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"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 | Link to Comment GeneMarchbanks
GeneMarchbanks's picture

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

Fri, 02/24/2012 - 11:57 | Link to Comment 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 | Link to Comment 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 | Link to Comment Joe Sixpack
Joe Sixpack's picture

** We are criminals, and we approve this message

Fri, 02/24/2012 - 13:25 | Link to Comment AbruptlyKawaii
AbruptlyKawaii's picture

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

Fri, 02/24/2012 - 14:14 | Link to Comment Esso
Esso's picture

Dead is considered stable, yes?

Fri, 02/24/2012 - 14:28 | Link to Comment GoldRulesPaperDrools
GoldRulesPaperDrools's picture

Well stated good sir! ;)

Fri, 02/24/2012 - 14:28 | Link to Comment GoldRulesPaperDrools
GoldRulesPaperDrools's picture

Well stated good sir! ;)

Fri, 02/24/2012 - 14:28 | Link to Comment GoldRulesPaperDrools
GoldRulesPaperDrools's picture

Well stated good sir! ;)

Fri, 02/24/2012 - 15:36 | Link to Comment rosiescenario
rosiescenario's picture

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

Fri, 02/24/2012 - 16:31 | Link to Comment 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 | Link to Comment 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 | Link to Comment 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 | Link to Comment Freddie
Freddie's picture

Hope & Change American Caliphate with Mugabe 2.

Fri, 02/24/2012 - 15:14 | Link to Comment 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 | Link to Comment 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 | Link to Comment 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 | Link to Comment SheepDog-One
SheepDog-One's picture

And then what?

Fri, 02/24/2012 - 12:31 | Link to Comment 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 | Link to Comment 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 | Link to Comment 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 | Link to Comment 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 | Link to Comment 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 | Link to Comment 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 | Link to Comment 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 | Link to Comment GoldRulesPaperDrools
GoldRulesPaperDrools's picture

You must live in Ashburn! ;)

Fri, 02/24/2012 - 18:51 | Link to Comment 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 | Link to Comment 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 | Link to Comment 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 | Link to Comment 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 | Link to Comment Joe Sixpack
Joe Sixpack's picture

The homebuilders are building apartment buildings and FEMA camps.

Fri, 02/24/2012 - 13:46 | Link to Comment 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 | Link to Comment Widowmaker
Widowmaker's picture

The "home builders" now work at McDonalds.

Do you want fries with that bullshit?

Fri, 02/24/2012 - 12:32 | Link to Comment YC2
YC2's picture

Consider the source:  NAR, JPM , MBA

Fri, 02/24/2012 - 11:45 | Link to Comment 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 | Link to Comment SheepDog-One
SheepDog-One's picture

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

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

LOVE your humor!

Fri, 02/24/2012 - 11:46 | Link to Comment 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 | Link to Comment 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 | Link to Comment 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 | Link to Comment 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 | Link to Comment 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 | Link to Comment 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 | Link to Comment espirit
espirit's picture

Green Chutes = rotten bum.

Fri, 02/24/2012 - 11:55 | Link to Comment ebworthen
ebworthen's picture

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

Fri, 02/24/2012 - 12:18 | Link to Comment resurger
resurger's picture

Charts Inverted FTMFW

Fri, 02/24/2012 - 12:46 | Link to Comment 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 | Link to Comment 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 | Link to Comment 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 | Link to Comment 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/

Fri, 02/24/2012 - 12:21 | Link to Comment LaLiLuLeLo
LaLiLuLeLo's picture

It's still cheaper to rent right now instead of throwing your money away at a house that is consistently loosing value. Not everywhere but in most areas.

Fri, 02/24/2012 - 14:19 | Link to Comment Widowmaker
Widowmaker's picture

Oh, it's obvious when one considers the first rule of real estate.

"Pride before price."

If you bought a home (clear or mortgage) in the last 15 years you will brutally crucified  -- mission accomplished!  Equity was the ultimate gimmick (for those that didn't cash out).

Wages taking a beating, energy price racketeering, and home ownership will be the triple knockout to the VAST majority of Americans and their accumulation of wealth.  Add to that inflation of around 8% REAL and the plundering is off the generational charts.

You Gen X/Y's are not going to be able to sustain anything at all related to wealth.  Sorry!

Fri, 02/24/2012 - 11:52 | Link to Comment ebworthen
ebworthen's picture

The nearly non-stop commercials from the National Realtors Association about "now is the time to buy a home" and "the great American dream" belie a housing market recovery of any substance.

Persistent advertising is a sign of either attempting to increase sales and market share or get them out of the gutter.

The U.S. housing market is in the gutter as the charts clearly show.

