Existing Home Sales Collapse - Worst November In History

Tyler Durden's picture

The 10.5% crash in existing home sales is the worst November drop ever. Against expectations of a mere 0.2% drop, this is the largest miss in history asnd tumbles SAAR sales to the weakest since March 2014. The collapse in sales was across all regions, and ironically was accompanied by a rise in median home prices across all regions. Of course there was plenty of blame to go around, from inventory constraints to weather but most of all - paperwork - as new regulations - Know Before You Owe initiative, has meant longer closing times. In other words, wait til next month, it will all be great!?

The biggest MoM drop since July 2010.. and worst November ever...


Pushing the Annualized sales rate near 2 year lows...


As home prices rose...


Regionally, the weakness is widespread...as home prices rose everywhere...

November existing-home sales in the Northeast declined 9.2 percent to an annual rate of 690,000, but are still 1.5 percent above a year ago. The median price in the Northeast was $254,800, which is 3.2 percent above November 2014.


In the Midwest, existing-home sales descended 15.4 percent to an annual rate of 1.10 million in November, and are now 2.7 percent below November 2014. The median price in the Midwest was $169,300, up 5.3 percent from a year ago.


Existing-home sales in the South decreased 6.2 percent to an annual rate of 1.98 million in November, and are now 5.7 percent below November 2014. The median price in the South was $189,400, up 6.3 percent from a year ago.


Existing-home sales in the West dropped 13.9 percent to an annual rate of 990,000 in November, and are now 4.8 percent lower than a year ago. The median price in the West was $319,700, which is 8.3 percent above November 2014.

Of course, there were excuses... Lawrence Yun, NAR chief economist, says multiple factors led to November's sales decline, but the primary reason could be an anomaly as the industry adjusts to the new Know Before You Owe rule.

"Sparse inventory and affordability issues continue to impede a large pool of buyers' ability to buy, which is holding back sales," he said. "However, signed contracts have remained mostly steady in recent months, and properties sold faster in November. Therefore it's highly possible the stark sales decline wasn't because of sudden, withering demand."


According to Yun, although Realtors® are adjusting accordingly to the Know Before You Owe initiative, the main takeaway so far has been the need for longer closing times. According to NAR's Realtors® Confidence Index, 47 percent of respondents in November reported that they are experiencing a longer time to close compared to a year ago, up from 37 percent in October.


"It's possible the longer timeframes pushed a latter portion of would-be November transactions into December," says Yun. "As long as closing timeframes don't rise even further, it's likely more sales will register to this month's total, and November's large dip will be more of an outlier."


"Realtors® worked hard to prepare for Know Before You Owe, and we knew there would be some near-term challenges as the industry continues to adapt," says NAR President Tom Salomone, broker-owner of Real Estate II Inc. in Coral Springs, Florida. "Nonetheless, an early trend of longer lead times to closings is cause for concern."

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Seems like the perfect time to hike rates?

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JustObserving's picture

Another rate hike will fix everything

order66's picture

Do this:

Pull up Redfin.com and type in the zip codes for places prices went up the most since 2009.

Filter for foreclosures and look at all the blue dots.

Eye opener.

lincolnsteffens's picture

I notice this morning on the heels of the fantastic housing numbers that the real estate index has once more jumped up. There seems to be great effort to keep IYR above $73 a share.

The9thDoctor's picture


Wake me back up when housing becomes affordable again.

A mid-century house that sold for $50,000 in 1995 isn't magically worth $200,000 today.

The elephant in the living room is that housing is totally unaffordable considering HALF of working American adults make less than $28,000 a year.

I'm surprised there is even home sales at all. Most I know are roomating even in middle age. We have 30 year olds who still live with their parents because their $10 an hour job can't cover the $1,500 a month mortgage payment despite these "historically low rates" these real estate scumbags always tout with their fake grin filled with bleached white fake teeth.

Housing needs a MAJOR correction, because even the 2009 "low" was still way overpriced.

If housing was actually affordable, we would have consumer spending again, because people could actually spend their disposable income instead of their mortgage or landlord taking it all away.

These patriots always warn of "FEMA camps". Why bother? The Rothschilds already have Americans in bondage with dead end jobs and overpriced housing.

847328_3527's picture

I'll see daylight when the rates revert near normal at 3% plus.

Colonel Klink's picture

Historic norm for interest rates for bonds is actually 5-6% (which mortgage rates are usually based), now price mortgage rates on top of that.  That'll help housing out!  Prices should just SKYROCKET!

TheDanimal's picture

If housing was actually affordable, people would actually have disposable income, oh wait, forgot about ObamaCare.

