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Housing Starts Print At 4 Year High, As Sandy Effect Mysteriously Avoided

Tyler Durden's picture


With everyone throwing the kitchen sink into creating the illusion that this time housing has bottomed, seriously, this morning's report on housing starts and permits was set to be quite awkward: on one hand, realistic data accounting for weakness due to Sandy would have broken the housing momentum - many were expecting a far weaker than expected print precisely due to the Hurricane. On the other, the Census Bureau could have gone hog wild and completely ignored the same reality that apparently is impacting all other data points, and said housing starts soared to their highest number in 4 years, or a seasonally adjusted 894,000 in October, up 3.6% from a downward revised 863,000 in September, and well above expectations of a Sandy-driven decline of 3.7% to 840K. The CB opted for the latter, while adding a solid pinch of seasonal adjustment to the data, which not annualized and not seasonally adjusted rose from 77.8K to 77.9K sales. In this number was the drop in Northeast housing starts from 4K to 3.5K, the lowest since February. The mystery boost came in the West, where annualized starts rose from 198K to 232K, even as they dropped in the South and Northeast. Finally, and more irrelevant, housing permits dropped from 890K to 866K seasonally adjusted, even as the NSA number rose from 71.4K to 75.0K.

Finally with the trendline still far below historical, this too continues to be merely Fed-stimulus driven noise.

Housing starts and completions +6 month lag:

As a reminder: what it takes to sell a house these days:


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Tue, 11/20/2012 - 09:55 | 2998431 Flakmeister
Flakmeister's picture

They are going to fold Sandy into the forward going seasonal adjustments....

Tue, 11/20/2012 - 09:58 | 2998442 GetZeeGold
GetZeeGold's picture



The revisions are going to hit like a hurricane.

Tue, 11/20/2012 - 10:09 | 2998476 curbyourrisk
curbyourrisk's picture

The truth is over rated.  The only revisions that will be made in this new administration will be ones that make our supreme leader look even more greaterer than the media plays him to be.  We should all bow down and kiss the ground he floats over.  It truly is happy happy / joy joy times for everyone....  Someone pass me the three seashell I have to take a crap now.

Tue, 11/20/2012 - 10:10 | 2998479 MillionDollarBonus_
MillionDollarBonus_'s picture

We are all responsible for the effects of Sandy. Everyone here is to some extent responsible for using too much electricity. I admit that last night I had a hot bath, which was a failure of responsibility on my part. We all need to start making sacrifices in our every daily lives to prevent climate change and make sure every annual climatic measure stays within exactly two standard deviations of the 10 year average.  

Tue, 11/20/2012 - 10:16 | 2998503 ejmoosa
ejmoosa's picture

The first thing YOU should do is stay off the internet.

Tue, 11/20/2012 - 10:32 | 2998550 economics9698
economics9698's picture


"We can't go on consuming 40 percent more energy than we produce. When we import oil we are also importing inflation plus unemployment."

"We've got to use what we have. The Middle East has only five percent of the world's energy, but the United States has 24 percent."

And this is one of the most vivid statements: "Our neck is stretched over the fence and OPEC has a knife."

Jimmy Carter 7-15-1979 


Tue, 11/20/2012 - 11:06 | 2998675 otto skorzeny
otto skorzeny's picture

Carter was not reelected because the US people like to be lied to and-like children-don't like to take any kind of advice.

Tue, 11/20/2012 - 11:10 | 2998686 economics9698
economics9698's picture

I think it was because we had more people with a IQ over 100 back in 1980.

Tue, 11/20/2012 - 20:13 | 3000415 Flakmeister
Flakmeister's picture

No, it was the original "Hope and Changey" thingie....

Tue, 11/20/2012 - 10:46 | 2998614 Oldballplayer
Oldballplayer's picture

I agree with you.  I took my responsibility seriously.  I adjusted the carbuerator on my lawnmower to blow out a lot of smoke.  Then I started it, and let it run for six hours. oil smoke.

Tue, 11/20/2012 - 11:48 | 2998802 Bansters-in-my-...
Bansters-in-my- feces's picture


You had a bath and YOU STILL FUCKING STINK.

