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New Home Sales "Beat" - What This Means In Context

Tyler Durden's picture




 

Moments ago new home sales came in at 369K, a "big beat" to expectations of a 347K print and up from the 343K previously. What does this mean? The chart below sums it up.

 

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Mon, 06/25/2012 - 10:13 | 2557642 Jason T
Jason T's picture

The disintigration will continue and there is no power great enough to stop it.  Aggregate demand collapse.  

Mon, 06/25/2012 - 10:19 | 2557671 Pladizow
Pladizow's picture

Fewer homes being sold is a good thing!

Mon, 06/25/2012 - 10:21 | 2557682 Aziz
Aziz's picture

Fall off a cliff and then rise up 5.5%?

Great Success! 

Mon, 06/25/2012 - 10:23 | 2557695 Caviar Emptor
Caviar Emptor's picture

Behold the look of a post-bubble economy. Japan here we come

Mon, 06/25/2012 - 10:28 | 2557720 JPM Hater001
JPM Hater001's picture

By the time you toss out the cup and grab the pail it wont matter.  The water will continue to wash in...violently.

Mon, 06/25/2012 - 10:30 | 2557740 Pure Evil
Pure Evil's picture

If that chart is considered UP, then you might want to talk to your doctor about a prescription for Viagra.

Better yet, if you want a second opinion, ask the wife.

Mon, 06/25/2012 - 11:51 | 2558160 SoCalBusted
SoCalBusted's picture

You're ugly too!

Mon, 06/25/2012 - 12:51 | 2558467 Joe Sixpack
Joe Sixpack's picture

"Fall off a cliff and then rise up 5.5%?"

 

Dead Cat Bounce.

Mon, 06/25/2012 - 15:22 | 2559170 SeattleBruce
SeattleBruce's picture

Is there resistance above from the 1966 new homes print?

Mon, 06/25/2012 - 11:38 | 2558107 Seer
Mon, 06/25/2012 - 12:37 | 2558413 Freegold
Freegold's picture

Sure is, I know a recovery when i find one!

Mon, 06/25/2012 - 10:20 | 2557678 Kayman
Kayman's picture

The lowest of the lows for the past 50 years is the highest of the highs for the past 2 years. 

Bloomey shilling for Oby.

Mon, 06/25/2012 - 10:35 | 2557765 Alea Iactaest
Alea Iactaest's picture

The head fakes just keep on coming. Sort of reminds me how we saw the smart people* went broke in 1929, then the really smart people went broke in 1932, and finally the really really smart people went broke in 1937. BTFD!

 

(I was going to write "money" instead of people, but there is a human toll to all of this.)

Mon, 06/25/2012 - 10:36 | 2557771 TrainWreck1
TrainWreck1's picture

Note that the numbers increase after the end of every 'recession', except the last one

 

Mon, 06/25/2012 - 12:54 | 2558480 Ragnar24
Ragnar24's picture

I also noticed that these "dumb" money retail investors (aka homebuyers) have incredible predictive power -- it looks to me that every recession was preceded by a decline in new home buying.

Mon, 06/25/2012 - 10:55 | 2557871 Stock Tips Inve...
Stock Tips Investment's picture

I agree. This graph reflects the current situation within a historical context. Beyond what they say the figures for this month compared to last month, this level remains very low. Evidence of the difficulties of the economy to recover.

Mon, 06/25/2012 - 11:06 | 2557921 Rainman
Rainman's picture

Here's more chart porn from Doctor Bubble on the median house pricing change in the 20 largest metros since 2006.

Pretty accurate indicator of why household net worth has been crushed !

http://www.doctorhousingbubble.com/wp-content/uploads/2012/06/price-changes-around-the-country.png

 

 

Mon, 06/25/2012 - 11:53 | 2558167 g speed
g speed's picture

Houston/Dallas still in reset from the "savings and loan" debotch of the Keating Five erra-- just shows how long these "burst bubbles" take to reinflate.

