"Welcome To The Housing Non-Recovery" In Three Simple Charts

Tyler Durden's picture




 

Below is some more hard data where you won't find the much anticipated, 'any minute now', housing recovery. While the first chart shows the annualized new home sales sold data, which came in at meaningless 321K in January on expectations of 315K, and a meaningless drop from an upward revised 324K, all this shows is that 3 years after the "recovery", there is zero improvement in housing. In non-SAARed terms, there were just 22K homes sold in January. Naturally, this is to be expected because as long as the government continues to prevent true price discovery, there will be no real housing market. Which is just what the second chart  shows: Completed houses for sale at the end of period dropped to 57K - this is the lowest point in the 40 years of this data series. Said otherwise nobody has any hopes that there will be a pick up in housing demand. And why should they - after all as the third and final chart shows, shadow inventory is at a record, and about to be unleashed on the market at bargain basement prices courtesy of the Robo-settlement, which in turn will drag down prevailing prices far, far lower everywhere. Welcome to the latest housing non-recovery.

New Homes for sale, courtesy of John Lohman:

Record low Completed Houses for sale at the end of the period:

And record high shadow Inventory:

 

Then again, since housing keeps hitting fresh record lows, it can only improve right? Just ask Cramer...

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Fri, 02/24/2012 - 11:49 | 2192759 GeneMarchbanks
GeneMarchbanks's picture

Shadow inventory is another statistic that might be padded to soften the blow.

Fri, 02/24/2012 - 11:57 | 2192798 redpill
redpill's picture

I've got some decent stats I can relate later today on shadow stuff.  It certainly isn't going away. 

The housing market's best chance is to catch some capital if/when it starts flowing out of the stock market in earnest and there is a rush toward hard assets.  That's probably not going to happen this year, so for new homes in particular the best they can hope for is a flattish result, or maybe some small percentage gains over 2011 since some of the 2011 demand was pulled back into 2010 with that assinine tax credit they tried.

Fri, 02/24/2012 - 12:15 | 2192862 TruthInSunshine
TruthInSunshine's picture

The bottom is is! It's a great time to buy a house, bitchez!*


*Message brought to you by The National Association of Realtors (not an actual word), The National Association of Homebuilders® , The National Mortgage Brokers Association®, ReMax® and your local property assessors' offices.

Fri, 02/24/2012 - 12:37 | 2192952 Joe Sixpack
Joe Sixpack's picture

** We are criminals, and we approve this message

Fri, 02/24/2012 - 13:25 | 2193188 AbruptlyKawaii
AbruptlyKawaii's picture

but but bloomberg sez : "New Home Sales Data Point to Stabilizing Market"

Fri, 02/24/2012 - 14:14 | 2193388 Esso
Esso's picture

Dead is considered stable, yes?

Fri, 02/24/2012 - 14:28 | 2193450 GoldRulesPaperDrools
GoldRulesPaperDrools's picture

Well stated good sir! ;)

Fri, 02/24/2012 - 14:28 | 2193451 GoldRulesPaperDrools
GoldRulesPaperDrools's picture

Well stated good sir! ;)

Fri, 02/24/2012 - 14:28 | 2193452 GoldRulesPaperDrools
GoldRulesPaperDrools's picture

Well stated good sir! ;)

Fri, 02/24/2012 - 15:36 | 2193776 rosiescenario
rosiescenario's picture

....as a realtor told me once "Home prices in California never decline."

Fri, 02/24/2012 - 16:31 | 2193993 RafterManFMJ
RafterManFMJ's picture

 

 

Toying with the idea of finding half-dozen houses or so that I'd be happy with, then going and offering 1/3 to 1/2 the asking price...just to see what happens.  One place I drive past daily has been on sale for 5 years, different realtors, FSBO, etc.  So many people living in the golden age of inflated house prices.

 

Fri, 02/24/2012 - 14:00 | 2193329 Abiotic Oil
Abiotic Oil's picture

I think the cats out of the bag now though.  Real estate isn't that "hard" of an asset anymore.  People have clearly seen their properties devalue in monetary terms and many have realized that even if they don't have a mortgage they don't "own" property due to property taxes and other means the government can use to steal the property.

We need to get back to allodial title.

Fri, 02/24/2012 - 16:41 | 2193367 Widowmaker
Widowmaker's picture

Smartest comment on this thread!

Housing is now a depreciating asset.  All the fraud in the world can't force people to buy a shit asset at turbo-inflated Bernanke prices.

US residential still has compression downward for an ADDITIONAL 50-75% decline in prices (in aggregate) from current levels (provided incomes do not continue decline in REAL, not bullshit Bernanke, terms).

Depending on how long this takes, one can expect accelerated depreciation as the shit quality homes deteriorate faster than pre-bubble homes not produced by Immigration and Customs Enforcement.

 

Fri, 02/24/2012 - 18:23 | 2194376 Freddie
Freddie's picture

Hope & Change American Caliphate with Mugabe 2.

