Chart Of The Day: Crushed US Consumer + All Time High New Home Prices = Record Housing Bubble

Tyler Durden's picture

We must have discovered a new bug in excel, because when we took median new home prices (which a week ago hit an all time high) which we then divided by the average American's purchasing power expressed through real disposable income per capita, we got this chart...

... which is impossible, as it would imply that not only are homes the most unaffordable they have ever been, but that the cheap credit propping up the housing market is bigger than it has ever been in history.

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HelluvaEngineer's picture

"MISSION ACCOMPLISHED"

LawsofPhysics's picture

Allow me to interject if I may.  Does CONgress know who is going to continue to fund the deficit spending?

http://www.marketwatch.com/investing/bond/10_year

Boom, motherfuckers...

James_Cole's picture

OT - no articles about liberty reserve on here? When are folks going to learn money laundering is only supported by the US .gov when it's through an approved TBTF?

nmewn's picture

I was just reading about that as a matter of fact...

"In addition to the criminal charges, five domain names were seized, including the one used by Liberty Reserve, and officials seized or restricted the activity of 45 bank accounts.

The charges outlined how the money transfer system operated, offering a glimpse into the murky world of online financial transactions that bounces money between far-flung accounts from Cyprus to New York in the blink of an eye."

 Note the way that was phrased...lol...and yes, the article mentions bitcoin in comparison.

"The business operated with even more anonymity, law enforcement officials say, than Bitcoin, a payment network started in 2009 to offer a decentralized way to create and transfer electronic cash around the world. Bitcoin transactions are stored in a public ledger, making it possible to trace Bitcoin transactions even years after the fact."

http://www.nytimes.com/2013/05/29/nyregion/liberty-reserve-operators-accused-of-money-laundering.html?pagewanted=all

Lets be careful out there boppers.

////////////////

What?

I was pointing out how MSM is beginning to frame bitcoin as a nefarious enterprise...or was it the Warriors reference? ;-)

James_Cole's picture

 

Was very interesting how that article was phrased... particularly the emphasis on child pornography off the top. 

I guess HSBC, Wells Fargo etc., have higher standards / quality control to make sure their money laundering operations have nothing to do with child porn and identity theft. 

The TBTF money-laundering checklist: Mexican drug gangs a-ok, identity theft - gawd forbid! Standards people, standards!!

 

nmewn's picture

lol...good point.

Anything they can't control or see they deem as a threat, both government & the credit system.

I noted Cyprus was also used, continuing with the original "hot money" theme implanted in the publics brain. As if, simply desiring a private (no outside eyes) transaction has become criminal intent or activity.

James_Cole's picture

If you wanna launder money in this town but don't have discount window status, fuggedaboutit!

nmewn's picture

Or trade on inside information...ala senator & reps trading accounts.

charliehbryan's picture

The CIA probably got its funds out before the seizures took place. (See the story of BCCI for the historical analogue.)

kchrisc's picture

In the Soviet Union all dissenters were "insane," but in the "land of the free, home of the brave," they're all connoisseurs of "child porn."

And my bet is that soon ZH, LRC, Mises.org and several more will also be tarred with that brush and then "seized" for the protection of the children I am sure.

I am more equal than others's picture

What an epic train wreck.

Nassem Talib - things are fine until they're not - break out the turkey story.

When this goes 'BOOM' there will be 'great sorrow and gnashing of teeth.'

PiltdownMan's picture

Flat mortgage purchase applications. It is an INVESTOR housiNg bubble. See here:
http://confoundedinterest.wordpress.com/2013/05/28/double-double-toil-an...

Pumpkin's picture

The Fed!  That's who.  Load em up and then blow em up!

slaughterer's picture

What the fuck happened to the 30 year today?

j0nx's picture

Home prices are nowhere near what they were in 2007. Rising yes but not even close to the madness of the RE bubble years.

Timmay's picture

Median home prices just hit an ALL TIME high.

TheTmfreak's picture

That is not the statistic. Its NEW home prices hit an all time high. Thats very different than Median Home Prices. Arguably this could say that the market for new houses is being pushed out of lower income affordability.

Omen IV's picture

... or more likely the houses that are being built are concentrated on the high end (income & house price) since only they have the money to afford new.

rest are buying "used" - both reo and other- which have whole different price point which i think is much lower than 2007

so this statistic is misleading of "general" trends in affordability

rosiescenario's picture

...and Porsche sales are up as well as Tiffany's.....it just points yet once again to the elites vs the normies....

q99x2's picture

Words have many meanings. 

“In the beginning was the Word and the Word was with God and the Word was God” (New Jerusalem Bible, John. 1.1).

Communication as a form of validating existence.reigns supreme.