Mon, 06/25/2012 - 10:25 | 2557705 ArkansasAngie
ArkansasAngie's picture

And ... they don't want mean ole investors buying houses at their true economic value.. Nope can't have that.  Price discovery is a bitch.  Hey Benny how many banksters does it take to kill an economy?

 

Evidently just one

 

Mon, 06/25/2012 - 10:29 | 2557726 lotusblue
lotusblue's picture

Aggregate demand collapse Indeed! the chart goes back 50 years and we're at lowest in all that time.Population has more than doubled.

Coportists have decided thier earlier bites not big enough.                                                                                              

A tipping point is approaching,something along the lines of French Revolution.

Mon, 06/25/2012 - 12:13 | 2558280 Quinvarius
Quinvarius's picture

Aggregate demand.  Sounds like something the Ancients had.  Wonderous people.  Soon there will be an Ancient Aliens episode on the history channel explaining aggregate demand and stonehenge.

That was a quarry/stone mason joke BTW.

Mon, 06/25/2012 - 10:13 | 2557645 rubearish10
rubearish10's picture

Err, not much?

Mon, 06/25/2012 - 10:13 | 2557648 mrktwtch2
mrktwtch2's picture

looks like the nas chart from 99 to 01..

Mon, 06/25/2012 - 11:21 | 2557781 Alea Iactaest
Alea Iactaest's picture

This housing chart, the nas chart... fucking amateur hour. Try this one (DJIA 1920-1940):

http://stockcharts.com/freecharts/historical/djia19201940.html

Have a nice day!

Mon, 06/25/2012 - 10:14 | 2557653 GolfHatesMe
GolfHatesMe's picture

Sipderman Towels with a new home

Mon, 06/25/2012 - 10:15 | 2557660 Beevreetr
Beevreetr's picture

Rock that hill on a Burton !!

Mon, 06/25/2012 - 10:16 | 2557662 Dr. Engali
Dr. Engali's picture

I think the trendline is definitely broken in that chart.

Mon, 06/25/2012 - 10:17 | 2557665 insanelysane
insanelysane's picture

Halfway there.

Mon, 06/25/2012 - 10:18 | 2557667 BobPaulson
BobPaulson's picture

They only need it to do that about one or two more decades and they can get through the inventory.

Mon, 06/25/2012 - 10:18 | 2557670 monopoly
monopoly's picture

Bouncing along the bottom until the bottom falls apart.

Mon, 06/25/2012 - 10:19 | 2557673 GubbermintWorker
GubbermintWorker's picture

It's called......noise.

Mon, 06/25/2012 - 10:19 | 2557674 insanelysane
insanelysane's picture

George Soros says that Germans need to buy houses in US, Spain, Greece, Italy, Ireland, France, UK, Japan,............

Mon, 06/25/2012 - 10:38 | 2557789 HardlyZero
HardlyZero's picture

And some wealthy are building and moving to new homes.  BFD.

Gentrification is probably on the upswing into the center cities...these are where UTILITIES will become KING.

Got Water?  Got Electric ?  Got natGAS ?

If you are on the city outskirts you are effectively OFFLINE or OFFGRID.

Get your better/central address...while you can at a reasonable price.

Mon, 06/25/2012 - 11:52 | 2558165 Seer
Seer's picture

Got FOOD, bitch?

I have wood for fuel.  The electrical gadgets will, over time, become worthless.

Enjoy your city life!

Mon, 06/25/2012 - 11:43 | 2558130 AbbeBrel
AbbeBrel's picture

Thanks that comment made my day!!! :-)   IT WAS REALLY FUNNY (sorry for being so loud :-) 

Mon, 06/25/2012 - 10:22 | 2557676 francis_sawyer
francis_sawyer's picture

So I'm basically wondering that as they start bulldozing houses to clear inventory, will the banks still carry the bulldozed house as an asset on the balance sheet /rhetorical...

