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Homebuilder Confidence Crashes By Most On Record

Tyler Durden's picture




 

Surprise! For the 3rd time in the last 20 years, homebuilder sentiment got way ahead of reality... and as the February NAHB data shows, reality is starting to catch up to them. The NAHB sentiment index crashed by its most on record in Feb, missed expectations by its most on record, and fell back below the crucial 50-level, as it starts to play cyclical catch-down to home sales and mortgage apps. Think it's the weather? nope...It's across every region (with The West dropping the most on record - hot dry weather?)

 

Yet again hope fades...

 

Biggest miss and biggest drop on record....

 

A 10-sigma wobble!!!!

 

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Tue, 02/18/2014 - 11:19 | 4447985 Sudden Debt
Sudden Debt's picture

Wobble Hobble Doe! What numbers will appear in my Shoe!

 

Tue, 02/18/2014 - 11:22 | 4448000 CH1
CH1's picture

Bullish!!!

(What isn't?)

Tue, 02/18/2014 - 11:29 | 4448034 Headbanger
Headbanger's picture

I'm shocked!!  

You mean the 30 somethings living with parents and drowning in student loan debt aren't rushing out to buy a brand new house, furniture, law mowers and a dog??

And I suppose they're not signing up for Obama care either!

Tue, 02/18/2014 - 11:35 | 4448064 Sudden Debt
Sudden Debt's picture

They're all buying bitcoins hand over fist...

like that guy who used to pump bitcoin on ZH for a while... fone foone phone... something...

Tue, 02/18/2014 - 11:52 | 4448143 Headbanger
Headbanger's picture

starfone??    fartsone??   fonerats??  

Yeah, something like that..

Tue, 02/18/2014 - 12:07 | 4448197 NoDebt
NoDebt's picture

"There has never been a better time to buy a home!"

Would somebody PLEASE make me an offer on my Mom's old place?  (It's been on the market 8 months and I've had a best offer of $50K under my already-lowered-three-times asking price.  Currently $200K, originally started at $225K.  Best offer to date: $150K plus help.  Ouch.).

I swear you can't go wrong.  Deal of a lifetime.  You'll be kicking yourself if you don't jump on this right away.  

Tue, 02/18/2014 - 12:52 | 4448457 TruthInSunshine
TruthInSunshine's picture

If the new housing market is deteriorating, along with the existing housing market, A&E is going to have to start running 2007 repeats of "Flip This House," starring Armando Montelongo.

Tue, 02/18/2014 - 13:58 | 4448796 Blano
Blano's picture

Take the K off the end and will talk.

Tue, 02/18/2014 - 14:02 | 4448806 thamnosma
thamnosma's picture

You'll have a bidding war with me, but I can't go higher than 175 bucks

Tue, 02/18/2014 - 15:44 | 4449285 Seer
Seer's picture

Some builders are moving along with signing off on my mother's place.  Years ago some amateurs tried doing a package deal to sell off this and other adjoining properties, it failed miserably.  I'd stated that the chance wouldn't come along again, but, much to my surprise there's yet another attempt, AND, the builders have offerred up even MOAR! (shy of 1 mill).  Big chunk of change has already been put down, in which case they're pretty serious about it.  The house will be torn down, it's the property that's the value (just under 3 acres).

It's great for my mother, but I can't help but feel too close to the insanity here...

Tue, 02/18/2014 - 11:30 | 4448038 Jumbotron
Jumbotron's picture

That's right......because this is old data.  Which means the worst is behind us.

Happy Days are ALREADY here again......we just don't know it yet.

(ahem......yes.....yes I WOULD like some Valium and Lithium with my egg white omelet.....thank you very much.)

Tue, 02/18/2014 - 11:20 | 4447990 NoWayJose
NoWayJose's picture

Winter weather might not slow housing, but a $20 billion a month taper might be having some effect...

Tue, 02/18/2014 - 11:20 | 4447993 adr
adr's picture

Buy a home now! You don't want to miss out on record high prices that will crater in a few years leaving you financially ruined for the rest of your life.

Tue, 02/18/2014 - 11:25 | 4448017 101 years and c...
101 years and counting's picture

lol.  been there, done that.  i have no plans to move.  which is good because i cant.

Tue, 02/18/2014 - 11:21 | 4447994 Ulterior
Ulterior's picture

Not to worry - americans build home from straw anyway. When did you stoped using brick and mortar?