JR's picture

The stock market (ongoing QE equity purchases and ZIRP) was planned as a raid on the general economy to force Americans into a stockade controlled by the banking cartel. The money from savings accounts and money lost by retail investors in high risk equity mistakes goes directly into equity buying by the Fed and its bank partners.

U.S. Census:

Period Median Average

Median and Average Sales Prices of New Homes Sold in United States

 Jan 2000 $163,500 $200,300

Apr 2000 $162,600 $207,300

May 2000 $164,700 $200,000

 Jan 2001 $171,300 $209,000

Apr 2001 $175,200 $205,500

May 2001 $175,300 $211,400

 Jan 2002 $187,100 $226,900

Apr 2002 $187,100 $228,100

May 2002 $181,000 $226,500

 Jan 2003 $181,700 $230,200

Apr 2003 $189,500 $237,200

May 2003 $195,500 $243,700

 Jan 2004 $209,500 $262,100

Apr 2004 $222,300 $269,300

May 2004 $211,700 $260,400

 Jan 2005 $223,100 $283,000

Apr 2005 $236,300 $289,100

May 2005 $228,300 $287,400

 Jan 2006 $244,900 $301,000

Apr 2006 $257,000 $310,300

May 2006 $238,200 $293,900

 Jan 2007 $254,400 $314,600

Apr 2007 $242,500 $311,700

May 2007 $245,000 $309,700

 Jan 2008 $232,400 $284,600

Apr 2008 $246,400 $314,300

May 2008 $229,300 $298,200

 Jan 2009 $208,600 $245,200

Apr 2009 $219,200 $269,800

May 2009 $222,300 $274,600

 Jan 2010 $218,200 $283,400

Apr 2010 $208,300 $270,500

May 2010 $230,500 $281,100

 Jan 2011 $240,100 $275,700

Apr 2011 $224,700 $268,900

May 2011 $222,000 $262,700

 Jan 2012 $221,700 $265,700

Apr 2012 $236,400 $287,900

May 2012 $239,200 $280,900

 Jan 2013 $251,500 $306,900

Apr 2013 $271,600 $330,800

 Note: The sales price includes the land

http://www.census.gov/construction/nrs/pdf/uspricemon.pdf

Mortgage News Daily: New Homes Hit Record Median Price in April, Sales Rise - May 23 2013

The median price of a new house sold in April was a record $271,000 compared to a median of $236,400 one year earlier.  The average price in the two periods was $330,800 and $287,900.  Of the estimated 45,000 homes sold in April 2013, 12,000 sold for less than $200,000 and another 14,000 sold between $200,000 and $300,000Six thousand homes (6,000) sold nationwide for more than $500,000.

http://www.mortgagenewsdaily.com/05232013_new_home_sales.asp

dirtbagger's picture

Big difference between NEW home median prices and OVERALL median prices.  Per Calculated Risk Real and Nominal home prices are at 2000

  http://www.calculatedriskblog.com/2013/05/real-house-prices-price-to-rent-ratio.html

Handful of Dust's picture

The only way 'they' prop up the prices are by leivation with zero interest rates, moar zero-down mortgages and tons of incentives by builders.  For those who don;t beleive those 'no-money-down' loans don't exist, merely google it or turn on your radio. Hard to believe but true.  These are some reasons, among others, I don't see a stable housing price market for years to come.

fuckitall's picture

"Median home prices just hit an ALL TIME high."

So was Zimbabwe stock market as the currency was collapsing in value.

These "all time highs" are smoke & mirrors hiding very healthy inflation in America now.   This "all time high" is in dollars debased 50% since 2007, so you can take this "all time high", cut it in half, and that's your true comparison to 2007.

Same with S&P, Dow, etc.  Cut those numbers in half and there's your true comparison to 2007 highs ...and it doesn't look good.  Dow would have to be 28,000 today to match 2007's 14,000 high.

Inflation (currency debasement) is a wonderful deception, fooling all the sheeple out there, even some here on ZH, distracted by rising charts, thinking they're getting ahead, not seeing the devalued dollars, not realizing they're breaking even or losing.

 

BKbroiler's picture

thou shalt not contradict the Tylers...

General Decline's picture

"thou shalt not contradict the Tylers..."

What? I didn't know they were infallible. I guess I better start praying to them before bed every night.

fuckitall's picture

Not infallible, but a little sensitive perhaps, they've kicked people off this site for less.

firstdivision's picture

If you adjust for inflation, then yes, its waaaaay down from '07.

TheTmfreak's picture

Technically this could just indicate that the only "new" homes that are being purchased are EXPENSIVE houses. Means that us po foke can't afford a NEW house, just the used ones.

