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Pending Home Sales See Biggest Collapse Since May 2010: Weather, Affordability Blamed

Tyler Durden's picture


Pending Home Sales collapsed 8.7% month-over-month - the worst since May 2010 - missing by the most in over 3 years. This is a 6.1% drop YoY. Sellside consensus (-0.3%) was unaware of the horrible weather in December until 13 minutes ago. Of course, analysts could never have guessed that weather could have an impact (and ths reduce their expectations) but NAR's Larry Yun notes "unusually disruptive weather" prevented buyers from looking. However, he goes on to add that "Home prices rising faster than income is also giving pause to some potential buyers." This unusually honest line from the realtor mouthpiece is notable.




But blaming this "miss" on weather means that analyst forecasting this number have no idea.

Isn't it odd that everyone blames the weather, but apparently when they were forecasting consensus they DIDN'T KNOW what the weather would be? (while it had already been!!)


Joe Lavorgna forecast +0.5% was not the worst but a 7-sigma miss of consensus is extreme!!!


Larry Yun explains what they missed

Lawrence Yun , NAR chief economist, said several factors are working against buyers. “Unusually disruptive weather across large stretches of the country in December forced people indoors and prevented some buyers from looking at homes or making offers,” he said. “Home prices rising faster than income is also giving pause to some potential buyers, while at the same time a lack of inventory means insufficient choice. Although it could take several months for us to get a clearer read on market momentum, job growth and pent-up demand are positive factors.”

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Thu, 01/30/2014 - 11:12 | 4384033 Max Damage
Max Damage's picture

They need to change pending home sales after that crap number. Change it to pending room sales? They change how to measure everything else. Should increace the stats by a factor of 10 using rooms, and then they can ramp away on such awesome growth figures

Thu, 01/30/2014 - 11:32 | 4384116 WarriorClass
WarriorClass's picture

But shouldn't the existing inventory of empty houses result in a lower price?


Thu, 01/30/2014 - 11:36 | 4384128 derek_vineyard
derek_vineyard's picture

pretty much everyone is now 'all in' with O's economic recovery.   no more fish to reel in so time to legislate more recovery.

Thu, 01/30/2014 - 11:42 | 4384140 ndotken
ndotken's picture

When weather is bad, it keeps buyers from shopping ... when weather is good, buyers have better things to do than shop for a home ... realtors just can't seem to catch a fucking break   /sarc

Thu, 01/30/2014 - 11:49 | 4384174 101 years and c...
101 years and counting's picture

the weather was normal winter weather in Dec.  they try to use weather since it is fresh in our minds of how bad the CURRENT weather is.  complete joke.

Thu, 01/30/2014 - 14:09 | 4384565 dontgoforit
dontgoforit's picture

In the realm of the funny cynic, this ain't half bad......ain't half good either.

Thu, 01/30/2014 - 11:52 | 4384157 zaphod42
zaphod42's picture

"But shouldn't the existing inventory of empty houses result in a lower price?"

Only now, at the end, do you understand the true power of the dark side of Free Market Capitalism.


edit:  and realize the anatomical position of the 'unseen hand' and what it it is up to.

Thu, 01/30/2014 - 13:50 | 4384508 Blankenstein
Blankenstein's picture


"dark side of Free Market Capitalism."

You mean like QE1 - QE3, bank bailouts, the twist, etc. ?

Thu, 01/30/2014 - 11:33 | 4384119 The Vineyard
The Vineyard's picture

This real estate market isn't too bad--all things considered.  When they lift interest rates, that's when you'll see everything shit the bed.  But who knows when that will happen.

Thu, 01/30/2014 - 12:31 | 4384295 NotApplicable
NotApplicable's picture

I was looking at the local small town county seat newspaper RE ads last night and noted most of them had a big "REDUCED" label on them.

Thu, 01/30/2014 - 11:12 | 4384034 ParkAveFlasher
ParkAveFlasher's picture

What should we do today honey?  Buy a house?

Nah, too cold.

OK then, let's watch a movie.  In fact I think the Godfather is on.

Thu, 01/30/2014 - 11:26 | 4384096 G.O.O.D
G.O.O.D's picture

No darlin, lets watch gold get fvkin moneyhammered again today

Thu, 01/30/2014 - 12:16 | 4384230 ParkAveFlasher
ParkAveFlasher's picture

We did that last week.  Wait a second, Groundhog Day is on.  Let's watch that again.  I love the part when he wakes up and it's the same day repeating.  I can watch it again and again.

Thu, 01/30/2014 - 12:51 | 4384355 ParkAveFlasher
ParkAveFlasher's picture

We did that last week.  Wait a second, Groundhog Day is on.  Let's watch that again.  I love the part when he wakes up and it's the same day repeating.  I can watch it again and again.

Thu, 01/30/2014 - 11:28 | 4384105 Millivanilli
Millivanilli's picture

Honey, our wages our stagnant or falling and you are at risk of layoff.  We'll never be able to pay our student loans let alone "buy" a house with rising prices.   Sighs...

