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Housing Starts Collapse Most In 8 Years To 18 Month Lows
Housing Recovery? Yellen, we have a problem. Housing Starts for February collapsed 17% - this is the biggest MoM percentage drop since February 2011, and at -184K units down, this was the single biggest monthly decline in absolute terms since January 2007! At 897k SAAR, this is the first sub-900k print since September 2013 and biggest miss since Feb 2007. Multi-family starts are the lowest since June 2014. The collapse was dominated by the Northeast (-56.5%) and Midwest (-37%) so it must be the weather, right? Not so fast, The West region saw starts collapse 18.2%.
Ugly:
California ("West") housing was crushed by heavy, heavy snow:
Multi-family starts are the lowest since June 2014.
There was one silver lining: hedge funds are rushing to take out permits
on rental housing which soared from 371K to 445K. At this rate there
will be more rental housing built in the US than single family.
Assuming, of course, any of these permits actually become "starts."
Charts: Bloomberg, ZH
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housing has been overpriced for 10 years, prices need to come down rather than just lowering monthly payments with low interest rates.
Obviously you do not earn a living in construction. Imagine what housing would cost if built by union carpenters rather than illegal Hispanics.
BDI + 100K shipping containers + = low housing starts
A whole new spin on "stacking".
I bet you stocks will go up on this, thinking it will increase the probability of QE5, (6, 7 or 8... I don't know, I lost the count).
Precious Metal Housing
It costs $120 sq foot to build a house, maybe $160 if you go full blown top of the line. Then this house sells for $500 sq foot becasue the land is so overpriced, not to mention the taxes!
Not sure where you are looking at $500/ft housing but it's not where most people live. Manhattan? HK?
Northern Virginia area in modest locales is damn near that high. I toured a very modest 1100 sq foot SFH last week in Fairfax County that was listed for $425K. No way my family could live in that.
tear down?
Houses in US built like in 18th century. The only difference to then are the electric and pneumatic tools.
http://www.businessinsider.com/3d-printer-builds-house-in-24-hours-2014-1
If buyers can't afford them, then the prices have to drop in a free market. No doubt the Fed and government will continue to pull out all the stops to get buyers into homes they can't afford. Housing Bubble 2.0 will end badly.
In 1984 when I was 9 my parents bought a 3 bedroom detached in the suburbs of Toronto with a pool that cost CAD 93,000 and my father was working in a factory and he made CAD 60,000 per year. The same house today is CAD 400,000+ and what factory jobs that are left would be lucky to make CAD 50,000 per year.
Yes house prices must come down, a lot just to meet the purchasing power of declining wages. Calculate in the inflation in heating, electricity, property taxes, food, clothing and petrol to get to work even more so.
Yes but that manufacturing job has been replaced
by the more important job of creating apps for
30 year olds playing video,games
Obviously the DC area did not get this memo. Shit is crazy out here in Northern Virginia.
Supply and demand from the nouveaux riche
on K Street...
All .gov workers with freshly minted 100's
We are all already living the dream. Why should we want for anything?
It's a big club, and we're not in it.
--George Carlin, bitches.
geez, didn't see that coming. ha, hockey stick (upside down) lumber futures.
So the NE comprises 17% of the population and the midwest 21% everyone can claim snow was the cause for the drop? Even though the West has 23% and the south 37%. Guess the entire country was covered in snow for the whole month..... Amazin!!!!
loosing track of down side misses. oh, looky stawks at nearly all time highs. makes purefect sense...
Its transitory....all bad news is transitory
wow, these numbers r fucking ugly.
correct me i am wrong, but is this the biggest miss since lehman?
shit keeps getting worse and worse.
But Building Permits data beats so it's all good for the algos.
SF permits continued down trend - blue line.
Mulit-Family permits are rising - red line
Since Lehman TM
Next are the Fema camps....so Billionaires have more room to play...they are building mult-family like wildfirre...odd thing is population around here keeps dropping
. wrong thread.
recovery? anyone?
Nothing a nice June Fed funds rate increase won't help.
Sez right here, "Heavy Snow..." http://www.marketwatch.com/story/housing-starts-sink-17-in-february-owin... Spin, baby spin!
Yes. A blizzard of deflection:
http://www.bloomberg.com/news/articles/2015-03-17/here-s-why-you-should-...
On a different note, there was a useful link for a good interactive rig shutdown page:
http://www.bloomberg.com/graphics/2015-oil-rigs/
Watch Yellen raise rates and continue QE policy simultaneously.
She's a magician.
An illusionist of bullshit.
Expect anything and everything.
I had the exact same thought a while back. Raise rates but do QE at the same time. The mind boggles at the thought.
"...so it must be the weather, right? Not so fast, The West region saw starts collapse 18.2%."
You need water to mix cement right?
Haven't seen the Live in California ads recently on the boob tube.
Also need water to keep the workers' backs wet.
Too bad you can't re-use fracking fluids for that. Uncle Warren would be glad to move it for you, too. ;)
The Northeast is to blame for the entire United States Housing market?
F A I L
A year ago, Houston-based real estate investment trust AmREIT Inc. unveiled a $1 billion plan to redevelop the Uptown Park shopping center at the corner of Post Oak Boulevard and the 610 Loop.
But the private company that just bought AmREIT is reconsidering those plans, the Houston Chronicle reports.
However, the drop in oil prices and its effect on Houston's real estate market is another factor.
http://www.bizjournals.com/houston/morning_call/2015/03/new-owner-hits-p...
Multi-family permits looking strong this period... yeah, we can all become one big gigantic Foxconn and live with all our worker-buddies in corporate owned units. Come to think about it, isn't that already underway in the Bay area with Google and others ?