BKbroiler's picture

I could correlate the amount of shits I took last week with the number of MBS bought by the fed and conclude that every time I crap Bernanke buys a 10 billion worthless mortgages.  If only I ate less the economy could rebalance itself.  Unfortunately my exrement doesn't prove causation or correlation, they're just 2 numbers next to each other. This chart does show that while median disposable income dropped, home prices went up, but it doesn't take in a massive amount of factors like foreign invesment and geographic considerations just to name two.

TheTmfreak's picture

Agreed. As far as I know, where I live there are no Chinese outbidding each other in cash sale of homes.

Raynja's picture

First, this is median home price, as in the middle number in a set your points are the reason average price wasn't used.
Second, the ratio speaks of the affordability of a new home to an average person. The reason for the disconnect is in no way analyzed in this article.

So to summarize, that's not your shit, that's you're brain, so pull it out of the toilet and shove it up your nose.

DeadFred's picture

You nailed it. The primary people driving the new home market are the top earners. They are doing quite well in this economy. Housing tracts for the great unwashed are no longer being made because there is more than enough recycled homes for them to buy or at least rent. I'd love to see the stats how the market has changed (if it has) in the percentge of new homes commissioned to be built versus those built on spec. Also of interest would be changes in square footage and other measures of the quality of the new home. Only the elites need apply.

Spastica Rex's picture

There are no "elites" in the US, only the middle class. If you can't afford to buy a new house, you're not middle class. The economy is doing great for the middle class.

DeadFred's picture

A rose by any other name may still smell as sweet but an elite by any other name is still a vampire squid. I really don't mean that. It's hard for me to judge many of the ones prospering today but the ones on the lower rungs are much worse off today than the last time the chart spiked like this.

DrunkenPleb's picture

Spot on... just imagine the magnitude of the hedonic adjustment factors that could be applied to housing prices if it suited the government to suggest that real estate prices weren't increasing.

disabledvet's picture

yeah no shit. impeccable in both presentation and simplicity. also goes a long way towards explaining the explosion in disability payments. "keeps the housing market alive." paying down debt, keep working on that camp as prices start falling for building materials...keep that zero interest rate regime going as well. here's your first suburb Planet Earth: http://en.wikipedia.org/wiki/Levittown,_New_York so while you're on your way to the Hamptons this weekend this is place you need to ponder. amazingly..."they didn't even come close to building it big enough." here's the place that got it right: http://www.trulia.com/real_estate/Washington-District_Of_Columbia/ that was the first real estate boom i actually witnessed first hand as massive amounts of perfectly good farmland got turned into McMansions...everywhere. the second was "the entire West Coast from Seattle to Olympia Washington" from 1994-1998. the "affordability index" wasn't any better there either. this is PURE mania stuff...there has to be a reason for such price action (almost always involving Government action...and i ain't talking interest rates...the new sports complex/public transportation hub in Brooklyn is a good one) and simply put...we just have too much debt that we're paying down here plus almost nothing to show for the hundreds of billions "already spent" at the DOT.

jusman's picture

Average is not the same as median. Median is the price where half the homes for sale are more expensive and half are less expensive.  Average means the total value of homes for sale divided by the number of homes for sale.  The value for average could be skewed by a small number of very expensive properties.  Be careful with statistics!

 

the grateful unemployed's picture

our insurance co jumped the cost to rebuild about a third. there is of course little or no market at that price. this is the 2007 bubble without any buyers. remember how government propped up farm prices in the 30's, farmers couldn't sell their produce, so they plowed it back into the soil, then they were evicted for taxes. substitute farm prices for home prices.

HeliBen's picture

No F'ing way! I better buy now before I am priced out of this red hot market...

Muppet Pimp's picture

This is probably the best piece of advice I have seen in some time.  Get em while you can folks, they are not making any more land you know.  In fact, I would buy three or four if you can swing it.  This bubble is just getting started, plenty of room to run.

Dewey Cheatum Howe's picture

Land reclaimation is going to be all the rage in the next few years especially properties of 'value' for the few that can afford new single family homes after the old properties are demolished. The rest of the people well fuck em they can go live in the new apartment complexes, like they used to do in certain other centrally planned countries like the USSR.

Muppet Pimp's picture

It is already standard practice in booming metros, they call them tear downs.

Seer's picture

Catherine Austin Fitts says that this is how it's done, they run things down in order to kick folks out so that they can buy up properties on the cheap.

I got so fucking tired of hearing all the clowns in my old (small) city talk year after year about "rebuilding the downtown core."   Many parts of the city were treated like unwanted step-children while these "leaders" (pols and bankers) talked about making "everything" wonderful.

But let's be honest here, WAY too much is unsustainable.  That's the reality.  Many people are unable to maintain things (the "System" doesn't want you to really think of these things up-front lest it discourages you from spending MORE than you should be for a property), in which case it would pretty much be inevitable that the property end up in significant disrepair.

carlsbro's picture

Chart addiction