Monday, August 27, 2007
Spinning Existing Home Sales
From Marketwatch:
The National Association of Realtors says the home sales for July were about the same as June despite "disruption in the pipeline for mortgage loans."
Only one problem with that statement - disruption in the mortgage loan pipeline didn't start until August.
When August's numbers are released next month, that's when we'll see what the mortgage pipeline disruptions have done to existing home sales and inventories.
Remember, the summer months are usually the strongest months for existing home sales, so tanking numbers in July and August means a depressed market overall.
The supply of homes number is a bit alarming too. As Calculated Risk notes, the 9.6 month supply of homes is the most since 1982 when mortgage rates were at 16%!
Still, CNBC shills like to say that existing home inventories don't matter too much because people can always pull their homes off the market if they're not getting the price they want (or need) and then put them back up for sale when the market gets better.
But that assumes that other economic pressures - like rising mortgage payments from resetting ARM's - are not forcing many of these home sales.
A 16 year high in existing home inventory, billions of dollars in resetting ARM's in the next year and a half, falling home values and tightened lending standards suggest that the market is going to get a whole lot worse before it gets better.
We used to hear that the housing market would recover by the end of 2008. Now you hear 2010 and 2011 thrown around.
Again, if you can make your payments on your mortgage and you're not forced to sell immediately, then falling home values and a tanking market for the next couple of years may not mean much to you in the short run.
But if you're having trouble making your mortgage payments and you're trying to unload your house before you get foreclosed upon, then life sucks.
WASHINGTON (MarketWatch) - Inventories of unsold single-family homes increased 2.2% to 3.85 million in July, sending the inventory in relation to sales to the highest level in 16 years, the National Association of Realtors reported Monday.
Resales of single-family homes and condominiums fell 0.2% to a seasonally adjusted annual rate of 5.75 million. The results were stronger than the 5.69 million sales pace expected by economists surveyed by MarketWatch, but still the slowest since November 2002.
Sales were down 9% compared with a year earlier but were essentially unchanged from June's 5.76 million pace, despite disruption in the pipeline for mortgage loans, the NAR said.
...
For all homes - condos and single-family homes - the inventory rose 5.1% to a record 4.59 million, representing a 9.6-month supply. Condo inventories surged 20% to 742,000, an 11.9-month supply at the July sales pace.
The National Association of Realtors says the home sales for July were about the same as June despite "disruption in the pipeline for mortgage loans."
Only one problem with that statement - disruption in the mortgage loan pipeline didn't start until August.
When August's numbers are released next month, that's when we'll see what the mortgage pipeline disruptions have done to existing home sales and inventories.
Remember, the summer months are usually the strongest months for existing home sales, so tanking numbers in July and August means a depressed market overall.
The supply of homes number is a bit alarming too. As Calculated Risk notes, the 9.6 month supply of homes is the most since 1982 when mortgage rates were at 16%!
Still, CNBC shills like to say that existing home inventories don't matter too much because people can always pull their homes off the market if they're not getting the price they want (or need) and then put them back up for sale when the market gets better.
But that assumes that other economic pressures - like rising mortgage payments from resetting ARM's - are not forcing many of these home sales.
A 16 year high in existing home inventory, billions of dollars in resetting ARM's in the next year and a half, falling home values and tightened lending standards suggest that the market is going to get a whole lot worse before it gets better.
We used to hear that the housing market would recover by the end of 2008. Now you hear 2010 and 2011 thrown around.
Again, if you can make your payments on your mortgage and you're not forced to sell immediately, then falling home values and a tanking market for the next couple of years may not mean much to you in the short run.
But if you're having trouble making your mortgage payments and you're trying to unload your house before you get foreclosed upon, then life sucks.
Comments:
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Good stuff. God I hadn't read that the shrills were writing off this report as not so bad since the mortgage disruption was included.
I figure we have at least another 3 months before we see the bottom in sales numbers. The prices are just starting to come down. I wonder how far they will go.
Also, I know a lot of people who want to sell but don't have their house on the market at all. That is in addition to the 9.6m that actually are on the market.
Just the beginning man, just the beginning.
And remember last year when certain people were calling you and I chicken little?
I'd laugh if it wasn't so sad.
I figure we have at least another 3 months before we see the bottom in sales numbers. The prices are just starting to come down. I wonder how far they will go.
Also, I know a lot of people who want to sell but don't have their house on the market at all. That is in addition to the 9.6m that actually are on the market.
Just the beginning man, just the beginning.
And remember last year when certain people were calling you and I chicken little?
I'd laugh if it wasn't so sad.
praguetwin, you wrote:
"I figure we have at least another 3 months before we see the bottom in sales numbers."
praguetwin, would you explain your analysis that led you to predict a bottoming of real estate prices three months hence? I would like to know how it's done.
You wrote:
"The prices are just starting to come down. I wonder how far they will go."
It's remarkable that you can predict the MOMENT the market will hit its bottom, but not not the PRICING at that time.
You wrote:
"Also, I know a lot of people who want to sell but don't have their house on the market a
t all."
If an asset is not offered for sale, then it is not for sale. If you know people who are merely jabbering in worried tones, that's one thing, but a desire to sell is accompanied by listing the house with a realtor. Anything less is just talk.
You wrote:
"That is in addition to the 9.6m that actually are on the market."
I heard some of them don't really want to sell. But they are following the small herd of sellers anyway.
You wrote:
"Just the beginning man, just the beginning."
Your preceding words of direness reveal your hope that a true economic crisis cripples the US.
You wrote:
"And remember last year when certain people were calling you and I chicken little?"
Let me re-state it. You guys sound like Chicken Littles.
"I figure we have at least another 3 months before we see the bottom in sales numbers."
praguetwin, would you explain your analysis that led you to predict a bottoming of real estate prices three months hence? I would like to know how it's done.
You wrote:
"The prices are just starting to come down. I wonder how far they will go."
It's remarkable that you can predict the MOMENT the market will hit its bottom, but not not the PRICING at that time.
You wrote:
"Also, I know a lot of people who want to sell but don't have their house on the market a
t all."
If an asset is not offered for sale, then it is not for sale. If you know people who are merely jabbering in worried tones, that's one thing, but a desire to sell is accompanied by listing the house with a realtor. Anything less is just talk.
You wrote:
"That is in addition to the 9.6m that actually are on the market."
I heard some of them don't really want to sell. But they are following the small herd of sellers anyway.
You wrote:
"Just the beginning man, just the beginning."
Your preceding words of direness reveal your hope that a true economic crisis cripples the US.
You wrote:
"And remember last year when certain people were calling you and I chicken little?"
Let me re-state it. You guys sound like Chicken Littles.
# posted by 
: 1:34 PM
: 1:34 PM
Pt, the Case-Schiller index numbers were even worse today and again, they are from BEFORE the August problems.
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