This page has been archived and commenting is disabled.

No, The Plunge In Home Sales Was "Not" Due To Cold Weather

Tyler Durden's picture




 

This morning's utter collapse in pending home sales - a 6-sigma miss by 'economists' unaware that it was cold in December - has been ushered away on the back of "weather" reasoning. However, a glance at the chart below confirms this is total bullshit. As Goldman Sachs admits "broad-based declines by region suggest that colder-than-average weather was likely not the primary driver."
 

(h/t @Not_Jim_Cramer )

Via Goldman Sachs,

Pending home sales dropped 8.7% in December (vs. consensus -0.3%), the largest decline since the expiration of the first-time homebuyer tax credit in 2010. Sales declined in the Northeast (-10.3%), West (-9.8%), South (-8.8%), and Midwest (-6.8%).

 

The broad-based declines by region suggest that colder-than-average weather was likely not the primary driver, given slightly warmer-than-average temperatures on the Pacific coast in December.

 

Although a noisy series, the December weakness in pending home sales is an unfavorable indicator for near-term existing home sales, and follows disappointing new home sales already released for the month.

So, if it wasn't the weather... could it be that fast-money has left the bubble and what is left of the real-money mortgage-paying homebuyers are all that remains?

 

- advertisements -

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Thu, 01/30/2014 - 15:02 | 4384814 TheRideNeverEnds
TheRideNeverEnds's picture

Maybe it was because of the rising turkish yeilds... or, erm, its Bush's fault!

Thu, 01/30/2014 - 15:05 | 4384817 fonestar
fonestar's picture

The housing recovery has got the Milli Vanilli blues....

 

"I guess we can blame it on the rain"

 

http://www.youtube.com/watch?v=NwrL9MV6jSk

Thu, 01/30/2014 - 15:11 | 4384852 kliguy38
kliguy38's picture

Yup.....that blizzard in California just about finished off all the prospective sales......it wuz a doooozy

Thu, 01/30/2014 - 15:25 | 4384924 imapopulistnow
imapopulistnow's picture

Can't afford a house working 29.5 hours a week.

Thu, 01/30/2014 - 16:35 | 4385279 devo
devo's picture

With 10% inflation, no less.

Thu, 01/30/2014 - 15:40 | 4385007 Levadiakos
Levadiakos's picture

Listen. with better weather it would have been a maceration

Thu, 01/30/2014 - 15:26 | 4384923 Bryan
Bryan's picture

You know, one would think that the general public would FINALLY get the hint that they are being lied to and begin to doubt the spun numbers and commentary coming out of talking heads.  But no!  Many seem to lap it up like little puppies and regurgitate it to their audiences, who then regurgitate it to their friends and so on... and we just keep digging the hole deeper and pretending it's not actually a hole after all.  It's like playing this giant game of "Gossip" with the politicians starting the rumor.

Thu, 01/30/2014 - 16:42 | 4385330 kchrisc
kchrisc's picture

What lies?! DWTS and Honey Boo Boo come on when they say it will. All is well.

Thu, 01/30/2014 - 15:07 | 4384829 ronincap
ronincap's picture

The spin doctors have to keep the neternal hope machine running at 100% even though the wheels just fell off

Thu, 01/30/2014 - 15:28 | 4384931 101 years and c...
101 years and counting's picture

holy shit.  someone actually realized the "polar vortex" did not happen in Dec?  thats great research that i released about 5 hours ago....

Thu, 01/30/2014 - 16:28 | 4385238 CrashisOptimistic
CrashisOptimistic's picture

My frequently posted DEFINITIVE CHART OF THE HOUSING RECOVERY:

 

http://research.stlouisfed.org/fredgraph.png?g=7iv

 

That's 1960s levels with 50 million more people in the country.

Thu, 01/30/2014 - 17:13 | 4385464 o2sd
o2sd's picture

According to your chart the recession ended in 2009.

 

Thu, 01/30/2014 - 15:06 | 4384831 Jack Burton
Jack Burton's picture

I've grown to love the "weather" excuse for every drop in an economic indicator. As if life somehow comes to a halt with hot weather, cold weather, rainy weather or snowy weather strikes. Economic statistics in the USA are on a par with the old Soviet economic figures of the late great USSR. They are political in nature, not economic indicators for planning or investment purposes. America, like Stalin's USSR, now sees everything in the political sense, we can no longer even ask the right questions in the USA, because things are judged politically and not realistically. Stalin's system has become more and more the AMerican system. If you doubt this, then look at the spy state, a state of total spying on everyone that Stalin would have been green with envy to have been able to impose the the Soviet People.

