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Existing Home Sales Plunge (and Don't Blame The Weather)
With homebuilder sentiment slipping, blamed on the weather (despite improvement in the Northeast), Architecture billings down, and lumber prices down, it should not be totally surprising that existing home sales collapsed in January, which they just did tumbling -4.9% against expectations of -1.8% to a worse than expected 4.82 million SAAR (4.95 expected). This was the biggest January drop since 2010, and is the lowest existing home sales since April.
Oh - and before the talking heads blame the weather - the biggest drop in home sales was in The West (with its warm, dry, sunny home-buying climate). Considering that existing home sales most recent peak in 2014 failed to take out the previous government-sponsored peak in 2013 and remains 30% or more below the 2005 peak, and claims that the housing recovery is in tact are greatly exaggerated.
Lower highs and the weakest sales since April 2014
Last year it was the "weather's" fault, when California led the decline. Guess what: in January 2015, California, aka the "West" again saw the biggest drop:
So we can't blame the weather... but since Lawrence Yun, NAR chief economist said the housing market got off to a somewhat disappointing start to begin the year with January closings down throughout the country, something has to be blamed, right? We know: let's blame lack of supply...
“January housing data can be volatile because of seasonal influences, but low housing supply and the ongoing rise in home prices above the pace of inflation appeared to slow sales despite interest rates remaining near historic lows,” he said.
“Realtors are reporting that low rates are attracting potential buyers, but the lack of new and affordable listings is leading some to delay decisions.”
... for lack of transactions.
There is only one problem: if there was not enough supply, existing home prices would rise not, well, see the chart below:
Slowly but surely, all the lies and easy money propaganda is falling apart.
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Blame the drought in California
Heck, for that matter, balme anything but the root cause of the situation.
It's global warming climate change that will cause the oceans to rise and ISIL ISIS Threats that may attack these very locations so people are moving to other locations not reflected on these charts like um MARS
Rising temperatures everywhere (Global warming) make record cold temperatures which cause home sales to decline. The Obama adminstration just said so.
this is clearly Putin's fault
So while we fight ISIL Putin attacks....and America calls it diplomacy.
Perhaps we're all just waiting for The Real War.
If so...the folks looking for it have found the perfect expression of it.
Now if only all those Americans would finally die...
Putin attacks? More like Putin reacts.
Regular forces aren't being used in Ukraine. Crimea is ostensibly Russian and it was in their legal and self interest to re claim what was always theirs.
There has been a concerted effort by neo nazi battalions ( now that the regular bohunk army has fallen apart ) to ethnically cleanse eastern ukraine, and Russia won't stand for it.
Back when all this started, the West had no right to offer Ukraine a stacked Free trade agreement when they already had one with Russia. This put Russian interests in peril as this would have allowed duty free gods from europe to enter ukraine, then pass duty free into russia which isn't fair. It would actually hurt some european companies who spent lots of money setting up in russia as well.
We do wait for war and the tribesmen and their able satanic familiars can't make it happen fast enough.
Ask a Progressive. It's because of electric cars, Bush's fault and racism
TRANSITORY, BULLISH!!!
Long straw!!!
this shell game has been going on since I got into SoCal real estate in the mid 90's... at least way back then the banks would entertain an offer on their MASSIVE REO portfolio, now they just hold everything for themselves unless it is an all cash deal or so one sided that they screw the past owner and rape the new one or they would just rather hold on to it and not report it and screw the people entering the housing market with FALSELY INFLATED PRICES. you think silver is manipulated...
If they let the market really do its job and rise and fall with demand, there would be properties in the 300's - low 400's... how "they" continually get away with this without someone blowing the lid off is beyond me.
I recall seeing an estimate here some time back that there were some 20 million homes sitting vacant in America. Anyone know anything about this?
blame the cold weather here in the East
keep in mind if you think this number is bad, wait until the FEB numbers come out
Come on, I'm sure the realtors in Boston have been busy selling homes. Buy now or be forever priced out!
need more programs for unemployed to buy homes with 0 down
The property taxes are the killer.
As are the new "Anti-money-laundering" loan standards/laws. The only people I know who are looking to buy are a few young people who are too fiscally responsible to qualify for a loan, all because they've never fallen victim to the swan-song of debt. So they have little to no credit history. Also, you have to provide proof via banking records of paying rent/utilities in a timely manner for a year. Use cash? Well, you must be a criminal.
Never mind that these are people who have saved up a 20% down payment.
With Obama administration setting up 3% down just like the FX traders who go wiped out on the Swiss Franc, this will let homebuyers get Franced.
ZH keeps pounding the table on all the economic misses. But the market has nothing to do with the economy. ES will probably top 2200 by month end.
Zimbabwe, here we come!
the market has nothing to do with the economy
That's the spirit.....we can print 4EVA!!!
