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Average New House Price Drops To Lowest Since 2003
Today's new annualized home sales print was 307k, below expectations of 315k (yet oddly better than last month's downward revised which moved from 313k to 303k, wink wink nudge nudge Census bureau). This is not to be confused with the actual number of houses sold which came at a whopping 25k, and the third month in a row in which under 500 homes sold in the over $750,000 category. Yet the most notable data point was the average new house sale price which dropped to $242,300. This is the lowest price since 2003! Something tells us that an MBS LSAP is pretty much guaranteed at this point.
Average New House Sale:
Number of houses in the $750,000 category:
And why the actual sales print was very much irrelevant:
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New home sales up 1.3%, but still stuck in a rut.
http://confoundedinterest.wordpress.com/2011/11/28/new-home-sales-rise-1-3-but-still-lingers-around-300k-per-year/
I had a ticker come accross from CNBC that said, "Home sales are up! click here for market reaction." It's like we live in two entirely different worlds! Kind of wish I was in the other one - so happy and positive and rich and free (until reality set in, of course!)... In the end there is only one actual world - choose wisely!!
Agent Smith: Then we have a deal?
Cypher: I don't wanna remember nothing. Nothing, you understand? And I wanna be rich. You know, someone important … like an actor.
Agent Smith: Whatever you want, Mr. Reagan.
------
the red pill is intense...
Life it seems will fade away
Drifting further every day
Getting lost within myself
Nothing matters, no one else
Need the end (of the banking cartel) to set me free...
and the average wage is what, $50,000 pa.
Let me know when it gets down to around $100K...
The Median HOUSEHOLD INCOME is - not $50,000, but just $47,000.
INDIVIDUAL MEDIAN INCOME is $23,500.
Average Income is a mis-informative construct - because the enormous incomes of, not the upper 1%, but the upper 1 per Million "lifts" the average number up, disguiding the fact that 50,000,000 US citizens are on minimum scale salaries making less than $14,000 per year. Another 25 million is unemployed.
Since one can only borrow ca. 4 times one's gross salary, the US Median Income accomodative Median New Home Price would have to be nowhere over $60,000.
Las Vegas masterplan home builders built for an average $35 per Sq Ft even in 2006, the last and grinding down housing "boom" year, bringing the cost of a small 1800 Sq Ft New Home to $63,000.
As a consequence of above metrics - if a New Home in 2012 is desired to raise New Home Sales, it must be sized and priced far smaller'and cheaper.
Unless US citizens demand an end to both outsourcing and offshoring, future US generations will live in small, cheap and highly condensed multi-family housing units.
Only a renaissance of US manufacturing will alter these facts. Will the US people rise and make that happen?
Consider these things:
1. Demographics i.e. boomers selling for years
2. Interest rates will be increasing at some point in the mid-term future
3. Property taxes will continue to rise.
4. The suburban housing model is dead.
5. Wages are going to be reduced substantially.
6. The propping up of home values in the face of the above.
Therefore, housing is nowhere near a bottom and will not be for a generation.
The Matrix: a guidebook to the present, in allegorical form.
Marc Faber was screaming back in February that now is the time to reinvest into housing: http://djia.tv/marc-faber/marc-faber-on-cnbc-fast-money-2_28_11-buy-hous...
Anyone think it will hold here ? I don’t, it’s going lower.
+- 5% of this print. This is bottom on residential, commercial is a whole different ball of earwax.
agree on total number, disagree on price. there's still room at the bottom (residential only).
I'll believe housing prices are close to bottom when the private sector is back in control of the housing market.
"...when the private sector is back in control..."
lol, that'll never happen again
Take a quick read.
http://realestate.msn.com/article.aspx?cp-documentid=25434829
HUD just changed the rules on section 8 allowing them into prime properties.
But - smart people keep saying that we've hit the bottom - at some point they have to be right. At that point, we'll all recognize how smart they are.
"Don't go around predicting the end of the world. It only happens once". Seems to apply to calling housing bottom, too.
