Less Than Expected 31,000 New Homes Sold In August; Dent "Recovery" Meme

Tyler Durden's picture




 

Moments ago, the Census Bureau released the August new single-family house sales number: at 373,000 on an annualized basis, it missed expectations of a rise to 380,000, and was down from a revised 374,000. This is only the second miss in 2012, and confirms that all talk of a housing recovery is misguided, and merely represents one particular segment of the housing market: that of existing home sales where buyers have all cash, are price indiscriminate, and are willing to take advantage of the NAR's exemptions from anti-money laundering provisions. I.e., US real estate is merely a place to park cash for those who have obtained it using questionable means. Looking at the number on a non-SAAR basis reveals that only 31,000 actual houses sold in August, of which 3,000 in the Northeast: surely a reason to keep on bidding up the builders into the stratosphere: fear not, actual sales will come. Eventually. Finally, and demonstrating that rich buyers focus primarily on dumping money into existing mansions, was the distribution of purchases by price bucket, which showed a (Z), or under 500 houses sold, in the $750,000+ category. This was the first time there was a (Z) in this bucket since February.

Some recovery. 

Eventually the restocking will resume. Just not yet: there are still about 10 million units in shadow inventory, despite the government "data".

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Wed, 09/26/2012 - 10:20 | 2831787 Aziz
Aziz's picture

The Unwealth Effect.

Wed, 09/26/2012 - 10:23 | 2831805 Precious
Precious's picture

... about as many were confiscated and bulldozed.

Wed, 09/26/2012 - 10:26 | 2831818 GetZeeGold
GetZeeGold's picture

 

 

Stand up to a tank.....but never pick a fight with a bulldozer - Confucius

Wed, 09/26/2012 - 10:26 | 2831830 ParkAveFlasher
ParkAveFlasher's picture

I think you meant "steamroller".

Wed, 09/26/2012 - 10:29 | 2831842 GetZeeGold
GetZeeGold's picture

 

 

That too - Gandhi

 

Wed, 09/26/2012 - 10:35 | 2831878 JPM Hater001
JPM Hater001's picture

I'm calling shenanigans.  I dont thing Confucious had a problem with tanks.

Wed, 09/26/2012 - 11:34 | 2832163 Dead Canary
Dead Canary's picture

Man who fart in church;

Sit in own pew.

~ Confucious

Wed, 09/26/2012 - 11:06 | 2832014 Tijuana Donkey Show
Tijuana Donkey Show's picture

Not a chinese steamroller..... 

Wed, 09/26/2012 - 10:36 | 2831881 Lost Wages
Lost Wages's picture

I'm surprised Confucius knew of tanks and bulldozers.

Wed, 09/26/2012 - 10:26 | 2831826 MachoMan
MachoMan's picture

At least bulldozing clears some inventory and gets on with the inevitable result of capital misallocation...

Wed, 09/26/2012 - 10:28 | 2831843 CrimsonAvenger
CrimsonAvenger's picture

Ah, the "cash for clunkers" theory.

Wed, 09/26/2012 - 10:34 | 2831855 Dr. Richard Head
Dr. Richard Head's picture

Breaking windows, great depression crop-tilled-over style - BITCHEZ!

The "great" Mayor of Youngstown Ohio won an award by simply bulldozing housing in his hood - http://www.vindy.com/news/2012/jun/07/mayor8217s-goal-500-vacant-houses-demoli/ and was then appointed to the Obama staff regarding auto stimulous - http://www.cleveland.com/open/index.ssf/2011/07/youngstown_mayor_to_be_named_w.html

Cash for clunkers, till under the crops, and destroy cheap housing.  This is definitely a recorvery.

Wed, 09/26/2012 - 10:30 | 2831851 Bay of Pigs
Bay of Pigs's picture

Raze the city?

Okay, lets start with Detroit.

Wed, 09/26/2012 - 11:12 | 2831899 JPM Hater001
JPM Hater001's picture

An unsettling haze ruled that morning as General Obama approached the city.  His overlords made this city what it was and now they wanted it gone.  The evidence of their disease had spread and now no one must see the end result.

No one.  And that meant everyone had to die.

General Obama smirked.

 

Thu, 09/27/2012 - 04:05 | 2834677 Colonel Klink
Colonel Klink's picture

BUZZ!  Starting with Washington DC would be more beneficial to the country.