Lol Bloombery business says housing dropped because of....... lack of supply that is driving prices higher!
http://www.bloomberg.com/news/articles/2015-02-23/sales-of-u-s-existing-...
Bad enough to send the SP500 to ATH
This is the Soveit states. We can blame the weather for everything.
Or just blame the Soviets for the weather.
Which I immediately took to mean that the US is about to get exposed for the same crime.
Got HAARP?
The US also has Harf, who can put out a tremendous amount of hot air
Oh, boy I can start to hear the hiss of the bubble popping.
When this fucker pops...you won't hear any hissing sound. You're confusing it with the fuse on a stick of dynomite just before it goes KABOOM! You know....Like those Drudge Headlines. KABOOM-Stawks Hit Record Highs!
popping bubble does not make a hissing sound :)
it s more like a shot being fired.
While the number of sales is declining, the number of LISTINGS in my area are the lowest that I have ever seen.
Simply nobody is trading anymore.
Maybe itsfinally time for the blankety blank real estate people to reduce paperwork and reduce closing costs and reduce commissions if thye still want to do any business .....
Bay Area RE is dropping significantly. Most weekends I get to house hunt with my daughter and her new husband. Looking for deals and able to fix most anything they put in another bid a couple weeks ago on a place with no toilets and power lines open in the walls. This time there were only 30 cash offers above asking and the top one less than 10% above asking. Definitely cooling down from last summer. Those had double the offers and more than double the premium. Patience young grasshopper.
They shouldn't even be house hunting in an environment like that.
None of the servers or delivery drivers where I work are talking about buying. BTW I'm in Phoenix and the weather has been perfect, of course.
Why would the NAR have people like Fun-Yun on the payroll. He is a wind up doll, repeats the same thing everytime.
Of course there has never been a better time to buy...It always is!
The morons lap it up though.
Thing is, we're running low on fresh morons. Stale morons just don't do the trick.
This is America. There will always be an abundant supply of morons.
I gave both of you a happy uptwinkle. I must be a moron.
Bullish as always.
Well if the home prices are too high then more people should inherit more money like Lord Yoda Yellen said.
Lord Yoda Yellen: "Not have enough money do you? Inherit more you must."
Going to ad one to the supply for sale in a few weeks. My formally underwater money pit finally has enough equity to allow me to put it on the market. Might even clear a few bernanke/yellan bucks if this dead cat bounce holds.
Best to wait to see how the spring sales go. From March to July the bulk of the home buying is done. Prices are rising on a SA basis, the chart clearly shows this.
You're right that people buy homes when the kids are between school sessions, but that rising price and the reversion to less ridiculous underwriting standards doesn't exactly make for bullish.
The rising median is bullshit because it's based on infinitesimal volume and is skewed towards the luxury market.
Housing Bust 2.0 might move in slow motion compared to the first, but it has already begun. With the exit of the specuvestors there is no backstop against prices reverting to end buyer income and financing fundamentals. Those who MUST sell are down to working with those that CAN buy and the former is out pacing the latter even as prices at the low end are already dropping.
+1 I know a place where there are 1200 residences on the market. Probably twice that many would list a property if they thought there was any hope of selling. Less than a hundred sales set "asking" prices. This will be a very long adjustment. Things could stagnate for a decade.
I live in bubblicious SoCal and I think the downward price action will happen over the next 3-4 years and then we'll scrape along the bottom. That would be your decade right there and mirror what happened from 1991-2001.
My area is so leveraged on specuvestor purchases that their mere exit and not their need to sell means that homes that HAVE to be sold over the next few years will face a shrinking pool of qualified buyers even with moderate price reductions.
2011 was the last time we had house prices not influenced by QE or specuvestor insanity. I suspect we'll be back to 2011 prices by 2018 at the latest and possibly sooner.
i expect starbucks managers to be out in droves purchasing 200,000 homes... spring is a time for growth
Yep, looks like noone wants to play the bigger fool for BlackRock right now...barrel dregs for inventory and dropping sales. LOL
A nice summary of where we are..interview this am FWIW with Jack Rasmus
http://www.telesurtv.net/english/opinion/On-the-So-Called-Recovery-of-th...
Obamacare premiums are the new house payment.
Because of the Obamacare premiums that are by design supposed to overcharge the young invinicibles who don't really need it in the first place, they are indeed not going to be able to afford a mortgage.
There are plenty of properties for sale. Problem is, they're in areas with no more jobs or means to pay for them
I guess Obamya will see a need for more homebuidling stimulus
Get a job building a home, buy the home, lose your job, lose your home, bankster moves on to next mark
Here in Charlotte, supply in my neighborhood is constrained. Only stuff coming up for sale is when people have to move for work or they die.
