Spot The Bubble: Average New Home Price Soars By Most Ever In One Month To All Time High

Tyler Durden's picture

Curious why in yesterday's FOMC minutes the following line "a few participants expressed concern that conditions in certain U.S. financial markets were becoming too buoyant" received special attention? Here is the reason: as the chart below shows, according to the census bureau, the average new home sale price just hit a new all time high, rising by a record 15.4% to a record $330,800. In a country in which real disposable consumer income is flat at best and in reality declining, it only makes sense that the average new home price just hit a level not seen since the prior credit-bubble fueled housing peak.

Average new home sale price:

And the sequential change in the average new home sale price:

Obviously both of the above charts are justified by the average real disposable income per capita in the US:

Or maybe not...

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insanelysane's picture

Buy high, sell low.

Home prices, stock prices, and food prices have never been cheaper.

McMolotov's picture

"Housing is going to the moon! Investment opportunity of a lifetime! Buy now before you're priced out forever!" —every realtor that has ever existed

duo's picture

you will be priced out forever when interest rates return to normal

SteveNYC's picture

Au contraire, you'll be able to buy a house with the contents of your checking account.

Bobbyrib's picture

I think duo was being sarcastic.

kaiserhoff's picture

The fallacy of thin markets...,

  and greatest fools.

i-dog's picture

The median price chart would be more telling. Multi-million dollar NYC apartment purchases in a thin market can really screw the average.

rosiescenario's picture

Toll Bros. recently reported some good numbers....they traditionally build for the higher end of the market. So what we have here is the elites being able to buy while the rest are not; therefore, the price reflects what is moving.

 

This also goes along with Porsche sales, Tesla sales, etc. confirming with some real numbers what we already know here....the U.S. has become a third world country with a few elites doing well and the rest surviving....

The Big Ching-aso's picture

Not everyone's gonna get rich off housing all at once.   It's gonna take several generations of greater fools.

mr_T's picture

when Vanilla Ice has a show flipping homes... no bubble here.. move along. these are not the bubbles you are looking for..

new game's picture

10 oz of gold for one 1500 sq ft ranch, coming to a city near you...

new game's picture

oh, so this is an opportunity of a lifetime.

Realtor to sheeple:NEVER A BETTER TIME TO BUY!

NOT SO FAST, SLICK DUDE - fuck off and take you piece of shit home that owns you for a lifetime of headaches and false returns and...

EscapeKey's picture

Yep, that's what they never admit on British TV, when the pundits argue "housing affordability has never been better". Uhuh, our bubble never truly burst - the interest rates were just manipulated (even further) down. As you say, when they return to normal, shitloads of borrowers will be in deep, deep shit.

new game's picture

oh, and these new higher prices due to currency devaluation, have a new higher taxation.  oh and how is that raise coming?

now, here in the states with these ultra low rates one can not even deduct the interest as it doesn't meet the treshold vs standard deduction. 

over fucking rated to the max. it OWNS  you!

Agent P's picture

That kind of advice seems worthy of a 6% commission, where do I sign?

NEOSERF's picture

Really is ridiculous...frequently the first time the realtor has seen the house is with you on a walk through and I need them to point out granite counter tops?!!

machineh's picture

No ... you need them to point out the 'babbling brook' which might otherwise escape your attention.

jerry_theking_lawler's picture

i hate RE agents....i avoid them at ALL costs....

venturen's picture

Good thing the record prices go with record income gains....Oh wait...is that air sound coming from the the bubble redux?

Professorlocknload's picture

In my area government employees are still getting nice wage increases. The school district just approved 6% again this year.

Also, my property manager reports many of her section 8 people are buying homes. No wonder;

http://portal.hud.gov/hudportal/HUD?src=/program_offices/public_indian_h...

PiltdownMan's picture

Even the FHFA house price index grew at an annual rate of 15% as mortgage purchase applications fall. This guy has great charts and data and points to a BUBBLE.

http://confoundedinterest.wordpress.com/2013/05/23/bubble-fhfa-house-prices-rise-15-6-annualized-new-home-sales-rise-2-3-in-april/

transaccountin's picture

only a 30% price increase, but theres no inflation brah

EscapeKey's picture

Well, as long as you adjust your weights on the 12-month sliding window that is called "seasonal adjustment", and alter the housing component weight of the CPI, then no, it doesn't have to show up.

 

DeadFred's picture

These are new homes, and the average price of new homes at that. The great unwashed must buy recycled older homes and those prices aren't going up as much. Build ten new homes, nine of which are ordinary and one is a commissioned palace for a Russian oligarch, corrupt Chinese finance minister or wall street bankster and you get this result. This like the once ever rising stock market are natural outcomes of the ongoing transfer of assets to the elites. This is my guess, analysing the distribution of prices would be needed to confirm.

