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Pending Home Sales Tumble Most Since 2013 Amid "Signs Of A Slowing US Economy"
Following the carnage in new home sales in September, amid sliding mortgage apps and despite soaring homebuilder sentiment, pending home sales in September also plunged - dropping 2.3% MoM (missing expectations of a 1.0% rise) and worse still from a downwardly revised history. This is the biggest MoM drop sicne Dec 2013 andthe second lowest level of pending home sales this year. While there is plenty of blame for this, NAR's Larry Yun, rather ominously warns, "signs of a slowing U.S. economy may be causing some prospective buyers to take a wait–and–see approach."
Worst MoM drop since Dec 2013...
as the rate of sales growth continues to lag...
Will homebuilders lose faith now?
Only The West region saw increased sales...
The PHSI in the Northeast fell 4.0 percent to 89.6 in September, but is still 3.9 percent above a year ago. In the Midwest the index declined 2.5 percent to 104.7 in September, but remains 4.3 percent above September 2014.
Pending home sales in the South decreased 2.6 percent to an index of 118.3 in September and are now 0.1 percent below last September. The index in the West inched back 0.2 percent in September to 104.4, but is still 6.6 percent above a year ago.
With last month's decline, the index is now at its second lowest level of the year (103.7 in January), but has still increased year–over–year for 13 straight months.
As NAR's Lawrence Yun explains...
a combination of factors likely led to September's dip in contract signings. "There continues to be a dearth of available listings in the lower end of the market for first–time buyers, and Realtors® in many areas are reporting stronger competition than what's normal this time of year because of stubbornly–low inventory conditions," he said. "Additionally, the rockiness in the financial markets at the end of the summer and signs of a slowing U.S. economy may be causing some prospective buyers to take a wait–and–see approach."
Charts: Bloomberg
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Paul Eberhart tumbled once amid a night of heavy drinking. www.pauleberhart.com
"There continues to be a dearth of available listings in the lower end of the market for first–time buyers"
<insert Tom Hanks 'Money Pit' laugh>
Seriously? NAR can't figure this one out? Incredible.
THERE IS NO MONEY IN LOW-END HOMES. Nobody is building new "starter" homes. Your starter home is somebody else's 30+ year old, worn out pile of crap or a rental condo. See you at the high end or we won't see you at all.
Realtors®
LOL
right, realtors and builders just can't make enough on the starter home price. Gotta build / sell only the extremely expensive stuff so their payday is worth it. And don't forget the bankers. they want as big a loan as possible too.
If i could do it all again i'd split a rental with a bunch of mexicans, until i had enough to buy a decrepit shack outright. F the usurers.
Realators are worthless on projections, too. They have two and only two projections on real estate.
1. Prices are going up! Buy now!
2. Prices are about to go up! Buy now!
Has anyone ever heard of a realator who said, "I think prices are risky and may crash. They just do not match up to incomes and demographics and the home flippers are out in force driving up fake demand and prices! Best to hold off for now."????
I have never heard such a story.
I have no appreciation for the lack of...appreciation. Therego, I wait.
The Partee's over I'm afraid. Manipulation, fraud and lies only work for so long. There's thousands if not millions of empty houses and apartments...lots of old ones and new ones mostly poorly quick-EZ-built ones. Add that to the too-broke-to-buy society that cannot even afford the zero-down no doc shacks now and it will surely get worse. Even Sam Zell sees the downward spiral reversion to the mean:
Is $5.4B sale Sam Zell’s way of saying the party’s over?Monday’s announcement that Zell’s Equity Residential is selling a multifamily portfolio to Starwood Capital Group for $5.37 billion is no exception. During the real estate investment trust’s earnings call Monday, UBS analyst asked: “Should people be reading in this that Sam is calling the top of the market twice in a row?”
http://therealdeal.com/blog/2015/10/26/is-5-3b-sale-sam-zells-way-of-say...
Tylers,
You really need to include the requisite "UNEXPECTEDLY" in the heading for these types of articles.
I've seen estimates of upwards of 20M+ vacant single-family homes.
The NAR is full of shit, but as usual they're tied in with the TBTF banks, so this is just a scheme to hide the 20M+ vacant homes.
I've posted here about our old digs down South, there are probably 5 or 6 vacant homes on our old street, out of about 50 homes. They're simply not listed. I can't imagine what condition some are in, now, especially after the floods.
A Google Street View car swung through there about a year ago. Two of the vacant homes don't even have mailboxes, the urban miners I'm sure claimed those. One has gutters which are falling off the house, in fact I could swear that house had loose gutters when we moved out of the neighborhood, five years ago.
Brought to you by the Everything Is Just Fine File.
I can confirm this, especially in FL! The banks are intentionally holding the homes as assets on the books as they are being allowed by regulators to do that at INFLATED values. They DO NOT WANT TO SELL THEM.
The price of a home never really came down from the original FED induced exponential growth in cost.
Let the prices fall, and people may start buying.
I'm not paying 3 times my salary for a Piece of Crap, run down, nasty neighborhood fixer upper, starter home. And I'm certainly not paying 6 times my salary for reasonable home in a reasonable town.