Fri, 02/24/2012 - 11:53 | Link to Comment EZYJET PILOT
EZYJET PILOT's picture

Greece is defaulting on news that the American housing market has not recovered but instead is in a serious slump. The Troika have announced that Greek bailout money will be diverted to IOWA in order to kick start spending in the first time home buyer category. 

Fri, 02/24/2012 - 11:53 | Link to Comment DeltaCharlie
DeltaCharlie's picture

Plus who would take out a 30yr loan knowing interest rates will only shoot up eventually to contain inflation. Royally screwed is the US housing market. 

Fri, 02/24/2012 - 12:07 | Link to Comment bdc63
bdc63's picture

What?  If you think interest rates will "shoot up" eventually, then now is EXACTLY the time to take out a 30yr fixed rate loan. 

Fri, 02/24/2012 - 12:12 | Link to Comment DeltaCharlie
DeltaCharlie's picture

Well, anyone who doesn't have a fixed rate loan will be defaulting! More inventory into the system, and supply glut means your house value is underwater, no matter how cheap you think it is now. Businesses will go bust, and joblessness increases. Royally screwed. 

Fri, 02/24/2012 - 12:25 | Link to Comment Panafrican Funk...
Panafrican Funktron Robot's picture

Agreed, the only housing I'd buy right now is housing I can put renters in, where there will at least be some margin to offset potential asset value loss.  More simply put, it's always a bad idea to borrow money if you're uncertain that your ROI is going to be more than the interest rate you're paying.  

Fri, 02/24/2012 - 12:25 | Link to Comment Sophist Economicus
Sophist Economicus's picture

IF you can AFFORD the house AND have a cushion to ride out the coming economic catastrophy, NOW is the time to buy a house if you can get a 30 year fixed rate.    The rates are being artificially supressed, therefore it is a perfect arbitrage and a great dollar short position without playing the FX market.

 

When they inflate the debt away, and they will, you won't care about the 'purchase price' -- the fixed payment will be chump change and the tax man cannot do anything about it...

Fri, 02/24/2012 - 12:30 | Link to Comment DeltaCharlie
DeltaCharlie's picture

Sure, you're right, it will inflate away. But if you're the only person left on the street while the rest of the neighbourhood vanishes, what good would that be to the value of your house. There's always winners and losers on either side of the ledger. 

Fri, 02/24/2012 - 12:36 | Link to Comment Flakmeister
Flakmeister's picture

The other factor is what happens to your RE tax bill??

 

Fri, 02/24/2012 - 12:40 | Link to Comment mayhem_korner
mayhem_korner's picture

 

 

 

...and the RE tax rate.  Collapsing home prices make for quite the budgetary quagmire for local gubmints. 

Fri, 02/24/2012 - 14:11 | Link to Comment MachoMan
MachoMan's picture

Not to belittle the RE bill, but who says you will get any income in the future to pay off the fixed loan?  That's the thing about biflation (goddamnit I hate that word), the cost of living increases while wages stagnate/decline...

Fri, 02/24/2012 - 12:56 | Link to Comment DeltaCharlie
DeltaCharlie's picture

Not to mention that banks would go bust with all those locked-rate loans! 

Ah yes, the joys of unintended consequences. 

Fri, 02/24/2012 - 12:39 | Link to Comment mayhem_korner
mayhem_korner's picture

When they inflate the debt away, and they will, you won't care about the 'purchase price' -- the fixed payment will be chump change and the tax man cannot do anything about it...

 

The "chump change" effect only occurs if your income moves, too.  If it doesn't, then that "fixed payment" is going to be tough to service when every loaf of bread is relieving you of a $5 FRN.  Homeowners are not CBs, mon frere.

Fri, 02/24/2012 - 12:48 | Link to Comment Sophist Economicus
Sophist Economicus's picture

Just speculation on my part, but if serious inflation ultimately rears it head, everything will chase the rate of inflation.   Your wages may or maynot keep pace in real terms, but things that are fixed will be fixed.

 

Lots of examples where this was true in the past, including the US in the 70s...

Fri, 02/24/2012 - 12:53 | Link to Comment Flakmeister
Flakmeister's picture

I went through the exercise of modelling a modest vacation home purchase...(a rather nice spreadsheet if I do say)...

1) Able to pay cash outright but want to play the inflation trade 

2) 30% down.... 15 yr fixed for the balance  1% capital upkeep, insurance etc...

3) The balance of funds (70%) are invested in oil/NG royalty trusts with larger current yield than mortage

Doing this only makes sense if you have cash flows that are "indexed" to your COL, hence oil/NG...