Lewshine's picture

@Trans:

How precise is Ben's control of every asset class?? He's able to claim "NO INFLATION (2%)", but at the same time he's able to directly target two asset classes that credits his POMO for the manipulation that it is - Housing and Stocks. He's also able to make Gold and Oil dance on the head of a pin, going in whatever direction he needs them to go, to again, strengthen his own credibility as Maestro. He owns the whole system, to the very last penny.

Oh there is ABSOLUTELY inflationary factors - "Controlled and targeted" minute to minute, everyday!

More_sellers_than_buyers's picture

HAHAHAHAHA   get ready to use your dollars for warmth in the winter in the fireplace

Cognitive Dissonance's picture

Bubblicious!

<And not a speck of inflation in sight. Nope, nothing here. Maybe over there. Nope. Nothing over there. Maybe housing. Nope. Nada.>

legal eagle's picture

Do not make a big deal about this.  It only means more houses have been built for millionaires and the higher price of those homes scews the average.  Right?  The lower price homes are not being built because the working class cannot afford to buy a new house, or should I say primarily former working class, now food stamp class.  You have to understand the difference between median and mean.

Cognitive Dissonance's picture

I understand very well the difference between median and mean.

I like my steak median well. :)

DeadFred's picture

But the cow thinks you are mean to say so.

Cognitive Dissonance's picture

On the udder hand.........

<Please.....make me stop. I'm begging you.> :)

FLUSA.com's picture

What goes up... must go up

SHEEPFUKKER's picture

Above the 2% inflation target I would say, or is there nothing actually included in the CPI. 

Bay of Pigs's picture

Nothing relevant to human survival like food and energy, clothing, taxes, cable, tuition, etc...

Bay of Pigs's picture

Just an example of rising prices and inflation. Obviously, you don't need to have it, but almost ALL do.

fonzannoon's picture

For whatever it's worth I am listening to Schiff's radio show and he is saying that new home prices reflect the cost of construction going up which is basically just another sign of inflation.

McMolotov's picture

Hey, did that beautiful crack den near you ever sell?

fonzannoon's picture

LOL yes it did and well above asking. It will be demolished soon and some monster will go up in it's place. I agree with the poster below. This has less to do with the economy and everything to do with musical chairs. If you have 500k would you rather have it in the market, the bank, or a home. Granted everyone on here would like me to add pm's but since most people don't buy them...which would you choose? I'd take real estate. It seems like most people do as well. Funny though when they get their property tax bills as the years go on, they may wish they went another way.

McMolotov's picture

$500k of alcohol. At least that's my plan.

fonzannoon's picture

Alcohol, tools, weapons, water, food, medicine. etc.

The hard part will be measuring everything. If we get to where this is going you will be valuing your bottles of alcohol in terms of something other than dollars. Cigarette's or something.

Everyone thinks that is like going back to the stone age. Maybe we were more advanced and this is the stone age.

McMolotov's picture

This guy's got good information based on what he experienced during the war in the Balkans.

http://shtfschool.com/trading/trading-101-for-long-term-survival-scenarios/

jerry_theking_lawler's picture

but that is the beauty of THIS market....you don't have $500k in the house. currently, with some of renewed craziness going on, 3% down will suffice nicely. so for a $500k property you could slip into it for $15k, making the owner pay the closing.

you have a nice place, save on rent, and if things turn out poorly, you pack your important things and move them to your 'paid off farm', and then walk away from the *ucker.......or that is my plan anyways....

i now consider a mortgage, rent.

new game's picture

hey fonz, from 20 years as broker there is an ol saying that "you buy a payment and the home comes with it".

I would suggest this rapid price increase is fueled primarily by low interest rates and the recent fear that rates will go higher and better buy the fucker now!

fonzannoon's picture

Thanks new game. My buddy and I were just discussing exactly that. I don't know enough to draw a conclusion. Interesting to hear.

new game's picture

i sat in models for 17 years and you can just feel the buyers juice flowing when it gets going. it is also that new big time toy rush.

and yea all for the low payment of ...

other factors for sure include the fact that existing is selling again and firs time buyers are moving into first home as payment lower than rent, suffice to say the log jam has freed up...

yogibear's picture

Some markets have bubblized back. Like in New York, Chicago, etc. Corporations bid against people to buy for flipping  to rent.

 

bonzo112358's picture

Don't forget L.A.  Check out what $1,200/sq. ft. gets you on the west side.

http://www.redfin.com/CA/West-Hollywood/562-Westbourne-Dr-90048/home/6816965