Fri, 02/24/2012 - 15:14 | 2193665 Braindonor1
Braindonor1's picture

I can't help but wonder if the third graphic actually understates the seriousness of the housing picture.

As (total) foreclosures continue and exceed the number of new homes built, the total stock of housing that is unencumbered by a pending default or actual foreclosure diminishes. I guess the point (for me) is that the destruction of housing as a store of wealth continues as the number of households owning an unencumbered home continues to decline, with this decline being accompanied by an accelerating loss of value.

Fri, 02/24/2012 - 16:11 | 2193906 Chariots of the Feds
Chariots of the Feds's picture

I agree.  Now where have I heard about a rush toward hard assets....Wiemar.  Oh this is gonna be good.

Fri, 02/24/2012 - 12:04 | 2192822 stocktivity
stocktivity's picture

Now thru November elections, any government statistic will be padded or slanted as "better than expected".

Fri, 02/24/2012 - 12:29 | 2192921 SheepDog-One
SheepDog-One's picture

And then what?

Fri, 02/24/2012 - 12:31 | 2192931 Panafrican Funk...
Panafrican Funktron Robot's picture

Right, padding stats has been the M.O. regardless of who's in office.

Fri, 02/24/2012 - 12:17 | 2192879 Panafrican Funk...
Panafrican Funktron Robot's picture

The charts look much, much worse when you take into account the average price paid per unit.

http://www.census.gov/const/uspricemon.pdf

Way less homes sold x way less price paid = way worse than the media/government is letting on.

Fri, 02/24/2012 - 12:23 | 2192903 redpill
redpill's picture

The home builders have learned to survive in this environment, at least those that are still around.  The longer term problem for housing is the millions of Americans 20%+ underwater on their mortgages, that is just not going to be resolved anytime soon.  All the gears of the housing are gummed up with that and the distressed properties pulling down values.  We're looking at 2015 for reasonable improvement at the earliest.

Fri, 02/24/2012 - 12:30 | 2192926 Panafrican Funk...
Panafrican Funktron Robot's picture

Good points, and agreed that 2015 would really be the absolute earliest we'd see an actual bottom.  Other stuff that will continue to delay it:

1.  Continued gumming up of MBS/CDS valuations.

2.  Continued foreclosure law issues (it doesn't look like the recent settlement is going to prevent private class action lawsuits).

3.  Prices vs. family income.  Until we see that 3:1 historical ratio, it's going to continue to drag (which tracks back to the underwater mortgage issue you mentioned). 

Fri, 02/24/2012 - 13:15 | 2193147 Ms. Erable
Ms. Erable's picture

2015 consumer pricing:

New Toyota Corrola: $45k.

Slightly lived in 2500 sq ft McMansion: $85K.

Watching the Bernank do the Scaffold Shuffle: priceless.

Fri, 02/24/2012 - 13:31 | 2193208 mayhem_korner
mayhem_korner's picture

 

 

I'm wondering where you live that 2,500 sq ft might be a McMansion.  Guessin' it's neither Fairfax County, VA nor Fairfield County, CT.

Fri, 02/24/2012 - 13:37 | 2193238 TruthInSunshine
TruthInSunshine's picture

In any enclave full of government workers or contractors, especially in the federal bloat areas in D.C., Virginia or Maryland, a McMansion must have a three car garage and a minimum of 3800 square feet to be deemed as such.

Let's not slander McMansions.

Fri, 02/24/2012 - 14:30 | 2193462 GoldRulesPaperDrools
GoldRulesPaperDrools's picture

You must live in Ashburn! ;)

Fri, 02/24/2012 - 18:51 | 2194456 Freddie
Freddie's picture

Better to slander the Beltway parasites who feed at Uncle El Sam Abdul's trough with the islamic.   2,500 sq ft McMansion sounds like Caliphate-pornia in the Valley.

Sat, 02/25/2012 - 02:00 | 2195202 NorthPole
NorthPole's picture

Dude, you seem obsessed with Muslims. They are nothing more than the scapegoat of our times.

Fri, 02/24/2012 - 18:51 | 2194457 Freddie
Freddie's picture

Better to slander the Beltway parasites who feed at Uncle El Sam Abdul's trough with the islamic.   2,500 sq ft McMansion sounds like Caliphate-pornia in the Valley.

Fri, 02/24/2012 - 14:53 | 2193556 redpill
redpill's picture

If at any point there is massive sudden inflation there could be a bump up in home transactions just as a result of flight to real property.  Just like there's all kinds of things artificially impacting equity markets, they are distorting housing as well.  In the long run, housing will eventually turn around because demographics are on the industry's side, but there's no guarantee of how quickly that will happen given all the chaos in the rest of the economy.

Fri, 02/24/2012 - 12:38 | 2192961 Joe Sixpack
Joe Sixpack's picture

The homebuilders are building apartment buildings and FEMA camps.

Fri, 02/24/2012 - 13:46 | 2193271 CrazyCooter
CrazyCooter's picture

We're looking at 2015 for reasonable improvement at the earliest.

Isn't that when the kids of all those baby boomers sell their parents home and stick them in assisted living?