The reason to do a 15 year (not 30), is that it is very hard to be cash flow positive with RE taxes...

After 15 years, you own the place, the cashflows from the trusts more than take care of the taxes and upkeep...

Fri, 02/24/2012 - 12:32 | Link to Comment pods
pods's picture

Well that works in theory, but in reality most people buy a mortgage payment.  So if rates are artificially low right now, when they go up people will not be able to afford the same house.  So in effect your house is overvalued in relation to what the price will be with normal interest rates.

So as rates rise, home values will drop.  That makes people leery about purchasing a house at the current propped up levels.

Notwithstanding is that many are not secure enough in their employment to take out a 30 year loan on a house.  

Housing is in the coffin corner.  They cannot drop rates further and risk another runaway bubble (people are too fearful about that now),  and they cannot let rates rise as that will add to the underwater section of housing causing a reinforcing downward pressure on pricing.

Basically we are f*cked.

pods

Fri, 02/24/2012 - 12:33 | Link to Comment SheepDog-One
SheepDog-One's picture

'Oh, rates may go up, so I better take out my slave loan today then!'

Its NEVER the time to take out a 30yr mortgage you damn fools there is no such thing as FREE LUNCH BORROWING your way to riches! 

Fri, 02/24/2012 - 12:55 | Link to Comment Sophist Economicus
Sophist Economicus's picture

Its NEVER the time to take out a 30yr mortgage you damn fools

 

Dog, with all due respect, I disagree.   There are times when it makes perfect sense, and this is one of them.   IF you can afford the payments and can get a 30 year fixed rate at these subsidized terms, you'd be crazy not to.    This may be one of those once-in-a-generation events.    These rates do not reflect true market risk - one should take advantage of them while they are around. 

Fri, 02/24/2012 - 12:58 | Link to Comment Red Raspberry
Red Raspberry's picture

unless they devaluate the dollar.

Fri, 02/24/2012 - 12:53 | Link to Comment markar
markar's picture

It's not the 30 year loan that's the problem in your scenario. It's housing prices tumbling further.

Fri, 02/24/2012 - 11:54 | Link to Comment lizzy36
lizzy36's picture

And XHB almost a double of its lows from October 2011.

Everytime someone says something about fundamentals driving stocks i throw up in my mouth.

Since 2008, stocks have raced up on down on sentiment and speculation, rather than on any actual valuation work.

Fri, 02/24/2012 - 11:58 | Link to Comment Tyler Durden
Tyler Durden's picture

"speculation" is nothing more than a transmission mechanism of taking central bank liquidity and putting it to work via the path of least resistance, i.e., the stock market.

Want to blame someone? Blame the ChairSatan.

Fri, 02/24/2012 - 12:06 | Link to Comment lizzy36
lizzy36's picture

Agree 1000% 

Inject $7 TRILLION dollars into world markets in 5 short years, and it will find a 4x levered ETF home.

Fri, 02/24/2012 - 12:06 | Link to Comment JPM Hater001
JPM Hater001's picture

Done.  Blame fully assigned.

Fri, 02/24/2012 - 12:28 | Link to Comment Sophist Economicus
Sophist Economicus's picture

Want to blame someone? Blame the ChairSatan...

 

I blame the Christians, the Jews, the Muslims, the blacks, the bald white rich guys, the industrialists, the working man, the unions, the liberals, ....

Fri, 02/24/2012 - 12:58 | Link to Comment mayhem_korner
mayhem_korner's picture

 

 

<deleted>

Fri, 02/24/2012 - 12:34 | Link to Comment Roy T
Roy T's picture

Bullish!

TOL is up today, it must be bullish

 

/snark

Fri, 02/24/2012 - 12:03 | Link to Comment EZYJET PILOT
EZYJET PILOT's picture

Tyler, quick Q about the 2 trillion over the last few months, has it come from LTRO and the central bank swaps revealed last year? Excuse me, I'm new at this...

Fri, 02/24/2012 - 12:05 | Link to Comment yogibear
yogibear's picture

The banksters loaded our youth down with school loans. So you can count those people out. Saturate everyone with debt and eventually it's default time. Nobody pays.

Fri, 02/24/2012 - 12:43 | Link to Comment pods
pods's picture

Student loans are the next bubble to burst.  Only with those, the carnage cannot be walked away from.  

Debt serfs.

pods

Fri, 02/24/2012 - 13:01 | Link to Comment Kobe Beef
Kobe Beef's picture

Speaking of the youth,

How many are forming families, and thus necessitating the purchase of a new home? Not so many, I suppose.

How many have secure, stable employment generating cash surplus, and thus necessitating the purchase of stocks? Not so many, I suppose.