Tue, 02/18/2014 - 11:23 | 4448008 wonderatitall
wonderatitall's picture

i blame christie and he new about a bridge and he kicked me in da nutz

Tue, 02/18/2014 - 11:24 | 4448014 CH1
CH1's picture

When did you stoped using brick and mortar?

When the builders saw that they could juice the profit margin a couple of percent by building with straw, as you say.

As long as the house looks new and shiny, the buyers don't care.

Tue, 02/18/2014 - 12:57 | 4448484 Hobo Sapien
Hobo Sapien's picture

Worked with RE agents for a now deceased corp. taking panoramic photos of RE listings(CA). 2007-8. Great job while it lasted. But as someone who has also worked in construction/painting, I have to say the McMansions I saw were kind of pathetic, and that was most of the business - rats escaping the sinking ship. Foamcore Dorian pillars, un-cured cement foundatios, etc., I dealt with owners in over their heads trying to sell at the top.

Most of the occupied units, if I met the owner, they seemed to be small business owners heading out of state. Kind of strange dealing with them. Most of the talk was spin, how this was going to be great, opportunities, etc.

The unoccuppied properties seemed like investments/rentals mostly - they were usually trashed. One million $ property I was tasked with with photoshopping in carpet, because when I shot it, the carpet had all been torn out as irretrievably filthy. Beautiful kitchen, 5 bedrooms, 20 ft ceiling in the living room, wall of glass, right on the edge of the golf course. Carpet so gross I never even got to see it, lol.

So yeah - the higher end properties I saw were built of straw. Google "Rancho Murieta."

Tue, 02/18/2014 - 13:45 | 4448737 saltedGold
saltedGold's picture

" I have to say the McMansions I saw were kind of pathetic, and that was most of the business - rats escaping the sinking ship. Foamcore Dorian pillars, un-cured cement foundatios, etc."

I know what you're talking about!  I did hvac work about 7-8 years ago on some "high end" homes.  Built to minimum specifications with minimum materials of the lowest grade.  I'm sorry, if I'm paying $2+ million for a home, at the very least put down a quality plywood subflooring, not CDX.  But seeing the home finished, they sure look nice once everything is covered up.  Too bad they have that hollow feel to them for some reason :)

Tue, 02/18/2014 - 15:57 | 4449328 Seer
Seer's picture

CDX IS plywood.  Perhaps you meant OSB? (being that I'm trailer trash and all that's how I roll- OSB [have a good roof and maintain- it's a compromise so I could have useful land (plus on-property energy for heating, and abundant water]; and, as my wife says: "cheap is a cardboard box")

Tue, 02/18/2014 - 16:44 | 4449554 TruthInSunshine
TruthInSunshine's picture

I've NEVER witnessed NOR IMAGINED houses built so shittily as the ones I saw in Phoenix, Sacramento, Las Vegas (Henderson), etc.

Chicken wire supported by 2 x 2 1/2s" studs (I only barely joke) with stucco poured over it on a defectively poured slab and the shittiest ass windows to ever be slapped aside a residential structure.

I could punch a hole through the side of those shitboxes if I wanted to gain entry. It was a sight to behold. Most of them were leaning, too, not being in square. They should call them lean toos.

Tue, 02/18/2014 - 21:47 | 4450888 Hobo Sapien
Hobo Sapien's picture

I soooo know what you mean. But I think I kind of get it now. McMansions were in large part marketing devices for the owner - showrooms/psyops. Not castles to live in forever and pass to one's heirs.

My bro-in-law has one of these; on a street too narrow to have cars parked at the curb both sides, huge house with a backyard just big enough for a gas grill and a couple of chairs. Open floor plan, with an entertainment room w/ surround sound, xbox/kinect, huge plasmascreen; amazing kitchen w/ granite counters. I think developers sussed the market and made good kitchens and the rest just big. (and cheap. It doesn't need to last, onwards and upwards!) It's more a place to entertain clients than a home, is what I'm saying. McMansions are prefab party houses.

 

Tue, 02/18/2014 - 22:36 | 4451079 TruthInSunshine
TruthInSunshine's picture

Toll Brothers pretty much invented the devoid-of-any-quality shitbox McMansion, and then Pulte, D.R. Horton, etc. took up the strategy thereafter.

