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New Home Sales "Beat" - What This Means In Context
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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The disintigration will continue and there is no power great enough to stop it. Aggregate demand collapse.
Fewer homes being sold is a good thing!
Fall off a cliff and then rise up 5.5%?
Great Success!
Behold the look of a post-bubble economy. Japan here we come
By the time you toss out the cup and grab the pail it wont matter. The water will continue to wash in...violently.
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.
You're ugly too!
"Fall off a cliff and then rise up 5.5%?"
Dead Cat Bounce.
Is there resistance above from the 1966 new homes print?
Hey! "Bumbles bounce!" (http://www.flickr.com/photos/scottod/2109407586/)
Sure is, I know a recovery when i find one!
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.
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.)
Note that the numbers increase after the end of every 'recession', except the last one
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.
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.
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
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.
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
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.
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.
Err, not much?
looks like the nas chart from 99 to 01..
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!
Sipderman Towels with a new home
Rock that hill on a Burton !!
I think the trendline is definitely broken in that chart.
Halfway there.
They only need it to do that about one or two more decades and they can get through the inventory.
Bouncing along the bottom until the bottom falls apart.
It's called......noise.
George Soros says that Germans need to buy houses in US, Spain, Greece, Italy, Ireland, France, UK, Japan,............
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.
Got FOOD, bitch?
I have wood for fuel. The electrical gadgets will, over time, become worthless.
Enjoy your city life!
Thanks that comment made my day!!! :-) IT WAS REALLY FUNNY (sorry for being so loud :-)
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...
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.
Ever seen mold creep up the walls from the baseboard in an empty house? I have. Remediation is not cheap. Neither is lung disease.
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.
With the market taking a beating a dose of hopium was in order. This is very bullish! (rolls eyes)
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.
Damn straight CE ! Damn straight!
...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!
Precisely, @John! It's the combo: Cost structure too high, incomes too low. Call it Bi-something
You guys are scaring me. I thought it was only in my city!
The definition of beat for the NAR is "(v) a term used to create optimism, only to be revised downward in three weeks"
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!
Well, clearly it's a bottom.
or another ledge...
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?
File this one under "Charts You Will NEVER see on CNBC"
Nicely done ZH .... again ...
No Obummer care ruling today...WTF?
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.
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.
An annualized, adjusted number. What is the unadjusted comparison for May sales, YOY?
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.
Yeah! I top ticked the housing market when I bought my castle. That's good......right?
RIGHT?
RIGHT??????
My home is paid for CD! Guess I was stupid!
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.
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).
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.
Cali housing has alot further to fall. Illegal immigrants do not make enough money to buy into that market.
Looks like it was "a steal." Just not for him...
management of perception is very important in all media markets as we see daily...
It just mean it will be revised lower...
Right on "FRED"
So, where are going to live krugman´s aliens?
I could solve the problem with a fleet of D8s
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.
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.
Tyler
You always give me a chuckle. Thanks
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.
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.
Now that the housing market is all fixed, better and doing fine, how come gold and silver heading up for the day???
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.
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/
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...
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/
Very funny in a twisted way.
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.
And they are most likley property investment purchases rather than authentic familys buying property for the real use of a home.
It's the dawning of a new golden age.