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Existing Home Sales Miss; Worst Start To Year Since 2007

Tyler Durden's picture




 

After 6 months of missed expectations, last month's fragile beat of dismal expectations (even though it was the worst existing home sales SAAR in 21 months) provided just enough of a glimmer of hope to stoke more short squeezes in homebuilder stocks and strengthen the pillar of the US economic recovery. Now we are in April... the start of the key seasonal selling season... and existing home sales rose modestly MoM (but fell for the 6th month in a row YoY) and missed expectations. There is - simply put - no post-weather bounce.. and still NAR is blaming slow April sales being delayed due to Winter weather! This is the worst start to a year since 2007.

7 of the last 8 months missed expectations

 

This is the 6th month in a row of slowing year-over-year sales

 

This is the worst start to a year since 2007...

 

Some disturbing trends:

  • Existing-home sales in the Northeast are 6.3 percent below April 2013
  • Existing-home sales in the West are 10.0 percent below a year ago
  • Existing-home sales in the Midwest slipped 1.0 percent in April to a pace of 1.03 million, and are 9.6 percent below a year ago
  • Existing-home sales in the South are 3.5 percent below April 2013

The details continue to show that the "normal" housing market continues to disappear, with the bulk of existing housing made simply to serve investors and flipping speculators :

  • 5.9 months supply in April vs. 5.1 in March
  • Inventory rose 16.8% to 2.29m homes
  • 1st-time buyers 29% of total sales; all cash 32%; investors 18%
  • Distressed sales 15% of total sales; of which
  • foreclosures 10%; short sales 5%
  • Median home price rose 5.2% from last year to $201,700

First-time buyers continue to represent fewer than one-third of all buyers at 29 percent in April, down from 30 percent in March; they were 29 percent in April 2013.

All-cash sales comprised 32 percent of transactions in April, compared with 33 percent in March and 32 percent in April 2013. Individual investors, who account for many cash sales, purchased 18 percent of homes in April, up from 17 percent in March; they were 19 percent in April 2013. Seven out of 10 investors paid cash in April.

In short: all hail America's landlord Blackstone!

 

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Thu, 05/22/2014 - 10:09 | 4784587 LawsofPhysics
LawsofPhysics's picture

That's not how CNBC is spinning the "data"...

 

http://www.cnbc.com/id/101697101

 

Thu, 05/22/2014 - 10:13 | 4784598 I am more equal...
I am more equal than others's picture

 

 

Low interest rates have been played out.  Now wait a bit and then decline.  Bigger and faster decline.

Rollercoaster....yeah

Thu, 05/22/2014 - 10:49 | 4784716 synergize
synergize's picture

LOL - little footnote in that article (3rd pargraph down):

"Compared to April last year, sales were down 6.8 percent. "

Guess you dont want to emphasize that CNBC, eh?

Good data in - garbage out

Thu, 05/22/2014 - 11:21 | 4784854 Xibalba
Thu, 05/22/2014 - 11:23 | 4784859 Australian Economist
Australian Economist's picture

It gets better

 

"And there is reason to be optimistic. The inventory of unsold homes on the market increased 6.5 percent from a year-ago"

 

More houses going unsold? Sounds bullish to me.

 

Thu, 05/22/2014 - 10:23 | 4784603 madcows
madcows's picture

Boy is that a crap article.  First thing, it quotes the NAR.  That bastion of good, honest, and true realty information (propaganda).

Second, the "causes" for the slump are the lack of homes, interest rates, and cost of homes BUT, the future is bright, b/c more home are coming on the market... and the economy is strengthening.  Cue the HOUSING RECOVERY MUSIC!

 

Thu, 05/22/2014 - 10:14 | 4784604 Clueless Economist
Clueless Economist's picture

CNBS headline:

Home Sales Rebound

ZH is wrong again

--Dr Krugman

Thu, 05/22/2014 - 10:22 | 4784631 LawsofPhysics
LawsofPhysics's picture

Boy I certainly hope that "deflationary collapse" hurrys up and gets here soon.  The cost of feeding my family, educating them, keeping them warm, and keeping them healthy is killing me.