Mon, 06/25/2012 - 10:31 | 2557744 Freewheelin Franklin
Freewheelin Franklin's picture

Clear inventory? Nah. They are going to start bulldozing houses because there is no basic maintenance like winterizing. I came across a house recently where the people moved out and left the water on in the basement. Nobody knew it until the neighbors saw water running down the driveway.

The "value" of many of these houses is the cost of demolition.

Mon, 06/25/2012 - 11:40 | 2558116 Its_the_economy...
Its_the_economy_stupid's picture

Ever seen mold creep up the walls from the baseboard in an empty house? I have. Remediation is not cheap. Neither is lung disease.

Mon, 06/25/2012 - 17:37 | 2559596 Freewheelin Franklin
Freewheelin Franklin's picture

I'm in the NE. Mold isn't as big of a problem as say, down South. But don't try to tell that to the insurance companies.

We had a house where the plumber had to move a second floor toilet. He forgot to glue one of his joints. It held for about a month, believe it or not. The damage wasn't too bad, but the insurance company wanted every piece of drywall that got just a little wet, replaced. It about doubled the cost of repairs. They paid for it, so I didn't really care.  And did I mention, it happened the night before the family was leaving for a 2 week vacation. No shit.

Mon, 06/25/2012 - 10:20 | 2557679 Xinu
Xinu's picture

With the market taking a beating a dose of hopium was in order.  This is very bullish!  (rolls eyes)

Mon, 06/25/2012 - 10:21 | 2557685 Caviar Emptor
Caviar Emptor's picture

In a word, new households ain't got the bucks, the confidence or the desire to commit to 30 years of debt-slavery. Considering the outlook for jobs, advancement, social mobility, incomes and net worth it's a damn solid business decision. 

Mon, 06/25/2012 - 10:25 | 2557707 jowenchrist
jowenchrist's picture

Damn straight CE ! Damn straight!

Mon, 06/25/2012 - 10:36 | 2557773 JohnKozac
JohnKozac's picture

...considering soaring property taxes, maintenance costs, insurance,  utilities, etc....how can you commit to a 30 year mortgage?

 

That's probably why I see more and more unmowed lawns, borken windows, garbage in the streets....and that's the nice neigborhood!

Mon, 06/25/2012 - 10:42 | 2557809 Caviar Emptor
Caviar Emptor's picture

Precisely, @John! It's the combo: Cost structure too high, incomes too low. Call it Bi-something

Mon, 06/25/2012 - 10:56 | 2557879 rufusbird
rufusbird's picture

You guys are scaring me. I thought it was only in my city!

Mon, 06/25/2012 - 10:22 | 2557690 killallthefiat
killallthefiat's picture

The definition of beat for the NAR is "(v) a term used to create optimism, only to be revised downward in three weeks"

Mon, 06/25/2012 - 10:22 | 2557691 GubbermintWorker
GubbermintWorker's picture

I wonder what that chart would look like if it was adjusted on a per 1,000 person basis thus taking into account the increase in population since 1960. Bet it would be butt ugly!

Mon, 06/25/2012 - 10:23 | 2557698 buchesky
buchesky's picture

Well, clearly it's a bottom.

Mon, 06/25/2012 - 10:45 | 2557828 TrainWreck1
TrainWreck1's picture

or another ledge...

Mon, 06/25/2012 - 10:26 | 2557709 mayhem_korner
mayhem_korner's picture

 

 

So after this HUGE beat, the market in the past 30 months is still below any time in the prior 50 years?

Where can I buy some lenses like the ones the MSM wears when they report this stuff?

Mon, 06/25/2012 - 10:27 | 2557711 bdc63
bdc63's picture

File this one under "Charts You Will NEVER see on CNBC"

Nicely done ZH .... again ...

