New Home Sales Soar Most Since 2007 Driven By Southern Sales Surge

Tyler Durden's picture

While the accuracy of the new home sales data is notorious questionable, with regular revisions wiping out both up- and down-side outlier prints, moments ago the Census reported that in July the US saw a whopping 654K new home sales, up 12.4%, from the prior month and higher by 31% from a year ago, smashing expectations of a 580K print, and a -2% decline from last month's pre-revision print of 592K (since revised lower to 582K).

What was most notably about the series is that while there was no sequential change in houses sold in the West, which were flat at 137K in July, the south posted a massive 18.1% jump in the month, up 40% from a year ago, surging to 398K in July from just 337K a month ago. It was not immediately clear what may have prompted this dramatic surge in home construction in the south, especially following our last week post hinting that the housing slowdown is accelerating when looking at such data points as plunging mortgage purchase applications, the Credit Suisse survey of realtors and spending on home improvement.

Perhaps the Census pushed forward the inevitable home construction that will follow as a result of the Louisiana floods, which however took place in August.

Finally, one potential catalyst for the spike in sales is that the median home price dropped from $311K in June to $294K in July, reverting to its recent average range.

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Government needs you to pay taxes's picture

Here in SC, construction is going gangbusters in the segment of the market attractive to tax'n'tyranny refugees from points north/northeast/northwest.  The average home price in my town in ~175k, but there is an explosion in the >$500K segment with land for horses.  I love to watch this, as it represents tiny steps toward the great and inevitable separation of Murrica into those who have lost the will for freedom and those who yet possess it.

wmbz's picture

Yep, here in central S.Carolina, they have been building like mad. Lexington Co. has issued another 750 permits in the last few months. For homes ranging from $200,000 to $500,000.

Downtown Columbia, has gone fucking crazy! Condos, apartments etc... Going up left and right. The USC students must have the very best, that mommie & daddy can buy.

So I guess you really can borrow yourself rich! Bullshit

nope-1004's picture

.GOV is backing everything that is financed.  Cars, houses, student loans.  The asset bubbles blown because of the market interference in lending and manipulating rates will crash one day in a grand heap of "no one told me".

I personally don't remember a time when housing and rates were this manipulated.  The banks are on the hook for all those mortgages, so if housing falls, they are directly exposed.  Housing cannot and must not fall, just like banks cannot and must not go bankrupt.

Only problem is at some point reality will step in.  I wouldn't want to be the one holding the $600K mortgage at that point.  And .GOV won't be there to help either, as all they are is a banking syndicate at this point.  How long the market gaming and rate insanity can last is anyone's guess.

 

Government needs you to pay taxes's picture

I agree with your point, but the homes >500K built in my town are not being financed.  These homes belong to the tax'n'tyranny refugees who built up enough equity/wealth where they used to live to come here and pay cash.  I was the same.  No way I could have financed the property we bought for 1 million dollars, let alone invest in all the improvements.  Farmers around SC are REALLY struggling with their bank credit lines.  The crash of the grain/row crop/cattle prices has led to several rounds of ag credit lending tightening. . .

847328_3527's picture

Almost all of the houses bought in my area are by Asians---Indians, Pakis, Chinese and Vietnamese--- engineers, doctors, business execs---and almost all for 100% cash. However, there's still many many more used houses for sale now then two years ago. Lots of layoffs as companies go under from soaring costs to operate and plunging sales/prices.

 

The average white American middle class worker is a broken donkey that may not survive much longer with all the costs of Obamacare, etc.

Kasperfx's picture

i'm seeing the same thing, there's been 5 homes in my mother's 30/40 home neighborhood (central NJ ) that were ether sitting vacant or up for short sales 6 months ageo that that only recently have new familys moved in them.. the strange part about it not one is showing as resently sold in records and the familys that moved in are all city/state workers that don't want to discuss the sale. could the city/states be moving familes into the invetory at discounted or free just to show and keep the properties clean ? 

847328_3527's picture

Any "recovery" has to be very lcoal imo. In my area there was a 3-6 month wait list to get into a new house two years ago. Now there are over 22 houses for sale not including all the new ones being constructed. I see "price reductions" every weekend.

 

I guess SC is different since their houses are cheaper maybe.