Wed, 09/26/2012 - 10:36 | 2831883 Arnold Ziffel
Arnold Ziffel's picture

Bulldozing? You gotta be kidding. They are building over 4,000 down the road from me depsite houses now on the market in the area for less then $55 psf ...sitting there for 180 days or longer !

It defies common sense. Who is financing this cr*p? Shadow inventory is now over 9,000,000 and these folks are just adding to it.....

Wed, 09/26/2012 - 11:19 | 2832099 MachoMan
MachoMan's picture

We are financing this crap...  welcome to the party.

Wed, 12/26/2012 - 06:18 | 3095841 Jeelan
Jeelan's picture

As potential landlords figure out that every prospective tenant is an indigent, the low end will lose its bid in favor of more formerly middle income/starter type homes that have low maintenance.composite door

Wed, 09/26/2012 - 10:23 | 2831806 GetZeeGold
GetZeeGold's picture

 

 

Didin't see it coming.....didn't expect it.

 

Well.....this sucks.

 

Wed, 09/26/2012 - 11:08 | 2832025 Snakeeyes
Snakeeyes's picture

Good one. But what kind of a rally where median home sales price falls for most lower and middle income houses, but rises for high-end homes (like DC and NY area)? So Fed policy beenfits Wall Street and DC hogs?

http://confoundedinterest.wordpress.com/2012/09/26/new-home-sales-fall-slightly-median-new-home-sales-rise-for-500k-750k-homes-mortgage-refi-index-rises-again/

Wed, 09/26/2012 - 10:21 | 2831788 LongSoupLine
LongSoupLine's picture

but, but NAR said...

Wed, 09/26/2012 - 13:08 | 2831823 Precious
Precious's picture

... compared to the same weekend last quarter, sales were up 20%.

Wed, 09/26/2012 - 10:24 | 2831814 IridiumRebel
IridiumRebel's picture

My house is on the market to sell....this pom pom shit is getting old. Housing is dead and will not come back just like "Merica! I am doing what I can to get my household prepped, hence selling the house that will be under water in a year if I do not sell it NOW. The only good news about these cheerleader MSM pushes is that it may make some sucker buy my house. Wish me luck. 

Wed, 09/26/2012 - 10:41 | 2831846 MachoMan
MachoMan's picture

Just depends on where  you are in the market.  At present, shanties are getting mercilessly bid up under the premise that renting to indigent crackheads pays ~10% (with a government backstop of course), which is greater than granny can get on a CD.  Now, this is simply a function of where we are in shedding our denial (not very far).  As potential landlords figure out that every prospective tenant is an indigent, the low end will lose its bid in favor of more formerly middle income/starter type homes that have low maintenance (which during this period should slightly decrease in value, although may catch plenty of bids from downsizing and those who have been forced to deleverage).

Wed, 09/26/2012 - 10:31 | 2831854 ParkAveFlasher
ParkAveFlasher's picture

Luck won't matter if the bank won't loan. 

Wed, 09/26/2012 - 10:34 | 2831870 IridiumRebel
IridiumRebel's picture

Hence, why I need luck captain optimistic. Ya know.....cuz no one is lending any fucking money?

Wed, 09/26/2012 - 10:43 | 2831914 Bay of Pigs
Bay of Pigs's picture

Stop paying your mortgage and save your cash for renting after they boot you in two or three years.

Save yourself Rebel, help isnt coming.

Wed, 09/26/2012 - 12:08 | 2832355 IridiumRebel
IridiumRebel's picture

I'll rent the SOB first and convert it into a 5 bedroom rental and make a grand a month before that. I just do not want to have to resort to that and deal with the Hand-outians who's rent is consistently late and I have redo all of the walls from thick KOOL smoke and beer soaked floors. 

Wed, 09/26/2012 - 20:24 | 2834155 Mr. Fix
Mr. Fix's picture


IridiumRebel,

I have been trying to return your Howdy to me for a couple of weeks now.

 Apparently, there is no way to send a personal message here on Zero Hedge.

 I spend a lot of time on a website called TF metals now,

 there is a link on the left side of this page,

 I sincerely hope that you stop by and say hi,

 I can't get into MarketWatch at all anymore.

(Banned for life, and I think they know my IP number.)

 You might find some more friends then me on Turd Fergusons site.

