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Existing Home Sales Spike To Highest Since Nov 2009 As Prices Soar For Expensive Homes
Following last month's disappointing drop in Existing Home Sales (ignored by most since other housing data provided just enough smoke and mirrors to confirm any inherent biases), May saw Home Sales surged 5.1% (handily beating expectations for a 4.4% rise after the 3.3% drop in April). At 5.35m SAAR, this is the highest rate of sales since Nov 2009 at the end of the government's last housing bailout plan spiked sales. For the 39th consecutive month, home prices rose (by 7.9% YoY) driven by prices rises at the high-end (and a 13.9% drop in prices at the low-end) but NAR's chief economist proclaimed this as sustainable (despite stagnant incomes and home prices about to take out the previous peak) but with 67% of investors paying cash for homes in May, the demand is clearly foreign as Chinese buyers surpass Canadian snowbirds as QE floods out into every asset.
Lawrence Yun, NAR chief economist, says May home sales rebounded strongly following April's decline and are now at their highest pace since November 2009 (5.44 million). "Solid sales gains were seen throughout the country in May as more homeowners listed their home for sale and therefore provided greater choices for buyers," he said. "However, overall supply still remains tight, homes are selling fast and price growth in many markets continues to teeter at or near double-digit appreciation. Without solid gains in new home construction, prices will likely stay elevated — even with higher mortgage rates above 4 percent."
The monthly swings are becoming extreme as "seasonal adjustments" try desperately to maintain a narrative...
The median existing-home price for all housing types in May was $228,700, which is 7.9 percent above May 2014. This marks the 39th consecutive month of year-over-year price gains.
The percent share of first-time buyers rose to 32 percent in May, up from 30 percent in April and matching the highest share since September 2012. A year ago, first-time buyers represented 27 percent of all buyers.
Welcome to the Oligarch recovery...
As The Wall Street Journal reports,
Chinese buyers have surpassed Canadian snowbirds as the dominant foreign buyers of homes in the U.S., according to the National Association of Realtors.
Purchasers from China made up 16% of international buyers who bought primarily single-family homes and condominiums in the 12-month period that ended in March, according to the survey by the National Association of Realtors.
The Chinese also dominated dollar volume of properties sold. Buyers from China purchased $28.6 billion of properties in the U.S. in the year ending in March 2015. That compares to $11.2 billion of properties that were purchased by Canadians and $7.9 billion by buyers from India. Mexicans were fourth by dollar volume with $4.9 billion of purchases.
The numbers reflect a growing interest by Chinese buyers in plunking their dollars in the relative safe haven of American real estate, where rules around owning property are well defined and the economy is viewed as strong and stable, said Jed Smith, managing director of quantitative research at the National Association of Realtors.
Charts: Bloomberg
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its officially a full blown recovery! Everything is awesome buy buy buy!
Except for trailor parks.
I cant afford a house, prices way too high
You and the rest of the 99%.
here in flyover those now selling are asking on the high side. a few weeks ago homes were selling within a day. probably at or over asking price. It's cooled off substantially and now the homes that haven't sold are just sitting.
Peeps buying..............................cuase they think interest rates are going to increase!
SACRE BLEU!
/facepalm @ "the Peeps."
Gold getting rocked!
67% purchased with cash.
US Citizens do not have this cash lying around, so it is obvious that 2/3rds of the market is pure foreign dollar repatriation without which the market totally collapses both in price and volume..
67% purchased with corrupted money................internal and external
SF and Seattle has lots of tech workers cashing out elevated equity compensation for housing.
being bought with leveraged stock market....Securities Based Lending....google it....biggest story not being talked about. total lent out using stock portfolios as collateral exceeds total Margin Debt. !!
it seems real estate has morphed into the same psychology as stocks....people want to buy more when prices are high, and as prices increase so does demand to buy more. this will lead to larger crashes. instead of supply/demand and price acting as invisible hand to balance things out, as prices go up demand INcreases.
as long as the CBs continue to buy /es and push stocks up this can continue. and those of us who shun paying more for less (earnings/free cash flow/dividends) will lose 1/3 of our books. But i would rather lose 1/3 of my book than 1/3 of my clients money.
the math if finite. as prices go up while earnings go down, there will be more marginal institutional sellers, and bids will thin. mutual fund cash levels continue at historical and 6yr lows of below 3.5%.
We're Numero Uno!
Rated by Money News as the "Best Place to Launder Your Loot!"
So what happens when if margin calls are made in China? Are they going to liquidate a huge chunk of American real estate overnight?
to whom would they liquidate?
Seasonally adjusted you say. I'm shocked!! 67% cash sounds sustainable.
Isn't this just stupid money (i.e obtained because money has been corrupted)?. Lack of capital investment in the means of production would seem to be a key indicator.
I suppose the question lies around the purpose of such purchases of large consumer items? Live or rent it out. Why burn cash on a single, large consumer item in which to live, when one could buy 2 or more smaller consumer items, and rent them...or even leverage up to buy several smaller rentals. Better yet, how about some arable land?
Awesome, think i will get a heloc for my second mortgage so i qualify for a ninja on a new property. Fuck you bernanke
America is money laundering capital of the world
For folks who need to launder their money...would appear so.