Thu, 01/30/2014 - 15:28 | 4384949 SAT 800
SAT 800's picture

Yeah, well, I'm sure it was entirely due to Global Warming. On another note; I bought back my S&P500 contracts last night at 1774; basis Mar. and put the money on the new Natural Gas Short; which started making money right away; so now I'm 300$ per penny short on Mar. Nat. Gas; and have taken the $13,000 off the table from the stock market short; moving along to the next sure thing.

Thu, 01/30/2014 - 15:36 | 4384982 SAT 800
SAT 800's picture

If you're following this series of posts intended to teach how to make money in the futures market; you might wonder, am I a Natural Gas expert? No. I know absolutely nothing about Natural Gas; I never even look at the price charts for it; it was Zero Hedge that presented the chart showing the completed manipulation process with the vertical element on top; that's about all I'm interested in; going along with the profit takers. I know the energy complex is frequently subject to manipulation; and when I checked out the charts for Nat. Gas. the front months were crazy higher than the back months; enough time had gone by to complete the upswing process, and it looked like a typical blow out top; and it's making money, fast. The nice thing about this compared to the Stock Market, which was showing signs of support around 1775 'ish; is that there isn't any reason it can't go all the way back to $4.35; which would be nice.

Thu, 01/30/2014 - 15:30 | 4384952 GooseShtepping Moron
GooseShtepping Moron's picture

I fully agree. As I noted earlier to little fanfare, Americanism is simply low-church Communism (although we are currently experiencing a transient upsurge in "piety") and Russia has spread her errors throughout the world.

Thu, 01/30/2014 - 21:55 | 4386306 TheReplacement
TheReplacement's picture

If "Americanism" is looking like any-kind-of-communism then it is not Americanism in truth.

Thu, 01/30/2014 - 15:41 | 4385012 Levadiakos
Levadiakos's picture

Wow, amazing! He really does look like a young Bob Dylan!

Thu, 01/30/2014 - 15:08 | 4384841 ArkansasAngie
ArkansasAngie's picture

Fast money is fast money
Blink and it's gone
Oh Yellem!!
Whatcha gonna do about it

Thu, 01/30/2014 - 15:07 | 4384842 Colonel Klink
Colonel Klink's picture

We all know they LIE about anything bad and trump up the good news.  Obamas policies are failing by design and the media is complicit with their propaganda.

Thu, 01/30/2014 - 15:13 | 4384859 corporatewhore
corporatewhore's picture

 it isn't just O's fault but the entire government and their attitude about us serfs.  They've been making up bullshit forever.

"Mission Accomplished"

Thu, 01/30/2014 - 15:14 | 4384871 Panem et Circus
Panem et Circus's picture

Bush and Obama, same path different velocities. The only difference between Team Red and Team Blue is velocity, neither leads towards more freedom for the individual.

Thu, 01/30/2014 - 15:21 | 4384904 corporatewhore
corporatewhore's picture

if only more grasped that simple idea.  and looking at 2016 it continues to be a horrendous upcoming dilemma

Thu, 01/30/2014 - 15:13 | 4384865 Panem et Circus
Panem et Circus's picture

I agree wholeheartedly.

Thu, 01/30/2014 - 15:09 | 4384847 Spastica Rex
Spastica Rex's picture

Here in Warshington State (The "r" is silent), early December was cold. Since then, it's been very mild. And very dry.

Thu, 01/30/2014 - 15:31 | 4384958 Vooter
Vooter's picture

"Since then, it's been very mild. And very dry."

Hey, don't kid yourself--it's very easy to get distracted by dry, mild weather and then completely forget that you're supposed to be out looking for a new house. In fact, I would guess that the dry, mild weather is exactly why housing sales are down in the Pacific Northwest...

Thu, 01/30/2014 - 15:47 | 4385031 Levadiakos
Levadiakos's picture

He's just another tea party snot not buying homes in an attempt to harm Obama

Thu, 01/30/2014 - 16:12 | 4385162 Spastica Rex
Spastica Rex's picture

If it only it were that easy.

I would be a revolutionary!

Thu, 01/30/2014 - 15:15 | 4384877 Stoploss
Stoploss's picture

Hey, rates haven't gone up much either.

 

 

 

 

Yet.

Thu, 01/30/2014 - 15:16 | 4384888 Ness.
Ness.'s picture

I guess I'm living during the wrong century, because nowadays it's cold in Chicago during the winter months.

 

"Dumb luck, that."

Thu, 01/30/2014 - 15:23 | 4384910 jballz
jballz's picture

That's not dumb luck, you fool, that's the Global Warming getting worse!!!