Fuck off asshole.

Tue, 11/20/2012 - 11:55 | 2998823 ebworthen
ebworthen's picture

Climactic measures adjusted per grant/funding models.

Tue, 11/20/2012 - 12:23 | 2998935 Clark Bent
Clark Bent's picture

Doh, accuracy alert. Somebody is on to the "new" economy. But don't omit the access to dewy eyed co-eds filled with high school fervor to save the planet. 

Tue, 11/20/2012 - 10:12 | 2998488 Flakmeister
Flakmeister's picture

CYR, you really need to work on those anger issues otherwise I foresee cancer in your future...

Tue, 11/20/2012 - 10:02 | 2998452 Pool Shark
Pool Shark's picture



So, more housing supply will help support housing prices?

This is supposed to be good news for homeowners?

Kinda like GM's channel-stuffing...

[PS: Keep the house.... I'll take the pizza...]

Tue, 11/20/2012 - 11:12 | 2998694 economics9698
economics9698's picture

lol, someone drank their coffee.

Tue, 11/20/2012 - 10:04 | 2998459 Eireann go Brach
Eireann go Brach's picture

As NAR are involved in these reports, they are all distorted! Realtors are the dumbest, most narcissistic, poorly trained, ignorant, sell their granny a house with no roof, snake oiled sales people that exist today!

Tue, 11/20/2012 - 10:34 | 2998508's picture

I'm a Realtor, and as I see it, my job is to advise my clients of all the known facts regarding real estate they want to sell or buy. Real Estate is local in nature and the national numbers reported by anyone doesn't really matter to me, except for a possible macro trendline.  I look at the trends in our area and focus down to the property at hand.  My first obligation is my fiduciary relationship to my clients and I for one Realtor take that seriously.  Brokers can make money with the markets going up or job is not to paint a rosy picture, just the most accurate one that I can at the time.

Tue, 11/20/2012 - 11:08 | 2998681 otto skorzeny
otto skorzeny's picture

I thought your job was similar to a car salesman-get the product sold and suck up the commision for not a whole lot of work. the NAR is a monopoly that also racketeers

Tue, 11/20/2012 - 12:43 | 2999037 ParkAveFlasher
ParkAveFlasher's picture

My question to FLUSA, how do you channel stuff a house?  You don't.  It sits there and rots in the rain.  Or, the residents of the neighborhood find Galt and burn the empties to the ground, gutting them first.

So sorry, perhaps you should sell fire insurance instead.

Tue, 11/20/2012 - 17:42 | 3000019 TruthInSunshine
TruthInSunshine's picture

FLAusa's job is to open closet doors, make statements like "I just love the color of that paint," ask if people would like something to drink or a cookie, and then tell them, regardless of shadow inventory levels (held by banks & GSEs only due to a tidal wave of excess reserves provided by The Bernank & massive interference by Treasury with the GSEs), "there's never been a better time to buy a home, bitchez!"

Hugh Honey & Vic Vinegar Close the Deal

(Sorry about the commercial in the beginning; only video clip available that I could find)

Tue, 11/20/2012 - 12:25 | 2998954 Clark Bent
Clark Bent's picture

The most? What about "financial planners?" I think they rate a comment, so I've commented.

Tue, 11/20/2012 - 09:55 | 2998432 sdmjake
sdmjake's picture

Weed legalized in the west...housing starts go crazy out there.

Tue, 11/20/2012 - 09:59 | 2998448 ihedgemyhedges
ihedgemyhedges's picture

If the chick in your avatar was included in the purchase of a house, SOLD TO ME!!!!!!

Tue, 11/20/2012 - 10:34 | 2998559 economics9698
economics9698's picture

She needs to bend over first before the sale.

Tue, 11/20/2012 - 10:05 | 2998463 SheepDog-One
SheepDog-One's picture

We've got block after block of empty houses out here ready to move in cheap, why bother with building one? 

Tue, 11/20/2012 - 10:45 | 2998611 e-recep
e-recep's picture

nice avatar, please post more often.

