The Schizophrenic US Housing Market In One Chart

Tyler Durden's picture


For those who are looking for just one chart with which to summarize the US housing market, here it is courtesy of the NAR, which earlier today reported July existing home sales, which despite beating expectations, were still 4.3% below the 5.38 million annualized homes sold a year ago.

The chart shows that while the housing market for the low-end continues to collapse (the 12.9% drop was "only" -12% three months ago), and the mid-range is virtually frozen, all the upside activity, activity which pushes the median price ever higher ( in July it was $222,900, 4.9% percent above July 2013 and the 29th consecutive month of year-over-year price gains), was in the ultra-luxury segment, or houses which cost over $1 million as the "1%", both foreign and domestic, continues to convert their pieces of fiat paper into hard real-estate assets

Source: NAR

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Thu, 08/21/2014 - 12:08 | 5125415 Quus Ant
Quus Ant's picture

Lookout below!  Gold be a tumblin'. 

Even I might back the bike up soon.

Thu, 08/21/2014 - 12:10 | 5125424 LawsofPhysics
LawsofPhysics's picture

yes, right along with treasury yields...

Thu, 08/21/2014 - 13:59 | 5125823 ebworthen
ebworthen's picture

Yes, and Silver...and sanity...and ethics...and...

Thu, 08/21/2014 - 12:18 | 5125454 Alhazred
Alhazred's picture

Time for me to jump in again.

@ $17 per ounce over spot for a brand new bar, i figured my bug out bag needed some universal emigration papers just in case.

Thu, 08/21/2014 - 12:21 | 5125463 Hippocratic Oaf
Hippocratic Oaf's picture

Wealth effect.............Bwahahahahahahaha!!!!

Bye Bye middle class

Thu, 08/21/2014 - 13:02 | 5125608 WakeUpPeeeeeople
WakeUpPeeeeeople's picture

Around here, 100k price range wouldn't get you a dbl-wide crack house down by the river. Might explain the 12% drop.

Thu, 08/21/2014 - 13:10 | 5125644 Oldwood
Oldwood's picture

If I can only hang on, my house will be billion dollars! I hope I can still find the wheels for it.

Thu, 08/21/2014 - 13:32 | 5125725 RaceToTheBottom
RaceToTheBottom's picture

This makes total sense.

Po people don't got no money.  

Bring on the middle class flop houses.....

Thu, 08/21/2014 - 12:11 | 5125433 RiskyBidness
RiskyBidness's picture

Oh just btfd!!  and stfu!!

Thu, 08/21/2014 - 12:13 | 5125440 Dead Man Walking
Dead Man Walking's picture

not schizo, just more proof the 1% are fine.

Thu, 08/21/2014 - 12:26 | 5125455 robilla
robilla's picture

The high-end of the market is on fire... credit has definitely opened up there.

90LTV loans with no MI. Hell, I can even do you a loan on a $700,000 purchase, 5% down and no MI

Mind you, there is a proctology exam required for Underwriting. Any problems... sorry sweetie, better luck next time.

The low-end?

Sorry, only FHA deals for people with foreclosures and bankruptcies or investors that are going to rent them out. But the rate is +5% and you have to put 20%, or 25% down if you have more than three mortgages.

Thu, 08/21/2014 - 12:23 | 5125469 Caveman93
Caveman93's picture

The weather MUST BE better in wealthier neighborhoods!

Thu, 08/21/2014 - 12:25 | 5125477 Jadr
Jadr's picture

Another one of these charts.  The bottom end of housing has fallen off because insititutional investors have either exited the space are have slowed down/reduced acquisitions from their extremely heightened pace the past 2 years.  Yes entry level buyer's are probably slightly negative as well but when comparing to last year's buying fest in those price ranges it would be expected for there to be a dip, even if the retail market was healthy.

Thu, 08/21/2014 - 12:25 | 5125479 TheRideNeverEnds
TheRideNeverEnds's picture

It just noise, the trend is clear; S&P 5,000 in a couple years as the DOW trades 36,000.

Its a given that we are going higher and there is close to zero downside risk.  

The only reason to sell anything here (aside from that worthless pile of shit gold) is if you don't have enough cash on the sidelines already to buy more AAPL. 

Thu, 08/21/2014 - 14:04 | 5125853 Quus Ant
Quus Ant's picture

gold is worthless?  last I checked it was trading around 1275.

