What Housing Recovery? Existing Home Sales Miss By Most In 2 Years

Tyler Durden's picture




 

While it seems like everyone 'wants' the housing recovery to be real and organic (and not simply a reflection of limited supply and P.E. investor interest in scraping up the lowest fruit - they have to earn their commish after all), even the NAR couldn't put lipstick on this morning's pig of an existing home sales number. The biggest drop MoM in 16 months and the largest miss to expectations in 24 months is hardly the stuff of a solid foundation for the renaissance of the American Dream. CNBC's Diana Olick speaks the truth on the distressed supply drying up (despite Liesman's efforts to ignore it).

 

 

CNBC's Diana Olick explains the reality...

Once again it seems CNBC's embed team just can't get it together so here is the direct link.

Charts: Bloomberg

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Thu, 07/19/2012 - 10:19 | 2631694 GetZeeGold
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Close though.....right?

 

Horseshoes, hand grenades......and housing.

 

Thu, 07/19/2012 - 10:22 | 2631732 redpill
redpill's picture

Many people still couldn't sell their existing home even if they wanted to, they are too far underwater.  Prices would need to rise more before it even becomes a possibility.

Thu, 07/19/2012 - 10:23 | 2631737 JPM Hater001
JPM Hater001's picture

With such good news I see 13000 just over the horizon.

I'll get the bowl.  You get the shotglass.

Thu, 07/19/2012 - 11:33 | 2632163 Taterboy
Taterboy's picture

If we had a drinking game for every time CNBS said "housing bottom" over the last 3 years, this country would have run out of booze long ago.

Thu, 07/19/2012 - 12:03 | 2632302 financial apoca...
financial apocalyptic contagion's picture

and then Steve Liesman said, "Let me jump in with some economics here, Diana"

Thu, 07/19/2012 - 12:18 | 2632409 azzhatter
azzhatter's picture

Such a fucking piece of shit this LIESman, such a doucher

Thu, 07/19/2012 - 10:26 | 2631765 Getting Old Sucks
Getting Old Sucks's picture

And then they have to figure out who the real owner is.

Thu, 07/19/2012 - 10:35 | 2631797 Arnold Ziffel
Arnold Ziffel's picture

Wait until all those title defects start popping up and the former seller turns up wanting his house back since he "never sold it to you" from what the defective papers show. You are looking at a hefty legal bill...it's expensive.

Thu, 07/19/2012 - 10:38 | 2631831 Oracle of Kypseli
Oracle of Kypseli's picture

And those who can afford to put 20% down know better to wait.

Thu, 07/19/2012 - 10:42 | 2631852 mcguire
mcguire's picture

wait until what??  both deflation and hyperinflation imply real estate massacres... and after "the great reset", does anyone think that property rights will be the basis of the post-reset "new normal"??

Thu, 07/19/2012 - 10:43 | 2631869 mcguire
mcguire's picture

it will be 'agenda 21' meets 'venus project'...  

Thu, 07/19/2012 - 10:47 | 2631881 Oracle of Kypseli
Oracle of Kypseli's picture

That's exactly right. The uknown is also a good reason to wait as well as lower prices and better understanding of what is happening to America.

 

Thu, 07/19/2012 - 11:02 | 2631996 Taterboy
Taterboy's picture

If Obame wins and you buy a new house, you have to take in LaTeshia and Keneshia and their six welfare babies because it's not "fair" you have a new house and they don't.

Thu, 07/19/2012 - 12:38 | 2632534 madridisburning
madridisburning's picture

Yeah, that and the ratings pretty much sums up where so much of this board is coming from.....KKK Redux.

Thu, 07/19/2012 - 11:07 | 2632024 DeadFred
DeadFred's picture

I'm waiting. But I'm worried the sharp down in prices might be more than offset by the sharp up in interest rates. Both deflation and inflation are coming but which wins, what the timing is a lot of unknown. Real estate outside of zombieland is a good investment IMHO.

Thu, 07/19/2012 - 11:36 | 2632177 giddy
giddy's picture

... that means buyers/investors will pay cash... what else will they have to invest in?  Anyway, the new CFPB rules in play will effectively kill all mortgage lending, at least to low/med inc borrowers.

Thu, 07/19/2012 - 16:14 | 2633397 Blankenstein
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Well they need to tighten lending standards, because currently a lot of people are still buying homes they can't afford.  The lenders will give smaller loans and the sellers will have to adjust their prices accordingly.  Until the home prices fall in line with incomes the Bernanke will have to keep fighting fundamentals with his zirp and twist.  One should pay a MAXIMUM of 3 times one's income for a home.  Ignoring this rule of affordability led to the housing debacle.  