So here's the Boomer generation, loaded up with these two "assets", heading into retirement, needing someone to sell to.

Who's buying? Certainly not the youth. They can't.

Fri, 02/24/2012 - 19:03 | Link to Comment Mentaliusanything
Mentaliusanything's picture

And there you have it.... a deflationary spiral in the "assets" you thought you owned but now own you.

Fri, 03/02/2012 - 14:42 | Link to Comment Kobe Beef
Kobe Beef's picture

Yup. Japan 2.0

Fri, 02/24/2012 - 12:08 | Link to Comment Dermasolarapate...
Dermasolarapaterraphatrima's picture
Wealthy deciding to walk away from luxury California homes

 

http://www.bankruptcylawyersanjoseca.com/2011/02/wealthy-deciding-to-wal...

 

Oh yeah, then there are those zero-down NINJA neighborhoods:

 

Suburbs to Slums: Age of the New Suburban Poor

 

 

Fri, 02/24/2012 - 13:39 | Link to Comment Kali
Kali's picture

You  mean like Stockton?  http://www.moneynews.com/Headline/Stockton-California-Bankruptcy/2012/02/24/id/430436

Ms Whitney was just a little too early with her muni calls IMO. 

Fri, 02/24/2012 - 12:10 | Link to Comment Moneyswirth
Moneyswirth's picture

This is what happens when you have a corrupt and inept President/Congress, with loyalties to one party, coupled with a complicit media that will do anything to cover up the ineptitude, so as to protect their favorite President.  He's half-black after all, and any suggestion that he is a clusterfcuk of a failure means you are racist or ignorant or both.

The utter collapse of the housing market over the past several years is one of for the record books.  A collosal failure of government intervention and social(ist) engineering, which has ruined the financial well-being of hundreds of thousands of families across this once-great nation.  Home ownership is the last pillar of middle class self-sufficiency and the pols just crapped all over it and set it on fire.

Well done, douchebags.

Fri, 02/24/2012 - 12:10 | Link to Comment EZYJET PILOT
EZYJET PILOT's picture

Thanks very much for that. I'm constantly trying to tell the sheeple about the smoke and mirrors in play, I just wish people would wake up to this fraud...

Fri, 02/24/2012 - 15:28 | Link to Comment Spigot
Spigot's picture

Oh, they will wake up to it once it pounces on them and starts ripping at their entrals. Until then: "Sleep my pretties, sleeeeep!"

Fri, 02/24/2012 - 12:24 | Link to Comment riphowardkatz
riphowardkatz's picture

Maybe Mrc Faber was saying Phoenix looks to be good value because of this chart?

http://athomeinscottsdale.com/wp-content/uploads/2012/02/phoenix-real-estate-median-sales-price.jpg

Typically recovery starts where the first price declines started. 

Ignore real estate and for what you will pay in one months rent you could have made 2 months of mortgage payments (plus get the tax deduction)

Too many incentives, tax deduction,lower rates, talk of land banks

The logic that the gov can create a bubble but cant reinflate it doesnt make sense. If they want higher home prices (they do) they will get higher home prices. 

Fri, 02/24/2012 - 12:59 | Link to Comment Cpl Hicks
Cpl Hicks's picture

There's not enough information on that chart to make any arguments or draw any conclusions- it could be a mislabeled S&P 500 chart. Maybe you can provide additional information.

As for your statement that the government can inflate home prices; we'd need to go out and mine the asteroid belt to get enough Hopium to do that.

Fri, 02/24/2012 - 13:20 | Link to Comment riphowardkatz
riphowardkatz's picture

Will add to that chart that +40% of purchases in phoenix metro are with cash. People who have saved up money and are getting rid of it because the money supply has tripled and has enough fire power to quintuple or more.

"government can inflate home prices" but they did it the first time. Genius

Have you heard the term land banks? Shadow inventory BE gone. The government is working on owning and renting it out. 

Again, when you are paying one months rent that would equal two months mortgage payments have a good time (or triple up with the parents and inlaws) and if your rejoinder is that you already own a house and you still think there is some big decline coming then you still arent a genius. 

Very insightful stuff on this site but if you are a speculator it is not the place for info. 

I like robotrader more every day.

 

Fri, 02/24/2012 - 12:23 | Link to Comment TheSilverJournal
TheSilverJournal's picture

Housing is set to fall 70%-80% considering hyperinflation will remove the easy credit because the printing press will be rendered worthless. Also, hyperinflation is completely economically devastitatin which will cause Americans to become much poorer, further driving down housing. In order to save on housing maintenance and utility costs, more people will live together in each household. In addition, many will altogether leave the country, which will further expose the overbuilding of housing that cheap money and government backing of mortgages has created.

