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Home Sales Plunge At Fastest Rate In 16 Months

Tyler Durden's picture




 

It seems, despite the Fed's efforts to unscamble the treasury complex's eggs, that the rate shock of a taper/no-taper decision has become sticky in the housing market. With the fast money exiting, existing home sales missed expectations for the 4th month in a row - dropping to the lowest annualized number since June (very much against the trend in recent years). This is the biggest month-over-month drop in existing home sales since June 2012 but, of course, NAR has an excuse... "low inventory is holding back sales." So, in other words, they could sell loads more houses if only there were more available for sale (or prices were lower...)...

This is not a "seasonal" thing... and in fact is very much against the seasonals of the last few years...

 

 

Via NAR,

Lawrence Yun, NAR chief economist, said a flattening trend is expected. “The erosion in buying power is dampening home sales,” he said. “Moreover, low inventory is holding back sales while at the same time pushing up home prices in most of the country. More new home construction is needed to help relieve the inventory pressure and moderate price gains.”

 

The median time on market for all homes was 54 days in October, up from 50 days in September, but well below the 71 days on market in October 2012. Short sales were on the market for a median of 93 days, while foreclosures typically sold in 46 days, and non-distressed homes took 53 days. Thirty-six percent of homes sold in October were on the market for less than a month.

 

Total housing inventory at the end of October declined 1.8 percent to 2.13 million existing homes available for sale, which represents a 5.0-month supply at the current sales pace; the relative supply was 4.9 months in September. Unsold inventory is 0.9 percent above a year ago, when there was a 5.2-month supply.

 

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Wed, 11/20/2013 - 11:15 | 4173339 1835jackson
1835jackson's picture

I am in the business and getting out. USA is becoming a nation of renters. 

Wed, 11/20/2013 - 11:18 | 4173349 corporatewhore
corporatewhore's picture

dont knock renters. we're waiting it out for it all to come tumbling down.

Wed, 11/20/2013 - 11:21 | 4173367 1835jackson
1835jackson's picture

Good but what will the mortgage rates look like then? Of course you might be cash buyers if you have a job that pays well and you actually work more than 29.5hrs a week. I feel so sorry for the younger generation what a cluster fuck they have been given.

Wed, 11/20/2013 - 11:39 | 4173437 max2205
max2205's picture

DC area is the new LA.....up up and away

Wed, 11/20/2013 - 11:49 | 4173487 Doubleguns
Doubleguns's picture

Great!!! Cluster all those politicians in one area and we wont have a problem tracking them down when this all falls apart. 

Wed, 11/20/2013 - 12:19 | 4173611 Blano
Blano's picture

One well placed neutron bomb fixes that problem.

Wed, 11/20/2013 - 16:11 | 4174778 SmittyinLA
SmittyinLA's picture

A neutron bomb is too good for those people, I figure we just build a wall and let them eat each other until there's one breeding pair left.

Wed, 11/20/2013 - 17:00 | 4175002 Oracle 911
Oracle 911's picture

Enclose them, give them guns and lot of ammo, and enough food and water for half of them and repeat the last step until one remains.

 

The last one witch left get few grams of silver...into his/her neck. I guarantee if you make it into a  form of reality show, it will be a worldwide success.

Thu, 11/21/2013 - 00:30 | 4176413 MisterMousePotato
MisterMousePotato's picture

Wasn't that the premise of The Hunger Games?

Thu, 11/21/2013 - 03:42 | 4176600 Oracle 911
Oracle 911's picture

Maybe, I didn't read any of the book, watched the films or read summary BUT doing the same thing with these scums would be 10000% more fun then watching how teenagers kills each other.

Wed, 11/20/2013 - 12:45 | 4173709 LauraB
LauraB's picture

http://www.zerohedge.com/news/2013-11-06/fitch-warns-housing-bubble-says...

Look at the full report to see the numbers on the DC and Baltimore areas.  25-30% overvalued in DC metro and 15-20% overvalued in Baltimore metro area. 