Thu, 08/21/2014 - 12:25 | 5125482 kowalli
kowalli's picture

this is a recovering

Thu, 08/21/2014 - 12:28 | 5125487 Atlantis Consigliore
Atlantis Consigliore's picture

sub prime car loans and house loans, Banks?  no loans period.

biz loans,  drop dead.  Europe? in a depression Kaput;   Gold  ?  wake me up at $ 800 an oz.

watch the Titanic its breaking apart pushing the stern stock market to all time highs, Lol.

Thu, 08/21/2014 - 12:36 | 5125518 Charles Nelson ...
Charles Nelson Reilly's picture

yea, sure pal, there will be a bunch of gold laying around for you at $800 when you "wake up".  

Thu, 08/21/2014 - 12:28 | 5125488 ChanceIs
ChanceIs's picture

>>>all the upside activity, activity which pushes the median price ever higher<<<

Median price rising??????

The median price is the price of the unit which has half of the units carrying a higher price and the other half a lower price.  If all of the high end prices rise, and the low end prices fall, the median won't change.

Given the sequence: 1 2 3 4 4 4 8 8 10, the median is 4.  If we change that to:  1 1 1 4 4 4 10 10 10, the median remains at 4.  Have I forgotten my statistics?

A better question would be in what manner is NAR using statistics to stretch the truth.

Does it matter as long as the Fed keeps buying MBS - taper or not?  I mean...don't they own them all by now.  They aren't like Treasuries where the governmet manufactures a few billion new one every minute.

Thu, 08/21/2014 - 12:30 | 5125496 i_call_you_my_base
i_call_you_my_base's picture

Good point.

"A better question would be in what manner is NAR using statistics to stretch the truth."

The answer is: in every way possible.

Thu, 08/21/2014 - 13:14 | 5125661 Oldwood
Oldwood's picture

They, like Obama are only spreading positivity, for the good of the people.

And everyone wants to be told they are beautiful, especially those who know you are lying. You actually care enough to lie. That is why Obama is so loved. They love him FOR his lies. He does it for the folks.

Thu, 08/21/2014 - 12:32 | 5125505 bigrooster
bigrooster's picture

The low end did not collapse. There are simply fewer houses available under 100k.  Three houses that I bought in Phoenix 3 to 4 years ago under 100k are all now worth well over 100k.  You can't find a decent house in Phoenix anymore under 100k.

Thu, 08/21/2014 - 12:49 | 5125559 directaction
directaction's picture

What a coincidence! You bought three. I bought six of 'em. A buddy of mine who drives a taxi in Vegas just bought two. All in Phoenix! Yeah, we all wonder why the sub-$100,000 price range for a decent home in Phoenix has vanished. Hmmm ... 

Thu, 08/21/2014 - 12:59 | 5125600 Oldwood
Oldwood's picture

The best part is, no one has ever lost any money flipping houses....

Property managment is the place to be...if you have the stomach for it. A piece of the action for eternity and you don't own shit. All these "investors" buying these house up are going to have to sell them (and hopefully not all in the same month as last time) or rent them out.

Good luck (from someone who owns rental houses)

Thu, 08/21/2014 - 13:11 | 5125646 WakeUpPeeeeeople
WakeUpPeeeeeople's picture

The trick to making money in the slumlord business is to 1) buy the property dirt cheap, 2) do all the work yourself. Everytime you call someone (contractor, manager) you're throwing money down the drain.

If the plan is to just collect mailbox money then expect to get fucked. Remember, there is only one kind of rent and that is low rent.

Thu, 08/21/2014 - 13:19 | 5125677 Oldwood
Oldwood's picture

The wife is the slum lord, I just do the dirty work, and it is dirty. Our properties are mid range so its not really slums, but renters are only renting, its not their house. As you say, if you rely on contractors, there is no profit, which makes me wonder how these large corporate outfits can survive, as well as the small time people who have no skills beyond signing checks. We started out hiring a manager but it sucked and they took all the income, leaving us the bills. Now we do most of it ourselves but I have been in construction my whole life so it is just more of the lower pay, and a mean boss.

Thu, 08/21/2014 - 14:07 | 5125871 astoriajoe
astoriajoe's picture

Perhaps they've added plumbing and wiring to the entry level rotations at Goldman and JPM.

Thu, 08/21/2014 - 12:58 | 5125592 Farmer Joe in B...
Farmer Joe in Brooklyn's picture

I was going to comment the same thing.  While interesting, one chart only leads to more questions than answers. 

Thu, 08/21/2014 - 13:09 | 5125641 toady
toady's picture

And that's a bad indicator for me because 80-90% of humans in the Phoenix area can't qualify for 100k or more.