Now is the time to take the equity out of your home if you would like to keep that equity. The best way to save is with silver. Gold is a great option too. If you’re looking to save in USD, nickels now have a melt value of more than $.05.

 

TheSilverJournal.com

Fri, 02/24/2012 - 12:26 | Link to Comment riphowardkatz
riphowardkatz's picture

That is not what history shows happens when there is hyperinflation. So you are making stuff up. Maybe you will be right but I doubt it.

 

Even in high inflation countries real estate booms. It is one of the only tangible assets you can get into to get out of the currency. Plus it is a great way to short the currency.

Weimer you could pay off mortgages with a couple months of salary. 

Fri, 02/24/2012 - 13:32 | Link to Comment Kali
Kali's picture

Sure, pay off houses that were destroyed in the ensuing world war.  If you weren't on the streets starving.  What salary?  You can buy a house in Detroit now for next to nothing, but who would want to live there?

Fri, 02/24/2012 - 13:33 | Link to Comment riphowardkatz
riphowardkatz's picture

Got a good LOL out of that... thanks

At that point I dont know that it really matters. Or maybe I am missing something.

 

Fri, 02/24/2012 - 12:23 | Link to Comment jse111
jse111's picture

Chart for objective minds:

http://tiny.cc/bk9yf

Reports of copper bottoming in 11/2011 along with global banks index additionally exist. Interesting triumvirate at a minimum.

Fri, 02/24/2012 - 12:30 | Link to Comment Stuck on Zero
Stuck on Zero's picture

All ye of little faith.  The fifth derivative is positive.

Fri, 02/24/2012 - 12:32 | Link to Comment Benjamin Glutton
Benjamin Glutton's picture

given the proper reality adjustments I would say housing sales are good and reflect the new normal.

 

1. lender trust is at an all time low

2. government trust is at an all time low

3. the ratio of secure jobs that outpace inflation is at an all time low for median home buyers

4. true price discovery has yet to be achieved

5. proper lending standards have been restored?

6. a house is no longer viewed as a safe investment by the masses

7. property taxes are too damn high (see 4)

This list could easily run to 100+...frankly given all that has transpired I'm surprised that anything other than short sales and auction homes are closing.

 

Fri, 02/24/2012 - 12:33 | Link to Comment mayhem_korner
mayhem_korner's picture

 

 

More MSM disreality - this from CNNMoney:

First, the facts...

The National Association of Realtors reported that the median home price in January fell 2% from December to $154,700. That's the lowest price reading since November 2001...

Then, the this-is-your-brain-on-hopium moment (a scant 4 paragraphs later):

The housing market has been showing signs of recovery in recent months. The combination of low mortgage rates and a decline in home prices means homes are more affordable than they've been in decades. PNC's Hoffman agreed that the report is a further sign of recovery in the market,

http://money.cnn.com/2012/02/22/real_estate/home_sales/index.htm?source=patrick.net&hpt=hp_t3

 

Fri, 02/24/2012 - 12:35 | Link to Comment JmanSilver.Gold
JmanSilver.Gold's picture

dicksack Cram-it claimed 'THE BOTTOM' was June 30, 2009, on the CNBS airwaves.  Why is this asshole NEVER held accountable for that idiotic, INCORRECT claim?  Not like he was quiet about it.

Fri, 02/24/2012 - 12:36 | Link to Comment Village Smithy
Village Smithy's picture

If we are really only talking around 22K homes being "built" NSA, then we can be pretty sure that the boys at Toll and Pulte et al are buying and selling between themselves to keep this number up. Pretty fuckin sad, what amounts to a middle class mans' castle they play with like clay poker chips. 

Fri, 02/24/2012 - 12:38 | Link to Comment GottaBKiddn
GottaBKiddn's picture

 

"True Price Discovery"? I doubt there is anyone living who can remember a time that the government allowed such a thing.

Fri, 02/24/2012 - 12:38 | Link to Comment andyupnorth
andyupnorth's picture

My wife really wants to buy and rent out a property.  She says all her friends are doing it.  Since they're not dumb and seem to be living very confortably, it must be a good idea.

So I did the math and showed her, to her surprise, that there would be no cash flow (i.e. break even).  Also, the annual net worth increase is quite marginal (roughly 1 of her paychecks + 1 of mine) all the while exposing ourselves to a housing correction, bad tenants, incidental major repairs, etc.  The significant benefit would be if housing here in Canadia continued to increase by 6-8% per year... which I don't think will happen.

We'll see...