Thu, 01/30/2014 - 15:25 | 4384921 Ness.
Ness.'s picture

Look up - you'll see my post flying over your head.

Thu, 01/30/2014 - 15:18 | 4384898 corporatewhore
corporatewhore's picture

the drop in sales is due to the following:

1. I'm out of a job and looking for a replacement

2. My replacement job is at 25-50% below what I made before

3. I filed bankruptcy because I no longer have the income I've had for 30 years

4. My corporation dropped my health insurance and the kids colleges are sending "payment overdue" notices

5. My home is currently been on the market for six months and I've no offers

6. All of the above

Thu, 01/30/2014 - 15:59 | 4385112 lotsoffun
lotsoffun's picture

corporatewhore - brother, you need to get in on the recovery!!  (sarc).

 

Thu, 01/30/2014 - 16:06 | 4385135 corporatewhore
corporatewhore's picture

at my age recovery isn't happening.  i'm thankful just to wake up in the morning

I just saw that the channel autostuffing now has a 100 supply to complement home sales.

 

Thu, 01/30/2014 - 16:46 | 4385353 greatbeard
greatbeard's picture

>> at my age recovery isn't happening.

Realizing that is half the battle.  I feel much better since I gave up.

Thu, 01/30/2014 - 15:25 | 4384899 tawdzilla
tawdzilla's picture

I don't think the weather was as much of a problem last December.  The main problem was the spike in the the number of people who had hangnails on their pinky toes and ingrown nose hairs (concurrently.)

Thu, 01/30/2014 - 15:22 | 4384907 denverdolomte
denverdolomte's picture

When is 1600 Penn. Ave going up for sale? 

Thu, 01/30/2014 - 15:42 | 4385010 W74
W74's picture

Christmas Day 1913?

Or was that the capitol building?  Not sure since I get my real estate mixed up all the time and both have great views of a 555 ft. phallus rising from the marsh.

Fri, 01/31/2014 - 15:24 | 4388874 Kobe Beef
Kobe Beef's picture

Vatican City, City of London, Washington DC... funny where those obelisks pop up. hmm..

Thu, 01/30/2014 - 15:24 | 4384913 conspicio
conspicio's picture

Well, duh. Of course it is not "the weather." It is "the racist klucker Bush Reagan Palin Republican ass backwards prolife religious gun toting freakshow angry white male...weather" that caused this.

There, fixed it for the progressive cvnts who throw this sh1t out for public consumption. After all, this is what they really meant to say caused it. Because Mulatto Jesus had nuttin to do with it.

Thu, 01/30/2014 - 15:28 | 4384946 Flakmeister
Flakmeister's picture

You come up with "Mulatto Jesus" and don't have the cojones to spell shit and cunt??

Thu, 01/30/2014 - 15:40 | 4384995 conspicio
conspicio's picture

I am sensitive that way and was simply trolling for you to notice. Is Mulatto Jesus offensive? This is news to me...

/s

Cheers, mate.

Thu, 01/30/2014 - 16:21 | 4385219 TPTB_r_TBTF
TPTB_r_TBTF's picture

Jesus is a mulatto.

That's why he has a Brazilian name.

Thu, 01/30/2014 - 16:29 | 4385246 Flakmeister
Flakmeister's picture

Trust me, I wasn't offended in the least... 

I was taken aback by your pusillanimous behaviour...

Thu, 01/30/2014 - 15:25 | 4384915 Flakmeister
Flakmeister's picture

Here are the current temperature anomalies:

http://cci-reanalyzer.org/DailySummary/output/T2_anom_satellite1.jpg

Notice how the Arctic is much warmer than normal, Alaska is basically in a record high temperature zone...

Be damn glad you ain't in Siberia where temperatures are 20 degrees or so below normal...

Thu, 01/30/2014 - 22:55 | 4386495 fedupwhiteguy
fedupwhiteguy's picture

North Dakota (jamestown) on Monday was -40 with that pesky wind chill and all my friends made it to work. It was a measly 11 degrees with 2" of snow this week in Birmingham, AL and it was PANDIMONIUM!! ha ha ha.

Housing in North Dakota is in demand, but the supply is very low. Mancamps and RV's are filling the voids.

Thu, 01/30/2014 - 15:27 | 4384926 Vooter
Vooter's picture

"Honey, I just LOVE that house--I think it's perfect for us!"

"I do, too, but it's so cold and snowy outside...what if we freeze to death on our way over to look at it?"

"You know, you're right--let's skip it. We can probably safely venture out again in April..."

Thu, 01/30/2014 - 15:26 | 4384929 dogmete
dogmete's picture

It's amazing that home prices are up anyway. I'll bet that changes soon. Dramatically.