These houses are so sloppily put together by the most hack of trades that boggles the mind. Even the things they try to incorporate that would ordinarily be of some value, like Tyvek, becomes useless as they rip & tear holes in the shit everywhere during and after installation.

Wed, 02/19/2014 - 05:49 | 4451739 Hobo Sapien
Hobo Sapien's picture

*Morgan Freeman voice*

Now I know you'se upset, an we all unnerstans;but here's what I'm sayin'.

It's more a place to entertain clients than a home, is what I'm saying. McMansions are prefab party houses.

Tue, 02/18/2014 - 15:57 | 4449291 Seer
Seer's picture

Please don't give straw a bad rap (no, I didn't down-arrow you).  I was going to build a straw bale home- they're nothing to laugh about: great thermal and accustic properties; AND, they can be more fire resistant than most new construction homes (and old too)- it's the finish that provides the buffer, and, well, compacted straw doesn't like to just go up in flames, which is why fire departments like to train with bales of straw- they smolder a lot.

Tue, 02/18/2014 - 11:25 | 4448018 Dr. Engali
Dr. Engali's picture

You mean the part time McBurger world workers aren't out buying up new homes en masse? Go figure....

Tue, 02/18/2014 - 11:29 | 4448036 RSloane
RSloane's picture

Soon to be unemployed as automation engineering will make them all redundant.

Tue, 02/18/2014 - 11:53 | 4448153 Spastica Rex
Spastica Rex's picture

Lot of folks may soon be automated, including mid-managers and other "professionals."

The top 20% should be OK.

Tue, 02/18/2014 - 15:59 | 4449335 Seer
Seer's picture

Have to wonder what the corporations are thinking when it's these very people that are the primary consumers...  Death Spiral...

Tue, 02/18/2014 - 11:26 | 4448021 Max Cynical
Max Cynical's picture

Someone didn't get the memo here in Henderson, NV.

A major public builder just started grading raw land for new homes.

The Las Vegas valley already has 40,000 existing vacant homes and thousands of graded raw lots available for sale.

I bet a friend that this developer won't ultimely build the houses...he wouldn't take the bet.

Developers...always the eternal optimists.

 

Tue, 02/18/2014 - 12:10 | 4448234 InflammatoryResponse
InflammatoryResponse's picture

really?  40k empty homes?  WOW.

 

 that really seems like a huge number to me.

 

I guess that doesn't include empty rentals?

 

Tue, 02/18/2014 - 20:44 | 4450599 Max Cynical
Max Cynical's picture

"...a study from the University of Nevada at Las Vegas show some 40,000 homes are vacant, or 8% of the metropolitan area’s single-family housing stock."

http://www.zerohedge.com/news/2013-05-04/las-vegas-housing-8-single-fami...

Tue, 02/18/2014 - 15:49 | 4449296 Seer
Seer's picture

Easter Island syndrome.  It's what they know, and they'll do it right up to the day that they can no longer, even if it takes everyone out with them.

Tue, 02/18/2014 - 11:27 | 4448024 Pig Circus
Pig Circus's picture

Maybe next month.

Tue, 02/18/2014 - 11:27 | 4448026 NoIdea
NoIdea's picture

Bad weather/good weather doesn't matter. All bad news is good news in USA Through The Looking Glass. Buy the dips!

Tue, 02/18/2014 - 11:29 | 4448033 ziggy59
ziggy59's picture

So since financial reality is in the toilet, consumer confidence will be seen to rise to highest levels ever now...

Tue, 02/18/2014 - 11:30 | 4448039 i_call_you_my_base
i_call_you_my_base's picture

I would have thought it impossible to create two housing bubbles inside of ten years, but it's been done. Really unbelievable work to acheive that.

Tue, 02/18/2014 - 11:37 | 4448076 RSloane
RSloane's picture

Never bet against the Fed! I'm certain they could conjure up a few more housing bubbles in the next twenty years to compliment our ever-increasing unemployed or underemployed population.

Tue, 02/18/2014 - 11:40 | 4448087 B2u
B2u's picture

I blame it on the rain....or snow...or whatever sounds good...

 

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

Tue, 02/18/2014 - 11:48 | 4448124 FieldingMellish
FieldingMellish's picture

Its just a glitch in the land of "All Is Well".

Tue, 02/18/2014 - 11:48 | 4448129 Yen Cross
Yen Cross's picture

    I'm sure there will be lots of eager buyers trolling the burbs for real estate this spring with oil prices over $101.00bbl.