So then I look into housing in Florida.  I see that 1/3rd are nice, relatively new and expensive places, and the other 2/3rds are really inexpensive crap old houses built over 50 years ago.  So it makes me think: average house prices in the US are going down, marginally because of a slight oversupply of nice housing, but mostly because of a giant oversupply of really old crappy houses that are destined for demolishing.

Just my two cents.

Fri, 02/24/2012 - 13:01 | Link to Comment digalert
digalert's picture

KD is calling the Canada bust...

http://market-ticker.org/akcs-www?post=202482

Fri, 02/24/2012 - 12:38 | Link to Comment Obnoxio
Obnoxio's picture

I believe the Middle-Class has to deal with declining incomes and aren't very secure in their employment long term if they have a job at all. Many don't have 20% to put down on a house and won't qualify for a loan. The confidence in the economy just isn't there to make a large purchase like a home where prices have been deflating. At some point housing will gain traction but it may be several years away and we could have gold at $5000/ounce by then. Government mal-investment may have killed the Golden Goose of the once Free Market.

Fri, 02/24/2012 - 12:58 | Link to Comment earleflorida
earleflorida's picture

the stock market as we have known it to be in the past, is but a shell of itself today. it has been taken completely out of public domain [hands?], and co-opted by the Fascist Oligarchy today, that have become more brazen every second ie. MF Global & TBTF's and LTRO's symbiotic love affair with QE's 

the NWO seems to be playing the grand finale to a complacent audience, that refuses to face reality - their lack of courage [ignorance is not an excuse?] that will, or already has, enslaved them 

jmo

Fri, 02/24/2012 - 12:46 | Link to Comment earleflorida
earleflorida's picture

perhaps, just maybe, when medium-priced housing comes down to the cost of a "Chevy Van",... will people buy a home - ridding themselves of their foolish nomadic ways --- one stabilizing factor would be $7-$8 petro

Fri, 02/24/2012 - 13:01 | Link to Comment Alex Kintner
Alex Kintner's picture

Is it possible to burn a house that's underwater? Just a rhetorical question there Pyro.

Fri, 02/24/2012 - 21:34 | Link to Comment engineertheeconomy
engineertheeconomy's picture

if it's made out of magnesium

Fri, 02/24/2012 - 13:01 | Link to Comment adr
adr's picture

The shadow inventory of homes will no longer be in sellable condition soon. Within two blocks of my home, on average 22 homes per block. There is 14 homes for sale and eight abandoned homes held in shadow inventory.

Most of the shadow homes have been vacant for three or more years. You know what happens to plumbing shut off for three years and moist basements?

Sure you may get a bargain if a shadw home goes on the market but you'll probably be looking at $50k or more just to get it back into livable shape.

Or you can just be a foreign real estate speculator and buy up all the property to rent, then have a renter's child die from a disease caused by the buildup of mold in the walls. That would be fun.

Fri, 02/24/2012 - 13:03 | Link to Comment andyupnorth
andyupnorth's picture

So I heard that Greece has defaulted today (@ 10:03 am)

;-)

Fri, 02/24/2012 - 13:03 | Link to Comment dataanalytics
dataanalytics's picture

Tyler, excellent report.
I believe that the FED actually had just published that there are 12 million mortgage holders underwater, the chart shows about 7.5m, am I reading this correctly? In addition, 60-day or more delinquencies are up, which will probably add to already enormous distresed inventories. Last year, I thought 2015 would be a fair target for the start of a recovery,
but now I am thinking somehwre around 2020. of course a lot hinges on the election and policies enacted in 2013.

Fri, 02/24/2012 - 13:04 | Link to Comment Bansters-in-my-...
Bansters-in-my- feces's picture

Who needs hard data when you have propaganda,and the govt. statistics?

The sheeple?

I should think not.

"Green Shoots" all round.

Fri, 02/24/2012 - 13:11 | Link to Comment bankonzhongguo
bankonzhongguo's picture

The added problem is that because the residential RE market is so manipulated with the shadow inventory owned by far-away banks, the local brokers are in the cat bird seat to play both sides.

The brokers can say the banks will not release properties for sale hence keeping the for-sale artificially inventory scarce, meanwhile the brokers are telling the OREO controllers what the market will bear.  Meanwhile a ton of "listings" are never put in MLS, no lock-box, no sign, nothing.  the good deals are pocket listings for the brokers that are fronting little local investment mafia straw buyers.  Watch the parking lot of your local RE office.  Those guys are not leaving the office to show properties to perspective buyers, they are sifting through price/sqft term sheets pulling the good deals and buying them for cash. 

Yet prices keep falling and inventory is still building up.

