December 27, 2006

Report says: New home prices up 3%. HousingPanic says: BULLCRAP!!!


Folks, you believe this number and you'll believe anything.

Yes, new home sales were up. It's called a fire sale. For $100,000 off, no closing costs, cash back, no payments for a year, a vacation and a new car, I'd have to consider picking one or two up too. No argument that units were up the 3% reported.

But prices up 3.2%? No way. Not in a trillion years. Why? BECAUSE THE GOD DAMN OUT OF CONTROL BUILDER INCENTIVES ARE NOT BEING RECORDED IN THE PURCHASE PRICE. The number is garbage. 100% worthless. Completely irrelevant. Meaningless. Bogus.

Note to the MSM who reports this bullcrap uncensored - DO YOUR DAMN JOB FOR A CHANGE. RESEARCH. DIG. REPORT. THINK.

Note to any readers of the MSM - just like Iraq, the true US deficit and the NORAD Santa reports, just know anything you read in the MSM should be seen as suspect.

WASHINGTON (Dow Jones) -- Sales of new homes rose 3.4% in November to a seasonally adjusted annual rate of 1.047 million, the Commerce Department reported Wednesday.
Sales are now down 15.3% in the past year, the government's data showed.

Sales in October were revised higher, to a sales pace of 1.013 million from 1.004 million that had been estimated previously.

The median sales price of a new home rose by 3.2%, reaching $251,700.

50 comments:

Anonymous said...

Median price also up slightly. That doesn't sound like a -100k for a firesell BULLCRAP!!

Salt Lake Mortgage Guy said...

So we should take this headline with a grain of salt too?

You can't just discredit the news you don't like because you say so. In your case, you have to take the good with the bad.

Here's how I deal with the numbers...

rent_boy said...

Hey Keith, check out calculated risk for a discussion on the numbers of sales for new homes. The headline number is wrong and doesn't reflect that the actual number of homes (not the statiscally manipulated one) is down significantly from last month, from last year, and is lower than 2003 sales figures.

I can't believe the blatant lies and deceit that is being spread to the public in the OPEN! Unbelievable that in the U.S. you can lie, cheat and then lie about it and get away.

squidly66 said...

"even if theye lies you should still believe the numbers"
whats up with that ? salt lake guy

Anonymous said...

Perhaps it's the first of many sucker rallies along the way to the distant housing bottom. The bubble areas are going down by at least 50% in real terms. This will take a lot longer than six months to play out.

Anonymous said...

"...I can't believe the blatant lies and deceit that is being spread to the public in the OPEN! Unbelievable that in the U.S. you can lie, cheat and then lie about it and get away."

Well, just take a look at the inflation numbers. Does anyone really believe that inflation is only 2% a year? Choose to believe what you observe, or what the government and corporations tell you. Common sense vs. propaganda. Not really a tough choice, is it?

buzz saw said...

They don't give a rat's a$$ about the truth, nobody does. They will print more and more money and bail out this and that. Steal, skim, pump, dump. Wash, rinse, spin, repeat. F2ck, f@ck, f@ckedy, f@ck.

buzz kill said...

Let's see them spin the facts when a friggen frackin' mutha humpin' loaf of bread costs friggin' $25.00. Spin that, a-hole!

Anonymous said...

it's called a "dead cat bounce"

sk said...

That 3.4% Nov. sales increase over Oct is actually 3.4% plus or minus 12.9%. That's an error margin that is 4 times the actual value.

O yeah, and the methodology of measuring this doesn't take cancellations into account. The Commerce Dept. explains this very well too - including that in a downturn, this means that they are OVERESTIMATING sales - they know it and they warn the reader of their statistic of this flaw.

I know because I went to the commerce dept/HUD/census bureau's press release. Its not THEIR fault - they explain this very clearly - they even say that if the resulting lower bound is below zero then the whole thing is invalid.

Its the MSM that just doesn't care. I don't understand why but I know they don't. Does the MSM do its job ? Did the Czar and the aristocracy see their impending demise ?

Sigh.

-K

Anonymous said...

Same old bs margain of error rebuttal. The problem is not the report. The problem is your margain of error is always -12% instead within the range of +/- 12%.

devestment said...

My operating costs are through the roof and money is becoming a joke. God help those who don’t have any.

Anonymous said...

The congress and the president's pay should be cut to zero. Let them get their money from the corporate hogs they slop.

sk said...

--------------------------
re anon:
Same old bs margain of error rebuttal. The problem is not the report. The problem is your
....
....
--------------------------

My point is that the number shouldn't be relied on for any argument, pro or con. - simply because of the size of the error margin up AND down. But the Commerce department specific guidance applies specifically tot his case. THEY say:
"If the range contains zero the result is NOT statistically signficant. It is uncertain whether there was a decrease or an increase"

3.4% - 12.9 % < 0 < 3.4%

Questions ?

