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Pending Home Sales Collapse At Fastest Pace Since April 2011, Drop To December 2012 Levels
Despite the downtick in rates for a month or two, the housing 'recovery' appears to have come to an end. This is the fifth consecutive monthly decline in pending home sales and even though a smorgasbord of Wall Street's best and brightest doth protest, it would appear the lagged impact of rising rates is with us for good (as the fast money has left the flipping building). This is the biggest YoY decline since April 2011 as NAR blames low inventories and affordability for the poor performance. Perhaps more worrying for those still clinging to the hope that this ends well is the new mortgage rules in January that could further delay approvals.
Via NAR,
“The government shutdown in the first half of last month sidelined some potential buyers. In a survey, 17 percent of Realtors reported delays in October, mostly from waiting for IRS income verification for mortgage approval,” he said.
“We could rebound a bit from this level, but still face the headwinds of limited inventory and falling affordability conditions. Job creation and a slight dialing down from current stringent mortgage underwriting standards going into 2014 can help offset the headwind factors,” Yun said.
Yun said there are concerns heading into 2014. “New mortgage rules in January could delay the approval process, and another government shutdown would harm both housing and the economy,” he said.
So the Fed provided the liquidity that bid prices up to a point that makes it unaffordable for the average joe and uneconomic for the average free-money-riding hedge fund. The Fed has made any recovery entirely dependent on extremely low rates and now is suggesting that taper is coming... and still... Strategists exclaim that rates are low by historical standards and so it won't matter!! come on!
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Merry Christmas Blue Haired Bitches
“The government shutdown in the first half of last month sidelined some potential buyers."
Yes, that goberment check is so crucial to the transaction.
And Blue Faced Mona too.
If prices start falling, you don't suppose this could cause problems for banks and GSEs holding those mortgages, do you?
Nah, people always pay their mortgage before everything else. They'd never default. It'll be fine.
No worries. There is no bubble cause everybody thinks there is and now is always the best time to buy that new home!
yeah, no explanation as to WHY the govt shutdown "sidelined" potential buyers. just "it did".
I'd have thought with all those people not at work, traffic would have been higher!
Okay , so the Fed must just print moar. Problem solved.
“The government shutdown in the first half of last month sidelined some potential buyers."
You mean NINJA's??
'Sidelined potential buyers' my ass....and HOW would they know any such a thing anyway? And... where are the potential buyers now then?
For fucks sake....will they EVER drop this huge non-event 'govt shutdown' nonsense? Not ONE negative thing happened because of it, at all!
dow 17,000...
And then what? Well, DOW 18,000 of course, within a week or 2 at most, at this accelerating pace. Soon these thousand DOW ticks will just be intraday trading marks....open at around 187,000 and reach 210,000 by that days close.
Taperish!
Larry Yun is doing excellent work for me.
I for one am shocked, shocked I say, that they didn't blame the weather.
Be patient...time is on my side.
Blame the weather? Every knows this is Bush's fault.
Fate the Magnificent
"Push the Button, Max"
$2.75 - $3.5 Billion says we don't care about your Steenkin pending home sales in 4 minutes
I think the CNBC Website has it right... Existing home sales fell for the fifth straight month in October, as the government shutdown added to an overall slowdown.
/sarc off
Government shutdown…yeah OK. I guess all those out of workers delayed their home buying plans, but just delayed mind you ;-)
IT’S WORSE THAN YOU THINK!
.
http://www.silverdoctors.com/its-worse-than-you-think/
.
"Our government is far more illegitimate than King George’s was in early 1776. Revolution is the only way out. Unfortunately America is addicted to TV, which causes brain rot and leads to any number of other debilitating physical maladies.
In fact, our country is no longer sovereign, having been taken over by a global criminal cartel, who rules by fiat (notwithstanding the ludicrous pretense of a republic).
2oz Freedom Girl(2)
Obama’s entire 2nd term is purely about securing the consent of the governed – not difficult when 99% of the population is brain dead. That is, while Obama (1st term) and Bush were all about tearing up the Constitution, Obama’s 2nd term mission is to destroy the Declaration of Independence, which provides the legal predicate (sovereignty; consent) on which the Constitution rests.
Meanwhile, dumbf#ck Americans are glued to the red-blue pro wrestling show of conservative-liberal, etc. As a nation, we deserve the monster c@ck that’s being shoved up our ass, sans lube"
.
its not worse than I think
Then you're not trying hard enough.
This would explain why pot is being sponsored big time by the MSM and the government.
If you're going to copy/paste, at least remove the ads.
#weaksauce
mate, oh, never mind. why listen to the worms crawling around in there?
"Meanwhile, occupation rates in the most coveted housing sector, empty refrigerator boxes, remains brisk and growing."
a nearby apartment complex converted to HUD. theoretically any government subsidy should support the price, or asset value of the property. higher asset prices, fewer people with jobs, those people who have to go across the street to rent an apartment will probably have to pay more (since supply comes off the market) virtuous, vicious cycle
Section-8 rents in SoCal are typically above market. Remove Section-8 and you gut effective demand and rental rates drop. On apts with very high % of Section-8 payment of rent, the owners do not even chase the tenants for their portion
I can attest to that. My Dad was a Sec-8 monkey farmer for years, though not in SoCal. He never bothered chasing down the chump change the tenant was expected to cough up.
Nick Lowe House For Sale Andrew Marr Show 2012
http://www.youtube.com/watch?v=xRjVV1ax3xU
My daughter dragged me to several new home builders this weekend...offices were empty..one sales clerk was snoozing in the back. Too-many-to-count inventory houses.