Hitlery_4_Dictator's picture

Good, if there is one sector that I hate more than housing, I have yet to find it. Well, maybe t-bonds.  Still, I can't wait until real estate crashes.....I am so sick of seeing all these morons running around in their Cadillac's that they can't afford with slogans on the back saying "Your Realtor of Choice." Screw you. 

NotApplicable's picture

Good luck, I've been waiting nearly ten years now for this crash to finally occur. Amazing how the funny money gang can keep the avg. price on an upward trend in defiance of common sense (as well as Say's Law).


KnuckleDragger-X's picture

They've been convincing people to buy crap for a long time and some of the market bending they've done with the close and willing help of the financial industry has been amazing. It's just too bad that they are running out of "greater fools" to sell to and they are starting to run of of Chinese fools now......

True Blue's picture

Well, all the inflation from the creation of so much 'money' has to go somewhere; thank god Berkshire Hoggaway is buying wholesale 'real' estate instead of groceries.

HopefulCynic's picture

You can pull the rubber band only so much before it breaks, even if it is a supper elastic rubber band, it will eventually brake. Relax the day will come, sooner than you expect.

gimme soma dat's picture

As of today's published data, my area has a higher number of realtors than houses for sale   I can't wait to see the fallout from that.  

Normalcy Bias's picture

Fannie and Freddie will probably come out with zero-down, 125% LTV negative interest rate mortgages for "Undocumented Citizens" only.

thunderchief's picture

This is why they are loosening the rules and opening the foreigner floodgates in the RE market.

Penis envy of  the Austrailians and Canadians RE ponzi markets

White Mountains's picture

Who the hell would buy a house now?  Prices are only inflated.  Most people I know buy homes with expectation the price will increase and they can sell at a profit.  Forget the fact that home ownership is a major money sink what with taxes, upkeep, etc.

A house is not an asset in normal times.  It's like supporting children, costs money.  Well, unless you are a parasite and the working people pay for all your children - so yeah, it is different this time.

swmnguy's picture

Buying a house is what it has always been, despite what the real estate resale industry has been pushing for the past 20 years.  The truth is, you need a place to keep yourself and your shit.  If you buy it, you have to pay for taxes and upkeep, but you can sell it later and get your money back.  If you rent, you don't have to pay for the upkeep and you can get refunded some of the taxes you pay, and when you leave you don't get your money back.  That's about it.  I am paying off a house, and I have enough equity to have a cheap HELOC, which I can tap on to even out cash flow issues month-to-month, and as long as I carry a balance on that for the shortest possible time, it's a good enough deal for me.

The benefit of buying a house is that it can turn a pure cost into a cost and also an asset.  But it's not for everybody, and you're not going to become a tycoon in the process.

The9thDoctor's picture

A house should be a place to live. Period. Instead, it has become a speculative gimmick for the .0001% to make cashflow off of the backs of working people.

Then they use overly complicated legalize and overly complicated instruments so only by knowing the right gurus and networking with the right people can one actually have a snowball's chance in hell of understanding how this real estate SCAM actually works.

The school system teaches NOTHING about how home mortgages work or how real estate works or how tenant rights work. Zero. Zilch. So ignorant masses get fleeced by the .0001%. Thank goodness for guys like Robert Kiyosaki who blew this wide open. Despite his whistleblowing, people like Bernie Sanders and Elizabeth Warren act like they will help the working class, but their proposed solutions will just play right into the hands of the predatory ruling class. Educating the masses how real estate actually works would cause the gap of inequality to narrow rapidly. Once more people are educated, they will demand reforms to simplify this deliberately over-complicated system.

PTR's picture

Funny how people have been fooled over the years to thinking how a home has become a financial investment.  Then again, most of those same people don't understand how the banking system currently in place operates.  If they did, some of them would think twice.

Killdo's picture

you are right - I am always surpirsed with how little  people know about different kinds of mortgages, insurances, predatory realtors and their tricks. I am proud to say that i helpd a few friends pick the repayment mortgage (instad of what banks were trying to screw them int buyng)

When I did my degree in Econmics (in London) all we learned was Milton Fridman and his crony capitalist tricks. It took me a decade to unlearn all the shit they brainwashed me with

thunderchief's picture

Homes are OK if you pay them off and keep them upgraded..

Thats why the blacks use the term "Homey and Crib" so much.

Word up..just sayin..

lincolnsteffens's picture

Don't forget the tax scheme has to be maintained. Over time with inflation, your house may not be worth any more in constant dollars than when you bought it but the number of dollars in sales price increases. This rise in numbers of dollars serves increased real estate taxes and upon sale, "profit" in numbers of dollars. In reality there may be no "profit" in constant dollars/value but you gotta pay capitol gains tax. If gold was used as money, capitol gains might be nil.