In contrast the YoY numbers don't span zero and CAN be seen as statistically significant.. Guess which way THEY point ? Yup.. decrease..

-K

Anonymous said...

These headlines are wistfull thnking to maintain ad revenue by the media. The trend is down, and a few slope angle canges do not contitute a trend reversal, be it housing, stocks, or commodities. the grim truth of inflated speculation will deflate the artificial equity in the next 36 - 60 months. Investors chart the trend and ignore one time variants. The media is acting as the shill for Mortgage Brokers and real estate drummers who are trying desperately to pull a few ignorant suckers back into their con game. Chart the trend and ignore the noise.

borkafatty said...

My observation:

Ok Retailers have been saying, "Sales are down". But they forgot to mention that Gift Card sales were through the roof.

Store's were packed the last 2 day's,
Movie Theater Packed,Restaurants packed.

Yes Americans were smart to buy Gift Cards. Christmas fell on a Monday, which gave us 2 extra days to shop, and the next day the store was open..IE: Gift Card discount.

Any how it was good to see Americans out and the Economy moves about. Yes Housing is tanking and along with it many many people who bought at the top, as well as the Toxic Mortgage Guy next door.

Folks rate are down, if an Adjustable Rate Mortgage is good for you and it works within your income, great!

Get a 30 year fixed, we are going to war with Iran no question the writing is on the wall..you need stablity..and inflation is going to reveal it's weary head in 07..1980's strap yourself in..rates are going to climb..bigtime.

At Homedepot a 10 foot peice of L copper is still $25..6 months ago it was $32..Hint hint...Metals!

So the cycle continues, and yes we will read about a lot of pain ..we have seen it before..except we only read what was givin to us in the local rag, it is more in your face blogging or the internet.

So I welcome 2007 with high hopes, no not about the ecomomy, not about my perservation, but about waking up everyday feet on the ground and work hard for what i need, and apreciate what i have in front of me, not what i need to have.

Everyday above ground is a good day..

Happy New Year HP

Anonymous said...

Personally, I am seeing every one of the builders in the St. Louis Folio Sunday insert advertise major incentives to buy their existing houses. Then incentives range from free upgrades to a free vacation to no payments for six months to a prepaid debit card. The smallest incentive I've seen is $10,000 and the largest was $60,000. We're also getting the "prices that will never be offered again" stuff...duh, it will be even lower in six months. I just read and giggle.

Anonymous said...

Mark your calendar. The Christmas Miracle Housing Sucker Rally of 2006 has passed. The first of many. Maybe the next will be the Easter Bunny Housing Sucker Rally of 2007! Who's up for a Tooth Fairy Rally?!? How's about a Jack-O-Lantern Rally?!?

Anonymous said...

Even if prices are up %3 inflation cause the USD do drop at least %3 in Nov.

Having your cash in a house is a good idea during the current 'bout of massive inflation going on for most people.

A $1,000,000 house will be an entry level home price for a blue color worker with 5 years.

The same worked with a high school degree will be making $300,000 USD per year.

A beer in Europe will then cost $50 USD.

chris said...

I watched MSN and CNN today reporting that home sales were up in November however all of the places where they said sales were up were in places like McAllen, Texas for example where you can buy a house for well under 200K which would compare with renting.

Makes sense to me. Rent vs Mortgage needs to be around the same, so here in Orange County I'll keep renting while I earn 5.5% int rate on my 200K savings I made during the boom.

FlyingMonkeyWarrior said...

F2ck, f@ck, f@ckedy, f@ck.
========
cant even get throuh the thread without your dark humor busting an

out

loud

laugh

from my mouth.

(-;

Michael Randallbard said...

"I can't believe the blatant lies and deceit that is being spread to the public in the OPEN! Unbelievable that in the U.S. you can lie, cheat and then lie about it and get away."

DEPENDS ON WHO YOU HAVE BEEN LISTENING TO

Michael Randallbard said...

So where is the smart money going now?

My observations by charts.....gold, silver, gold stocks, silver stocks, uranium stocks, zinc stocks and other base metals and REEs and into Swissies and China stocks and maybe some into Euros and the Australian dollar.

The dumb money is still arguing about real estate prices in the USA and is still in the broader stock markets (watch and learn) and the dumbest money of all is cash sitting in US banks in US dollars. That money will get wiped out by July

Anonymous said...

