The "Undisputed Housing Recovery" Is Unmissable On This New Home Sales Chart

Tyler Durden's picture

We could bore readers with the just announced New Homes Sales data from the Census Bureau, which put a somewhat largish dent in the "undisputed" housing recovery fairytale taking place in America (perhaps in the Hamptons, and triplexes in Manhattan where the NAR continues to launder Chinese and Russian oligarch money) such as:

  • December new homes sales, seasonally adjusted annualized, dropped from an upward revised 398K (was 377K) to 369K on expectations of a 385K print;
  • That this was the biggest M/M drop since February 2011;
  • That months supply rose from 4.5 to 4.9, the highest since January 2012;
  • That on an unadjusted, actual basis, a tiny 26K houses were actually sold in December, compared to 24K last December, of which just 2K in the Northeast;
  • That a whopping 1,000 houses were sold in the $750,000 and over category
  • That houses for sale rose to 150K, the highest since December of 2011
  • That the punditry already spun this as being due to lack of clarity over the Fiscal Cliff and tax hikes, when in reality with expectations of higher taxes, consumers would have spent more money on hard assets in December, but why not regurgitate generic stupidity...

Or we could just show this chart of the non-seasonally adjusted, unannualized New Home Sales in the past decade, and ask: just where is this recovery everyone keeps on talking about?

Source: St Louis Fed

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CheapBastard's picture

Young people are more mobile and beginning to realize it may not be a good idea to tie a lead weight around their ankle for 30 years. Most have to move every 3-5 years these days for a better job and try to sell a house? Stress plus the 10% in commissions and fees make it very difficult for them  since most have zero equity so they have to fork over thousands of dollars to close the deal.


The ones who have money find buy/sell stocks are much easier...simple and cheap and fast....just tap the key to buy and tap the key to sell.  Selling a house is no less thena Nightmare...I know...been down that road.

donsluck's picture

As the saying goes, you can buy more real estate in a day then you can sell in a lifetime. By the way, I sold two of our three houses without a realitor.

Never One Roach's picture

I sold mine years ago.... thank God!

economessed's picture

Obviously, they're excluding 1981 Ford Econoline vans, tents, cardboard boxes, and bridge overpasses from the new housing numbers -- why the omission?  It's distorting the true housing picture.

edifice's picture

In Colorado, most of the bridge underpasses have been redesigned, specifically to prevent sleeping under them.

foodstampbarry's picture

Move to Washington DC get a gov't job and you're fucking set. Those fucking pigs are living the high life

otto skorzeny's picture

that's why DC has been one of the lone bright spots in housing

Umh's picture

Move to DC get a government job and then immediately start looking for a transfer to somewhere else. Don't let them pay you to move to DC or your going to be stuck for a while.

Uncle Zuzu's picture

The combination of lower prices and lower interest rates means that you can own the same house today at HALF the monthly payment of back in 2006.  Even with that, there is no bounce.  Bernie must be really upset.

jimcg's picture

I'm so damn tired of having this "recovery" conversation with the same people over the last five years. Can't recall whether this the twentieth or thirtish recovery to date. Oh well, not to worry, there will be many more...I'm sure.

I ask whether the NAR prostitutes have ever, yes ever, publicaly stated anything other than it's "an excellent time to buy", even moreso as prices were crashing thru the floor.

The day we hear "the market is correcting, we are in a bubble, wait till prices correct at least 60% until you even think of buying" is the day I will start considering taking these hookers serious.




Spacemoose's picture

just got back from the builder's show in vegas where we exhibited. this was the smallest show in years and was on a shortened schedule of three days as opposed to the normal schedule of four.  we spoke to about 300 builders and vendors.  now a caveat, i'm a cassandra and not a pollyanna and no one has ever accused me of having an optimistic personality.  that said, here are my takeaways from the show:b

1. there is a boomlet in new home sales. optimism reigns supreme. suitable land is ecoming hard to find. over and over i heard, it is a seller's market right now.  builders are scrambling to gear up to meet demand.  this may be survivor bias, but this was the most positive IBS show we have been to in years. 

2. activity is picking up strongly in the northeast.  (bastiat would disapprove but this may be due to hurricane sandy.)  

3 california is experiencing an exodus of the middle class which is driving a substantial pickup in sales in the bordering states.  one idaho builder related the story of a friend who was going to buy 10 acres and "plant californians".  this may bode well for some regional distributors of new home construction materials and furnishings.

4 ironically, given the above, california builders are still doing surprisingly well with strong sales.

5. demand for luxury housing within commuting distance of the  forbidden city washington dc metro area remains very strong.

i'm still trying to sort out what this all means because it seems to fly in the face of logic.  however, i,m coming to the conclusion that the shadow inventory may consist of homes for which there is no demand due to location or other factors.  gotta run now and followup on our many (and strong) leads.




jimcg's picture

I appreciate your input, and it may seem a bit illogical, but you must consider the quality of your information.

Worked for several major national, and international real estate developers and investors for over twenty plus years at a relatively senior level, witnessed the aftermath of the 70s bust and participated in both the 1990s and the current boom/bust cycles. 