Thu, 07/19/2012 - 14:06 | 2632931 fnordfnordfnord
fnordfnordfnord's picture

20%? For what? I'd not risk one thin dime of my own in a rigged game like this.

Thu, 07/19/2012 - 10:46 | 2631882 redpill
redpill's picture

That's what Title Insurance is for.

Thu, 07/19/2012 - 13:01 | 2632645 Son of Loki
Son of Loki's picture

Title insurance? Good luck with that.

Thu, 07/19/2012 - 14:20 | 2632994 fnordfnordfnord
fnordfnordfnord's picture

Like the FDIC, when the wheels finally come off, there won't be anyone to answer the phones at the title insurance co. The windows will be boarded up.

Thu, 07/19/2012 - 14:39 | 2633066 hidingfromhelis
hidingfromhelis's picture

Title insurers are simply skimming their vig when times are relatively normal.  Sure, once in a while, they pay on a policy.  When things really go bad and it's determined that 50%+ of all titles are clouded, they're closing their doors and walking away.  Same goes for ALTA (American Land Title Association,) the umbrella organization or trade association.  When TSHTF, the whole mess will be nationalized.  I'm sure that will sort things out quickly! sarc/.

Thu, 07/19/2012 - 10:48 | 2631900 Abiotic Oil
Abiotic Oil's picture

"July 18--The Oregon Court of Appeals struck a blow to the mortgage industry in Oregon today, ruling that its controversial document-registry system could not be used to skirt state recording law in out-of-court foreclosures.


In a decision with implications beyond the Mortgage Electronic Registration Systems Inc., the state's second-highest court also held today that a lender must ensure a complete ownership history of the mortgage is filed in county records before it can foreclose outside a courtroom."

Thu, 07/19/2012 - 12:08 | 2632335 jbvtme
jbvtme's picture

MERS cy me!

Thu, 07/19/2012 - 14:40 | 2633074 CoolBeans
CoolBeans's picture

++1,000

Thu, 07/19/2012 - 12:07 | 2632327 bonddude
bonddude's picture

Fucking unbeliveable Liesman ! What a douche wag water carrying punk.

Thu, 07/19/2012 - 12:20 | 2632417 azzhatter
azzhatter's picture

You could see Olick wanted to beat the fucking crap out of Liesman, that condescending prick

Thu, 07/19/2012 - 10:18 | 2631705 CaptFufflePants
CaptFufflePants's picture

Median price is up +7.9% YoY

Thu, 07/19/2012 - 10:21 | 2631719 LawsofPhysics
LawsofPhysics's picture

Sssshhhhh, there is no inflation, anywhere, Krugman and the Bernanke say so.

Thu, 07/19/2012 - 10:21 | 2631726 GetZeeGold
GetZeeGold's picture

 

 

Just don't go to Walmart.

 

Thu, 07/19/2012 - 10:32 | 2631787 JPM Hater001
JPM Hater001's picture

Can I just look it up on-line.  I always feel sullied when I go there.

Thu, 07/19/2012 - 10:22 | 2631728 Seize Mars
Seize Mars's picture

I don't believe any numbers any more.

Thu, 07/19/2012 - 10:42 | 2631859 Max Hunter
Max Hunter's picture

Zackly.. Was looking through local houses for sale.. Unreal deals out there.. Down about 30-50% from 2006.. Gonna be even better next year..  Housing prices are not up.. Don't believe it.. Had a friend tell me a few years ago his hous appraised for 265k.. I told him BS.. He looked into selling it last year.. Agent said if he didn't list at 175, he would even get a single bite.. Lots of lies being told out there.. The market is a disaster for sellers..

Thu, 07/19/2012 - 15:32 | 2633278 Blankenstein
Blankenstein's picture

You must not be in the Chicago area.  The houses in a decent area that are big enough to warrant a move from a two bedroom apartment are still WAY out of line with incomes.  Sifting through the new mortgages on the homes that do sell, it is apparent that the lending standards still aren't that high.  There are some pretty big mortgages on those overpriced crap boxes.  

Thu, 07/19/2012 - 14:40 | 2633075 WolfePaq
WolfePaq's picture

So what? Median has nothing to do with appreciation or inflation... it is just a statistic of the homes sold- meaning higher end homes are being sold and lower end are languishing.... and the number of those homes are at 30 year lows, even with the increase in population over the last 30 years- DISMAL is the only word that comes to mind.

Thu, 07/19/2012 - 14:56 | 2633137 Bunga Bunga
Bunga Bunga's picture

The banks put some high end REOs for sale at a bargain price ... and voila!