 Hope I see you there someday.

 

I have the same name and avatar there as always,

 if you sign up, I will find you, and say hi,

 if you look for me, it will be easy there.

 

 In the meantime, I hope you are well, and just keep stacking!

Wed, 09/26/2012 - 10:48 | 2831943 MachoMan
MachoMan's picture

Not really.  Price according to your market (i.e. give the appraiser some wiggle room to give the buyer a valuation that meets your asking price and then some), pay the buyer's closing costs, and allow them to sign a contract with a de minimis down payment.  If there is any competition in your price range in your locale, then your house had better be perfect and all of your shit (if you're living there) needs to be moved.  If all else fails, you can try a differentiation strategy by adding some amenities not seen in your price range (e.g. solid surface counters, backyard pergola, etc.).  Obviously any updates that you do come at huge risk (some more than others), given your prospective buyers may not appreciate the changes and, thus, don't want to pay for them.  Of course, if this allows you to sell the home quicker and avoid an avalanche of losses, then it may be the better choice.  Who knows.

You also might want to pack up shop and keep the home off the market until the buying season starts back in earnest...  if a house has been on the market for a while without many nibbles, prospective buyers a few months from now are going to start wondering what's wrong with your house.  Think blitzkrieg.  (remember, if you swing and miss, places like zillow are going to catalog your previous asking prices).

Wed, 09/26/2012 - 11:02 | 2831994 ParkAveFlasher
ParkAveFlasher's picture

You need to price your offering correctly, and see if there is any reason to move into your neighborhood, and that has nothing to do with luck.  Why did you move there?

The only houses moving by me (Maspeth, Queens) are bought up by immigrant Poles, I suppose the nearby Polish/Slavic Credit Union has something to do with.  These are working people who seem to have either money or loans to gut renovate, or do as I did, gut renovate themselves.  I haven't seen the sell prices there because they haven't yet posted to Zillow. 

Wed, 09/26/2012 - 12:04 | 2832348 IridiumRebel
IridiumRebel's picture

We live in lovely Fairfield CT......home of the laid off banker. We are in a middle class neighborhood so these folks are getting raped economically so naturally they have no ability to buy. 'MERICA~!

Wed, 09/26/2012 - 13:00 | 2832623 ParkAveFlasher
ParkAveFlasher's picture

The suburbs have it toughest.

Wed, 09/26/2012 - 20:25 | 2834160 Mr. Fix
Mr. Fix's picture


IridiumRebel,

I have been trying to return your Howdy to me for a couple of weeks now.

 Apparently, there is no way to send a personal message here on Zero Hedge.

 I spend a lot of time on a website called TF metals now,

 there is a link on the left side of this page,

 I sincerely hope that you stop by and say hi,

 I can't get into MarketWatch at all anymore.

(Banned for life, and I think they know my IP number.)

 You might find some more friends then me on Turd Fergusons site.

 Hope I see you there someday.

 

I have the same name and avatar there as always,

 if you sign up, I will find you, and say hi,

 if you look for me, it will be easy there.

 

 In the meantime, I hope you are well, and just keep stacking!

Wed, 09/26/2012 - 20:27 | 2834161 Mr. Fix
Mr. Fix's picture


IridiumRebel,

I have been trying to return your Howdy to me for a couple of weeks now.

 Apparently, there is no way to send a personal message here on Zero Hedge.

 I spend a lot of time on a website called TF metals now,

 there is a link on the left side of this page,

 I sincerely hope that you stop by and say hi,

 I can't get into MarketWatch at all anymore.

(Banned for life, and I think they know my IP number.)

 You might find some more friends then me on Turd Fergusons site.

 Hope I see you there someday.

 

I have the same name and avatar there as always,

 if you sign up, I will find you, and say hi,

 if you look for me, it will be easy there.

 

 In the meantime, I hope you are well, and just keep stacking!

Wed, 09/26/2012 - 10:25 | 2831816 rsnoble
rsnoble's picture

Even if there had been more sold it's still not a real recovery as it's just investors buying them and turning the US into a nation of renters. Gona be hard for min wage employees to afford $1k rent, better have 5 families in each one.  The new mega-slumlords.