Even downsizing has stopped because we're in a middle income/price neighborhood and not much gain for someone to downsize. In fact, they probably would end up breaking even financially not to mention all the hassle factor, etc. So both move up and move down have been severely reduced. And this is the pricepoint that the better off younger folks can only afford unless they want to live out in the burbs where they can buy a little mcmansion for cheap. But crappy schools and lots of commuting.
Interesting comment. Implies that the jobs are really only in the big city.
Gubmint will soon require all charts to replace the color red with rainbow.
This is what happens when economists decide, against all historical evidence, that HIGHER prices will cause more demand.
2008 was the market trying to correct the excesses of overpriced houses, overpriced college degrees, etc. The Fed didn't get the memo.
Actually the Fed wrote the memo...and it said exactly the opposite.
Many of the major areas are ridiculously high. Close to the bubble prices if not higher.
The Fed's mission accomplished. Bubble-up asset prices.
No reason they won't attempt to bubble them up to insane levels.
Even with the recent spike in rates, financing is still cheap. A booming and healthy middle class would be tearing through this market like a raging bull. But the reality is that the sector of the economy that the feds rely on to gauge the market are dirt broke. Throw in rising health care costs, living paycheck to paycheck, etc. and thats some malaise out there.
Hey Tyler, WHAT'S THE SOURCE OF YOUR DATA? What is the source of your charts? They don't mean shit unless you source it........and even then you need to look at the methodology used..........
Give me quantitative sourced data or give me Bullshit..........
Even with quantitative sourced data today doesn't mean much especially if it comes from the government. But it is better than no info....
I've never been so happy just renting. 35 year history of owning homes and feel like I got damn good money for the crap.
Reset this pig. Oh yeah, you can see rents are now falling. Speculators got fucked and the investment dudes will get negative interest just like the banks offer.
Gold Bitchez.....I pick up pennies
Oh no, the flippers aren't flipping to each other so furiously anymore, artificially boosting sales numbers. It's the end of the world. Rupert, errr, ZH told me so.
Am I the only one who read Main Street by Sinclair Lewis?
From all the commercials I see on the TV its never been a better time to buy. Rates will be rising, and now is the time to lock in those cheap rates. The NAR acts like buying a home is like going down to the Walmart and buying a TV. Maybe student loans which seem to be exploding have something to do with it. Maybe the generation that has to buy up millions of babyboomers homes can't afford them. Maybe the only reason home prices hadn't plunged (even more) in the past was that the vast majority were sold to hedge funds and for cash to foreign investors. Maybe two twenty somethings pulling in $70,000 a year can't save enough to put down 20% on a $350,000 home. If its in a nice area the taxes alone would probably run them 2% or $7,000.
Speaking of teevee commercials, now is the best time to buy silver and gold. I have not watched this many for quite some time. Might mean two diff things.
A. I am watching more teevee than I normally do(very little)
B. Now is the worst time to buy metals.(not that I would say there is ever a bad time to trade paper for metals)
It's because all the retards who didn't sell when upside down with forgiven debt laws, now, not only do they have to pay the IRS but the banks too. Live and learn, never, ever look a gift horse in the mouth.
I smell an increase in BK's 2016 and beyond.
What gets me is these rental houses. They are such pieces of shit. Little paint inside, slap some tile around with new cabinets and you think the rent should be over $2k a month with a yard of dirt and trees that haven't been trimmed since Moses walked? Yeah right, I'm going to landscape your house to the tune of $30k in plants, sprinklers and back breaking work because you went to home depot and learned how to run an airless for a day. Did you use liquid nails on the tile job or thinset? ha ha
Clearly George Bush's fault. Hey, why not?
Inventory? Weather ? Yah right...
For a bit more of an eyefull - check CalculatedRisk on new home sales. Basically sales have NOT "recovered" - and realistically are stuck at rates that were present at the BOTTOM of recent recessions. Weather - what a crock.
http://www.calculatedriskblog.com/2014/12/new-home-sales-at-438000-annua...
I don't see a lot of inventory in Middle TN. Wherever there are a concentration jobs the housing market becomes extremely competitive. The local real estate agents are working hard to get people into houses and to keep the valuations up. Funny, I know alot of home builders from Florida. They are all coming to Nashville to start building their cheap cardboard, Chinese dry-rock, stink holes.
Recently, visited my old stomping ground in Miami. That market is developing into another real estate ponzi explosive debacle. We'll hear that market crash around the country and it will take a lot of ponzi money with it.
Houses? We don't neeeeed no stiiinking houses.
There's a good 80's movie called Wisdom. It was fight club before fight club in a way.
https://m.youtube.com/watch?v=NjzUU3csP_0
And you get to see a young hot Demi Moore's tits
Ok, you said Demi Moore's tits and I just HAD to look.
So I like tits.
:)
squid
Calm down, the banks just had to slow down their money laundering business a bit, because there were too many bead headlines recently. Later on they will work on the backlog of Chinese blood money again.