Bottom market is your local section 8 rent allowance, since we are all going to be eating the government cheese.

What is your market telling you?

1 bdrm house $649, rent $481/utilities $168

2 bdrm house $789, rent $597/util $192

3 bdrm house $1125, rent $885/util $240 4 bdrm house $1314, rent $1050/util $264 5 bdrm house $1511, rent $1221/util $290 Funny thing is you are better able to qualify for a FHA loan if you are indigent - 1.5% down. Now just find something to buy.
Fri, 02/24/2012 - 13:14 | Link to Comment Seasmoke
Seasmoke's picture

i still dont understand the last chart , what the japanees rising sun red dot represents

Fri, 02/24/2012 - 15:01 | Link to Comment faustian bargain
faustian bargain's picture

Atomic bomb.

Fri, 02/24/2012 - 13:15 | Link to Comment blunderdog
blunderdog's picture

Young people are the folks traditionally expected to be buying homes.

+

Young people have no jobs or savings or financial security.

=

great incomprehensible mystery of why housing market is not recovering

Fri, 02/24/2012 - 13:26 | Link to Comment riphowardkatz
riphowardkatz's picture

you mean the young people that work for Apple, microsoft, facebook, google, Fed government, nike, caterpillar, Deere, GM, Ford? Or the ones working their family farm in the midwest where crop prices and profits are higher than ever? Or the ones working for defense contractors? Or the ones building bridges to no where? Or the ones working for GE, and companies owned by Buffet? Or are you talking about the ones that work for state and local ? Or maybe it is all the nurses who are graduating while there is a shortage of nurses? Or maybe it is the young people they are highering to work at banks?

Come on get real. Open your eyes and start being honest. Lots of young people have jobs and are making money hand over fist. 

Fri, 02/24/2012 - 18:28 | Link to Comment blunderdog
blunderdog's picture

You sound frightened. 

Fri, 02/24/2012 - 20:18 | Link to Comment Greenspan Shrugged
Greenspan Shrugged's picture

Okay good job.  You named about 3-5% of the young people out there (I'm being generous).  Now keep going.  I'll even give you a free one.  Mcdonald's (50,000 job hiring spree last year)

Fri, 02/24/2012 - 21:30 | Link to Comment engineertheeconomy
engineertheeconomy's picture

TROLL riphowardkatz

Fri, 02/24/2012 - 13:29 | Link to Comment ddtrader
ddtrader's picture

Where is housing headed??  Actual example:  2/17/12 absolute sale of bank owned property in the Northeast. 

4400 s.f. house bulit in 1985. - 2890 s.f. 3 br/3 bath, with a 7 car garage with 1600 s.f. finished above, all on 9 acres.  Sold in 2004 for $440k.  Replacement cost conservatively estimated at $450k+.  Foreclosed in mid 2011.  Bank just auctioned off at $217.5K.  This is where housing is now, and I believe it is headed further south. 

Fri, 02/24/2012 - 13:46 | Link to Comment sbenard
sbenard's picture

Re: Last chart -- inventory

I can't help noticing that the only strata that is shrinking is the GOOD one -- existing homes (blue)! All the others are stable, and that's NOT good! Foreclosed homes, homes delinquent, etc., are all staying the same!

Fri, 02/24/2012 - 13:47 | Link to Comment riphowardkatz
riphowardkatz's picture

about the shadow inventory...

Bernanke has mentioned this multiple times now, land banks(btw I think this is a disgusting use of other peoples money, I am only pointing the facts out).

https://www.google.com/search?hl=en&gl=us&tbm=nws&q=land+banks&oq=land+banks&aq=f&aqi=d1d-o1&aql=&gs_sm=3&gs_upl=501l1747l0l1844l10l9l0l3l2l1l266l993l0.3.2l5l0  

http://www.huffingtonpost.com/dan-kildee/foreclosure-settlement_b_1282127.html  

"Land banks give local communities the ability to create amazing and inspiring projects on the ground -- the kinds of projects that transform neighborhoods and lend hope and real economic gains to struggling neighborhoods. In my hometown of Flint, Michigan, the land bank has demolished hundreds of eyesores, spurred the redevelopment of empty homes and shuttered commercial properties, and breathed new life into forgotten historic buildings. In Kalamazoo, the local land bank is working with residents to expand a wildly successful community garden project that puts food on people's plates and encourages healthy life choices"