Tue, 02/18/2014 - 11:52 | 4448147 skwid vacuous
skwid vacuous's picture

Must be a good time to buy a house?

Tue, 02/18/2014 - 12:02 | 4448196 damicol
damicol's picture

Don't be fucking stupid. What are you trying to do, Ignite the entire US economy by yourself..

 That would make obummer look good wouldn't it you daft bugger

Tue, 02/18/2014 - 11:55 | 4448158 starman
starman's picture

Hey when you can live with mom and drive a new Beemer to college, whoda fuck wants a house or a taxpayer  funded healthinsurance! 

Welcome to the new American dream! Thanks to our Fuhrer.

Tue, 02/18/2014 - 11:57 | 4448171 Frank -THE COIN -
Frank -THE COIN -'s picture

Caliornia has Mamoth Mountain for year round skiing. Maybe seeing a picture of it on TV affected the West Region.

Tue, 02/18/2014 - 12:01 | 4448188 j.tennquist
j.tennquist's picture

If the NAHB admits that it is bad, you can be sure it's worse.  

But then... we already know that, don't we? 

Tue, 02/18/2014 - 12:07 | 4448215 trilliontroll
Tue, 02/18/2014 - 12:11 | 4448235 Rising Sun
Rising Sun's picture

Time for that cunt Yellen to pay for my fucking mortgage!!!

 

Start writing checks bitch!!!!!

Tue, 02/18/2014 - 13:06 | 4448542 Ex Cathedra
Ex Cathedra's picture

Off your meds?

Tue, 02/18/2014 - 12:18 | 4448263 USofAzzDownWeGo
USofAzzDownWeGo's picture

maybe my ryl $40 puts won't expire worthless this friday that i bought a week ago for .35c ..... wishful thinking

Tue, 02/18/2014 - 12:32 | 4448340 TheRideNeverEnds
TheRideNeverEnds's picture

...as we make new all time highs on our way to even higher all time highes

Tue, 02/18/2014 - 12:52 | 4448458 afton
afton's picture

We have some unbelievable...and I mean unbelievable...deals here in San Diego...

http://www.trulia.com/property/3145489161-6905-Wisconsin-Ave-La-Mesa-CA-...

Tue, 02/18/2014 - 13:53 | 4448771 Oxbo Rene
Oxbo Rene's picture

Chit man ! ! !
I'll get a few of them ! ! ! !

Tue, 02/18/2014 - 12:57 | 4448490 Spungo
Spungo's picture

New reality show: demolish houses that have never been occupied then show the film to homeless people to get their reaction.

Tue, 02/18/2014 - 14:04 | 4448815 thamnosma
thamnosma's picture

Prices going down -- great time to buy

Prices going up -- great time to buy

Price going stratospheric -- better get in before it's too late

Real estate touts are really bottom of the societal barrel

Tue, 02/18/2014 - 15:54 | 4449321 Ewtman
Tue, 02/18/2014 - 16:12 | 4449394 Seer
Seer's picture

"While inventory can play a role in housing prices on a local basis, it is a symptom, not a cause of demand, and credit availability is always the driver in the broader market."

Unfortunately this is missing the big FACT that the banks have helped prop up demand and keep prices elevated by sitting on a ton of properties.  I'd state that inventory manipulation, along with interest rate manipulation, IS more than a symptom and is actually a big part of the underlying strategy.

"As you can see, housing prices have only declined about halfway down to the levels where I expect they will eventually stabilize."

"Stabilize," for how long?  Keep in mind it all comes down to affordability, and, well, job participation rates are down and to the right, with no end in sight.

Economies of scale in reverse.  People have no idea how crushing this will be...

Wed, 02/19/2014 - 00:00 | 4451370 earl swagger
earl swagger's picture

Right on the money with the inventory dumps. Judicial foreclosure timeframe to final disposition huge driver uneven dump REO.

Dumping REO at the mark vs current market price Agency &TBTFs kills move up buyer willing to list current home.

Subcontractors & TBTF,s distracted with 800 unit new apartment in outs. Oversupply rent units will destroy the FTHB "own vs rent" equation.

Clearing REO early & often at market (180 days marketing time) should start the recovery, not trail.

Rates number 6 ,top 5 demand drivers home buyers.

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