firm in New York City.
I see nothing in this that leads me to trust his opinion as unbiased. No thanks Bob; peddle your DNC crap elsewhere.
Division Chief at the New York Fed? That almost makes him as credible as Tim Geithner.
DNC?
I'm not that kind of doctor.
Yo, Bob! Do you still stand by that forecast for a housing recovery in the third quarter of 2008?
Oh, BTW, use a proofreader. Your writing absolutely sucks.
3 strikes and your OUT!
STRIKE 1- Ph.D
STRIKE 2-"economist"
STRIKE 3-"on Wall Street"
ALL that in the first sentence alone!!
Shall I continue?
Lots of Hopium, no Facts. Not worthy of ZH space.
The CME is falling on lumber and is down from last year. That, pal, are the facts.
So let's see there Robert..
1) there's a trillion dollars of student debt debt that has to be impacting the first time home buyers market
2) 30% of mortgages are either underwater or have less that 5% equity which has to impair the trade-up or repeat market
3) real wage growth is either flat or most likely negative ..depending on what u think inflation really is(something tells me bobby boy here thinks it 3%
4) home prices are down 4% YoY, this despite mortgage rates 1% lower than last year, suppoedly 2.2 million jobs adding and an very mild winter
5) credit remains very tight with 1/2 the banks not even giving quotes for anyone with a fico score less than 620( about 25% of the country)
Brusca..keep dreaming and peddle your BS on CNBC where it belongs
Don't forget the cash sales are up because you can buy a house here in Detroit for $1500.
Did this author find this article in the Japan Times circa 1993? The real estate market has yet to defile itself.
Larry Yun maybe?
"Housing affordability remains very high but the joke of the series is that those loans are only for those who can qualify for them. I refer to this an a Republican monetary policy since if you are not underwater on your mortgage, still have a good job, can make your current house payments and have maintained a high credit score you can be eligible for a lower mortgage rate. In classical economic fashion the rich get richer. But those of you who are desperate for financing relief or purchase help are largely left disappointed. "
Sorry, you kinda lost me after this statement. Your argument is counter-intuitive. We are in the current housing mess because of irresponsible lending, not in spite of it. Handing out loans to those who simply do not qualify to repay them will not fix the housing mess, it will only extend it as those who once again purchased more home than they could possibly afford to ever repay - default. Same story, different day.
It IS good to see someone more optimistic about the recovery. We need cheerleaders to remind us that eventually the game will come to an end, someone will tally the scores, and a loser will be declared in the Financial Bowl.
Mr Silverman set down your crack pipe
Reads like a good DNC election ad. Other than that, where's the value? Pure and simple "democrat good - republican bad" tripe.
Does the posting of this article indicate a political bias on the part of ZH?
"...but it its signals jibe with those from the job market."
If the author is referring to the real job market - not the stats coming from the hopium crowd - then I'd agree; housing is still fucked. It's in perfect correlation with the job market, and neither will be improving anytime soon.
Last time I had cash I just gave it to who I was buying something they had. I didn't see a barrelhead. Do you get some kind of discount if you buy a house and there's a barrelhead there for you to put your cash on? What's in the barrel? In this guys case it's Jack Daniels.
You know, there are actually schools where you can learn comedy
I can't figure out what he's on, heroin or gin.
Your taste is so limited.
Rye and Scotch
hangemhigh77
I can't figure out what he's on, heroin or gin
Comment:
It's Herogin. Newest craze to hit the west.
I hope his checks from the NAR and NAHB don't bounce.
Real estate is local. I currently do not personally know anyone who is buying a house. I can't help but question the data. Not only housing data but the employment statistics. The job market is crumbling where I live. Who is buying houses. Can the 50 million people on food stamps afford a house? Maybe in Detroit where the average price is $6,000.
where do you live?
mind_imminst
Real estate is local. I currently do not personally know anyone who is buying a house.
Comment:
Charleston, WV here.
I know of more people wanting to sell their house then people looking to buy. Quite a few people that have been waiting for the market to return so they can sell their home closer to break even prices. Even a few that have their home paid off are waiting. Why? Well, the ones I know are worried about the future and that money was part of their retirement. Selling now at these prices and they don't see a very good retirement. Gonna be really bad if another leg down in the RE market occurs (which I think it will for most markets). Every once in a while I take a gander at what is up for sale, foreclosures, sale by owner, etc. I am seeing some amazing deals and these houses are on the market for months and months.
Charleston is a nice looking town. I was there about 5 years ago. Even the homeless were polite.
Thanks for the comment sessinpo. I have seen some amazing deals as well. I never used to see sub $20,000 foreclosure deals (on decent fixer-uppers) where I live, but now they are popping up every month.
Prices are going up but the banks refuse to lend. Do they know something we don't?
Career ender.
Yes, the data presented is to be blindly trusted, the weather really is to blame, historical approaches to analysis are still valid, and green shoots abound.
Robert Brusca
Brusca is absolutely right. In fact he just bought some ocean front property from me in Arizona.
no shizz... glad he (Brusca) just sold me all those time shares in Friso, CO... the market is finally heating up... please... utter garbage...
Odd piece for ZH
why do you have to be a snarky, lobotomized pessimist to write here?
I don't think so
B
Leo Koslosolarstocks got ditched a long time ago, so this is peek into the mind of the hopium addicts.
WAIT!! LEO KOCKALAKA was last seen pawning off "slightly used" solar panels in China Town just to pay his rent...
the shills are everywhere.
Here's Brusca from February 2008:
"Existing home sales fell last month, according to the National Association of Realtors. But when it comes to the housing slump, Robert Brusca is wondering what all the hubbub is about. The chief economist at Fact and Opinion Economics says housing is not collapsing. And he tells John Wordock the 4.6% decline in home prices in the last year is not that bad given the rise in prices during the boom. Brusca also predicts we could see a recovery in the third quarter."
ROFL! Rose-Tinted Bob forecast a housing recovery for Q3 of 2008!
http://www.marketwatch.com/story/robert-brusca-third-quarter-recovery-fo...
LOL! Bottom pickers are the worst kind of investors. So are experts, who eventually become very skilled at constructing arguments to convince them of their own bullshit opinions. Every opinion has to pass the sniff test, and this one uses noise to make a claim that is laughable on its face. The US is broke. The government is involved in multiple wars, and much of the jobs out there are government jobs. Aside from that, unemployment is rampant. So where are the jobs going to come from to purchase all these homes?
Read Reinhardt and Rogoff's This Time is Different. No country has EVER escaped from the damage we've already done to our economy.
After 5 years of this crap, does anyone really trust the economic numbers we are getting? Those cash transactions are not a healthy sign for housing. They are buzzards trying to pick the bottom and they are going to suffer the fate of all bottom pickers.
Did Larry Kudlow help you co-author this? A for effort on optimism!
I believe this was the "April Fools" edition accidentally published early...
BTW Tyler brings on these new authors to ruffle your feathers!! LMAO
Na, this is just more bullshit data from NAR...