Thu, 05/22/2014 - 10:46 | 4784703 j0nx
j0nx's picture

Tell this data to the NoVa area as home prices in desirable locations continue to climb straight up and $650k homes have multiple offers in days. What a crock of shit from my standpoint.

Thu, 05/22/2014 - 11:42 | 4784928 Doña K
Doña K's picture

The beltway bandits area had always been pricy. Those who are feeding on the .gov contracts and where all the ex military high brass hang out lobbying. 

Thu, 05/22/2014 - 11:51 | 4784955 disabledvet
disabledvet's picture

"Ex military"? "Hanging on to that ex credit rating with a wing and a prayer"?

Once the last bubble bursts we'll see a generalized default ("Detroit writ large.")

I did see the Silver Line has blown out all budget projections and the entire management team has been let go.

Thu, 05/22/2014 - 10:09 | 4784588 CrashisOptimistic
CrashisOptimistic's picture

I have discovered the correct reply to assurances "everything is going to be okay."

 

The correct reply is . . . when?

Thu, 05/22/2014 - 10:09 | 4784591 Smegley Wanxalot
Smegley Wanxalot's picture

Clearly more printing is necessary to generate confidence and productive activity.

Thu, 05/22/2014 - 10:29 | 4784646 what's that smell
what's that smell's picture

stupid humans!

don't you know the algos don't give a flying fart about your home sales?

BTFD!

Thu, 05/22/2014 - 10:35 | 4784659 intric8
intric8's picture

Yet prices have risen out of reach of many americans. Our marvelous fed is handing asset inflation to the rich, price inflation to the poor! (formerly known as the middle class)

Thu, 05/22/2014 - 10:13 | 4784595 Moneyswirth
Moneyswirth's picture

No worries.  This will pick up once DC bails out all the deadbeat millenials with past due student loan debt.  Then they go out and get loans to buy houses.  Problem solved

Thu, 05/22/2014 - 10:32 | 4784649 tiger uppercut
tiger uppercut's picture

This is absolutely what's going to happen. Free shit giveaway 2014.

Thu, 05/22/2014 - 10:56 | 4784740 ebworthen
ebworthen's picture

Past due, seeing as .gov gave banks/insurers/corporations almost $1 Trillion in 2009, and have slathered them with nearly $1 Trillion per year in QE.

I calculate they owe each of us $3 Million tax free.  That ought to take care of student loan debt, underwater mortgages, and retail sales.

Of course if people act like Wall Street, they'll take it to Vegas and gamble on 30 to 1 double sixes bets, and be called "heroes".

Thu, 05/22/2014 - 11:19 | 4784837 intric8
intric8's picture

That is a provocative thought, that financial recklessness on an individual level is punished quite severely, but on systemic and macro levels it is forgiven and even reimbursed! I'd like to elevate to that level as well, but engaging in the tradecraft of financial theft with fed sanctioned scuzzbuckets, crooks and charlatans is beyond what my petty mortal heart can bear. I'd rather keep eating my instant noodles and still be able to look myself in the mirror each day.

Thu, 05/22/2014 - 10:13 | 4784597 FreeNewEnergy
FreeNewEnergy's picture

Note how all-cash buyers are also slowly drifting away. When they're gone, it's game over.

As a side note, BofA still hasn't moved their foreclosure against me forward... since March 2010. They seem to have given up.

I smell blood in the water.

Thu, 05/22/2014 - 10:16 | 4784612 monopoly
monopoly's picture

Good for you Freene. I hope that bank just dies.

Thu, 05/22/2014 - 10:17 | 4784617 monopoly
monopoly's picture

Do you live in Vegas?

 

Thu, 05/22/2014 - 10:23 | 4784632 FreeNewEnergy
FreeNewEnergy's picture

No. Rochester, NY. But I may move to Vegas after I get the house free and clear. Two more years, I figure, possibly less, should BofA go tits up (I know it's a long shot, but why the fuck not? They're upside-down as it is.).

I hate to admit it, but my dad passed away in July 2009, and since then, the bank has taken very good care of me. I live in Banksta Paradise™.

Thu, 05/22/2014 - 10:26 | 4784636 fonzannoon
fonzannoon's picture

One of my good buddies lives in Webster. Nice area. He had a fortress built up there for like 250k. Taxes are obscene for the prices and the weather is cold as shit. But this time of year it's beautiful up there. I like going into the city when I visit for beers. Nice to drive right into a city and park right in front of the place you are going to.