Thu, 07/19/2012 - 15:28 | 2633258 AustriAnnie
AustriAnnie's picture

If there are fewer existing homes being sold overall, because fewer at the foreclosure/short sale end (cheaper priced homes), that shifts the median price upwards, even if the average home is static in price.

Also, the median would rise if the same number of homes are for sale, but a larger percentage of them are higher-priced homes.  This isn't necessarily good news, since it may indicate higher-income households are entering the default/foreclosure/short sale pool.  It just means the pain is spreading to upper middle class families.

Or, everything is peachy and its totally obvious that buying a home today and flipping it in a year or two will make you filthy rich.

 

Thu, 07/19/2012 - 10:21 | 2631722 The Axe
The Axe's picture

Markets broken.....period

Thu, 07/19/2012 - 10:21 | 2631723 alien-IQ
alien-IQ's picture

An essential component in believing the American Dream is...you must be asleep.

Thu, 07/19/2012 - 10:22 | 2631727 rlouis
rlouis's picture

But this morning's front page lead story banner in my paper says "HOME SALES GO THROUGH THE ROOF"

Thu, 07/19/2012 - 10:24 | 2631743 alien-IQ
alien-IQ's picture

Perhaps they forgot to mention the house was upside down?

Thu, 07/19/2012 - 15:37 | 2633293 AustriAnnie
AustriAnnie's picture

upside down and under water

Thu, 07/19/2012 - 10:23 | 2631735 Dr. Engali
Dr. Engali's picture

Four houses went up for sale on my street this month. I live in one of he nicer areas too. My wife says the new listings are starting to overwhelm the office.

Thu, 07/19/2012 - 10:35 | 2631808 RobD
RobD's picture

The Mortgage Forgiveness Dept Relief act of 2007 expires at the end of the year and most likely will not be renewed by our dis-functional fed government. So if you are under water and are going to try and short sale you need to get it done before Dec 31 or you will get a visit from the tax man next year. Expect many more for sale signs to show up, thinking of doing it myself as I'm 100k underwater currently.

Thu, 07/19/2012 - 10:54 | 2631943 FEDbuster
FEDbuster's picture

Maybe someone versed in tax law can answer this one.  I was told since you don't have to pay tax on gains from your principle residence after living there two years, that the "gain" from default/deficiency would not be taxable either.   Is the deficiency treated as income or a capital gain?   That would be the difference.

Thu, 07/19/2012 - 16:16 | 2633487 AustriAnnie
AustriAnnie's picture

Deficiencies are treated as debt cancellation (and therefore income), and are also non-taxable according to the Mortgage Relief Act (so long as requirements are met).  This is stated on many financial websites.  What is unclear to me is whether the timing matters.  It seems that after the foreclosure goes through, is when many banks come after the seller for the deficiency amount.  (I don't know if the deficiency forgiveness must occur as part of the foreclosure process in order to be covered, or if it is also covered if it occurs later)

I am not a tax professional, but this is how I understand the language.

"If the outstanding loan balance was more than the FMV of the property and the lender cancels all or part of the remaining loan balance, you also may realize ordinary income from the cancellation of debt. You must report this income on your return unless certain excep- tions or exclusions apply."

The definitions given elsewhere in the doc imply that forgiven amounts are "debt cancelation" and therefore "income" rather than capital gain.  

  http://www.irs.gov/pub/irs-pdf/p4681.pdf


 

http://www.irs.gov/individuals/article/0,,id=179414,00.html/

Thu, 07/19/2012 - 16:19 | 2633527 AustriAnnie
AustriAnnie's picture

The reason for it being income instead of cap gain is that at the time you took out the loan, the funds borrowed were not income, because you owed them to the lender.

Once they are no longer owed to the lender, that relationshiop changes and it is now income.  (as opposed to gain on the value of the house).

So the origin of that money is the LOAN not an increase in value (cap gain).  And a loan that doesn't have to be paid back is classified as income.

As I understand it anyway.

Thu, 07/19/2012 - 12:22 | 2632430 azzhatter
azzhatter's picture

Yep there is really pent up demand on the sell side. I know personally of 4 people on my street that are just waiting for a slight uptick to go on the market, all boomers

Thu, 07/19/2012 - 12:40 | 2632543 madridisburning
madridisburning's picture

try pent up supply.

Thu, 07/19/2012 - 10:23 | 2631738 mrktwtch2
mrktwtch2's picture

i bought my condo in a chicago suburb for 227k in 2002 and now im trying to sell it for 175k..had some showings but no offer its 3 bed 2 bath 1700 sq feet on the 3rd (top) floor with a elevator and 1 parking spot in the garage..at least im not under water (owe 165 on the mortgage..)

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