Fri, 02/24/2012 - 14:31 | Link to Comment alexanderstollznow
alexanderstollznow's picture

the US housing situation is undoubtedly terrible, but the lead chart is - of course! - chosen to present it in the most alarming possible way.  that peak rate in 2004 was hugely beyond any justifiable level, as everyone knows.  if you look at the data going back 50 years, AND scale the chart properly so it starts a 0 (seems it isnt only the Commerce Dept and the NAR who like to fake their numbers, eh?), you will realise that 600k units is a typical long run annual rate.  so we are currently looking at half that.   yep, pretty bad, but nothing like the above charts imply.

the "completed houses for sale" appears to be the number of new homes which have been built, but not yet sold.  the article implies that a record low is a negative indicator for housing.  how can that be?  i would have thought a high inventory of unsold new homes was a negative indicator.  a low number means a smaller excess of building over demand.  that cannot be a bad thing, in itself.  a fall in this number is obviously a precondition for an improvement at some point.

 

the "shadow housing inventory" chart does actually show a shrinking shadow inventory.  again, that is an indicator of an improving housing picture, even if it is painfully slow.

Fri, 02/24/2012 - 14:54 | Link to Comment faustian bargain
faustian bargain's picture

I don't think it indicates improvement at all. You may have a point on #2, but on #3 the shadow inventory chart does NOT show a shrinking inventory...it shows a looming pop in the foreclosure number, and the only number that is actually shrinking is existing homes. Everything else is staying flat. And on #1, assuming this number is indeed already 'normalized' to historical levels, the rest of the economy hasn't, so the overall structure we've had in the past is just not there. i.e. more downside to come.

And to echo sentiments expressed elsewhere, consider the source of these charts. You can bet pretty safely that these charts are trying to put things in the rosiest light possible. That alone should be alarming enough.

Fri, 02/24/2012 - 14:21 | Link to Comment Taterboy
Taterboy's picture

I intend to buy a house now that I have my new job guarding Whitney Houston's grave from grave robbers!

Fri, 02/24/2012 - 14:51 | Link to Comment Westcoastliberal
Westcoastliberal's picture

Didn't I read that NAR once again "revised" their headline 4th Q number from +5.5% to -.5%?

Fri, 02/24/2012 - 14:55 | Link to Comment CitizenPete
CitizenPete's picture

Frig'n Baby Boomers  -- it's that demographic thing as well.

Fri, 02/24/2012 - 15:42 | Link to Comment rosiescenario
rosiescenario's picture

And the housing death spiral continues as it will now be accelerated by the robo signing settlement. More foreclosures, more house to be sold, lower prices, putting more homes underwater and begatting more foreclosures.

Fri, 02/24/2012 - 15:54 | Link to Comment riphowardkatz
riphowardkatz's picture

Nope.

The gov is putting land banks in place to

a. demolish properties considered blight
b. buy and rent out properties in foreclosure.

Lots of people buying with cash creating a floor. Lots of other people (around 35%) own their home outright.

Rents are above mortgages in lots of places.

Homes have never been cheaper in gold terms.

Boomers/Snowbirds are buying multiple homes.

I wish someone  would add something of substance to the "home prices will continue to crash debate" but I have yet to see it. Lots of scary out of context charts, no one has jobs, shadow inventory (who f'ing cares about shadow inventory the banks holding it have a blank f'ing check from the gov to back it up for as long as they want),
Same old same old.

 

Fri, 02/24/2012 - 21:24 | Link to Comment engineertheeconomy
engineertheeconomy's picture

I want some of what ever it is that you're smoking.

There are forclosure signs going up on every street in this country. It cost's twice as much to keep a job than the job pays. No one can afford food, gas, healthcare, insurance, clothes... let alone a mortgage WITH INTEREST. Even if the banks WERE approving loans, that would only postpone the collapse of THE PONZI SCHEME.

 Same old same old...  TROLLS

Fri, 02/24/2012 - 16:13 | Link to Comment Rentenmark
Rentenmark's picture

Eventually Cramer will be right, there will be a bottom, and he will tell you how great of a call he made!  Too bad you'll already be broke!

Fri, 02/24/2012 - 16:58 | Link to Comment mayhem_korner
mayhem_korner's picture

 

 

MSM abject dis-reality trifecta - this one from CNBC.  (warning: you might want to boil some water and get some iodine ready for after this read):

Home Builders Say Market Positives Trump High Gas Prices

http://www.cnbc.com/id/46514121

Fri, 02/24/2012 - 16:59 | Link to Comment zerozulu
zerozulu's picture

If you have a housing problem, there are FEMA camps. If you are worried about food prices, SNAP for you. If you have critical sickness, prisons are there for you. What's the problem?

Fri, 02/24/2012 - 17:12 | Link to Comment Bunga Bunga
Bunga Bunga's picture

Buy low, sell high, just ask the furreal man.

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