Amen to that brother.
Another Amen to that brother.
Either prices fall or interest rates go lower. The FR can do that, right?
I am in the market in the West and frankly it is stupid. Buying is optional for me. I am trying to get rid of about 3hrs/day driving-commuting. It is nice on one side because my condo has appreciated and I took out some of the cash.
On the other side it is freaking insane. Crappy homes sell for what nice middle class home sold for...and it sketchy neighborhoods. The new construction is the worst. A dozen builders in the middle of building mostly townhomes repriced their homes upwards by 10-15%. So, even if I sell my place at an appreciated price I will have to try to move into another place at a much appreciated price. Normally, over time you can usually upgrade your home, but not necessarily, now. In essence, I will have to take on far more net debt and with even a small downturn in the market I would instantly lose all equity. Don't forget that transaction costs are very high in real estate and municipalities are getting drunk off the rising tax rates sincie it is a percentage of the selling price. (As a side note it is insane the way we do property taxes and even immoral).
The flip side is rents are eye bleeding, too. So, if rents are painfully high, home prices are very risky, a.k.a. 2008 what do you do? You stay put in your home.
That is why inventory may stay low. The options are painful or risky. Staying put is the safe play.
My bet is that builders will come in, because that is what they do...and they will overbuild, overprice and essentially be front and center for the next crash. They and the home flippers who are back in force. Personally, I will not mourn them too much.
My Suggestion, sell your condo at these appreciated prices. Rent yourslef something for a year or 2 then buy your dream house... My pops did it back in 06/07 and I am doing it now. We too can rinse and repeat like the bastard Wall streeters and CBS.
You know, Gambit, that idea has crossed my mind. The rents are eye bleeding but I can move to less desireable areas where they are not. The question is whether this is 2007, 6, 5 or so on. I can see myself getting priced out of where I live, now and I love where I live.
But, I still like your idea.
My other idea is to buy a Class A RV and live freely wherever the hell I want to!
Aaaand it's bullish. Of course.
There are millions of vacant homes around the country. That's one thing. In this area, the only new homes being built are "apartment communities" in infill locations near freeways. The focus on new homes is old school. That era is over. There aren't enough people to buy them.
All new "homes" being built in Pittsburgh are the same - large apartment complexes, increasingly being developed in newly-gentrifying neighborhoods.
The fascist takeover of America is nearly complete.
I was tallking to an appraiser and some others. Rental apartments are easier to get financed for the builders. Condo's are the hardest and riskiest. Class action lawsuits often drive them under. In between are single family homes and townhomes.
My theory based on demographic changes is that apartments, condos and things like patio homes will get more popular as baby boomers retire, downsize and simplify. Perhaps the builders in Pittsburgh and around the country read things similarly.
The up-surge of apartment complexes are of these times partly because HUD money is available to developers
Especially if those who are going to be renting these apartments will be high-income wage earners.
Takers.
Oh Larry you crack me up every time. I bet he was a riot in band camp.
One time, at band camp....
Who would down-vote Larry sticking a flute up his ass at band cam? I mean seriously, what's wrong with you people?
probably cause the saying is... Last Summer, at band camp -
I up vote ya
NoVa
Whose flute was it?
Maybe it has something to do with insurance premiums, student loans and stagnant wages. Maybe it has to do with median home prices rising while banks sit on foreclosed properties at mark to fantasy valuations. Maybe they should just seasonally adjust moar.
True. It's hard to believe there are still over 13 million underwater houses that need to be foreclosed upon but as long as the banks get free money from the Fed there is no incentive for them.
We should take heart from the fact that at least one sort of cycle still appears to be, er, cyclical.
So, the FED will be raising rates in December then?
LMFAO
Stop the Merry Go Round - I need to get off.
If the merry-go-round goes too fast everyone goes off.
If it stops too fast, everyone goes off.
If you say you are ready to slow it down, some day, depending on data, stocks go up and gold goes down: wheeee!
Is the world spinning or is your mind spinning?
Multi-family everywhere, build to last less than a 30-year mortgage. I see a taxpayer-funded remodel loan program bubble in 20 years.
May be time to go from zero down to negitive down payments to spur growth in this most important market!
Neg. down 100 year mgts. Yea that's the ticket!!
"may be causing some prospective buyers to take a wait–and–see approach"
I believe they call that a negative feedback loop. Good luck with that Mr. Yellen.
i'm still recovering from 2008. i know i won't be buying right now as the asking prices are right where they were the last time this thing tanked--and that was 2007/2008.
i notice that our business at the two jobs i work has slowed dramatically within the last 60 days. These "solid, stable" industries i'm in are supposedly recession resistant (ha). Economic hard times will be here shortly--why should i buy now?
btw, how are cruise lines doing?
I saw the crash coming and sold in 2006. I was then going to buy back when the market clearing discounts happened. Never happened, still renting.
Is the China sucker boom already over? I still see lots of Asian students driving around in luxury cars picking up appartments like collecting stamps.