Does it really matter at this stage who says what? Simple fact: The housing and lending atmosphere that allows a 9.50/hr kid to purchase a $500,000 house is NUTS! It’s going to severely correct/crash because it’s 'unsustainable.'

When? Who Knows

How long? Who Knows

Will it? Oh Yea

How will you know
it bottomed?
When you look it up in the
History books years
later

Imagine that the housing bubble is a yo-yo. Then imagine a mountain climber coming down off of Mt Everest while bouncing that yo-yo up and down. He's dropping into deep crevasses only to immediately ascend to secondary peaks in the range all the while continuously headed down towards the bottom, bouncing that yo-yo.

The dead cat bounces, large and small, will be many.

Eventually tabby will run out of bounces.

123 said...

Salt lake Mortgage Guy and anyone else who thinks the home price "increase" is legit:

Even Ben Bernanke, when he spoke about a month ago , said the home price figures did not reflect the true situation because *** "incentives were not reported in the stats" ****.

His concern was/is that housing is actually doing worse than reported because none of these "incentives to buy" are factored in.

stuckinthecity said...

hey who is paying the MSM's bills? Not HP!!

stuckinthecity said...

smallest incentive I've seen is $10,000 and the largest was $60,000. We're also getting the "prices that will never be offered again" stuff...duh, it will be even lower in six months. I just read and giggle.

Thursday, December 28, 2006 2:44:39 AM
-------------------

Wait until people catch on and want to adjust the sales prices bsed on incentives. The bottom will fall out.

stuckinthecity said...

A $1,000,000 house will be an entry level home price for a blue color worker with 5 years.

The same worked with a high school degree will be making $300,000 USD per year.
--------------

Well, there will STILL be a problem because your hypothetical blue collar guy STILL wouldn't be able to AFFORD or QUALIFY for an entry level house!

300,000 x 3 = 900,000

Anonymous said...

Don't forget all the mortgage fraud going on... Purchases made above the asking price on the stipulation the difference is returned to the purchaser upon close...

stuckinthecity said...

chris said...
I watched MSN and CNN today reporting that home sales were up in November however all of the places where they said sales were up
----------

ANYTHING would be "up" from Toll's "dancing on the bottom".

Anonymous said...

I'm in So. Cal and still waiting for those foreclosures. Will lending standards ever go back to normal. Anyone remember when you actually had to have a down payment and half-decent credit??

Anonymous said...

Anytime you attempt to measure and report a number, people are going to "game" the number or "push the stat". This means they'll do whatever it takes to make that particular number look good. So home builders can give away the store, and give rebates or whatever, as long as the Purchase Price isn't affected badly.

So, while the stat may be correct (I don't even believe the stat since it comes from the NAR) the actual state of the market is something you have to evaluate for yourself, using your eyes, ears, nose and brain.

CNBC had that economist from the NAR David Loser and some clown from Fannie Mae on this morning and it was a mutual admiration society. Reporters have to stop interviewing people who have vested interests in spinning facts.

Anonymous said...

I don't worry about the lies and deceit. I just say, "If you are stupid enough to listen to these clowns whose living depends on you buying a bubble house, you deserve what you get."

I hope builders keep building and people keep buying more house than they can afford. It will all mean cheaper properties later when foreclosures become rampant and add to the bloated inventory.

It will also be a wake up call to the U.S. to start producing and stop merely pushing paper around.

It doesn't matter what we say or what the NAR says. Things will go the way they will go.

Anonymous said...

Lending standards will never go back to normal. The U.S. is so heavily in debt that the only way to even manage the interest is to borrow even more, which in the case of the government means to simply ask the Fed to create dollars out of thin air.

Most Americans have probably borrowed at least 10 years ahead and won't even have the net worth of a Calcutta sidewalk derelict (0) in their lifetimes.

Anonymous said...

On a lighter note. Consider that money is merely the hydraulic fluid of society. It is the way to allow energy to flow from one area to another. By itself, it's only paper. What is the true wealth of the country is the infrastructure and services available divided by the population which gives you an average standard of living.

If that is increasing, who cares that the money becomes worthless? Houses where people can live are being built, and those are real value.

gangsta said...

BWA HA HA HA HA HA HA HA!!!

Oh baby. This is starting to get good. Prices are increasing, sales are increasing and the paranoid wingnuts are spinning, spinningg, spinning.

The NAR is cooking the books. The government is cooking the books. It's not really an increase in sales since it's a decerase from 2 years ago. Riiiiiight.

Mind you of course there very same reports that said the market was tanking were accepted at face value earlier in the year.

Anonymous said...