The USA is entering its full on Soviet phase, so don't epect a return to the private sector any time soon.
There can be no bottom in housing prices until there is marked improvement in jobs, wages, and inflation. Until then, everyone is trying to downsize in everything. Inflation in things you need, coupled with a lack of jobs and lower incomes, leads to deflation in things you own. We are not even close to a bottom in housing prices. You've not seen the worse yet.
+1
I and a few others have been wondering what planet the ANAL-CYSTS live on (we already known that The National Association of Realtors & National Mortgage Brokers Association will say anything to prevent another sheeple from realizing the sad state of the housing market depression).
The FOUNDATION for increased home sales is J-O-B-S, wages & benefits.
As long as jobs, wages & benefits (after all, benefits are reall just another form of wages; insurance co-pay went up 20%? That's at least 4% loss of income on a weighted scale) continue to stagnate, or worse yet, decline, there can and will be no housing 'recovery.'
The super-trend now is for 5 senior citizens who don't know each other to buy a used home at a 50% off price and share rent there (there was a story about this in a national MSM-Sheeple magazine two days ago).
much lower
It is going lower. The market is devoid of buyers and the banks are foreclosing at a feverish pace on people they are inducing into default with promises of lower interest and reduced. There is nothing on the horizon that indicates the situation is going to change and the banks stubbornly refuse to let the market clear so that values can be priced by the market. Further, banks won't lend to anyone but those with the very best credit, and the steady decline means (1) downpayments decline because home buyers can't get a return on the houses they sell, and (2) declines mean that the collateral is more likely to decrease in value perhaps leaving the lender unseucred for a portion. With high unemployment they become targets for bankrutpcy write-downs wherver they are unsecured. There just does not seem to be anything positive upon which to assume that prices have stabilized. I predice we see average decline of another 25% in 2012, with more to come unless we get some new political leadership.
considering a World wide ressession is coming I would think owning a millstone around your neck would not be a smart move if you need to move. capish
Im waiting till 3 oz of gold can buy a house in tampa or vegas
I'm waiting till 3 oz of gold can buy Vegas. :D
I can understand tampa, but vegas. I guess he is interested in starving in the desert. Hell, water is going to be a real problem for these folks.
Problem Solved. Whether it is a problem or not it is the next regulatory-trading-taxing framework to be set up. The MSM is good for somethings, it telegraphs what the busybody PTB are upto. It always starts with benevolence. Matt Damon (poor mans brad pitt) was on "this week with chritine amapour" (most watch US weekly political talk show) to talk about his cause in africa to create fresh water infrastructure. heart warming stories about little girls who can not go to school because they spend all their time collecting fresh water. (read: phase 1, "gods work")
http://abcnews.go.com/Politics/matt-damons-clean-water-mission/story?id=15036160#.TtO2fWNC80I
Phase 2 will be some type of police action to put the right type of leaders in to enforce new paridgm, that has little to do with the premise. But accomplishing the goal brigning awareness to the masses of "gods work".
And the shift from benevolence to something else becomes complete when you get the control framework back to the the "affluent" west in the form of a trading platform (see Enron. see Carbon trade). Hey atleast it creates jobs. And when that does or does not play out in our crony capitolistic system, it is implemented as a taking/taxing. Never forget Paul Krugman was an advisor to Enron.
Phase 3. You'll have some subsistance farmer in the land of a 1000 lakes (minnesota) forced by the government to pay the same for fresh water as the sunbelters living in brand new construction in Vegas. Our Minessotan gets 7 months of winter, 5 months of mosquitos, but hey, if matt damon wants to pay the same price for water in his sunny mansion in SoCal, then it must be alright! Think of the girls in africa who can't go to school because they spend all their time hauling water!
True, but that condition is likely to change too. There are a lot of very bright people working on fusion. When that puzzle is unlocked, and it is likely to be soon, we will have clean, cheap, energy and all the water we can squander. It will be a game changer for anybody lucky enough to survive the coming wars.