Thu, 01/30/2014 - 12:01 | 4384192 101 years and c...
101 years and counting's picture

maybe we should look at obama's plan to further rape us by opening a myRA. 

Thu, 01/30/2014 - 11:38 | 4384136 zaphod42
zaphod42's picture

W:  "What should we do today honey? Buy a house?"

H:  Yeah.  Let's sell our house and buy a much large McMansion. 

[[6 months later]]

W:  No one is buying our house.  Why not?

H:  I hear the only homes being purchased are ones in "pre-foreclosure."  And those are being purchased for cash, at about 60 cents on the dollar.  And we can't afford to take a loss and still buy a new home.  Plus, no one who doesn't 'own' a home has enough cash saved for a down payment to qualify.  They cannot save - hell, they can't even stay current with their rent.

W:  ::sighs::  I guess we're screwed, huh?

[[scene fades as lights go out]]


Thu, 01/30/2014 - 11:50 | 4384169 ChanceIs
ChanceIs's picture

I know that I am way out there past six sigma in my thinking - suppose that Doug Casey and Karl Denninger are my siblings amongst identical triplets, separated at birth and otherwise unknown to me.  (Of course they are both way more successful so that analogy only goes so far.)  When I am in house buying mode - a rare occurrence - then I love rotten weather.  I am in Washington, DC where through federal government corruption wages are very high.  People fight over homes.  I saw one bid up 10% back in August.  Sooooooooo if you want a house in Washington and one comes on the market, you better pray that it is raining and get off your fat a*&.  I can be somewhat sure that in the rest of the (normal) world weather might have some negative impact.  But still - supply and demand.  That empty house sitting on the market is an opportunity cost to the seller.  If demand is low - whether it is weather related or not - the buyer has some incremental negotiating power.  Best to get on the raincoat or snowshoes and hit those open houses.

I wouldn't go so far as to say that rotten weather should enhance sales, but........

Thu, 01/30/2014 - 11:13 | 4384036 buzzsaw99
buzzsaw99's picture

fun yun - job growth - yuk yuk

Thu, 01/30/2014 - 11:41 | 4384147 BandGap
BandGap's picture

The word "collapse" is being used in a lot of headlines this week.

Thu, 01/30/2014 - 11:12 | 4384037 syntaxterror
syntaxterror's picture

Bigger Fools are getting tougher to find.

Thu, 01/30/2014 - 11:16 | 4384055 JPM Hater001
JPM Hater001's picture

Oh, I don't know about that...we have plenty where I live.

Thu, 01/30/2014 - 11:33 | 4384122 syntaxterror
syntaxterror's picture

Unless your local airport has direct flights from China, good luck with finding the next bigger fools.

Thu, 01/30/2014 - 11:12 | 4384038 Jason T
Jason T's picture

weather is playing a role .. hard to work or do much anything is this cold.  

farmers almanac nailed it bigtime!

Thu, 01/30/2014 - 11:13 | 4384044 Kaiser Sousa
Kaiser Sousa's picture

"Pending Home Sales collapsed 8.7% month-over-month - the worst since May 2010 - missing by the most in over 3 years. This is a 6.1% drop YoY."

who cares...buy Facebook - right?????



Thu, 01/30/2014 - 11:13 | 4384046 One And Only
One And Only's picture

"Home prices rising faster than income is also giving pause to some potential buyers."

When 50% are all-cash deals, remind me again why income matters?

Thu, 01/30/2014 - 14:01 | 4384545 Blankenstein
Blankenstein's picture

These cash buyers are a bunch of specuvestors who need an end user (renter or buyer) to make money.  So if these end users don't have any income, the specuvestors will be stuck with a bunch of "great investments" they will need to unload - it will be a race to the exits.  

Thu, 01/30/2014 - 11:16 | 4384047 dizzyfingers
dizzyfingers's picture

How about 91 million people have no jobs, and most of the others don't earn enough to qualify for any mortgage? And don't forget that real estate taxes are going up while "value" (what one can get when selling) is plummeting...

Thu, 01/30/2014 - 11:28 | 4384103 G.O.O.D
G.O.O.D's picture

Or if you do have a job it is fracking in the man camps so who the fvk needs a house? Not like you are ever going to go there anyway.

Thu, 01/30/2014 - 11:16 | 4384053 youngman
youngman's picture

I have had many showings at my condo...no offers...so I raised the price...screw em....

Thu, 01/30/2014 - 11:23 | 4384090 DblAjent
DblAjent's picture

It took 100 days to sell our home in the Raleigh / Durham Triangle and we got what we paid for it 7 years ago. Friends say we lived for free...not. I put $25k into it. No shortage of showings. Buyers were just not that motivated (or, rather, concerned).

Thu, 01/30/2014 - 11:34 | 4384120 greatbeard
greatbeard's picture

>> I have had many showings at my condo...no offers..