Wed, 11/20/2013 - 11:39 | 4173430 CheapBastard
CheapBastard's picture

Rent Control is making a come back in some areas. Not sure who this will influence markets. In my area rents are dropping on their own since everyone and their kid brother bought a place to rent out and not there is a Uber-Oversupply of houses and apartments for rent.

Wed, 11/20/2013 - 14:49 | 4174269 aVileRat
aVileRat's picture

So, somebody help me out here

- If home starts are at zero, and the stock is nearing max headroom then normally one would expect that home builders are not building new communities but relying on infills or rebuilds to stay alive, and are simply laying off the blue-collars to meet their bottom line EPS

- If unemployment is still increasing and we are well above the structural rate of U%, savings is stupidly negative and so is wage inflation. REITS are strugging to pass-through and we know capital upgrades for density residential are being delayed with low-yield properties being hived or sold off (see Och or Brookfield). 

- If consumer small ticket purchases, electronics and middle-income luxury brands are all seeing negative demand growth over 2013/14

WHO THE FUCK is buying/remodeling their homes and/or buying all these new GM's ? IF home starts  and sales are both flat, if SOFT WOOD is at a below seasonal low demand, what the hell is propping up HD and the Faucet fixers ? Is there some sort of cash economy for fixing your home that started in August that nobody got the memo on ?

No I'm 100% serious. Are we supposed to believe that JoeQ is nolonger buying premium brand cherrios, campbell soup or sony TV's but somehow he is buying 3 Toilets per foot traffic customer (according to the retail IPUC indicators) and a brand new Tahoe ? Where the fuck is this money comming from ? Can someone direct me to which United State is actually contributing to this pump ? Do not say North Dakota or Cali.

 

Wed, 11/20/2013 - 11:18 | 4173350 Sudden Debt
Sudden Debt's picture

if Europa would turn into a renters nation our real estate would really crash and burn.

A appartment costs 230K to buy (euro's) and when you rent it out you get 600 euro's a month for it. If they pay their rents.

But most people buy so renting out is just a way to keep a house of the market for a while and to increase it's value as "it has renters who pay in it".

But realisticly, that appartment would be worth about 60K and not a dime more if the market was normally prices like it was 10 years ago.

Wed, 11/20/2013 - 11:31 | 4173409 j0nx
j0nx's picture

I had an underwater TH in Northern Va. for 6 years until this summer when the prices came up enough for me to sell and break even. Been renting ever since waiting for prices to drop. So far this is the first year in 5 where the home values didn't plummet in the off season. They continue to rise all over the area still, some areas more than others and lots of folks coming to the table with lots of cash. The DC area is still pretty strong so it looks like we are either moving out of the area in the next year or we will be long term renters. I think every 1%'er in the nation has migrated to this area...

Wed, 11/20/2013 - 12:26 | 4173644 Hubbs
Hubbs's picture

Shows you how all is well if you have a government job, especially near DC.

 

When a house in my former town (Snowden's) sold for 399,000 , I was astounded, until I learned it was a retired couple who left Washington DC (probably made a tidy profit on their house there) and looking to downside to the cheap seats in northeast NC.

Wed, 11/20/2013 - 15:06 | 4174365 Those Fukerz Ha...
Those Fukerz Have R Money's picture

@j0nx,

I think there is something odd going on in the real estate market that might have a lot to do with what has become one very big player in residential real estate--Ocwen (OCN). Ocwen has lots of progeny now, and the entire focus of the "Ocwen family of companies" seems to have become focussed on the purchase of NPLs (non-performing loans) rather than so much on MSRs (mortgage servicing rights). Ocwen's publicly-traded progeny, other than (OCN) itself, are (HLSS), (ASPS), (AAMC), and (RESI). But Ocwen has far more progeny--progeny that has not gone public. For example, (ASPS) owns Hubzu and REALHomes Services and Solutions.

To take Northern Virginia as an example, if you Zillow the property at 600 Walker Road, Great Falls, VA, you can see that it is a foreclosure and it is currently up for auction, and the sites you are sent to are those two Ocwen-related companies, REALHomes Services and Solutions AND Hubzu.

(I left a message to be contacted, but was not contacted--perhaps because I only left an email address, and not a phone number.)