Wed, 09/26/2012 - 10:59 | 2831983 MachoMan
MachoMan's picture

Exactly.  A lot of people are jumping in the water with the expectation that rents are going to increase in perpetuity.  The simple fact is that rents, like home prices, are simply a function of wages (although, this can be offset or goosed through foreign investment, as stated by the Tylers).  With wages taking a big shit and not expected to get off the pot any time soon, rents are naturally going to decrease.

I live in one of the best economies in the country (anecdotal) insofar as diversity of income, natural resources, cost of living, housing overhang, etc.  And $1k/mo. rent is basically top of the mark.  Much past this and the people can afford to purchase a house and/or obtain a home loan.  As a result, there is a hard ceiling on the amount of rent you can charge, simply because you're up against 3.5% mortgage rates (or lower).  You get the "why would I waste my money on rent?"  [never actually sitting down and doing the math that quite a few rents are actually cheaper than the real cost of ownership, but I digress].    

Now, the flip side of the coin is that, at present, you can pretty much pick up anything @ a 10% CAP rate.  There is a lot of wiggle room before it's as bad of a yield as a CD, et al.  Obviously decreasing prices have to be factored in, as well as inflation...  but some people simply prefer a little more... tangible assets, despite the locale's ability to tax the shit out of them (not like uncle sugar is any less tax prone). 

Wed, 09/26/2012 - 11:00 | 2831989 Arnold Ziffel
Arnold Ziffel's picture

"jobless recovery"

Wed, 09/26/2012 - 11:05 | 2832007 j0nx
j0nx's picture

Yup. I call it the Manassas Park effect. That very same thing happened here about 4 years ago. My neighborhood of 100 homes is at least 50% section 8 renters now if I had to make a guess. Finding any accurate information out as to how many are section 8 is difficult though because they make it intentioanlly difficult for that reason. Crushed home values here though as well as created many association violations that the association just gave up on enforcing. Once the homes slide into foreclosure then it's only a matter of time before the investors buy up the homes and rent them out. Once that happens then it's over.

Wed, 09/26/2012 - 10:25 | 2831819 j0nx
j0nx's picture

Always with the hate Tyler. Can't you see that this recovery is in full swing regardless of what you might think...aww hell, I'll leave the trolling to MDB.

Wed, 09/26/2012 - 10:27 | 2831834 Crabshacker
Crabshacker's picture

You didn't build that! Somebody else built....well,maybe not so much.

Wed, 09/26/2012 - 10:27 | 2831836 Debtonation
Debtonation's picture

But Alan Greenspan said the government should buy up homes and burn them to the ground to raise prices.

Wed, 09/26/2012 - 10:33 | 2831864 ParkAveFlasher
ParkAveFlasher's picture

The local govts. probably couldn't afford the carbon offsets to torch 'em.

Wed, 09/26/2012 - 10:43 | 2831916 strayaway
strayaway's picture

The federal government is expanding into building codes concerning lead paint in older homes and energy efficiency. This could make tearing down one's house cheaper than bringing it up to code and lead to a shortage of housing if done right. Code rehabilitations have already been helpful in reducing the housing stock in places like Detroit and Flint.

Wed, 09/26/2012 - 11:06 | 2832016 ParkAveFlasher
ParkAveFlasher's picture

Right.  Don't replace the window, or put up insulation, just replace the whole house.  THAT MAKES SENSE>

Wed, 09/26/2012 - 10:50 | 2831951 docj
docj's picture

Worked wonders on food prices for FDR during the 1st Great Depression, didn't it?

http://mises.org/freemarket_detail.aspx?control=355

Wed, 09/26/2012 - 10:28 | 2831841 Dr. Engali
Dr. Engali's picture

It's only going to get worse. The only houses moving around here are the 50 to 60k houses. Anything over 100k is just sitting...there are too many to choose from.

Wed, 09/26/2012 - 11:05 | 2831980 dwdollar
dwdollar's picture

Yep... 90k is about the limit for anyone making the new median wage AND that's IF they have zero debt. Beyond that you need to have a down payment. So... how many young people are debtless and have +10k they can put down on a house? LOL...

Wed, 09/26/2012 - 11:07 | 2832021 ParkAveFlasher
ParkAveFlasher's picture

Can I ask what general area are you guys referring to?

Wed, 09/26/2012 - 11:10 | 2832038 dwdollar
dwdollar's picture

OKC metro here... We are looking to close on our first home in Oct. for 68.4k (including closing costs).

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