My math:

1945 + 70 = 2015

Unless said boomers are eating quality food and getting daily exercise (implies access to affordable health care), their bodies are going to be going kaput in increasing numbers about then...

Regards,

Cooter

Fri, 02/24/2012 - 14:12 | 2193377 Widowmaker
Widowmaker's picture

The "home builders" now work at McDonalds.

Do you want fries with that bullshit?

Fri, 02/24/2012 - 12:32 | 2192935 YC2
YC2's picture

Consider the source:  NAR, JPM , MBA

Fri, 02/24/2012 - 11:45 | 2192760 battle axe
battle axe's picture

Bloomberg sayys "new home sales data point to stabilizing market" BWAAA YAHAAAAAAAAAAAA. OH MY GOD THAT  FELT GOOD>

Fri, 02/24/2012 - 12:30 | 2192927 SheepDog-One
SheepDog-One's picture

the Titanic also eventually 'stabilized' nicely on the bottom of the Atlantic.

Fri, 02/24/2012 - 13:42 | 2193256 Joy on Maui
Joy on Maui's picture

LOVE your humor!

Fri, 02/24/2012 - 11:46 | 2192766 Dr. Engali
Dr. Engali's picture

Seeing as the chart  source is the NAR my guess is it's much worse than pictured.

Fri, 02/24/2012 - 11:49 | 2192771 espirit
espirit's picture

Right, the NAR data is not to be trusted.  IF they show decline, it's much much worse.

Fri, 02/24/2012 - 12:45 | 2192989 Common_Cents22
Common_Cents22's picture

Yep, when has a realtor EVER said its a bad time to buy a home? (give him a commission)

when has a mortgage company EVER said you should wait to get financing? ha, every commercial is rates are going up! (give him  a commission.

When has a broker EVER said its not a good time to buy stocks? (give him a commission)

 

Any time is always a good time to give people a commission.  LOL.   People are just too stupid to realize that is what they are asking.

 

 

Fri, 02/24/2012 - 14:09 | 2193361 tekhneek
tekhneek's picture

So true. I went to look at a house last week with a realtor and that's all that came out of his mouth:

  • "The market here has actually bottomed here at these prices."
  • "Money's never been cheaper" (this is kind of true)
  • "You're not going to get a better price for a house than right now, real estate values are already starting to pick back up."
  • "It's the best investment you can make, rent's only going up."
  • "Might as well put some of that cash into some equity."

I asked him if he ever heard of/read ZeroHedge, he just looked at me like I asked him something in a different language "Zero, what? No." Nice house. I just think I'm going to rent another year or two. The thought of buying a house at full price right now scares me.

There's some good deals on foreclosures though, the trick is getting them in a good location.

Fri, 02/24/2012 - 15:16 | 2193683 Spigot
Spigot's picture

Personally I'd rather wait till the market actually demonstrates a more solid "rebound" vis a vis actual prices paid rising for a year, rather than take some ass hole's word for it, but you knew that already.

The guy has to sell to make a living. He's not going to tell you to wait on it.

Aesop: "Dis-trust interested advice."

Fri, 02/24/2012 - 11:49 | 2192770 mayhem_korner
mayhem_korner's picture

 

 

Abject disreality from the shepherds at CNBC:

an upward revision to the prior months' data and a drop in the supply of properties on the market added to growing signs of a budding recovery in the housing sector...

Despite the weak sales last month, details of the report offered further fresh signs of green shoots in the housing market...

http://www.cnbc.com/id/46511706

Fri, 02/24/2012 - 11:51 | 2192774 espirit
espirit's picture

Green Chutes = rotten bum.

Fri, 02/24/2012 - 11:55 | 2192795 ebworthen
ebworthen's picture

Mustard seeds! (to make mustard for a baloney sandwich).

Fri, 02/24/2012 - 12:18 | 2192882 resurger
resurger's picture

Charts Inverted FTMFW

Fri, 02/24/2012 - 12:46 | 2192999 Common_Cents22
Common_Cents22's picture

Green shoots?   no, that is MOLD growing on the ever growing stagnant housing market.

Fri, 02/24/2012 - 11:51 | 2192773 resurger
resurger's picture

The

prevarication machine does not agree with you Tyler

http://www.bloomberg.com/news/2012-02-24/purchases-of-new-houses-in-u-s-...


Fri, 02/24/2012 - 11:51 | 2192775 uno
uno's picture

Scott Grannis had a good chart at http://scottgrannis.blogspot.com/2012/02/update-on-bursting-of-housing-price.html

He uses the Federal manipulated inflation number, wish he used the Shadow Stats real world numbers.

Fri, 02/24/2012 - 11:51 | 2192778 Snakeeyes
Snakeeyes's picture

This is getting ridiculous. Mortgage rates at all time lows, The Fed and Obama throwing everything at it, and we STILL can't get new home sales up.

http://confoundedinterest.wordpress.com/2012/02/24/new-home-sales-decline-in-january-still-in-the-penalty-box/

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