ACES FULL's picture

My considerable experience with S.C. is that once something gets here(in this case,booming home construction)then the end is nigh for whatever the subject is. Kinda like they say all trends start in California,well,they end in S.C. Prepare accordingly.

Also,the tax-n-tyranny refugees mentioned above,please stay where you are or find somewhere other than the South to locate. Most of the Northern immigrants we receive come here for weather,less taxes and less govt regulations/intrusions. Soon after they get here they start seeing things they want to change,they get themselves onto boards,councils,committees,etc and start passing laws,ordinances,rules,regulations effectively turning their new home into the shitholes they call themselves escaping from. Either stay where you are or accept our way of life if you do move here. Assimilation would be greatly appreciated. If you don't,when and if TSHTF,you will wish you had stayed wherever you came from.Just friendly advice.

Omen IV's picture

yes - im noticing a vey old stable community i am familiar with for 60 years all of a sudden have scattered muslims with veils walking around in twos and threes - this is Italian and Irish neighborhood - properties dont change hands frequently

 

so the DC program to being these people in for no money is in play

Theta_Burn's picture

Sheesh..

A beautiful condo I have in Murtle Beach is still 30% below its high..

And the yearly visit we make, I've also seen in the MB area insane number of 250-275K priced condo consrtuction.

Must be some really nice construction loan terms you boys are handing out down there..

* Just seen the cash buyer posts, Never an Asian around with a suitcase full of money when I need one.....

FireBrander's picture

"Wealth through Debt" it's the American way.

Same story here...$300K to $600k homes selling like hotcakes thanks to sub 3% mortgages...pratically free fucking money. My home, and property taxes, have appriciated 50% in the last 7 years...total madness...and now the city wants $15 minwage so that people can "afford" to buy homes...lol...what a fucking shitshow America has become all because of a handfull of bankers and their "monetary theory".

FireBrander's picture

Soory, I was public shcool educated.

Why doesn't spell check work on this site? Tried different browsers, none will spell check this site...others yes, but not this site?

Houses Depreciate's picture

What are your losses on the shack?

RiverRoad's picture

Hey, people believe in Climate Change:  They're moving South!  Got that Obama?

ikhan's picture

I agree with you sir, i myself am a yankee refugee who sought economic freedom in the south. As a person of color, all the myths pertaining to fears of racism is a scam designed to keep hard working immigrants and first generation immigrants away from the south. In the south they value hard work,  integretiy and honor. No matter what you look like.

ACES FULL's picture

Most people will not believe this,but outside of major metro areas,racism hardly exists in the South. Sure,you will find isolated samples here and there,show me somewhere that doesn't happen. Blacks and Whites grow up side by side in most of the South and get along just fine.

bookofenoch's picture

I'm in SC. Sad to see the influx of Northerners. They come to escape the natural consequences of their socialist policies, but bring their liberal bs with them to pollute the very purity that drew them here.

BlindMonkey's picture

"Sad to see the influx of Central Americans.  They come to escape the natural consequences of their socialist polices but bring their criminality with them to pollute the very purity that drew them here."

 

Fixed if for ya.

gimli's picture

All the homes were purchased by Japan -- to diversify with their stock holdings.

 

Houses Depreciate's picture

"Finally, one potential catalyst for the spike in sales is that the median home price dropped from $311K in June to $294K in July, reverting to its recent average range."

 

And this is the point; Nothing accelerates the economy and creates jobs like falling prices to dramatically lower and more affordable levels. Nothing.

Son of Loki's picture

This smells fishy since the Houston Area realtors reported a DROP in sales over 8%

 

HOUSTON (August 10, 2016) The greater Houston real estate market experienced its first sales decline in six months in July, with the sharpest drop in volume reported among homes on the highest and lowest ends of the pricing spectrum.

According to the latest monthly report prepared by the Houston Association of Realtors (HAR), a total of 7,204 homes sold in July compared to 7,898 a year earlier. That represents a drop of 8.8 percent, the first decline since January.

bh2's picture

All real estate is local. Houston knows this better than most other southerly cities since it booms and busts on the oil price.

Houses Depreciate's picture

That expression is an well worn marketing technique to get the sucker to pay far more than the house is worth.