If you move to Tampa, screw the gold, have plenty of lead.
http://www.youtube.com/watch?v=pZxa0-IXl_U&feature=player_embedded
The Kuala Lumpur War Crimes Tribunal found former British prime minister Tony Blair and his American counterpart George W. Bush guilty and will lobby for them to be charged internationally for war crimes. Good luck with that. Nevertheless it's a noble decision and deserves attention. Hopefully these criminals and many alike will get their fair verdict in the future.
that's some funny schitt right there. has about as much credibility/strength as a trial held in RoboTrader's Mom's basement.
how naive.
Charged with what exactly?
So even at record low prices the housing sales are record low, 2+2=4, prices are going Lower much lower
you should compare it to the number of tent sales, that'll show you!!
RE/MAX, bitchezzz!!!!
Year on year, number of Realtors nationwide declined -5.49%. Most are independant contractors, and therefore do not qualify for unemployment benefits, or appear on BLS statistics.
http://www.realtor.org/wps/wcm/connect/aa817f8048eaa432aa58ee2e39654e23/10-2011.pdf?MOD=AJPERES&CACHEID=aa817f8048eaa432aa58ee2e39654e23
I am getting a T-Shirt printed:
"MBS LSAP 2012! Hell yeah!"
What good does MBS LSAP do when so many people have no fucking job to borrow against???????????????? That defies ANY logic whatsoever.
Manipulated statistically insignificant bounces along a depression level base. Basically no change and no hope in the housing market.
But look at the median new home sales chart. Only back to early 2009 levels. Although that still stinks.
http://confoundedinterest.wordpress.com/2011/11/28/new-home-sales-rise-1-3-but-still-lingers-around-300k-per-year/
don't worry about it. its just a weather related problem.....nothing to see here folks. just move along please......
but, when reading the CNBC article about the same thing, one is left feeling positive....
http://www.cnbc.com/id/45462471
Pity CNBC don't also post the US new home sales graph from above. 307 000 houses is much lower than the last few decades. It would be interesting to know what 307 000 is as an estimate percentage of all homes vs the percentage of all homes of say 1982, the previous low era. I would expect there are many more homes in the US today than there were in 1982.
Two or three "Fast Money" traders were going long last week saying the "news is not as bad as the media makes you think." Guess they should know. /sarc
There is not a week that goes by when they are not bullish.
Every unicorn & rainbow housing sector analyst predicted one year ago that we'd be well into the 600,000+ annual new home sales water mark by now.
The only water mark getting higher is the underwater one.
500,000 annual new home sales is a depression.
300,000 is a mega depression.
No job or making less than you did at your last one, AND your underwater on your current home and/or have bad credit? No tickey, no laundry.
I've found with CNBC that if it doesn't have the word "soar" in the headline, it's really bad news. And if it does, it has a half-life of 45 minutes.
When I hear CNBS'ers say the word "soar" I think of them talking about herpes. Sort of like a drinking game, only if I played it that way I wouldn't have a liver.
Man, how can anyone look at the graph at the top of the page (not the posted article) and see a positive? And the way things appear we are not yet at the bottom.
I'm an optimistic person, but at what point does the real picture have to be presented as the real picture instead of this hope and change bullshit?
The economic pressure has spread from lower incomes deep into the middle classes. At some point the bullshit will explode. This morning the local station had a discussion with people on the street (middle class) about Christmas expectations (giving and receiving). Not like anything I have heard in my lifetime, people are starting to see the light. The silver lining is people should start being thankful for what they have rather than what they can get with a credit card and pepper spray....
Is it time to buy yet?
/sarc
Lets see if European markets sell off into the close today. Seems like the DAX might.
Historically speaking House prices should be about 3 times income to be affordable. Avg income in US is about $50k. do the math. That avg House price has a more downside room in it. (NOTE- its all about location. Some US cities housing is at 1.5-2 times local avg income. Other places it is 7 or 8x local avg income.)