Better than buying a 100 million dollar apartment. How do you get the groceries to that thing anyways?
So frikken Chinese are pricing Americans out of their own homes?
Can this insanity really get any worse?
Dumb ass govt better start to think really hard about the consequences of this "recovery".
First we lost our jobs to the Chinese, bidding for lower wages
Now we're losing our houses, bidding for higher prices
Americans now paying more for rent and housing with lower wages
VERY SCARY TREND...
This is what happens when every CB is throwing monopoly money around
Bring on that TPP, baby!!!
WTF
Just hand the keys over to the Chinese to the White House and Capitol
They can't do much worse
Oh, sure it can get worse.
The govt can fly away while hoardes of Chinese soldiers arrive to enforce their new property rights in North America.
I bought a house in 2009 in FL as a short sale and paid $70k cash. It's now supposed to be worth over $230k now. What a bubble but no matter what happens I can still live in it. My PM purchases have gone nowhere since 2011 but I consider myself well hedged. IF housing crashes maybe my PMs will keep me solvent?
No one struggling to buy overpriced homes in Denver. Just sold my box of rot for $440K and it sold in 16 hours to first bidder. Could have gotten $460 most likely. Some friends put down a bid on what was probably a $325-350K home. 50 FUCKING BIDS on one home. What a joke. There is probably a 30K home shortage in this city and realtors, developers, bankers and assorted ancillary RE whores are LOVING IT!
Wait until half of Denver is underwater in 6 months. Guy buying my home will be underwater in less than a year is my guess. No amount of dope going to prop this sick horse up forever.
instead of supply and demand balancing out via Price mechanism....real estate now behaves like stocks--higher prices= higher demand.
most buying is in cash and not mortgaged. there may not be a true RE 'crash' like last time....but there will be a lot of bag holders. since its 'cash' the home wont get foreclosed upon, but where ever the $ came from will have issues. RE becomes illiquid and those who need to sell, sell bidless and prices go down....but not wholesale 'everyone stops paying their mortgage' like last time. just a very long grind down with gap downs in prices and difficult appraisals for those helocs!
...most buying is in cash and not mortgaged.
A lot of that "cash", though not mortgaged, is still leveraged. Tomato, tomato...
Disgusting lie. The whole game is a fraud from the Greece sham to the US recovery!
Here in central S.Carolina developers are cutting down trees as fast as they can, slapping up houses everywhere. Permits being issued by the multi hundreds.
It's build,build build. Good thing the zero down loans are back, makes it so much easier and that's what the USSA is all about!
"Lawrence Yun, NAR chief economist"
Yes Larry you're people are doing a wonderful job of grabbing real estate in Canada and America. In fact, Larry, the signs in VICTORIA, BC, Canada are mainly in Mandarin! And NYC is increasingly Chinese, legal and illegal both, but what does that matter?
"The Chinese also dominated dollar volume of properties sold. Buyers from China purchased $28.6 billion of properties in the U.S. in the year ending in March 2015. That compares to $11.2 billion of properties that were purchased by Canadians and $7.9 billion by buyers from India. Mexicans were fourth by dollar volume with $4.9 billion of purchases."
So what if the historic American, i.e. the White person, has to compete with hordes of "preferred" people of color for jobs (oh oh affirmative action and government set asides and on and on), education (oh oh scholarships for people of color, Whites can just pay the full freight) housing, food, potable water, breathable air...
Since 2000, All Employment Growth Has Gone to Immigrants
The Trade bill aka ObamaTrade will have essentially OPEN IMMIGRATION, among other goodies.
And who is fighting to protect us from this?
The GOP????
GOP House Leadership Purges Republicans Who Voted Against Obamatrade—And They’re All Immigration Patriots
http://media.komonews.com/images/121126_Boehner_Obama_2.jpg
Um. The "historic american" was red, not white. Wherefore art they now?
So this is what the start of hyperinflation looks like. I've seen the same shit in 3rd world toilet bowls like Venezuela. Are houses gaining in value? Or is the dollar losing its value? There is a lot of foreign Dollars looking for an asset. There will be a housing crash in value, but not in Yellenbucks. Are food prices getting higher because of availability? Or because foreigners are bidding up Mexican and South American food stuffs? Another sign of Dollar weakness.
Hyperinflation started 2010 thereabouts. 15% annum. Houses are catching up after the mortgage drought. Equity market running even or a bit ahead. Wages are for slaves. It might look like debt is good to have under hyperinflation but not if it cannot be paid--then it is only coordinated confiscation.
http://viewlasvegasrealestate.com/
On the drive to work this morning (yes, some of us do still work) I heard on the radio a local credit union doing no equity "home improvement" loans again. Regardless of whether you have equity, you will get a loan between $5,000-$30,000. Truly amazing, we do not learn anything - even from recent history.
So a Chinese person buys a home in the US because it is seen as a safe investment and pays $500k for what should be a $200k house.
Yet, because the house is so drastically overpriced there isn't actually anyone in the USA that can afford to live in it. SO although you are trying to store your wealth, the object really can't be sold to anyone who will use the asset for its intended purpose.
How is that a safe asset again?