Must be Global Warming causing it?...or Fuki radiation?...or the roatation of earth on its axis?....or ....? ...
the federal reserve criminal monopoly?
" limited inventory and falling affordability "
Limited inventory my ass. Come to my resort retirement community on a golf course in south texas. For sale signs everywhere and very little movement in any of them...
If the FED would stop paying banks for these distressed propeties and the banks had to unload them, prices would fall in a hurry.
Mitt Romney is tearing down his beach house in La Jolla, and building a new one three times as large. he would have done something about this housing crisis
Sounds like old Mitt is doing something!!!
Go 1%'ers. Pull the US up!!!
That rain in LaJolla is not rain, it is piss trickling down from the 1%'ers
again, I'm getting tired of this, it's not the 1% but the 0.1%, and that is exactly why this time it is different and will end bad. The 0.99% will lead the change.
You must mean 99.9% will lead the change....
PS, don't get tired, take a math class.
I estimated how much wealth needs to be wiped out to solve the 400 trillion derivative hole in the financial system. And guess what, the bottom 99% don't have enogh wealth to plug the hole so they are going after the bottom 99.9% as stealthily as possible. The 0.9% believe they will be able to save themselves and are currently playing along but the numbers don't support that. They will be royally scr.wed with the 99%.
What math class do you suggest I take? Please check my background on zh and advise. I have never stopped educating myself, like collecting degrees :) History is very blatant on this, all revolutions started when the middle upper class interests were affected by the top upper class, and then the middle upper class (in this case the 0.99%) always aligned itself with the middle and lower classes. Only to become the new top 0.1% 100 years after the revolution was over.
can you even get a mortgage with 4 part time jobs?
No, but who cares? Just pay cash. Right?
We're still blaming the government shutdown I see.
Son, we're still blaming Geroge W. So...
tough to buy a house when you can't afford food, just ask walmart employees.
Scary thing about this is that propaganda media is also reporting it. Granted, with a "shutdown" twist/spin, but reporting it they are.
What's also funny is that if you talk to realtors they still claim that business is roaring. How can that be when fewer homes are being sold than there are realtors? So three transactions a year, at best, is good business?
Realtors are like used car salesmen. Asked ' how's bizness ? ' .....cars are flying off the lot, no matter what !
Flying cars? FINALLY. Been waiting to get my hands on one.
Os76? Don't think I've seen you post here before. There's another guy who goes by IridiumRebel (Ir77).
Now we just need someone to scoop up Rhenium to complete the chain that comes before Platinum and Gold.
Let me know when I'm needed.
All residential real estate trends down going into the end of the year and heads back up starting in march. Not sure there is as much of a slowdown as you are suggesting. I think the biggest story is the lack of inventory on the market and the price point of of homes that are actively on the market. I have never seen inventory this low in Dallas and at the same time, the homes available are at the high end of the price band. This tells me that nobody has or wants to sell their homes, foreclosures have ceased and the ones that are listed have been completely rehabed while the ones that have not have been rehabed are priced using the fairy dust market analysis method of pricing. There is no normal market anymore. There used to always be a good mix of fixer uppers, average homes and then your rehabed homes. Not anymore, just rehabed and average homes priced using the fairy dust method of pricing.
Dood, the data is seasonally adjusted and the comparisons are year over year, with last year having the same seasons as this year. Down is down.
The numbers are down because the economy is shit. Foreclosures have slowed because banks have little income with which to offset the write down they have to take when the foreclosure sells at a lower price than they are carrying it on their books.
no no no, this is part of the great rotation, people see more upside in stocks than in house prices
The inventory remark seems credible in some markets. Near me in NC, a 20 home sub is completely sold before the first houses are even completed. A realtor friend in the business for years said this is the lowest inventory he's had since 2006. Only 1 for sale in my 'hood, and none in the much bigger development next to me. Houses aren't flying off the market, and prices aren't equal to the highs of 2007, but it's pretty healthy looking. Apts going up everywhere, too (ugh).
Funny, six months ago, the housing recovery was being touted as the driver for the economy as a whole and why 1600 on the S&P was justified.
Now that the housing recovery has proven to be yet another withered and dead green shoot, the collapsing economy is being touted as the driver for the Fed and why 1800 on the S&P is justified.
I remember clearly at the beginning of the year, that 1450 was justified by the expected first half recovery whioch had better come otherwise we'd fall back from 1450. Then the first half recoveryu got pushed back to the second half, just like prior years.
Damn, with collapsing fundamentals like these, who needs a recovery (at least if you are a stock trader or uber-wealthy).
There is a simple fix to the sales activity and affordability. The sellers just have to lower their prices.
The sellers have to meet a price that, net of transaction costs, gets them to at least zero remaining equity. That would basically necessitate anywhere from a 6-8% price premium vs. where prices were running back in the mid 2000's boom. Ergo, low inventories and unjustified ask prices. Anyone that was still left willing to take a hit on net equity just to GTFO is long gone.
Uh....sales have now dropped to December 2012 levels.
Well....we are pretty much at December now (only 5 days to go)so how significant is this 'drop'?
Actually, as I am in the 'biz' I suspect it is worse this December than last December. Except I am hearing about a fair amount of sales being for cash and from out of country buyers.
While I think that domestic buyers are less in numbers, there is some offset of out of country buyers that are keeping things up somewhat. But if off shore buyers start to drop, then we will certainly see a good example of 'fugly'.
Hey all your dead-end ZHedgers; Fear not QE. The sell side's defense.
http://www.ftportfolios.com/Commentary/EconomicResearch/2013/11/25/qe-not-that-big-of-a-deal
Isn't everything wonderful?