WayBehind's picture

80% of all mortgage loans in my area are either HOA loans or Conventional loans with 3% downpayment ... so relax, definitely not a bubble 

Houses Depreciate's picture

Ahh.... The 3% downpayment mortgage. The very definition of subprime.

GunnerySgtHartman's picture

I'm starting to see more lenders advertise zero-down mortgages.  2007, welcome back!

FireBrander's picture

"If you have a job and make $800 per month, we can get you into the home you deserve!"

DosZap's picture

Same with vehicle 0-60/66mos common.ic

SillyWabbits's picture

Looks like there is room(s) for error!

overmedicatedundersexed's picture

reit's thru the roof...hmmmm

buzzsaw99's picture

It was not immediately clear what may have prompted this dramatic surge in home construction in the south, especially following our last week post hinting that the housing slowdown is accelerating when looking at such data points as plunging mortgage purchase applications, the Credit Suisse survey of realtors and spending on home improvement.

 

Just a guess but egad some of the pre owned houses are over priced and in dire need of a bunch of work. why buy someone else's nightmare when you can buy new for nearly the same price? The pictures always look nice but upon closer inspection the rot is everywhere. houses aren't built to last and people have no money for maintenance because they are levered to the hilt. disposable houses.

Hubbs's picture

Interesting that here in northeastern costal NC, 4 brand new custom  homes being constructed while about 6 existing homes languish unsold  on the same street. 

buzzsaw99's picture

credit is so easy that even if the 6 existing houses go into foreclosure the "owners" will be able to get financing for another new house within a year or two.

847328_3527's picture

In the 1980s when we still had a functioning government and D0J, there were over 700 financial bankers indicted, th ebanks foreclosed, house prices dropped and the market cleared uip in 4 years.

 

Due to this lawless DC bunch and heavily manipulated market, the entire market is a sham that eventually will collpase but timing of it is difficult as we all know.

SubjectivObject's picture

I agree, people want new because (subconsciously/unconsciously) they cannot face the effects of time (from low competence in building through low competence in maintenance).  Disposable houses ... so saddening a reflection on the consciousness of the general population.

FireBrander's picture

"New House" construction quality is for the most part shit; it will self destruct in less than 10 years.

My uncle built homes back in the 60's and strictly used bricks for the exterior...those home are still standing today and look as good as the day they were completed.

Houses Depreciate's picture

All houses depreciate irrespective of age.

SubjectivObject's picture

Let me clarify then; people want new surfaces  (chyna syndrome), which want reflects their "depth" of apprehension.

RLE's picture

I am begining to understand why MSM does not report all of the news that is here on ZH...basically it is meaningless...doom and gloom folllwed by yippie...followed by doom amd gloom...ever try to have a conversation with anyone about what you see here...they want to have you put away...housing is crashing...no wait housing is up...no wait housing and the money system is crashing...no wait it is up....WTF

TradingTroll's picture

The Second Law of Thermodynamics is doom and gloom.

Got physics?

Hubbs's picture

Housing and price of oil. One minute it's up and the next it's down. Oil supply building-no it's falling. Wait! What about all the off shore strorage vessels?

 

Madness.

Kaiser Sousa's picture

we understand...

enjoy your LSM (LAMEstream MEdia) disinformation feed...

u will be missed.

innertrader's picture

MSM.... that's truly funny!  FREE MARKETS are only priced exactly right about 50% of the time.  The other 50% happens when the market is 25% too high or 25% too low.  If you are wanting ONLY bullish information or only bearish information, go to providers that ONLY provide that service, then you will be happy.  Otherwise, you will have to educate yourself and make decisions based on your ability to "think and research for yourself."  Good Researching... or not!

847328_3527's picture

Wait until Obama and Hillary force the TPP down American throats...oi vey!

 

More massive job losses and huge economic dislocations ... not to mention the unfolding disaster they call Obamacare .... and add in Hillary's promise to increase Muslim refugee imports by 500% and the American society may simply descend into a deeper chaos then it is already in under His Majesty Oasma.

Omen IV's picture

If your not comfortable analyzing data why don't you stick to comic books

g3h's picture

Another stab at ZH.

Houses Depreciate's picture

"the median home price dropped from $311K in June to $294K in July"

 

With a long way to fall yet.