One of the strangest of the common themes of the boom/bust cycle is the inability of even the biggest and most experienced principles to recognize either the signs of, or detect the deceptive and false upticks during, even the biggest and obvious collapses. They tend to repeatedly acquire, overbuild, develop, and invest, at the highest peak of the cycle. Recall one major player during the late 80s (withholding name) actually state: "If I knew that prices would go this high, I would have never sold anything", that was just before the bust.

Good luck.




Spacemoose's picture

we actually host our client's sales data (sql server).  our records seem to confirm the anectdotal evidence. 

are we there yet's picture

Housing market hospice not recovery in Detroit. Toxic assets means houses that are unsalable due to crime areas, minority neighbors, or a collapse of a tax base after white flight takes its income away and the entitlement economy takes over as on the Detroit model.

IridiumRebel's picture

Yep! They are just lining up in my neck of the woods to buy my house......about to lower the price AGAIN....i'll give the fucker away by March as I know whats around the corner. 

q99x2's picture

Looks like the slug is trying to crawl out of the room unnoticed.

monopoly's picture

It is all so absurd. Much better economy, right.

dvfco's picture

There is no recovery.  The very, very few people able to obtain mortgages are buying and, yes, at somewhat higher prices than last year.  However, they have received 3.5% mortgages, where it costs $450 per month and can pay $900 for $200,000 in a loan.  Add typical taxes and they are paying another $250 for taxes (outside of metropolitan areas on the west, east and southeast portions of the perimeter of our country).

So, they are paying $1,150 per month plus maybe $150 in insurance, or $1,300 / month.

Think what happens when their municipality hits this shits and has to continue paying every teacher, firefighter, cop and municipal employees pension and healthcare and taxes will double in the next 3 years.  Then, assume that mortgage rates go to a measly 4.5%, which would still be ridiculously low in historic terms.  Then, their insurance would be, say, $175, taxes $500 / month and they'll have $675 per month gone before mortgage.  Subtracting that the $1,300 per month they were paying in a fixed rate mortgage, a new buyer would actually have only $625 per month to pay.  Assume in 3 years more people can get loan and they're able to pend $1,500 per month rather than $1,300 per month.  Then, they'll have $825 left over for their mortgage.  

Unfortunately, now thee $825 they have to pay their note only pay a mortgage of $158,000.  So, the $200,000 mortgage they could afford only pays a mortgage of $158,000 if mortgage rates rise to only 4.5%.  So, there's a loss of 21% of value.  If mortgage rates ever head back to 6%, the mortgage drops to $137,500, representing a loss of 31.25% loss of value.  

So, could I get anyone to agree that we don't have a turnaround in the market but, instead, we have a temporary (yes, I'm going to say it) BUBBLE that will last until rates break into the low- to mid-4% range.

On the other hand, and being a partially practical person, I would say that it still is a great time to buy if a) you have a very secure job (and preferably you and your wife have secure jobs - teacher, cop, fireman, etc.), b) you are able to buy a house you plan on living in for a minimum of 10 years, and c) you will still be fine if you sell your house for 20% below the purchase price in a decade.  Then, you're getting the deal of the century at these mortgage rates.

Never One Roach's picture


property taxes going up to pay for 'school security' insurance premiums soaring....maintenance soaring....


Lots of rising costs and problems  not addressed by MSM in their, "all is fine" reports.

DosZap's picture

property taxes going up to pay for 'school security' insurance premiums soaring....maintenance soaring....


Lots of rising costs and problems not addressed by MSM in their, "all is fine" reports.

Ditto, a biatch ran through 60' of my Redwood fence, posts and all, totalled his car, ran from the scene.

So cops do not know WHO was driving(dumbass locked the vehicle when he ran away @ 2:45 a.m.)So we know it was some really conscientous thief, not a drunk/drug stupored moron right?.

Well, I call my insurance agent to see where I stand (car is insured), he said well we auotomatically had a 1% increase based on home value so your deductible is now DOUBLED.

And yet costs a lot more.

Since the car was insured, but no way to place owner behind wheel, I ate the repairs to my fence, and I am in subrogation, and it could take up to a year for me to recoup the out of pocket expenses, and deductible.(they paid 25% of my deductible.) WOW~~

Could be far worse, at least I may recoup my losses.


Jake88's picture

And the ones mother gives you don't do anything at all.

Mark Noonan's picture

Geesh, you are waaaaaay too picky - I mean, look at the chart!  We're slightly above the bottom!  That's all you need to know - it isn't as bad as it was, ergo its a bottom which means we're in a recovery, which means its time to buy, buy, buy! 

NEOSERF's picture

Tents, boats and vans; the new mobile housing units you should buy now...

jbvtme's picture

if this economy was viable, they wouldn't be trying to take our guns away.

neutrinoman's picture

Kyle Bass said housing has bottomed and has taken positions in once-toxic, now-underpriced MBS. He's not talking about a big jump in houses proper, just the paper.

DosZap's picture

Kyle Bass said housing has bottomed and has taken positions in once-toxic, now-underpriced MBS. He's not talking about a big jump in houses proper, just the paper.

I certainly ain't Kyle Bass, but I beg to differ,the bottom may be temporaily on hold, but when(not if they stop printing,or we go totally in the tank), I see an easy 20%+ more drop.

When the ObamaNOcare health BS goes into effect next year fullbore, who will be left to buy onto it with min pay jobs, and less than 40hr weeks?.