On my last Keys stay about 6 years ago there was a good deal of talk about the State building income-controllled housing in an adjacent key just so local PD, EMT's, even service industry people, etc. could afford to have housing. Keys RE having taken off so fast that those people were simply priced out of the market and there is literally no where to live for them. I even remember seeing boat slips with live-aboard rights going for $300k+, that's a hole in the water. The RE market around here (outside of Tampa) is a shambles and soon that 3 oz. of gold will buy you something, something you'll need to fix up but still a property.
>> The RE market around here (outside of Tampa) is a shambles and soon that 3 oz. of gold will buy you something, something you'll need to fix up but still a property.
I sold my home there three years ago. I sold my commercial property last year. My home was bought by a developer who was going to tear it down and build a monument to himself. He figured it would take him about six months to tear it down and built his final estate. The neighbors (actually very nice people) told me I was crazy to sell my house at that price. It wasn't that I was brilliant and knew the housing market continue to crash, but I know my business was dead and I couldn't afford to stay. Three years later the house is still there and the developer has had a string of renters in and out. I took a decent loss from the top, but did pretty well. Mr. My Crap Don't Stink developer and his My Crap Don't Stink Either wife have lost at least $100K on the deal by now. Sometimes the best things in life don't appear that way initially.
Look at previously owned homes... Not new. First those have to be sold off and we are not there yet.
...don't forget the all-important foreclosures. What's happening with the price of those? :D
I think we're only about a third a way through the foreclosures. I say housing prices will go lower and stay low for a long while yet.
I picked one up for $45K. Only 5yo.
The recoveryless recovery rolls along!
Dow 30,000 - here we come! Right, RoboTrader? LOL
Good needs to go down more. Like to 1X the average salary.
Did Corzine buy a new pad last month?
The housing market slump is transitory, if you define transitory exactly how the Fed uses the word
i will wait for interest rates to hit 0.0 before buying........................
Still too high.
better yet i will wait till houses revert to cash only prices.........
If you wait a little longer, you can probably get paid by the govt. to purchase a home.
The beatiful thing is house prices are not equity prices. They will not bounce like stocks. You can afford to sit back and study the housing market and don't have to catch a falling knife. I see prices dropping and doing a dead cat splat, staying at a bottom. Even if they could work out the inventory and foreclosure issues, unless the jobs and income issues are resolved, and they are not going to be resolved except over a long period of time, it's a buyers market to infinity.
We're surrendering our upsidedown Vegas condominium to the bank during our Ch. 7, knowing full well when we're allowed to get a mortgage again in a few years, home prices will still be at bottom. (If we even want another mortgage.) We're still waiting for the bank to collect the property, but have already put ourselves on the silver rehabilitation plan. Thanks to sites like zerohedge, the next 10 years look brighter than the last 10 have been. Knowing the truth is half the battle. If we'd got out of our condo in 2005-2006, we'd have doubled our money. Now it's worth about 60% of our mortgage.
Godspeed.
http://ftalphaville.ft.com/blog/2011/11/28/767031/why-i-was-wrong-by-dic...
An unrelated question...did anyone notice the ~5 minute drop in VIX around 10:20? What was it? It fell all the way down to 29.48!! And then right back all the way up to 32....
I guess my neck of the woods is just ass backwards from the rest of the country...
Our average home price is ~$125,000.00
Our average household income is ~$37,000.00
At this point, realtors are desperate to get ANY inventory to sell... basically anything short of $175k doesn't sit on the market long... (obviously each parcel must be taken on its own, but still).
Our low end ($50k-75k) has been mercilessly bid up to $100,000.00... across the board. Trying to take advantage of a little dry powder, in our real estate market, is virtually impossible. The top RE doggies have a stranglehold on all HUD/Fannie/Short sales. Basically local deep pockets has an open bid with the listing agents for the properties, Agent gives deep pockets a heads up as soon as property is listed and immediately submits a bid based on open arrangement... then everyone else gets to bid, after deep pockets' has been placed... thus being academic, given the "bid" process is really a first to meet the asking price wins situation.