We can all live in little pens, chew on Cud-book and line up to by iMoos!
once a permit is pulled, how long does a builder get to put up a house? 1 year? when do they pay the impact fee?
the 'south'....how much of that is south florida? they think its perpetual xmas here. radio ads about buying 'ugly' houses; seminars on flipping; very aggressive responses when one says 'florida has a long history of boom bust housing, going back to Flagler and railroads'. 240k median prices for a populace whose median income is 32k/yr...
."but its the retirees dontchaknow!" I ask, how are they paying (cash is over 60% of sales!)...oh they are selling their house up north, is the standard reply (probably straight from NAR). im no Realtor, so im not the 'expert', but given the $400Billion of securities based lending that has sprouted up...maybe that has something to do with it. whocouldaknode!
that which has happened once, surely can never occur again (to begin a quote).... given stock crash and housing crash last time: Picture if you will, a 30% stock mkt correction, securities based lending 'calls', more stock selling; cash for real estate dries up, real estate prices dive, suddenly the boomers stuck with too much illiquid underwater real estate AND 1/2 their paper wealth evaporated...'and its gone'. gen X got it the first time, boomers dodged it, now they will get it, millenials are permenantly crippled, will go on 15+ years post college working part time and in menial jobs. but 2030 forward should set up another good secular mkt...getting from here to there is the question.
http://www.globaldeflationnews.com/inflation-vs-deflation-part-3how-the-...
You can build today in the Sun Belt for around $50-$60/sf using immigrant labor that works for subs that don't pay comp and issue 1099s instead of W4s. Assume a $30k lot cost. As a builder you need 30% gross profit to survive; thus a typical suburban 3/2 of 2200sf must sell for around $180k, which is 4X median household income in the Sun Belt. See the disconnect?
Are House made with gold ??
Just back from Florida. Staggering the number of seemingly abandoned houses - I'm talking mansions here - all along the intracoastal by Ft. Lauderdale. Told they're being looked after by bank-appointed caretaers.
????? your observation makes no sense. perhaps they are simply empty, owned by absentee owners, which is very common here.
miami condos, ft lauderdale mansions highest prices ever full price recovery at the high end, not so much for everyone else.
a brief visit by a person who doesnt live here may not be the most reliable observation. RE here is ridiculous again.
When prices fell from the bubblicious boom prices, a lot of homes were bought by investors: institutional, flippers and don't forget the foreigners laundering money. Most haven't tried to unload on the nonexistent end users.
.... I can look after one of them in the winter.
Unemployement is 5,5%. #EverythingIsAwesome! <sarc>
Crack, Molly, Shrums, Goldman Banker? tell me your secret?
Seems like when permits diverge to the high side of completions bad things happen...
http://research.stlouisfed.org/fred2/graph/?g=14qJ
Is Multi-Family the same as FEMA camp?
Up here in Rochester, NY, there's a 1/2 hour show every Sunday by the area's largest real estate firm, called the "Nothnagle Gallery of Homes."
I try to catch it every week, because it's a fascinating insight into a pretty much shuffling, dead market.
At the start of the show are the biggies, all over $400,000, some of them pretty decent with 3-10 acres, about half of them vacant. Ad the show continues, they get into the moderate-pricing category, 135k-250k. Not so good, smaller lots, older houses, more than half vacant, but, this week, a twist. They showed two houses under construction. Really, with the Tyvek™ showing and all. Priced over 200K.
Dead stop. Builders around here are fucked with all CAPS. Population is declining, there's a glut of bank REO just sitting there and about 20-30% of everybody in the metro area is either in foreclosure, pre-foreclosure, about to be, underwater, or owes back taxes of 2 years or more. A massive implosion is coming to upstate NY (Syracuse and Rochester; Buffalo already in the crapper) which will take down not only the real estate market but the city governments and some of the older suburbs (hopefully state .gov too, but that's another story). Population decline and aging, lack of jobs, crumbling infrastructure, huge municipal pension costs and ineffective (and that's being nice) local governments are feeding the descent into chaos. Rochester, Syracuse and Buffalo's inner cities are crime-ridden, FSA strongholds. The city school districts are a complete and utter disaster. High wages for teachers, low graduation rates, scandals, union vs. administration fights are common, as are fights, stabbings, gun confiscations, etc. TPTB are trying to ship some of the little minority cretins out to the suburbs in what they call something like "city-county partnership opportunity" or some other libtard crap, but the voters in more than a few suburbs have shot down the school board recommendations, saying, in effect, "keep my schools white."
Lots of trouble brewing here where the property taxes are the highest in the nation. Shocked a guy from South Carolina last week when I told him a 30-year mortgage on a $100,000 house here would cost less monthly than the taxes.
True Dat. This whole thing has to blow, because upstate NY is just one small sliver of what's wrong in this country. Get ready, Southern states, a flood of Yankees is a comin' yer way.
Your loss in NY state is sad. I live in Charlotte. Everyone from up north is moving down here for weather and lower taxes. So it's booming in some areas. This is state arbitrage at its finest. So much for the 'united" states of america.
Nuke.
Time to admit this is due to people not able to build/buy. Ask a regular Joe Schmoe and buying a house is a no brainer, best investment around. It is so ingrained in the consumer psyche that nothing else matters.
Demand obviously depends on affordability.
Take away the 30 year mortgage and watch home values drop 50%!
at least.
LOWER HOUSING STARTS ALWAYS BLAMED ON WEATHER, OBAMA CONSIDERS BANNING THE WINTER
The White House wants to impose sanctions on Winter, to discourage it from affecting key economic indicators in the US.
Source: www.financialpaparazzi.com
houses are still cheap in vegas - and new home builders are building like crazy
http://paper.li/VegasRealtor8/1425656222
http://www.vegasinc.com/news/2015/mar/16/rebuilding-years-southern-nevad...
Unpossible!! Real estate never goes down!