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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 | Link to Comment 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 | Link to Comment Pladizow
Pladizow's picture

Fewer homes being sold is a good thing!

Mon, 06/25/2012 - 10:21 | Link to Comment Aziz
Aziz's picture

Fall off a cliff and then rise up 5.5%?

Great Success! 

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

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

Mon, 06/25/2012 - 10:28 | Link to Comment 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 | Link to Comment 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 | Link to Comment SoCalBusted
SoCalBusted's picture

You're ugly too!

Mon, 06/25/2012 - 12:51 | Link to Comment 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 | Link to Comment SeattleBruce
SeattleBruce's picture

Is there resistance above from the 1966 new homes print?

Mon, 06/25/2012 - 11:38 | Link to Comment Seer
Mon, 06/25/2012 - 12:37 | Link to Comment Freegold
Freegold's picture

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

Mon, 06/25/2012 - 10:20 | Link to Comment 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 | Link to Comment 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 | Link to Comment 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 | Link to Comment 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 | Link to Comment 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 | Link to Comment 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 | Link to Comment 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 | Link to Comment 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 | Link to Comment 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 | Link to Comment 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 | Link to Comment rubearish10
rubearish10's picture

Err, not much?

Mon, 06/25/2012 - 10:13 | Link to Comment mrktwtch2
mrktwtch2's picture

looks like the nas chart from 99 to 01..

Mon, 06/25/2012 - 11:21 | Link to Comment 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 | Link to Comment GolfHatesMe
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Sipderman Towels with a new home

Mon, 06/25/2012 - 10:15 | Link to Comment Beevreetr
Beevreetr's picture

Rock that hill on a Burton !!

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

I think the trendline is definitely broken in that chart.

Mon, 06/25/2012 - 10:17 | Link to Comment insanelysane
insanelysane's picture

Halfway there.

Mon, 06/25/2012 - 10:18 | Link to Comment 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 | Link to Comment monopoly
monopoly's picture

Bouncing along the bottom until the bottom falls apart.

Mon, 06/25/2012 - 10:19 | Link to Comment GubbermintWorker
GubbermintWorker's picture

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

Mon, 06/25/2012 - 10:19 | Link to Comment 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 | Link to Comment 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 | Link to Comment 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 | Link to Comment 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 | Link to Comment 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 | Link to Comment 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 | Link to Comment 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 | Link to Comment 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 | Link to Comment 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 | Link to Comment 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 | Link to Comment jowenchrist
jowenchrist's picture

Damn straight CE ! Damn straight!

Mon, 06/25/2012 - 10:36 | Link to Comment 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 | Link to Comment 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 | Link to Comment rufusbird
rufusbird's picture

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

Mon, 06/25/2012 - 10:22 | Link to Comment 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 | Link to Comment 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 | Link to Comment buchesky
buchesky's picture

Well, clearly it's a bottom.

Mon, 06/25/2012 - 10:45 | Link to Comment TrainWreck1
TrainWreck1's picture

or another ledge...

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

No Obummer care ruling today...WTF?

Mon, 06/25/2012 - 10:27 | Link to Comment 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 | Link to Comment 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 | Link to Comment Hohum
Hohum's picture

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

Mon, 06/25/2012 - 10:31 | Link to Comment 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 | Link to Comment 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 | Link to Comment GCT
GCT's picture

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

Mon, 06/25/2012 - 10:34 | Link to Comment 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 | Link to Comment 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 | Link to Comment 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 | Link to Comment 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 | Link to Comment mayhem_korner
mayhem_korner's picture

 

 

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

Mon, 06/25/2012 - 10:52 | Link to Comment 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 | Link to Comment Overflow-admin
Overflow-admin's picture

It just mean it will be revised lower...

Mon, 06/25/2012 - 11:00 | Link to Comment dbomb12
dbomb12's picture

Right on "FRED"

Mon, 06/25/2012 - 11:03 | Link to Comment Alejandrito
Alejandrito's picture

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

Mon, 06/25/2012 - 11:04 | Link to Comment mirac
mirac's picture

I could solve the problem with a fleet of D8s

Mon, 06/25/2012 - 12:02 | Link to Comment 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 | Link to Comment 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 | Link to Comment Cult of Criminality
Cult of Criminality's picture

Tyler

 You always give me a chuckle. Thanks

 

Mon, 06/25/2012 - 11:30 | Link to Comment 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 | Link to Comment 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 | Link to Comment 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 | Link to Comment 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 | Link to Comment 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 | Link to Comment 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 | Link to Comment 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 | Link to Comment Father Lucifer
Father Lucifer's picture

Very funny in a twisted way.

Mon, 06/25/2012 - 12:28 | Link to Comment 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 | Link to Comment 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 | Link to Comment Dead Canary
Dead Canary's picture

It's the dawning of a new golden age.

Do NOT follow this link or you will be banned from the site!