Mon, 06/25/2012 - 10:26 | 2557712 Dr. Engali
Dr. Engali's picture

No Obummer care ruling today...WTF?

Mon, 06/25/2012 - 10:27 | 2557718 Freewheelin Franklin
Freewheelin Franklin's picture

Speaking from experience, the only thing moving is the very cheap and the very expensive. The middle is dead. And the middle won't start moving until the market is allowed to hit bottom. It ain't there yet.

Mon, 06/25/2012 - 10:29 | 2557728 Never One Roach
Never One Roach's picture

Go to some open houses ...they are still handing out zero down loans or near zero down.....that's one more reason house prices will continue to drop (as Shiller says). When you give people 'somehting for nothing' it does not work out well.

Mon, 06/25/2012 - 10:30 | 2557735 Hohum
Hohum's picture

An annualized, adjusted number.  What is the unadjusted comparison for May sales, YOY?

Mon, 06/25/2012 - 10:31 | 2557739 Chupacabra-322
Chupacabra-322's picture

You kidding me?  These Psycopaths/Sociopaths are professional liars.  You expect me to believe any numbers coming out of The US Dept. of Commerce?  Yea right.

Mon, 06/25/2012 - 10:30 | 2557741 Cognitive Dissonance
Cognitive Dissonance's picture

Yeah! I top ticked the housing market when I bought my castle. That's good......right?

RIGHT?

RIGHT??????

Mon, 06/25/2012 - 10:44 | 2557823 GCT
GCT's picture

My home is paid for CD!  Guess I was stupid!

Mon, 06/25/2012 - 10:34 | 2557763 orangedrinkandchips
orangedrinkandchips's picture

Still, today, we are seeing people fall over themselves to buy buy buy....My friends in a college town within a big city sold their crib in 4 days. And, it's a tiny bungalo built post WW2, two bed, just tiny really but the location was key. It's a cliche but location x3 does hold up.

 

BUT, this is the epitome of a dead-cat bounce....

 

Just becase it USE to be 1.5MM and now it's a "steal" at 1.2MM......doesnt mean it's worth 1.2!!! I dont know the term but it's the opposite of low-balling someone. You overprice the asset and then slash it to show it's half of that price. You think it's a good deal...

 

but you are paying outrageous money for a depreciating asset....which has depreciated a shitload already! Both are going the wrong way.

Mon, 06/25/2012 - 11:58 | 2558194 Seer
Seer's picture

In the past homes weren't considered assets.

I once had an "investment" (sold prior to the bubble burst), now I have a "home" (with property, which provides me with wood for fuel and pasture for raising animals for food).

Mon, 06/25/2012 - 10:39 | 2557793 JohnKozac
JohnKozac's picture

My friend bought a place outside LA last year for $1.2 million calling it " a steal."

Now he was transferred to Atlanta and guess what....no takers even at $780,000.

 

As Dr Housing Bubbel wrties, the high end Cali market is getting worse by the week.

Mon, 06/25/2012 - 10:45 | 2557829 GCT
GCT's picture

Cali housing has alot further to fall.  Illegal immigrants do not make enough money to buy into that market.

Mon, 06/25/2012 - 10:46 | 2557835 mayhem_korner
mayhem_korner's picture

 

 

Looks like it was "a steal."  Just not for him...

Mon, 06/25/2012 - 10:52 | 2557857 slewie the pi-rat
slewie the pi-rat's picture

management of perception is very important in all media markets as we see daily...

Mon, 06/25/2012 - 10:54 | 2557868 Overflow-admin
Overflow-admin's picture

It just mean it will be revised lower...

Mon, 06/25/2012 - 11:00 | 2557893 dbomb12
dbomb12's picture

Right on "FRED"

Mon, 06/25/2012 - 11:03 | 2557904 Alejandrito
Alejandrito's picture

So, where  are going to live krugman´s aliens?