You sound like my mother who says how can inflation be 2% when the price of milk went up 50 cents to $2.89? I tried explaining to her that the computer she bought for $2000 last year costs $1200 this year and that more than makes up for the 50 cent increase in the price of milk. You like her concentrate on the 50 cents milk and refuse to see everything else like computer or the fact that new car prices increased by less than 2% in 2006 vs. 2005.

I can forgive my mother since she's in her 60s and doesn't really understand finance/economics. But for such sophisticated financial wizzard here, you disappoint me.

"Well, just take a look at the inflation numbers. Does anyone really believe that inflation is only 2% a year? Choose to believe what you observe, or what the government and corporations tell you. Common sense vs. propaganda. Not really a tough choice, is it?"

Anonymous said...

Anonymous said...
You sound like my mother who says how can inflation be 2% when the price of milk went up 50 cents to $2.89? I tried explaining to her that the computer she bought for $2000 last year costs $1200 this year and that more than makes up for the 50 cent increase in the price of milk. You like her concentrate on the 50 cents milk and refuse to see everything else like computer or the fact that new car prices increased by less than 2% in 2006 vs. 2005.

I can forgive my mother since she's in her 60s and doesn't really understand finance/economics. But for such sophisticated financial wizzard here, you disappoint me.

"Well, just take a look at the inflation numbers. Does anyone really believe that inflation is only 2% a year? Choose to believe what you observe, or what the government and corporations tell you. Common sense vs. propaganda. Not really a tough choice, is it?"

--------------------------

Those little annoying things like food and energy, that one has to buy all the time, have a much bigger impact on one's cost of living than a computer that one may -or may not- have to buy once every five years or so. How much would that Chinese computer cost if the exchange rate was set by the market instead of the Chinese central bank?

Keep in mind that the government has a vested interest in creating inflation, then lying about the amount (saying it's 2% when it might be closer to 8%). Lots of "methodological improvements" (hedonic adjustments, geometric weighting) have been made over the years to make it easier to lie with their statistics.

Anonymous said...

Lots of "methodological improvements" (hedonic adjustments, geometric weighting) have been made over the years to make it easier to lie with their statistics.

--------------------

Coming soon to an inflation report near you (maybe): the substitution effect, such as when you have to switch from eating steak (which went up in price a lot) to eating dog food (much cheaper than steak), so hey, your cost of "living" went down!

underdog2u said...

The real story:

http://www.axcessnews.com/modules/wfsection/article.php?articleid=12520

foxwoodlief said...

Well, deflation or inflation, which is it? And who is lying to who?

All I know is I didn't see the massive price declines in Phoenix on my trip and though prices are down they are still higher than in 2004 so until they come down to 2003 or 2000 levels I'm out on that call.

Prices? Just got back from the store and the bill was $67 for a head of lettuce, some tomatoes, a bunch of scallions, one avocado, a baguette, two donuts, a gallon of milk, soda, a bag of generic chips and dip and a box of six fudgecycles. I'm sure the cost of those items has doubled in the past six years if not trippled.

I'm glad I own a house.

foxwoodlief said...

Oh, and on that trip to Phoenix, vacancies on rental apartments is down to less than 5%. 95% occupancy is pretty high, no new projects on the board in 2005/6, and rents rising in Phoenix 8%. Guess the bubble will move from buying a house to renting as the money always follows the money.

Anonymous said...

Oh, and on that trip to Phoenix, vacancies on rental apartments is down to less than 5%. 95% occupancy is pretty high, no new projects on the board in 2005/6, and rents rising in Phoenix 8%. Guess the bubble will move from buying a house to renting as the money always follows the money.

---------------------

The rising grocery prices and rents are inflation; the home prices drifting lower are the beginnings of a bursting bubble. The relatively high inflation we are experiencing will make NOMINAL home price declines less than they would have been, however, in real terms, the bubble areas are going down by 50%, and may well overshoot and crap out by 60-70%.

Also, a lot of the overbuilt crap will eventually end up on the rental market and will moderate the growth in rents. Food and gasoline will continue going up rapidly though.

foxwoodlief said...

Annonymous I agree with you that there will be a combination of inflation and deflation to try and correct the current imbalances. Of course as always in this discussion how these forces will affect us depends on when or if we bought a house. For most of my friends in Phoenix they will loose the value/equity they could have had had they sold at the peak but still will see the general value of their homes to still be worth more than what they paid since they bought six, ten, fifteen, twenty-five years ago and didn't take out equity.

Having lived in Phoenix for so many years and having both rented and owned homes there I can say that the vast majority who own still pay less than those who rent for comprable properties. What percentage of the market is overvalued and over mortgaged? Even if it is 40% that leaves 60% sitting pretty.