However, anything $300k+ is probably going to sit on the market in perpetuity... There was a new house that was for sale at the same time rosenberg made his "there hasn't been a new house sold over $750k for months" post... I have to drive by it every day to work (it's in an odd location and a little "pricey" for the neighborhood lol). Needless to say, the builder dropped it off the market, probably lived in it for a while, and it has now been relisted... best of luck with that one... hopefully those interest payments don't eat all your prospective profit.
In our market, we're adding jobs daily... and decent jobs too. Like $30k/yr + jobs. The simple fact is that we weren't over built... and have a diverse local economy (manufacturing + ag + service + retail + e). This is literally about as good as it gets right now... and even we have a SIGNIFICANT deleveraging to go through with anything 4x+ average household income... I honestly think the demand curve hits a brick wall after a certain price... The only reason houses on the low end aren't being pushed downward is that the houses on the top end aren't moving... here, this allows the low end to remain "decent" deals...
In the end, buying a $100k house is cheaper than renting an apartment... at least insofar as the monthly payments go... take away the zero loan standards in this category of buyer and the dead wood can clear... until that day, I'll be sitting on the sidelines with my little pee pee stash, waiting to feed from deep pockets' scraps.
I would expect to see squatter litigation exponentiate in the coming years. would not surprise me if someone picked up a nice real estate portfolio through squatting in one of the fucked up places in america. banks and mortgage brokers will hopefully shut down so we can return to a normal sustainable economy based on imputs and real economic value. robo signing is a pretty good metaphor for the level of lunatic behavior in corporate america. at least the real estate situation will turn around soon (on a geologic time scale).
How would bne go about acquiring a property by squatting? Adverse possession laws?
Yes. The basic policy argument (and the basic end-all-be-all argument in property law) is that land must be put to its most productive use... ultimately, squatting > bank letting it sit vacant. As a result, we legally provide for those seeking to utilize real property over the existing, dormant owner.
There are some caveats though... and some places have made statutory requirements in addition to common law pre-requisites... that effectively gut squatting leading to ownership. Just depends on your locale (it's a state by state issue).
Regardless, living ~free is better than paying for it even if you don't end up with ownership (probably can't afford the court battle anyway).
The overwhelming reality is that the median H/H income is less than 50K which, in a best case scenario and under current mortgage qualification guidelines, would support a median house price of no greater than 150K. Still a long way to drop.
With what the housing market is up against, these figures won't improve. Until the foreclosure fraud mess unwinds, the banks are going to get skinned in the haircut.
http://georgesblogforum.wordpress.com/2011/11/02/the-daily-climb-2/
National averages in housing statistics can be very misleading and inaccurate when applying to one's own location or situation. There are many geographical markets in the West, having already declined by 50-60%, where the LOW END of the housing market has stabilized and there is active bidding for these properties. However, in these same geographical markets, the UPPER END housing market is still declining.
The new home sales statistics are really not that informative. Of course new home sales are in the toilet. Who in their right mind would pay new prices when a 3-4 year old house can be purchased at a big discount.
Wooooooo...I live In New Jersey ,So Why are my property taxes up over 58% from 2003 levels ...and climbing higher !
House prices drop but real estate taxes keep going up to pay for the bloated public wage and pension increases. The municipalities keep tapping real estate owners for more. No longer own a house, you rent it to be an enslaved taxpayer.
Back to the Future...........1997 Reset
"Nothing is moving over the $500k price point," a Cali RE told me.
Seems obvious to me when the median income is at a 30 year low...and dropping at a hefty pace.
I tried linking home prices to Black Friday and WalMart/BestBuy. As a joke, of course.
http://video.foxbusiness.com/v/1299455910001/how-long-will-the-housing-slump-linger
MBS LSAP's won't move the needle on housing, but will only serve to be another form of bailout/stimulus that the financial institutions will benefit from-- more bonuses and compensation for a job well done.
Can someone please explain the 307k sales print but only 25k were sold?