Thu, 01/30/2014 - 15:28 | 4384938 greatbeard
greatbeard's picture

I'm cooling my search because there's more froth to the market than I'm comfortable with.  As I do my research it's clear the insider's are getting the decent deals and jacking the prices way up, and I mean way up.  I watch my areas very closly and the only decent values are "under contract" before they every hit the market, only to resurface with a 50% or better mark-up.  It's a pretty consistent pattern all over the SW Florida market.  The only homes/properties available to J6P are the ones recenlty sold and marked up.  I do understand that repos show as sold but this is a different bunch of "buyers", not banks repo-ing product. 

Thu, 01/30/2014 - 15:47 | 4385032 gbresnahan
gbresnahan's picture

Same here. If it's affordable, odds are they accepted an offer above asking.  If it's not, it sits for a long time.

Thu, 01/30/2014 - 19:06 | 4385823 new game
new game's picture

here in snowta i am activly in the market. looked at one y-day. g beard is spot on. insiders of gse homes pluck the good fixers, next tier is realtor first come but overpriced. then there is the norm mls, and if it is priced right, nice, no problems or project gone with possible multiple offers.  i am around 200-225 which in mn is about mean cost in the twin cities.  the burbs are much higher-add 50-100k.

country homes with acreage picked over last fall with shit left and trailor trash homes.

inventory very low...

wait and see atitude.  mo to mo lease, cash to go, but florida looking awfull good :)

-9 tonite with -25 windchill - fuck that!

Thu, 01/30/2014 - 15:27 | 4384942 gaoptimize
gaoptimize's picture

I sense that the incredulity meter here is pegging, just like Rush announced his was last week.  Morphing into anger?

Thu, 01/30/2014 - 16:18 | 4385202 corporatewhore
corporatewhore's picture

do you honestly believe that hustler?

Thu, 01/30/2014 - 16:28 | 4385248 gaoptimize
gaoptimize's picture

Another leftist who rarely if ever listens to Rush.  Did you know he is an acknoledged fan of Zerohedge?

Thu, 01/30/2014 - 16:35 | 4385274 corporatewhore
corporatewhore's picture

I wear that badge honorably sir.  Rush Limbaugh is a hypocritcal radio personality, gifted with verbiage.   I believed his sort of nonsene for years and then discovered it was all nothing but bullshit.  Perhaps you will be enlightened also someday.

Thu, 01/30/2014 - 15:42 | 4384985 kenezen
kenezen's picture

The big Wall St. Houses and large hedge and Investment firms saw opportunity to salvage some of the stupid purchases they made of bad mortgages put into their derivative product which caused the crash. That practice was: Let's go out and form subsidiaries hire outsourced firms and buy all the housing defaulted upon and rent. The nation was going to go toward rental as a trend which was correct. But in their normal method of Getting outsource agencies and various unrelated department of their companies all intertwined guaranteed to cause confusion just as they did with disastrous consequences in Mortgage, they set forth!

That challenge required a inordinately efficient process of Acquisition, verified ownership, correct evaluation of condition and rent ability, correct estimation of cost preparation and potential price available to guarantee net income after all services are performed. 

It hasn't worked cause they just did not take it seriously!! Now only a relative few are still buying. Housing sales go lower. This was sooo predictable. Now the question is what will that do to derivatives of this disaster?

Thu, 01/30/2014 - 15:44 | 4385016 gbresnahan
gbresnahan's picture

Where I live, the cheap places sold quickly but the higher priced ones are stagnating.

Thu, 01/30/2014 - 15:47 | 4385038 Levadiakos
Levadiakos's picture

Yup, car sales are up here also

Thu, 01/30/2014 - 18:04 | 4385668 W74
W74's picture

I'm telling you guys, people stuck paying astronomical rents and who are smart enough to know that renting is financial suicide (for working and middle class) and a 100% loss every month are desperate to get into any small homes they can that aren't in the ghetto/wrecked just to build some equity.

I know a lot of ZH'ers probably have a different take on this from their own perspectives, but I believe this to be the dynamic for people just on that rent/buy threshold who are paying double in rent over what a mortgage is.

Thu, 01/30/2014 - 15:55 | 4385086 glossolalia
glossolalia's picture

After this massive catastrophic collpasiplunge it's only a matter of days before packs of feral dogs are roaming the streets picking off those unlucky enough to still be alive.

Thu, 01/30/2014 - 16:41 | 4385315 kchrisc
kchrisc's picture

Then it was Global "Make Al Gore Rich" Warming (Climate Change, whatever...)

 

"Is this guillotine working?!"