If you look at the history of the property, which is a tiny 1935 cottage on 3.5 acres, it was originally listed in 2008 for over $2.5 million, and is was priced a couple of days ago at $427,000. (The current bid, however, is for $541,000 with 8 hours to go.) But there was apparently a gasoline leak at a nearby gas station in 2009, and the leak has apparently contaminated nearby water tables, and most of the homes in the area seem to have private wells. So, I wrote to ask if that would be disclosed and if it presented a problem for that particular property, etc. As I said--I still have not heard back from them.

My deeper question, however goes to the lack of reps and warranties, the possible title issues, the "as is" condition, etc. And it sort of reminds me of that "reality" show called "Storage Wars," in which folks get a peek at a storage container and have to bid on it--not knowing what is really in it.

(Personally--I don't think this is a good long-term trend for the conveyance of real estate.)

But there must be a lot of this going on right now, and it just seems to me that we are quickly going to exhaust the pool of buyers who are willing to purchase real estate in this manner. Ya know--kinda sorta maybe knowing what you are getting yourself into--but not really positive? Most folks aren't up for that these days, particularly when it comes to the purchase of residential real estate.

Anyway--I think YOU should call on the property  :-)  and find out what you are able to find out, and get back to us. Because you are a believable potential buyer, and I am probably not. (Although, when the property was at $308,000 the other day, and before I read about the possible water table contamination--I was thinking of sending my daughter to have a look at it, as she is on the verge a thinking of maybe possibly moving to the DC suburbs. (She currently rents in DC proper.)

It would be great to get some feedback from a real-live Northern Virginian who kinda sorta has his eyes on the real estate market and see how you would feel about such red flags, etc., and if you would be inclined to transact a real estate deal in this fashion. If most deals are being transacted this way, then it stands to reason that the relatively fewer "traditional sales" are going to keep the prices of "traditional inventory" unrealistically high for the time-being. My guess is that, eventually, however, enough people are going to get burned on these "no reps, no warranties, as is, caveat emptor" properties and when that happens--it will impact the whole real estate market--in a big way and in a big hurry.

But what do I know? I'm just a housewife on a blog asking a perfect stranger to call about the details of an Ocwen house.  :-)

Wed, 11/20/2013 - 16:07 | 4174756 SmittyinLA
SmittyinLA's picture

Don't buy for AT LEAST 10 years, we're in a massive baby boomer home liquidation sell off demographic trend that is just beginning, and China's boomer die off is on the horizon too, in the 30 year long boomer liquidation housing sell off price drop bell curve we're at the leading edge, not only that we have artifically low rates. 

There's an obamacare tax on housing too, it's going to rise a lot every year, and with every rise prices will drop.

Don't bet against the baby boomers, they're like a giant herd of buffalo, move out the way, them them pass, let somebody else fight human population demographics, and don't bet on mass immigration propping up home prices, poor illiterate Socialist voters on welfare kill housing prices, look at Detroit.  

 

 

 

 

 

Wed, 11/20/2013 - 11:53 | 4173501 rubiconsolutions
rubiconsolutions's picture

"USA is becoming a nation of renters."

Even home owners are renters these days. Try not paying property tax to pay for crappy public schools. Or in some case growing a garden on land you ostensibly own. People have been evicted over as little as $100 in property tax and their homes auctioned off. Nobody really owns property in this country anymore. It's an illusion. About the only benefit to 'owning' a home is the tax write-off and I suspect that will go away at some point in time.

Wed, 11/20/2013 - 12:57 | 4173746 donsluck
donsluck's picture

There is no "tax write-off" except for the interest payments, which means you only get (in my case) 25% of the interest expense back. Far better to pay cash, which is exactly what the international drug lords and cleptocrats are doing.

Wed, 11/20/2013 - 15:59 | 4174698 Yes We Can. But...
Yes We Can. But Lets Not.'s picture

I used to live a few miles from there. Would be surprised if 3.5 acres in that very affluent hood went for under $1.5mm if it can yield more than one buildable lot...