Thu, 05/22/2014 - 10:48 | 4784710 FreeNewEnergy
FreeNewEnergy's picture

Yeah, fonz, the nightlife in Rochester ain't much, but it is very accessible. Lots of good honkey tonks near the Eastman School in downtown, like Moe's, the only smoking bar in the county, I believe. If you're ever up this way, give me a heads up. I'd love to have a few drinks and laughs.

My place is in Irondequoit. The city is a six minute drive. Pretty convenient, but alas, also too close to high crime areas. Webster is excellent. I spend a lot of time near Newark, a little further out. Very rural, peaceful, and cheap. The weather is beginning to get to excellent phase. Too bad it only lasts about 4 1/2 months.

Thu, 05/22/2014 - 10:33 | 4784653 Miffed Microbio...
Miffed Microbiologist's picture

The only problem is living sustainably in a desert. Lake Mead's water level is quite low and at some point nature may reclaim Sin City. Facing severe drought in San Diego has made me question my own plans as well.

Miffed;-)

Thu, 05/22/2014 - 11:33 | 4784898 Hal n back
Hal n back's picture

ever look at how much  in resources Vegas wastes?

 

Electrivity usage, water features and pools everywhere in multiples.  Jets of all sorts flying in and out all the time. Street gridlock. Its an environmentalists nightmare.

 

 

I Wonder why the climate change/global warming/tree hugger folks do not go after vegas?

 

Thu, 05/22/2014 - 11:56 | 4784978 disabledvet
disabledvet's picture

They don't produce any of their own resources (save silver.)

If there's a hyperinflationary shock it'll hit Nevada first. The price of ice has already soared.

Thu, 05/22/2014 - 10:19 | 4784624 madcows
madcows's picture

32% of all sales are cash.  That can't be just individuals.  Only the 1% has enough cash to buy a house with cash.  That has to be investment buys by large funded collectives... I take it that these investors are pulling out of the stock market (as it is at a top), and putting it into Realty.  They certainly can't put it into bonds or cash.  Those are losers, too.  The cash buyers know it's a renter nation and it's going to get worse when the markets implode.  they're just setting up the next wealth transfer.

 

 

Thu, 05/22/2014 - 10:41 | 4784680 FreeNewEnergy
FreeNewEnergy's picture

Those all-cash sales were 40% of the market a few months ago. Those such as Blackrock are finding out that being a landlord is a loveless task, especially when renting to people on the edge of bankruptcy. I'd love to know what the default rate is on the houses they've turned into rentals.

Interest rates remain low, but the median sales price continues to rise. Of course, real estate is all local. Around upstate NY, the low-end is getting very, very cheap, in the cities and out in rural areas. Upstate NY is depressed by high property taxes and limited job growth, making it one of the most affordable areas in the country. Rochester, NY was #10 in a recent survey on home affordability.

This will come as a shock to some, but very nice, well-built colonials and cap cods in Irondequoit and Greece - two suburbs north of the city - can be had for under $90,000, some well under. But the property taxes are killer, unless you're 65+, in which case you get a huge (like, $65k) reduction in your assessment under what we call the STAR program. Realistically, if you buy a home around here for $80,000, and are over 65, you pay tax on an assessment of just $15,000. I'm toying with the idea of shared senior living on a large scale, using the government's own policy against itself.

Rochester, NY suburbs could become Boca of the North.

Thu, 05/22/2014 - 11:21 | 4784848 tgmur10
tgmur10's picture

"I'm toying with the idea of shared senior living on a large scale, using the government's own policy against itself."  Will only work if you transfer title for Enhanced Star Exemption but I like your thinking.......  Paying large on L.I. !!!!

Thu, 05/22/2014 - 10:28 | 4784644 greatbeard
greatbeard's picture

>> all-cash buyers are also slowly drifting away.

Prices have gotten too high for those folks. There are very few viable deals.  I have 25 or 30 properties on my search list that sold for $65K, plus or minus $10K, in '11 and '12, that are now asking in the high $100K range, with no renovations.    I have at least a dozen that sold in the last year or less than are now asking double what they sold for.  The amazing thing is so many of those homes, which I thought were so outlandishly marked up they would never sell, have sold, or have contracts on them.  I'm simply not going there.