Thu, 01/30/2014 - 17:27 | 4385532 kareninca
kareninca's picture

All of a sudden there are loads of preforeclosure listings in my hometown in eastern CT, after years of nothing.  Suddenly on Zillow, 28 preforeclosures, to go with the 36 regular listings.  I had been looking for so many years, and seeing nothing, that I took a break from looking, and then boom.

This is going to freak people out; it freaked me out, and my parents, who still live there.  I checked neighoring towns, and the same:  sudden huge number of preforeclosures easy to see.  Maybe they findable somewhere before, but now they are in your face.  Houses that sold in 2003 for $480k, now have Zillow "foreclosure sale estimates" of 250k.  The more modest houses don't seem to be listed, but I can't imagine that that is because they aren't behind in payments too; the banks probably just can't be bothered.  This is horrible; I had thought things were holding up okay there; I guess it was smoke and mirrors.  Hope these people have saved some money from not paying the mortgage, over the past several years.

I looked at West Hartford, too.  Just six months ago I had checked; there was basically no sign of distress on the regular/free sites.  Now about 115 preforeclusres.  That is a very desirable town to many people.

Thu, 01/30/2014 - 17:58 | 4385637 W74
W74's picture

What's sad is that I think there's still enough pent-up demand for small starter homes from people who've been forced to rent these past few years, that as soon as the banks finally make them available....that first wave might actually sell.

The threshold for "getting in the door" is tight because there really is low inventory of smaller starter homes (NAR is half right about low inventory) that are not completely destroyed and/or in the ghetto.

Thus, people who're paying these astronomical rents which have shot up 40-50% over the last 5-7 years, a lot of them are desperate to get into at least a small home (can't raise a family in an apartment and houses are crazy high rents) and build equity, but either can't or don't want to get into what's readily available, which is to say that which the flippers & local realtor guild are putting out.

Thu, 01/30/2014 - 17:35 | 4385562 pashley1411
pashley1411's picture

I dunno, blaming the weather is better than burning witches.   How many grandma's do you think this administration would throw into the flames for a 2% rise in approval rating?    all of them

Thu, 01/30/2014 - 18:23 | 4385734 Luapnor
Luapnor's picture

Help a newb out, where can I find that Goldman Sach quote somewhere else on teh internet? All the searches are claiming this was caused by the weather.

Thu, 01/30/2014 - 19:13 | 4385839 q99x2
q99x2's picture

Bernanke trashed the planet left Yellen, an old lady that looks like she could be anyone's pet dog, not someone easily categorized as a villian and Obama and his stazi to finish the take down of the United States of America.

Well fuck the fed Lock Yellen up with Madoff.

Thu, 01/30/2014 - 19:59 | 4385942 falak pema
falak pema's picture

Oligarchy market racketeering and gangsterment.

A word from <london about the housing market and how it entrains pauperisation for the 99%.

The dystopian world of urban first world metropoles.

Are we all, or more appropriately, will our children be metrodisposable recyclable human waste for the metrosexual 1% ?

What does it tell us about the housing market that my flat earns so much more than I do? | Melissa Kite | Comment is free | The Guardian

Fri, 01/31/2014 - 09:09 | 4387339 The Pop In
The Pop In's picture

In all likelihood Martin Armstrong has this RIGHT !

Former Chairman of Princeton Economics International and Foundation for the Study of Cycles, Martin Armstrong, discusses his 78 Year Real Estate Cycle Wave. Armstrong provides readers with a brief look at real estate by superimposing his model throughout history dating back to Athens and Julius Caesar, through 2009 and beyond.

“There is no delicate way to put this right now, but we are looking at a serious economic depression in terms of values of real estate. We have reached a crossroad that is very profound and if we do not at least try to comprehend the problem, we may be facing the worst economic implosion that has taken place in centuries. Thanks to the New York Investment Banks, they helped to leverage real estate far beyond anything that took place in history, and we are going to pay the price.”

The following 78 Year Real Estate Cycle Wave shows the major turning points for real estate through 2033. Note the 2007.15 turning point as being the top of a 52 year rise. According to Armstrong, the following 26 years will see a decline in real estate prices through 2033, with a brief rise from 2012 through 2015.

http://www.shtfplan.com/forecasting/martin-armstrong-a-forecast-for-real-estate_11232009

If you want a home to be a decent investment, then only buy what you can afford with a 15 year mortgage and a 20% down payment.
If you want
to make yourself a debt slave and make the banksters rich, than put <5% down and take out a 30 year mortgage.

"Life is really simple, but we insist on making it complicated."  ~ Confucius

Do NOT follow this link or you will be banned from the site!