This is only one reason why the Fed must be eliminated with gold and silver returned to use. This would help rein in rampant government expansion.

wwxx's picture

"Who the hell would buy a house now?  Prices are only inflated."--whitemountains--


Doesn't leave a lot of options now does it?  Build, or rent, move back in with mom & dad?...those prices are also inflated, well OK maybe Mom & Dad can carry you somewhat...which returns us to your regularly scheduled broadcast: to bitch about the Fed and the overall inflationary direction they stand firmly upon. 


But it was nice to hear the latest excuse from the rolladex of excuses...blame it on 'know before you owe, lag time'  hahahaha rofl


Of course we heard just this week how the Obamaites have 'waived the foreign investment tax law thingy' so that probably figures in there somewhere.



Hohum's picture

Just like the 5 sigma beats, one has to wonder about the accuracy of this figure.

corporatewhore's picture

Hmmm...did more people lose their well paying job back in 2007 and never recover than I thought?  Getting paid at maybe 50% of what they made before 2007?  How many got seriously burned with their homes?  How many used all their 401ks, IRAs and other investments trying to save their home?

Home prices are astronomical.  Way too expensive.  Health care premiums that are sky high.  Economy currently imploding as a continuation from 2007.  

And yet there are a few bright spots/sarc--I had a car dealer bring in a BMW with an Italian afterthought name that had sold for $137000.  The world has gone mad.

MFL8240's picture

Recovery picking up steam!  

Thisisbullishright's picture

Of course everything will be even more awesome next week, month, year, decade!!  You just wait and see...


Allen_H's picture

There is always rental, try to find low rental that does not include broom closets and other holes in the walls, attics and basements. Anyway you look at it, its screwed, wait till it blows up before even thinking about approaching a buy.

lincolnsteffens's picture

Ah the pleasures of big city life.

ebworthen's picture

Prices will have to come down as the rates go up.

Then we'll be back to MBS's dumping and foreclosures.

Who wins?  Fannie/Freddie, Berkshire/Hathaway, Banks, States that will take 2-3 years to lower property taxes on inflated house values.

BigRedRider's picture

"... States that will take 2-3 years to lower property taxes on inflated house values..."

States lower property taxes?  Surely you jest.

Bernoulli's picture

So it seems this news is bullish for stocks?

Oh boy. It will never end. Longest slow motion train wreck EVER!!

wmbz's picture

Larry Fun-Yun really is a pathetic little douche bag!

Omega_Man's picture

hard to fake that number... I am sure they will blame something

tc06rtw's picture

 …  No, there was TOO MUCH weather
                            ( or  NOT ENOUGH… )

Jethro's picture

Surplus people with too much outstanding debt will rent surplus houses

orangegeek's picture

they'll blame it on yellen's rotting ham wallet

Seasmoke's picture

This must be awesome news as Stocks are up and Gold is down. There has never been a better time to go fuck yourself.

orangegeek's picture

Yes, but on a different note, crawl space rentals for $500 per month have been rocketing 2000% week over week.


Long crawl space rentals.

lincolnsteffens's picture

I rent out a small 3 room basement apartment for $375 a month. That includes heat, hot water and electricity. Yeah I could probably get a hundred more but I get responsible long term low income single tenants. This in an upscale town of under 10,000 but over an hour commute by car (no train or bus practical) to any city. The largest town nearby (45 minute drive) has a 45,000 population but the down town has been dying for 25 years with lower rents there than where I live. The largest multi-national manufacturer closed its operation in the county 20 years ago.

Ajax_USB_Port_Repair_Service_'s picture

Stock market is handling the Home Sales news well. To be expected, since real estate sales, industrial production, shipping, and inventory levels are not relevant in the 'new economy'.

Rikky's picture

Real estate prices are just plain out of control.  Type in zip code 07090 in redfin and see what the prices are for the luxury of living in a NYC suburb on top of others and paying a minimum of $15k a year in property taxees on top of all the other taxes that make NJ #1 in almost every tax category.  The worm is bound to turn.

My Days Are Getting Fewer's picture

I have lived in a neighboring community for 40 years.  Real estate and sewer taxes go up 2% per year on average.  If you rent, those costs are passed on to you.

Dragon HAwk's picture

List price = Good Laugh.. now let's Talk...

yellensNIRPles's picture

Anyone who buys a home right now with the way things currently are between inflated prices and out of control taxes is either completely fucking insane, or so wealthy they can afford to eat the loss and not give a shit.

Lostinfortwalton's picture

There are still nice places in this country where you can buy a modest house at a fair price, but you would have to be retired or have a job where you could work out of your home. We lived for 20 years in northern Virginia before moving out. We would go live in a cave before going back up there.