Tue, 11/20/2012 - 09:56 | 2998435 Silvertrader
Silvertrader's picture

When housing picks up, so will the economy. At least we hope so. In the mean time I take care of myself by trading CFD

Tue, 11/20/2012 - 10:00 | 2998449 GetZeeGold
GetZeeGold's picture



Tell us more!

Tue, 11/20/2012 - 10:35 | 2998565 economics9698
economics9698's picture

I think we need to let 20 million more Mexicans into America and housing starts will increase. /sarc

Tue, 11/20/2012 - 11:12 | 2998693 otto skorzeny
otto skorzeny's picture

20 million-then they only need like 5000 house to pack them all into. then you get 40 shitty old Chevy Tahoes with $10K in rims parked in front of the house.

Tue, 11/20/2012 - 12:32 | 2998979 Clark Bent
Clark Bent's picture

The daring and execution of that slam was worthy of your avatar.

Tue, 11/20/2012 - 10:05 | 2998464 Snidley Whipsnae
Snidley Whipsnae's picture

REAL housing sales will pick up when REAL jobs pick up... as opposed to bs NRA (and now everyone else jumping on the bandwagon) numbers.

Fixed it for you silvertrader.

Tue, 11/20/2012 - 10:10 | 2998443 Village Smithy
Village Smithy's picture

The builders are really making great strides at improving efficiency. Even as housing starts rise employment in the construction industry is falling. Wow, those builders! Seriously though Bernanke did say last week that the Fed would do everything in its power to restore the housing market. A quick phone call to the CB with some Phd. backed "advice" wouldn't be out of line then. 

Tue, 11/20/2012 - 10:03 | 2998445 SheepDog-One
SheepDog-One's picture

Well I guess if the FED was throwing $85 billion/month at me I'd look like a fuckin rock star too.

FED gives a diversion for the financial media whores to go gaga over while the country continues implosion. 

Tue, 11/20/2012 - 10:05 | 2998460 Pool Shark
Pool Shark's picture



You forgot to mention FHA-subsidized 100% LTV loans under 3%...

[Oh, yeah... and a free pizza...]



Tue, 11/20/2012 - 10:00 | 2998447 buzzsaw99
buzzsaw99's picture

Builders keep building until they can't borrow another dime (which won't happen with the bernank at the switch).

Tue, 11/20/2012 - 10:07 | 2998468 Snidley Whipsnae
Snidley Whipsnae's picture

"Builders keep building until they can't borrow another dime (which won't happen with the bernank at the switch)."

yeah... what happens when you only have a hammer. lol

Tue, 11/20/2012 - 10:13 | 2998493 Flakmeister
Flakmeister's picture

Same business model for the shale gas and oil players...

Tue, 11/20/2012 - 10:00 | 2998454 ziggy59
ziggy59's picture

Perception Deception 101...
Keep em questioning whats real and false
Black and white becomes gray

Tue, 11/20/2012 - 10:01 | 2998456 Robslob
Robslob's picture

Housing starts start with permits and I am positive SuperStorm Sandy did not stop "paper" from being shoveled just in time for Christmas.

A Keynesian's wet dream...just think of all those "redesigns" coming up for new permits...Thanks Sandy!

Tue, 11/20/2012 - 12:39 | 2999016 Clark Bent
Clark Bent's picture

Now we need the department of tools (led by a "kaiser") to come in and insist that all shovels be abandoned for spoons, eliminate all power tools in favor of their "old school" forerunners...then horses, no oxen, no, let's not use those damned wheels, how unsporting. Get the damned slaves making bricks without straw and we'll have full employment in no time, paid by new Fed scrip. 

Tue, 11/20/2012 - 10:02 | 2998457 TrumpXVI
TrumpXVI's picture

How many toppings are included with that free pizza?

Probably none.....well, forget it then.

Tue, 11/20/2012 - 10:03 | 2998458 youngman
youngman's picture

In Denver its all Apartments....all apartments

Tue, 11/20/2012 - 11:13 | 2998696 otto skorzeny
otto skorzeny's picture

section 8?

Tue, 11/20/2012 - 10:09 | 2998473 ekm
ekm's picture

Let's assume for a moment that the data is correct.

So, there are 5 million empty houses in USA as per Seth Klarman, and what do we do?