Wed, 11/20/2013 - 17:07 | 4175038 Those Fukerz Ha...
Those Fukerz Have R Money's picture

The county website to which Zillow linked remarked that the buildability of the lot was "poor." So, maybe that tiny little 1935 cottage is the best building that will ever be on that lot? Maybe?

But I was surprised at the price as well, that's why I researched a bit and found the information about the contaminated water "thing." It was not difficult to find, as it seems to get a lot of "press" in the Great Falls Citizens Association (Homeowner's Association?) newsletters.

I guess it will be an interesting auction to watch. (But the bidding is sort of funny. If there is an updated bid within 15 minutes of closing, the auction gets extended, because, as the Hubzu site explains--bidding at the last minute is called "sniping" and is not "fair."  :-)  Funny that.  Ocwen is all about "fair," ya know! lol!

Wed, 11/20/2013 - 12:13 | 4173582 serog
serog's picture

What field are you moving to?

Wed, 11/20/2013 - 12:55 | 4173739 auntiesocial
auntiesocial's picture

My goal in life is to become a section 8 slumlord. 

Wed, 11/20/2013 - 15:53 | 4174662 SmittyinLA
SmittyinLA's picture

Obama achieved your lifegoal around age 28 with zero investment.

Wed, 11/20/2013 - 16:02 | 4174729 Yes We Can. But...
Yes We Can. But Lets Not.'s picture

You can do it in say small town Iowa with houses at $10k per. Put $5k in and rent out to vast pool of those on Gubmint assistance.

Thu, 11/21/2013 - 18:15 | 4179078 European American
European American's picture

Better yet, get an RV, and take your home with you. Many locations across the country where one can park their rig for free.

 

$10K or less for the rig

15 to 20 mpg.

Wed, 11/20/2013 - 11:15 | 4173340 Sudden Debt
Sudden Debt's picture

THAT JUST MEANS THEY HAVE TO BUILD MOAR!!!

Wed, 11/20/2013 - 11:20 | 4173357 Tsar Pointless
Tsar Pointless's picture

There are BLOCKS of empty homes in my area, and I live in a fairly "good" neighborhood in a fairly "good" school district. In other words, it's no Detroit, but it's no Hamptons.

Maybe - just MAYBE - if all of those empty homes on which the banks are sitting were unleashed onto the market, existing home sales would RISE. Then again, that would mean FALLING prices, and we can't have that, now can we?

Wed, 11/20/2013 - 12:22 | 4173620 LawyerScum
LawyerScum's picture

I had to move back to my home town to take care of my mother and the old middle-class neighborhood does not resemble what I remember growing up.  Houses stand empty for months, then are rented, then are empty again. It is obvious that whomever owns these rentals houses does not perform basic upkeep.  The biggest red flag I have seen is that 3 houses now have extra "tenants" living in campers/RVs in addition to the 4-6 people living in the homes.  In the 30+ years I have been observing the neighborhood, I have never seen anything like this before.

Wed, 11/20/2013 - 11:20 | 4173359 1835jackson
1835jackson's picture

No jobs for young people, older citizens downsizing to deleverage the credit card and cash flow better equals a nonexistent housing market. The mortgage rates were great and still are but of course who cares now. The economy is fundamentally screwed. We are living in a fantasy land or a plutocracy. 

Wed, 11/20/2013 - 11:21 | 4173361 Quinvarius
Quinvarius's picture

Are we rally blaming low inventory for this?  LOL.

Wed, 11/20/2013 - 11:28 | 4173379 Al Huxley
Al Huxley's picture

This is the new normal (just when you think the bar can't get any fucking lower for financial news reporting).  I've read TWICE that gold demand for India is down massively this month - the reason - the central bank's cut off supply, so the jewelers have no nothing to sell.  So NO SUPPLY gets reported as NO DEMAND.

 

Fuck, the standing joke in software support was always 'we drastically improved our service - calls are almost zero now - how?  we disconnected the phone'.  But it was always understood to be a fucking JOKE. 