In contenplation of a move, I put my house on the market at what I initially thought was a fair mark up, paid $58K, put $30K into it, put it up for $125K.  It was like throwing liver into a shark tank.  I quickly realized I'd make a mistake and pulled it off the market but two people who looked at it won't take no for an answer.  A month later both of them are trying to convince me to sell it to them at $150K.  The problem is, I now see, in our market, it would be difficult to replace for $200K.  There is simply no way this place should be worth more than double what I've got into it in less than two years.  That is not a healthy market dynamic and can't continue.

Thu, 05/22/2014 - 10:36 | 4784663 fonzannoon
fonzannoon's picture

why not take the money and rent if you think it can't continue? Grab yourself something on Central park west after the reset.

Thu, 05/22/2014 - 10:50 | 4784717 Dingleberry
Dingleberry's picture

Probably because you gotta live somewhere, and rents have really inflated (despite fed denials).

Plus, used to be you could park your "profits" from house selling into a nice little short term CD for 5%.

Can't do that anymore either. So yes....I would stay put too.

Regardless, this market is going one way. The fed can suspend reality.....but eventually reality will take over.

Enjoy the slow train to economic hell.

Thu, 05/22/2014 - 10:55 | 4784747 greatbeard
greatbeard's picture

>> ake the money and rent

A lot of reasons.  It's my perfect crib.  Five acres, fruit trees, gardens, pasture, ideal location, nicely renovated home, free and clear.  And, since I bought it for a pittance (compared to neighboring properties), my taxes are set at a low $700 a year.  And it's an ideal spot for my dogs.

I said it can't continue but I'm clearly wrong in that reguard.  It can continue, I just won't participate. Even if my place were to sell for $200K and I bought another for $200K, my taxes would reset to the mid $3K range.  That in itself makes it unplatable. 

I was wanting/willing to move if I could take a meager profit out of this place and buy another renovation project.  Beings as I'm long term unemployed/retired, making $10 an hour, plus free housing while I do a project, is just fine for me.  But there are no more value priced renovation projects on the West Florida market that I can find.  Everything is priced to perfection.

So, after a reassement of the market, I've decided the best thing for me to do is keep what I've got.  Living is darned cheap here and the quality of life can't be beat.  I'm going to buy another RV and do some more traveling locally.  I can grow my gardens/fruit in season and do my canning/preserving, then get away for a month or so in the RV when I'm not doing the hobby farm thing.  Being located in North Florida I can range from New Orleans to Tennessee to the Outer Banks and the Everglades without running up astronomical fuel bills.  I camp remote, cook my own meals and entertain myslelf by hiking and enjoying nature so my travel expenses are really minimal.

So, in a nutshell, although I would have liked to replinish my nest egg by doing a bit more flipping, economic reality is telling me to enjoy what I have for now.  If the situation changes, I'll change.  If I keep what I have and the market continues to surge, I'm good.  If I sell and rent, and the market continues to surge, I'm fucked.  I'm just playing it safe, IMO.

 

 

 

Thu, 05/22/2014 - 11:10 | 4784811 fonzannoon
fonzannoon's picture

well if it's your perfect crib, that says it all. Not many can say that.

Thu, 05/22/2014 - 12:37 | 4785184 nuclearsquid
nuclearsquid's picture

Here is an idea...

get it assessed, then get a Heloc.

Then plow those dollars into lending club loans (infinite leverage)

$$$ Profit!!

what could go wrong?

 

Thu, 05/22/2014 - 11:37 | 4784821 tip e. canoe
tip e. canoe's picture

as long as you got ample water, $200k for a solid home on 5 acres with maturing fruit trees and a fertile garden & pasture is going to turn out to be a steal of the century before this is all over.
imho, you're right to sit beard.
not yet time to reap what you sowed.
sit back and enjoy the fruits.

Thu, 05/22/2014 - 11:53 | 4784966 greatbeard
greatbeard's picture

>> as long as you got ample water,

Water we do have, as well as some very fertile ground.  This area is well known for springs and cave diving.  I know over the last 50 or so years the springs are way down but I don't see my access to well water being a future problem.  And in a state known for sandy soil I'm fortunate to be in an area of nice, black, rich dirt.  I'm surrounded by crops and orchards.  It really is an idyllic spot if one must be stranded.