Answer: We build more houses.


Does anybody remember the law of supply/demand?

This will lead to a further crash in prices and not gradual, but baaaaaaaaam, 40% less, as it happened in Canada in 1982. Overnight prices dropped 30-40%.

Tue, 11/20/2012 - 10:37 | 2998581 q99x2
q99x2's picture

The revolution is anticipated to wipe out 25 million people or roughly 10 million homes so it should work out ok.

Tue, 11/20/2012 - 10:08 | 2998474 TideFighter
TideFighter's picture

North Atlanta getting Obamanized. A lot of downsizing going on, upscale apartments being built everywhere, insurance company financing.

Tue, 11/20/2012 - 10:15 | 2998500 GetZeeGold
GetZeeGold's picture



China is doing the same thing.

Tue, 11/20/2012 - 10:08 | 2998475 Boilermaker
Boilermaker's picture

Brought to you buy the good folks with a maximum vested interest in duping the public into believing now is the opportunity of lifetime to buy a home.


Tue, 11/20/2012 - 10:10 | 2998480's picture

Most houses are now selling well below the cost to construct (In the areas I work in), and builders are now going hog wild?  Do people really value a new home at 20% to 35% more then a used home around the corner? The only real volume of construction I see is in Apartments which are needed due to people losing homes.  With builders stock values rising they need to do something with the cash so I guess they are going all in.  Just remember...escalator up elevator down.

Tue, 11/20/2012 - 10:10 | 2998481 Gandalf6900
Gandalf6900's picture

one house with every pizza, or was it the other way round?

Tue, 11/20/2012 - 10:12 | 2998485 Lendo
Lendo's picture

NAR is constantly complaining about lack of inventory as the "housing recovery" continues to gather steam.  When will the Fed release the tens of millions of foreclosed units to market?

+1 to the anti-realator comments.  For the most part, realators are functionally worthless.

Tue, 11/20/2012 - 11:53 | 2998817 KCMLO
KCMLO's picture

From personal experience working within the real estate industry, you will never find someone that knows less about what they're actually selling than a realtor.  I remember having multiple conversations with realtors during the downturn where they didn't understand that a home price could drop.  I'm not exagerating one bit, they literally did not know that the price could be reduced due to macro forces.  This took place even with those stating "I've been doing this for 25 years and I've never had this problem before..." blah blah blah.  When they say things like that I think that they have been gleaning a living as a marketing middleman for 25 years and STILL never took the time to understand what they were selling/getting people into.  Of course there are exceptions to this, I'd say about 10% are rather competant, but they are far outshadowed by those that have little to no knowledge.

To be fair, that is an industry-wide issue though.  I work at a mortgage lender.  The people that process and underwrite mortgage loans have NO IDEA where these ultimately end up, how securitization works, how the lender is recapitalized, etc.   Actually, I don't know for sure but I don't think the company owner fully understands that either.  All they see is a conveyer belt and a product.  What frustrates me even more?  If you try to explain it to them they don't understand it, or they don't want to know because "it's too complicated."  The overall effect is an entire industry of people that don't really know what they are doing.  They see a paycheck but have no clue how they are impacting the world around them.  You can chalk that up to a lack of intellectual curiosity (which is rampant in this world regardless), but I don't think I know another industry that is quite this hoodwinked.  Ditch diggers know they dig ditches.  Drug dealers know they get people high.

Tue, 11/20/2012 - 12:47 | 2999063 Clark Bent
Clark Bent's picture

As Hannah Arendt described it; "the banality of evil." I think that comes from her book about Adolf Eichman on trial in Israel. Nobody bears any responsibility becuase it is the bureaucratic machine that actually liquidates poeple. The individuals involved are merely running trains and delivering Zyklon B. Arbeit Macht Frei! 

Tue, 11/20/2012 - 10:16 | 2998501 Village Smithy
Village Smithy's picture

They think that they can fix the economy by restoring confidence. This they attempt to accomplish by pure bull shit. My problem with this approach is that when it eventually fails there will be even more naive, innocent but hard working young people with a big underwater home on their backs. All because they believed this banana republic propaganda.