I'm looking for a new ghetto dwelling with not much success.  I have my eye on one that wasn't priced yet, a Homepath repo.  So I ask a realtor to let me know when it's priced.  He tells me Homepath isn't going to price it (lie) but they are taking highest and best offer (lie) and that I'd better step up to the plate as they are getting lots of showings (lie again.  Houses in that area migt be getting lots of showings but this one isn't even on the market). And as a matter of fact, it was just shown yesterday (more than likely another lie, but certainly a scare tactic).  Fuck him and fuck all realtors that I've ever met.  I a firm believer in honesty and fairness but I'll be damned if realtors don't all deserve any fucking they get.  Every stinking one of them I've ever had the displeasure of getting to know business wise was a lying shit bag.

Thu, 01/30/2014 - 11:41 | 4384151 G.O.O.D
G.O.O.D's picture

I will sell you my shack beard, cheap.. 20% down and you can take care of this dump for awhile.

Thu, 01/30/2014 - 11:56 | 4384182 greatbeard
greatbeard's picture

>> 20% down and you can take care of this dump for awhile.

Tell me more, bro.  But I'm one of those flush baby boomer types, I pay all cash.  No fucking around, no surveys, on inspections, no insurance, no financing, no whiny wife.  Right house (property actually, I buy property and deal with what-ever house is sitting on it), right price, done deal, close anytime.  I don't pussy foot around.  All that pillow biting stuff home buyers go through is just a cash cow for the real estate industry and their hangers on.  Fuck them all.

Thu, 01/30/2014 - 14:12 | 4384577 Blankenstein
Blankenstein's picture

This nauseating commercial about sums it up:




"All that pillow biting stuff home buyers go through is just a cash cow for the real estate industry"



Thu, 01/30/2014 - 17:18 | 4385482 eddymunster
eddymunster's picture

@ greatbeard the fucking lot of 'em.



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Thu, 01/30/2014 - 14:28 | 4384632 Zadig
Zadig's picture

No offers means your price is too high.  I've had quite a few offers on my house, which is within $5k of the fluctuating zillow price, but they never close.  Lenders have pulled the financing from 'pre-approved' buyers days before closing multiple times.  It's currently under contract again and I'm not really expecting it to close this time either.  Apparently I'll have to write another check to a contractor before they let me know.  

Thu, 01/30/2014 - 11:14 | 4384054 T-NUTZ
T-NUTZ's picture

Yeah the weather has been BRUTAL in phoenix, San Diego, LA, Vegas...

Thu, 01/30/2014 - 12:21 | 4384132 foodstampbarry
foodstampbarry's picture

I agree, it was sunny yesterday and I had to turn the air conditioner on. Today, it's cloudy. The weather fluctuations in Tampa are a real horror.

Thu, 01/30/2014 - 12:27 | 4384281 Tall Tom
Tall Tom's picture

It is too hot in San Diego. It is forecast to be 80 Degrees today in the inland valley, in Lakeside, where I live.


Nobody wants to live here in the heat near a beach. There is no rain or snow. There is a drought.  Who would buy a property here?

The weather is so bad.

Thu, 01/30/2014 - 11:16 | 4384057 Its All Good
Its All Good's picture

Thank God that we have the weather cooperating to play scapegoat for all of our economy's maladies...



Thu, 01/30/2014 - 12:09 | 4384215 Tall Tom
Tall Tom's picture

The Super Toilet Bowl LOSER will blame the weather. The Sportscasters will blame the weather. The NFL will blame the weather for poor ticket sales and not their INEPTNESS for choosing such a Cold Weather site in an UNDOMED Stadium.


It reminds me when I was a kid and the parents told me to go weed the yard...


It's too hot was the excuse.


The population has turned into a bunch of whiny adult-children dependent on Mommy Government and Daddy Federal Reserve to take care of all of their needs.

Thu, 01/30/2014 - 11:17 | 4384058 FieldingMellish
FieldingMellish's picture

Honesty would be "lack of drug dealers to launder money for is the cause"

Thu, 01/30/2014 - 11:30 | 4384111 G.O.O.D
G.O.O.D's picture

Damn states legalizing pot is the problem. now we have no cartels to wash the money through RE

Thu, 01/30/2014 - 11:18 | 4384063 BudFox2012
BudFox2012's picture

Don't worry, these numbers will skyrocket next month as I just bought 1/2 the city of Detriot for $27.97

Thu, 01/30/2014 - 11:27 | 4384099 BandGap
BandGap's picture

And they threw na case of Bud Light, to, didn't they?

When the SHTF Detroit is goingto be OK. They have nothing left.

Thu, 01/30/2014 - 12:13 | 4384223 BudFox2012
BudFox2012's picture

Exactly.  Everything that can be burned or stolen is long since gone, and everyone has moved.  Some people will be bugging out to the wilderness to get away from people when TSHTF, I will be bugging in to the city for the same reason.

Thu, 01/30/2014 - 11:43 | 4384153 G.O.O.D
G.O.O.D's picture

Man did you ever get ripped off. A sucker born every minute.

Thu, 01/30/2014 - 12:10 | 4384217 BudFox2012
BudFox2012's picture

Actually, you the tax payer got ripped off.  I paid with my EBT card.

Thu, 01/30/2014 - 12:14 | 4384226 Tall Tom
Tall Tom's picture

You purchased a Property Tax Bill to pay for the LOSER Government remaining there?


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