Thu, 05/22/2014 - 10:48 | 4784709 Max Cynical
Max Cynical's picture

Is is so hard to reference the area you're talking about? I like this kind of "man on the street" info but it means nothing if you're not going to be silent about its locale.

Thu, 05/22/2014 - 11:07 | 4784791 greatbeard
greatbeard's picture

>> reference the area

Sorry bro, I've rambled on about this stuff so much I assumed anyone who cares knows.  My current property is in North Florida, NW of Gainesville.  My target shopping area was from south of Tampa to Ft Myers.  Hope that helps.

Thu, 05/22/2014 - 11:52 | 4784960 Dingleberry
Dingleberry's picture

I thought about moving to coastal NW Florida, but mother nature seems to use it as a bowling alley with hurricanes.

Maybe the Atlantic side.

Thu, 05/22/2014 - 12:01 | 4785009 greatbeard
greatbeard's picture

>> coastal NW Florida,

AFA hurricanes go, the area from Crystal River to Applachacola really isn't a bad area.  Hurricane's have a natural arc to their trajectory and the really big storms don't, in general, seem to be able to make the turn into the big bend area.  Applachicola and west, yes.  I don't live in fear of hurricanes, I just make sure now not to live right on the coast.  I'd rather drive to the water when I want it.  Flood insurance is going to change radically over the next few years and I'd think twice about buying anything that require it.  Even if you self insure, like I do, it will still greatly impact your resale value.  Stay back off the beach and the barrier islands.

Thu, 05/22/2014 - 10:14 | 4784601 Bosch
Bosch's picture

No one wants to buy anything on the coast because everyone now knows that those homes will be underwater in 3 years.  Or 5.  Maybe 10, but shit, could be 100 years, who knows.  Point is,  shitty home sales numbers are the fault of global warming. 

Thu, 05/22/2014 - 10:15 | 4784605 Bosch
Bosch's picture

But wait, it was too COLD to buy a home?  Hard to keep all this erratic climate straight. 

Thu, 05/22/2014 - 11:21 | 4784855 insanelysane
insanelysane's picture

This climate change stuff is so new, of course you need to ignore the fact that there was a major ice age, warming, a mini ice age, and warming.

Thu, 05/22/2014 - 10:16 | 4784611 Kaiser Sousa
Kaiser Sousa's picture

fucking CNBS...

just heard this dumb ass bitch named diana say that "it was housing that got the US into this mess, and its housing that's gonna get it out of this mess"...

u couldnt make these propaganda points up if u tried..but they can.

 

 

 

Thu, 05/22/2014 - 10:26 | 4784637 Grande Tetons
Grande Tetons's picture

Some bimbo on Bloomberg...mentioned a year or so ago that Japan was going to show us the way...out. She never said what out meant or out of what. But, she did I have a nice rack. 

Thu, 05/22/2014 - 10:41 | 4784678 Tinky
Tinky's picture

 

She was channeling an all-time great:

"If stupidity got us into this mess, then why can't it get us out?"

 – Will Rogers

 

Thu, 05/22/2014 - 10:17 | 4784614 NDXTrader
NDXTrader's picture

Our global overlords have declared this an UP day...and the people rejoice

Thu, 05/22/2014 - 10:17 | 4784618 unknwn
unknwn's picture

With all this weather crap I'm going long thermometers.

Thu, 05/22/2014 - 10:18 | 4784620 Muppet
Muppet's picture

Bullish!   Less home sales.   More stock sales.

Thu, 05/22/2014 - 10:23 | 4784633 NDXTrader
NDXTrader's picture

Housing topped in the fall of last year. It's obvious to anyone paying attention or without an agenda

Thu, 05/22/2014 - 10:53 | 4784733 j0nx
j0nx's picture

Tell that to the NoVa area. Still renting and STILL waiting for this so called crash to appear so I can buy something in a non-illegal alien/section 8 infested neighborhood.

Thu, 05/22/2014 - 10:28 | 4784643 alien-IQ
alien-IQ's picture

I've just spent 45 minutes watching Turbo Tax Timmy squirm and lie to Jon Stewart, I'm ready to kill someone.