Tue, 11/20/2012 - 10:47 | 2998616 e-recep
e-recep's picture

> "They think that they can fix the economy by restoring confidence."


no, they think they can steal some more by restoring confidence.

Tue, 11/20/2012 - 10:15 | 2998502 Jason T
Jason T's picture

Are we junking more homes than building like cars in America as we enter new dark age?

Tue, 11/20/2012 - 10:19 | 2998511 chinaboy
chinaboy's picture

Even assuming government number is true, you have to realize that a big housing starts number can work both ways. It may signals true housing recovery. But if it does not, it cements the trap with premature built up of inventory.

Never mind, just make sure the algo machines are on and you have no problems.

Tue, 11/20/2012 - 10:31 | 2998547 Yen Cross
Yen Cross's picture

The U.S. homebuilders are just trying to emulate Detroit. Long termite farming.

Tue, 11/20/2012 - 10:53 | 2998646 TideFighter
TideFighter's picture

Introducing the Cash for McShanties Program. Trade in your 7,000 sq. ft. McShanty and recieve a 3% down payment

credit for your new 900 sq. ft. apartment financed at 0% for 72 months. 

Tue, 11/20/2012 - 12:50 | 2999070 Clark Bent
Clark Bent's picture

I sense prescience in what you say.

Tue, 11/20/2012 - 11:09 | 2998684 Bicycle Repairman
Bicycle Repairman's picture

I want bacon on that pizza.

Tue, 11/20/2012 - 11:18 | 2998703 Kasperfx
Kasperfx's picture

I live in south fla  as a father of two starting grade school 2 years ago we moved from my owned beach condo to a rented acreage home for better school, dog and room for my kids. i bike at least three times a week always keeping my eyes open for a home we can buy. within biking distance we have at least from what i could see with my own eyes ( lots of gated communities, so can't get the full view in) i have counted over 3 dozen uncompleted home sitting at some stage of completion but never see anyone working on them, their was at least 12 publicly known foreclosure that supposably came to market but when  trying to get more info i was told that sold, but have yet to see anyone moving in more then half of them the other have cleaned up the grounds but yet to see any families other then a white van that goes back and forth to turn the lights on a nd make them looked lived in.
 its like the episode of the old show twilight zone and I'm not buying in until i see something we call organic growth. 

Tue, 11/20/2012 - 11:19 | 2998711 Cycle
Cycle's picture

Absolutely amazing - Bernanke et al have munged the market feedback systems to the point where people are fooled into thinking that building houses, a dead end investment, is a good place to put capital even though there is a huge overhang of unoccupied houses all over the country. The economic misinformation engineered by the Fed pushes the misallocation of capital which isn't even capital - it is debt masquerading as capital....the capital ran out a long time ago. What can go wrong?

Tue, 11/20/2012 - 11:40 | 2998777 e-recep
e-recep's picture

actually the location will be a key in the long run. buying a condo in nyc is not the same as buying a mcmansion in the middle of nowhere.

Tue, 11/20/2012 - 12:12 | 2998811 ebworthen
ebworthen's picture

Mainly in multi-family units, eg. APARTMENTS.

This is not a sign of a housing recovery, nor a recovery in general; it is a sign of increasing POVERTY.

Tue, 11/20/2012 - 12:53 | 2999084 Clark Bent
Clark Bent's picture

Obama cares about the middle class, like Lenin did; like wolves care about the happiness of the sheep. 

Tue, 11/20/2012 - 12:30 | 2998974 SmoothCoolSmoke
SmoothCoolSmoke's picture

Why anyone would build a house when there are so many existing ones on the market....baffles me.

Tue, 11/20/2012 - 12:34 | 2998990 SmoothCoolSmoke
SmoothCoolSmoke's picture

Why doesn't someone just come out and call the NAR liars?  Why?

Tue, 11/20/2012 - 21:34 | 3000683 rjs
rjs's picture

meaningless...starts were at a seasonally adjusted annual rate of 894,000, which was 3.6% above the revised September estimate of 863,000; however, the 90% confidence interval on that gain was ±13.1%, which puts the new starts gain way outside of the range census calls statistically significant;

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