 

BTW, if the REAL reason home sales are down is lack of inventory, then I'd expect prices to be soaring as buyers compete for what little inventory is available - is that the case NAR?  To tie back to my original point, t's the case wrt to gold in India -govt restriction on supply has resulted in big premiums as buyers compete for what's available.

Wed, 11/20/2013 - 11:38 | 4173425 Headbanger
Headbanger's picture

I thought the joke was 'It's not a bug, it's a feature!" 

Did I tell you guys I know Fortran??   And of course my other two favorites ALGOL and FORTH.. but then there's also CMS and Ada.. (It's a name, not an acronym)

BONUS QUESTION:   WHAT DOES "ALGOL" STAND FOR?? 

Extra Credit:  How did the name "Ada" come about?

And does anybody give a shit?

Wed, 11/20/2013 - 12:59 | 4173758 donsluck
donsluck's picture

No.

Wed, 11/20/2013 - 13:46 | 4173938 Nobody For President
Nobody For President's picture

Algorithimic Language, banger.

Ada =  Augusta Ada King

(PS - Love your little pix)

I was a COBOL guy.

So what's that mean, math freak?

;-)

Wed, 11/20/2013 - 15:33 | 4174548 keninla
keninla's picture

and CMS is Compiler Monitor System.

 

Yep I used that too. Long ago.

 

and Nobody cares

 

Wed, 11/20/2013 - 16:21 | 4174819 Occams_Chainsaw
Occams_Chainsaw's picture

Is Algol the programming language Al Gore invented?

Wed, 11/20/2013 - 11:35 | 4173421 Stoploss
Stoploss's picture

It's because of the little blip at the end.

http://research.stlouisfed.org/fred2/series/MORTG

This is why rates can never rise as well.

Tis but transient. Until it isn't.

Wed, 11/20/2013 - 11:20 | 4173362 Al Huxley
Al Huxley's picture

Why invest in something as illiquid as real estate when you can lever up and double your money risk free every 2 months in the market?  Ben and the FED, always lookin' out for the little guy.

Wed, 11/20/2013 - 11:23 | 4173365 Atlantis Consigliore
Atlantis Consigliore's picture

DEPRESSION.... QEen Yellen, I dont care how much you print that Weimar counterfeit, the velocity is -0-

even the real estate pimps are screaming to get out of socialist NY and chicago and Collyfornia.

change Dancing with the Stars, to Listing with the Stars.

even that old Bart jumped from BS TV with her parachute. 

Bye bye. 

 

Wed, 11/20/2013 - 11:22 | 4173366 FieldingMellish
FieldingMellish's picture

NAR: Your Official Money Laundering Agent.

Wed, 11/20/2013 - 11:22 | 4173370 replaceme
replaceme's picture

Inventory is (artficially) low, prices are up, and sales are down.  Somehow I can't graph that without thinking we're not at an equilibrium (yet).  Prices to either go down or ?

Wed, 11/20/2013 - 11:23 | 4173376 Dr. Engali
Dr. Engali's picture

I'm fairly certain that a person needs more than a part time job to both buy a home and spend the rest of your miserable day trying to get on the Zerocare exchange for overpriced insurance.

Wed, 11/20/2013 - 11:41 | 4173398 Quinvarius
Quinvarius's picture

Obamacare and the Obama tax hikes put a poorly aimed bullet into the back of the head of this economy.  Now it is just flopping around, dying a slow painful death.  I am sure Obama will find a ball peen hammer to beat on its shins until he finally finishes it off. 

It is really sad to watch after Bush put the economy into that Captain Pike space wheel chair to save it.  The light on the front keeps blinking twice over and over for "no".

Wed, 11/20/2013 - 11:32 | 4173407 CheapBastard
CheapBastard's picture

Lots of houses For Sale where I live. 8,000 more just north.

I went to Houston last weekend to visit some relatives and tons of houses--used and new--For Sale there too. Drove thru Woodlands and then on down to the so-called energy corridor....tons for sale.

No low inventory here or there.

Larry and the NAR need a better excuse.

