Surprise: Right After The Election, New Home Sales Tumble From Downward Revised Two Year High

Tyler Durden's picture

There are those who may be surprised that last month's number of Seasonally Adjusted New Home Sales, which was then reported at 389K, and which number hit the airwaves days before the Obama reelection, was the highest since April 2010. We are not among them, as we were fully expecting today's number to be a major revision of the September number lower - as just happened, with the whopper of a print revised far lower to 369K - but doubled down with the additional miss of expectations of Seasonally Adjusted annualized new home sales of 390K for October when in reality only 368K were sold. All these numbers are annualized. When observed on an as is basis, in October there was a grand total of 29,000 new homes sold in the entire USA, with the Northeast representing a whopping... 2,000 of this. Oh and of the 29,000 houses sold, 9,000 were not even started. And finally, for those who enjoy pointing out the rise in home prices driven only and exclusively by foreclosure inventory stuffing and removal of all such real estate from the open markets, both the median and average new home price ($237,700 and $278,900) printed at at the lowest since June. Oh wait, we know: Sandy's fault. Which explains all bad data. When the data is good, it is nobody's fault.

Please point out the housing "recovery" on the chart below.

And a longer term chart:

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buzzsaw99's picture

bullish for homebuilder shares imo

adr's picture

People actually buying homes would probably be the only bearish thing for homebuilder stocks in the new normal.

If people bought new homes, there would be no reason to build more because they would already be living in one.

Yes, that is the logic of today's market.

kridkrid's picture

Any published number that is based on a projection that uses a formula is propaganda. Even the later revised number is likely a lie, but the first one, pure propaganda. I'd bet that the numbers were reasonably accurate as the debt bubble grew somewhat naturally... The whole system was based on a lie, but the numbers likely supported the myth. But peak credit was the game changer. A line in the sand that should tell everyone to not believe anything. That is where we are today. Best you can do is look at the harder to fudge numbers: food stamps, BDI... Prices in the super market after accounting for package shrinkage.

dvsteenk's picture

can someone explain me this 1% pop market reaction? I don't understand shit anymore...

Toolshed's picture


You are welcome.



dvsteenk's picture

would it be safe to say the Fed just decided to "invest" some freshly printed money in oil and stocks on behalf of the American people?

strange, I thought market was ready for a 2% sell-off right before that pop came... I must be wrong

adr's picture

No they wouldn't lie to keep the Fraudnabler In Chief in office. Can't be true.

What's next, we find out Obamaclaus doesn't exist? What are the children going to think when they don't get phones under the holiday tree.

Bad Attitude's picture

People will believe in Obamaclause until he runs out of other people's money. Once the Obamaphones stop working and the SNAP cards stop working, the moochers are going to be angry.

Downtoolong's picture

I wonder how long it’s going to be before banks start self-dealing their foreclosed home inventory among themselves to drive up home prices and the apparent strength their balance sheets? (you buy mine, he’ll buy yours, I’ll buy his, etc.) Hey, they did it with MBS and got away with it, why not real homes too?

Village Smithy's picture

Works for the SPY, why not housing as well.

Kasperfx's picture

Thats actually the business model in play right now.


Fed/Banks hand out cheep Fiat money to cooperative  so called institutional buyers to buy to show inflated prices and play hot potato with to make the markets look like it has some activity and upword gaines with hopes the general public will start to buy in to. 

caimen garou's picture

whats the word I'm looking for, oh yes it's FUBAR! now lets all go out and get some I-Crack!

buzzsaw99's picture

this market will bath salt your face off

pocomotion's picture

As the American consumer goes, so goes America!

Harbanger's picture

When America sneezes the World farts.

Tsar Pointless's picture

Well, if Harry Reid was short @ S&P 1405, then John Boehner is long @ S&P 1388-ish.

Yen Cross's picture

 Does fucking Boehner have some spx buy orders! The market spikes (100 points) on some bullshit obscure remark from that assclown over the fiscal cliff!

cosmictrainwreck's picture

oh, is that what it was? I thought it was reaction to homes report HA - wouldn't surprise me

ebworthen's picture

Boehner says something about the President and the Democrats "getting serious about spending" and the market rallies?

This is a pop-fly into foul territory, or an imcomplete pass, and suddenly it's a game changer?

HFT algo comprehension heuristics need a lot of work; suggest connecting "get serious" with "about spending" from a Republican to trigger a sell versus a buy.

BraveSirRobin's picture

Oh come now. That would be unethical. His wife and kids have the call options.

Chmee's picture

October Home Sales Revised. Yeah, Sandy's fault.... I kinda doubt five lost days of sales would drop the real numbers to only 29,000.

dvsteenk's picture

maybe the algos think that once sales drop to zero, the new home sales will become negative and considered as home buys, which is positive... no?

wisefool's picture

If you knowingly roll the 5 digit odometer in an automobile over, and sell the car as is, you did not technically, unethically, roll the odometer backwards. 

mayhem_korner's picture



What's the half-life of "Sandy's fault" anyway?  Six months?  A year?  "Katrina" was about 18 months, and "Bush's fault" apparently still survives...

wisefool's picture

Cue Leisman vs. Santelli, round 86 in their 259th rematch.

"You dont know how to do math Rick. The NAR has smart people like me that aparently need to do it for you." 

DavidC's picture

And twenty minutes later, the the Dow has rallied over 100 points.


ebworthen's picture

Economists will revert back to their Econ 101 for a brief moment and claim that this must mean prices are higher.

mayhem_korner's picture



What's 20,000 home among friends?

news printer's picture

You've heard of peak oil—the idea that the globe's easy-to-get-to petroleum reserves are largely cashed, and most of what's left is the hard stuff, buried in deep-sea deposits or tar sands. But what about peak phosphorus and potassium?

Are We Heading Toward Peak Fertilizer?

Acet's picture

Silly Tyler, if you do a little bit of technical analysis on the first chart you can immediatly spot the upwards slanted trend line. It's obvious that the housing market is recovering and at it's current breath-taking pace we'll be back to 2005 level of New Home Starts in about 50 years or so.

edifice's picture

The housing bubble has followed the "classic bubble chart" almost perfectly. Anyone with two firing neurons knows we're just in the dead-cat-bounce of the correction phase.

AynRandFan's picture

Similarly, we didn't fail to anticipate and prevent a terrorist attack on an American consulate on 9/11, until after the election of course.

dexter_morgan's picture

Seriously, which propaganda is it that can be trusted?

CheapBastard's picture

I watched all those new zero-down houses beibng sold in 2006-2010 at $100 psf.


When people started to default prices dropped and they "walked away" or were foreclosed, prices dropped to $75 psf.


In September many dropped to $50 psf and now the market is flooded with boxes at $45-$48 psf!


Concurrenctly, builders are busy adding over 6,000 new houses to the area. I don't see house prices stabiulzing for years to come. All RE is local is true and there are a few pockets where the "Aliens" are buying, but those areas are tiny compared to the 99.9% rest of the nation where prices are still falling and there is little job recovery.