Mon, 06/25/2012 - 11:04 | 2557907 mirac
mirac's picture

I could solve the problem with a fleet of D8s

Mon, 06/25/2012 - 12:02 | 2558220 Seer
Seer's picture

You're volunteering?  Free time AND fuel (not to mention other operational costs associated with operating that fleet)?

Nothing's free.  And AFTER everything is leveled you'll have the costs associated with demolition (unless, that is, you're going to do it for "free") AND loans you have to write off AND a population that STILL cannot afford homes.

Mon, 06/25/2012 - 12:06 | 2558251 Seer
Seer's picture

Actually, if the banks were smart they'd offer disgruntled, evicted previous home "owners" first shot at demolishing their previous homes for free.  Solves two problems: 1) eliminates demolition costs (well, I'm sure that there'll still be cleanup costs, but perhaps the bulk is taken care of); 2) Redirects pent up anger away from the banks.

Mon, 06/25/2012 - 11:22 | 2558028 Cult of Criminality
Cult of Criminality's picture

Tyler

 You always give me a chuckle. Thanks

 

Mon, 06/25/2012 - 11:30 | 2558072 apberusdisvet
apberusdisvet's picture

Gated communities to become mini FEMA camps, sold to the taxpayer at original loan amount plus 10% vig (to pay for the barbed wire and permanent on-site SWAT team).

 

solves a lot of problems, doesn't it.

Mon, 06/25/2012 - 11:30 | 2558075 Cortez
Cortez's picture

With fixed 30 year mortgages at under 4% it makes it easier for a buyer to "qualify" since the loan payment is lower than in past years.  I do believe that once big banks have unloaded all their foreclosure inventory that Ben will cite inflation fears and end ZIRP. 

Mon, 06/25/2012 - 11:38 | 2558106 chiswickcat
chiswickcat's picture

Now that the housing market is all fixed, better and doing fine, how come gold and silver heading up for the day???

Mon, 06/25/2012 - 11:42 | 2558126 Dan Conway
Dan Conway's picture

Good news - We are almost to the previous bottom!  Bad news - just as the economy is beginning to roll-over - maybe the next "recovery" will get us back to the previous low. 

Mon, 06/25/2012 - 11:44 | 2558136 Snakeeyes
Snakeeyes's picture

Nice recovery ... not! Chicago Fed index down, so this housing recovery won't have legs.

http://confoundedinterest.wordpress.com/2012/06/25/new-homes-sales-rise-7-6-dallas-fed-index-rises-chicago-fed-index-falls/

Mon, 06/25/2012 - 11:46 | 2558145 icanhasbailout
icanhasbailout's picture

what a purchase with a loan is is "pulled forward demand"

easy credit brought something like 5 years' worth of net demand forward that otherwise would not have been under existing conditions

 

now we're when the demand was pulled forward from...

Mon, 06/25/2012 - 11:47 | 2558147 Snakeeyes
Snakeeyes's picture

Here is a blog I wrote yesterday based on my debate with Jared Bernstein, Biden's Chief Economist. The bigger picture numbers point to a questionable recovery.

http://confoundedinterest.wordpress.com/2012/06/24/the-limits-of-fed-monetary-policy-for-affordable-housing-uk-hints-at-relaxing-bank-lending-rules-us-tightens/

Mon, 06/25/2012 - 11:48 | 2558152 Father Lucifer
Father Lucifer's picture

Very funny in a twisted way.

Mon, 06/25/2012 - 12:28 | 2558379 TideFighter
TideFighter's picture

Free houses for anyone that permanently goes off the government dole. Houses would be all gone in a week and we find the bottom. Why not? Cheaper than dole-for-life.

Mon, 06/25/2012 - 14:04 | 2558826 danster82
danster82's picture

And they are most likley property investment purchases rather than authentic familys buying property for the real use of a home.

Mon, 06/25/2012 - 16:46 | 2559436 Dead Canary
Dead Canary's picture

It's the dawning of a new golden age.

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