I believe the most screwed folk will be Californians, maybe New Jersey(ites?), New Yorkers, flippers, and people who bought in 2004-2006 in those bubble markets, the rest of the country will be in better condition but still affected but by how much? I guess only time will tell as it depends on what happens with the world economy.

The big question is how to hedge one's bets? What do you recommend? What are you doing to mitigate the various scenarios that can be played out?

My philosophy for 30 years has always been that I don't care if I make money in real estate, I just want to ensure I don't loose it and I've lived by that rule and never have to date and I always try to buy based on historical norms of the past 80 years.

I guess as a hedge I could buy a small farm somewhere where you can't give land away so I'd always have a place to go if hell breaks loose.

What would you do?

Anonymous said...

"Annonymous I agree with you that there will be a combination of inflation and deflation to try and correct the current imbalances...."

I think it's most useful to view inflation as an increase in the money supply. We are in the midst of a massive inflation in the supply of fiat currency. That's showing up as increases in the prices of various things (stocks, bonds, houses, precious metals, etc.). The collapse of a speculative bubble (housing) is another matter. It got too far ahead of incomes and most everything else and is now in the process of correcting.

"... Of course as always in this discussion how these forces will affect us depends on when or if we bought a house. For most of my friends in Phoenix they will loose the value/equity they could have had had they sold at the peak but still will see the general value of their homes to still be worth more than what they paid since they bought six, ten, fifteen, twenty-five years ago and didn't take out equity...."

The big question is when they bought and if they took out equity. People that bought pre-bubble (5+ years ago) and didn't take any equity out for a spin should do OK.

"...Having lived in Phoenix for so many years and having both rented and owned homes there I can say that the vast majority who own still pay less than those who rent for comprable properties...."

Well, it mainly depends when one bought. At today's prices and rents in SoCal, it is MUCH less expensive to rent than 'own,' and also far less risky.

"...I believe the most screwed folk will be Californians, maybe New Jersey(ites?), New Yorkers, flippers, and people who bought in 2004-2006 in those bubble markets, the rest of the country will be in better condition but still affected but by how much? I guess only time will tell as it depends on what happens with the world economy...."

Most of the major metro areas are bubble markets. Any place where REIC jobs are a large part of the economy will be sucked into a downward spiral.

"...The big question is how to hedge one's bets? What do you recommend? What are you doing to mitigate the various scenarios that can be played out?..."

Well, gold, silver, and oil are a place to start.

"... I guess as a hedge I could buy a small farm somewhere where you can't give land away so I'd always have a place to go if hell breaks loose. ..."

The small farm idea has some appeal but it might be tricky to make it work. Who would look after/take care of the farm when you're not there? How would the locals feel about you moving into their rural town? Also, the small farm would be most useful in the case of a total collapse. But in that scenario, there are likely to be bad people with guns that will want to take your farm.

Anonymous said...

I should add that even after a total collapse of civilization, once (and if) society starts to rebuild itself, gold and silver will be the money of choice, not pieces of paper with numbers on them. Of course to benefit from this, one has to have physical gold and silver and to survive the collapse (so it's a good idea to also stock up on canned/dried food, bottled water, guns, and ammo). This seems to be a pretty low probability scenario though.

A stagflationary malaise that more or less wipes out (economically) what's left of the middle class in America is far more likely. Look to any one of our neighbors to the south (Mexico, Argentina, etc.) for examples.

Anonymous said...

You are citing the wrong statistic.

Sales volume - the amount of sales - is down by about 30%. That's huge.

Anonymous said...

I'm glad I own a house.

Thursday, December 28, 2006 9:49:49 PM



ya....so are we.

stuckinthecity said...

Anonymous said...
I should add that even after a total collapse of civilization, once (and if) society starts to rebuild itself, gold and silver will be the money of choice, not pieces of paper with numbers on them.
--------------

What if it's REALLY good paper??

Anonymous said...

Sales down 30% YOY? Umm no, not quite.

http://www.bloomberg.com/apps/
news?pid=20601087&
sid=aCqwBksyi_0o&refer=home


Sales of new homes were down 15 percent in November from the same month last year, the Commerce Department said in today's report. The number of homes completed and waiting to be sold rose by 2,000 to 169,000 in October.

Sales rose in three of four regions. They increased 22.5 percent in the Northeast to a 49,000 annual rate, 22.4 percent in the Midwest to a 175,000 pace, and 19 percent in the West to a 294,000. The rise in the Midwest was the biggest since December 2004. Sales fell 9.3 percent in the South to 529,000.


------------------------------------

Sales volume - the amount of sales - is down by about 30%. That's huge.