Probably works for your rentals though...

Thu, 08/21/2014 - 12:49 | 5125563 NOTaREALmerican
NOTaREALmerican's picture

The housing marking in my bucolic Elysium Support Class college town is goin' like gang-busters.    Once again, there's two separate economies: the bottom 70% in the Trash Class, and the non Trash.  

Thu, 08/21/2014 - 12:51 | 5125570 augustusgloop
augustusgloop's picture

A rising tide does not float leaky boats.

Thu, 08/21/2014 - 13:01 | 5125605 Oldwood
Oldwood's picture

Only with a large bilge pump (the fed)

Thu, 08/21/2014 - 13:07 | 5125631 Oldwood
Oldwood's picture

Come on now! lets give them smart n savy the big high five! And don't be hangin with them bottom 70% losers anymore, ya hear?

Thu, 08/21/2014 - 14:04 | 5125827 pashley1411
pashley1411's picture

The rents you can get for the college crowd are sick.

With another round of new students, I don't seem to remember quite so many BMW's, Mercedes, and Lexus's driven by parents (CU, Boulder) as I see now.

So screw it, in the comparatively small realm of student housing, soak the rich.

Thu, 08/21/2014 - 12:50 | 5125567 NEOSERF
NEOSERF's picture

Could probably do another about the last 12 month total permits by type, builders confidence index and then on the other side what actually gets built and sold which would likely show a 5x disconnect between what is supposed to happen vs. reality.

Thu, 08/21/2014 - 13:05 | 5125622 Oldwood
Oldwood's picture

There is no confidence in our economic fundamentals, only in our government's willingness to do just about anything to prevent a "numerical" backslide in the economy. Housing or stock market, its all the same. Of course there is the possibility that things could actually escape their control....nah, that could never happen, besides they would see it comining, right?

Thu, 08/21/2014 - 13:02 | 5125607 starman
starman's picture

Correction: your house doesn't really worth more, it's demand and the multiplying effect that's creating its "new" value. Untill of course that evaporates! 

Good luck to you multiple home owners. 

Thu, 08/21/2014 - 13:22 | 5125682 Tenshin Headache
Tenshin Headache's picture

Steal from the poor, give to the rich. It's an ancient game.

Thu, 08/21/2014 - 13:30 | 5125715 gatorengineer
gatorengineer's picture

The reason is simple there is no <100k homes....

Thu, 08/21/2014 - 13:45 | 5125771 greatbeard
greatbeard's picture

>> there is no <100k homes....

I've run across a few.  Problem being they are worth less than half the asking price, and they're getting it.  I wouldn't mind moving, again, but the property tax implications keep me here.  Not a bad place, really, but I'm a rolling stone at heart.  But if dump this place and pick up a similarly price house in another location, my taxes go from $850 to about $2,500 a year.  Escalating prices are only a boon to the tax man, the banker and the insurance man.  It's fools gold to owners really.  All things considered, I'm just happy to be "stuck" where I'm "stuck". 

Thu, 08/21/2014 - 13:47 | 5125784 plane jain
plane jain's picture

Here a '70s era tract home around 1500 sq. ft. is running $200K on average.  You can get cheaper houses in nearby towns, but the schools are very poor quality, as in below standard vs. exemplary.  Turn key properties are selling in 3-4 days.

Thu, 08/21/2014 - 13:56 | 5125817 RattNRoll
RattNRoll's picture

My 70's style home I sold recently for 225K, I paid 150K 6 years ago for it. This is defintely a seller's market. Problem is finding a good neighborhood with decent folks and clean stores. House styles/decor dont matter, quality of the area around me does.

Thu, 08/21/2014 - 14:56 | 5126132 novictim
novictim's picture

Essentially, sales of homes for less than $750k are down.  Wonder why?

The peeps is broke, mofos.

Thu, 08/21/2014 - 15:08 | 5126193 venturen
venturen's picture

Obama's cronies living it up! 

Thu, 08/21/2014 - 15:16 | 5126238 uncle_vito
uncle_vito's picture

That is CHANGE in sales.   Actual sales is much different.   All actual sales are quite good.   But who really cares.

Thu, 08/21/2014 - 15:48 | 5126441 ebworthen
ebworthen's picture

Income inequality, Chart B.

Thu, 08/21/2014 - 17:07 | 5126836 bitterwolf
bitterwolf's picture

750K and under more relo's than move up buyers IMO.

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