Infuriating does not begin to describe that interview.

Here it is:
http://thedailyshow.cc.com/extended-interviews/z9b8f1/timothy-geithner-e...

Thu, 05/22/2014 - 10:32 | 4784652 Kaiser Sousa
Kaiser Sousa's picture

well if ur ready to kill someone MAKE SURE ITS A FUCKING BANKER FOR GOD FUCK'S SAKE..

Thu, 05/22/2014 - 10:37 | 4784664 alien-IQ
alien-IQ's picture

absolutely...or a lawyer...or perhaps one of each.

Thu, 05/22/2014 - 10:44 | 4784697 Kaiser Sousa
Kaiser Sousa's picture

i dare anyone to watch this clip and not wanna blow up the building where they broadcast from....

 

http://video.cnbc.com/gallery/?video=3000277914

Thu, 05/22/2014 - 10:54 | 4784741 alien-IQ
alien-IQ's picture

58 seconds into it, I started gagging...thought I was gonna puke. Had to shut it off...I like my new monitor.

Thu, 05/22/2014 - 11:44 | 4784931 intric8
intric8's picture

The housing atm solution seems like the only tripe these clowns are tossing on the table as a fix for the economy. It isnt surprising why our country got fucked when asshats like this are trotted out on air and allowed to influence a financially illiterate public without offering a single solution that involves long term sustainability.

Thu, 05/22/2014 - 11:56 | 4784982 Hal n back
Hal n back's picture

if you listen carefully Swonk says that "unfortunately" we need housing to lead  us out and I assum she used unfotunately becaus eits not hapening anytime soon.

 

we could also lean on autos, but wth wants a GM vehicle now. maybe zero down zero interest and 12 months no pay with no background check.

 

Perhaps we can lean on retail. Probably not due to lower quality and fewer jobs and money the masses have has to go to necessities.

 

I am in the camp that the economy and probably markets will unravel quickly, for all the reasons scattered about this over all blog.

Thu, 05/22/2014 - 10:50 | 4784721 Bernoulli
Bernoulli's picture

thanks for the link.

When he implied that HE landed the plane safely and saved all the innocent american people, i almost threw the screen out of the window...

Watched the first five minutes only, but can't really handle it...

 

 

Thu, 05/22/2014 - 11:28 | 4784876 jtz5
jtz5's picture

What a total dickhead...I don't remember hating a public figure more in my lifetime.

Thu, 05/22/2014 - 12:24 | 4785127 davidalan1
davidalan1's picture

over hill clinton?  seriously?

Thu, 05/22/2014 - 12:37 | 4785187 jtz5
jtz5's picture

Did you watch the interview?

Thu, 05/22/2014 - 10:31 | 4784651 starman
starman's picture

nah, tent cities popping up all over Murrika, recovery baby recovery!

Thu, 05/22/2014 - 10:41 | 4784685 ghostzapper
ghostzapper's picture

I'm setting up a new corporation to potentially take advantage of a hedging opportunity over the next 6-24 months.  Housing is well on its way to a meaningful collapse.  That said certain residential properties in my area have some appeal as a hedge against confiscation and as a legit generator of yield at the right price.  I know "they" can get me with property taxes though politically there are limits there but confiscation impacts too many of the sheep and is thus politically and logistically a nightmare.

I might start nibbling when this turd pops and craps out.  I wonder if I'll be right or if CNBC will be right. 

Thu, 05/22/2014 - 10:46 | 4784705 Spungo
Spungo's picture

Why is record high debt being such a drag on the economy? Guys like Krugman said credit was good!

Thu, 05/22/2014 - 10:58 | 4784757 FreeNewEnergy
FreeNewEnergy's picture

The sun is shining and I'm off to the garden!

Thu, 05/22/2014 - 11:00 | 4784762 buzzsaw99
buzzsaw99's picture

bullish - btatfh

Thu, 05/22/2014 - 12:46 | 4785222 Atlantis Consigliore
Atlantis Consigliore's picture

Watch after the 1% hike in Chicano Income Tax hike:

then there will be a huge flight from the Shitty;    last CONDO IN CHICANO HOLDS DA BAGO....

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