Wed, 11/20/2013 - 11:48 | 4173479 OneTinSoldier66
OneTinSoldier66's picture

It seems like I am starting to see more "For Sale" signs in the area I live in too. Are people starting to think there is a top in the price of homes and now is the time to sell? I don't know. But if the market starts to get flooded with inventory, what will that do to the price of homes? If that is what's starting to happen then as LOP would say, tick tock mf'ers.

Wed, 11/20/2013 - 12:55 | 4173737 Darksky
Darksky's picture

I trained for the San Antonio half marathon running all over Cinco Ranch for the last 4 months and i only saw a handful of houses for sale. All the new houses being built between Cinco Ranch, Fulshear, and Katy all appear to be being built to spec for people who have already bought them. Commercial construction along I 10 energy corridor is explosive. After living in NOVA for last 10 years and watching a similar boom cycle i have to admit I am a little concerned about what i am seeing going on in the Katy area. So i called my realtor and asked her about it and she said 2013 was a record year for her and 2014 will be better...i got off the phone and told my olde lady we need to sell now and rent.

Wed, 11/20/2013 - 13:01 | 4173766 Singelguy
Singelguy's picture

Smart man, DarkSky!

Wed, 11/20/2013 - 11:42 | 4173449 vote_libertaria...
vote_libertarian_party's picture

I guess the hedge realized buying homes isn't such a good business model after all.

 

D'OOHHHH

 

 

And the banks won't sell because they would need to book the losses.  Extend and pretend.

 

 

Wed, 11/20/2013 - 11:58 | 4173511 Kirk2NCC1701
Kirk2NCC1701's picture

That applies only for the 99%ers.  The 1% are busy buying and refinancing at rock-bottom rates. 

The Commercial RE market is booming.  "We don't need no stinkin' chart".  All you need to do to confirm this, compare the staffing level at the title companies, and compare the layoffs in residential and the overtime on commercial.  QED.

The Wealth Transfer Mechanism of endless QE is working like a charm for the 1% -- and especially the <0.1%.  Short democracy & freedom, long fascism & feudalism. 

p.s. Also... Long rentals and sharecropping.  That ought to make LoP happy.

Wed, 11/20/2013 - 12:08 | 4173562 Manipuflation
Manipuflation's picture

I have a house for sale for $0.00.  Can't get an offer though, too many property taxes to pay for no goods or services that I am aware of.  It's the American Dream alright but it sure seems like a nightmare instead.

Wed, 11/20/2013 - 13:00 | 4173759 orangegeek
orangegeek's picture

Declining home sales.

 

Well that's going to really fuck up hidden "foreclosure inventory" that all those banks have.

 

The news just keeps getting shittier by the day - and barely any MSM coverage.

 

ONWARD!!!!!!

Wed, 11/20/2013 - 14:18 | 4174096 ncdirtdigger
ncdirtdigger's picture

This is obviously good news for the stock market!

Wed, 11/20/2013 - 15:16 | 4174444 SmittyinLA
SmittyinLA's picture

Grandma died last year, everybody thought they were gonna unload her 70 yo 1600' home in Van Nuys CA for 600-650K, we got  a quick "all cash" offer for $550k from some Israeli for a quick flip to a bigger sucker but the cash wasn't his, crickets since.

The nanosecond QE ends CA real estate crashes big time, there's a total disconnect from reality here. 

I think the Israeli was on a tourist visa too.

Wed, 11/20/2013 - 15:56 | 4174690 Those Fukerz Ha...
Those Fukerz Have R Money's picture

Well, that brings up an interesting point that I had not thought of.

I imagine that it is harder for a non-U.S. citizen to get traditional financing for residential real estate in the U.S.? Is that true?

So, if that were true, would that tend to suggest that these "as is, no reps or warranties, possibly title-clouded homes" that are being purchased for cash are simply being purchased by a larger pool of homebuyers because it's a "global" pool, and not just a U.S. citizen-based pool of homebuyers? (U.S. citizen homebuying pool being smaller?)

Because that would be one way in which the numbers of buyers today would be higher than pre-melt down. Couldn't that be distorting the numbers in an upward trend?

Or would that totally not be a thing and should I go back to being a housewife for the rest of the afternoon?

 

 

 

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