Gotta love this NAR report - "pending cancellations" is a better name. But the interesting thing about it besides the 8.5% decline from a year ago being spun as good news by the MSM is Lereah saying (honestly?) that March and April are going to suck. That means he's already hearing from his ramen-eaters that the market is dead, nobody's getting paid, poor people and liar's can't get loans, and homes didn't sell in March.
NAR: WASHINGTON, April 3
A forward-looking index based onpending home sales indicates that bad weather, and possibly the loss ofsome subprime lending, will dampen sales closed in March and April,according to the National Association of Realtors(R).
The Pending Home Sales Index,* based on contracts signed in February,stood at 109.3 -- down 8.5 percent from February 2006 when it reached119.4, but is 0.7 percent higher than a downwardly revised reading of 108.5in January. Earlier, mild weather caused the index to spike at 113.3 in December.
David Lereah, NAR's chief economist, said there has been a steady narrowing from year-ago readings since last July.
"If it wasn't for theunusually bad weather in February, we'd be seeing a better performance inpending home sales," he said. "We also may be seeing some fallout from a decline in subprime lending, but a slight improvement in the more volatile month-to-month index is encouraging -- the data suggests an underlying stabilization is taking place in the housing market, but it will take another month or two to clarify."
"Problems in the subprime mortgage market will become more apparentover time, and they will modestly depress the overall level of improvement in existing-home sales we expect as the year progresses," Lereah said.
The index is a leading indicator for the housing sector, based onpending sales of existing homes. A sale is listed as pending when thecontract has been signed but the transaction has not closed, though thesale usually is finalized within one or two months of signing.
41 comments:
What's more, pending sales dropped in the NE and West; as a result, median prices will probably continue falling in the months ahead.
The stock market has become detached from reality these days - "home sales up .07%" and the market goes wild. . .I am beginning to see that the "fix is in" on Wall Street, as another bubble needs to be pumped (the market), so everyone looks at their 401's and says "wow - let's go buy a big SUV!"
I have noticed for the past few weeks that everytime there is some bad news, the market tanks, only to finish up a bit, or at least down only small amount. Either the fix is in, or Wall Street traders never leave their rarified world of high priced Manhattan condos (bought with huge Wall Street bonus). Read today about "trading floor envy" big trading houses are leasing huge amounts of Manhattan real estate to build big trading floors - hmmmm. . .
"That says people are getting mortgages, people are buying houses, people have incomes, jobs, all that good stuff," said Kim Caughey, equity research analyst at Fort Pitt Capital Group.
from a yahoo article. yeppers, this is what they got...all that good stuff.
man this is gonna suck.
How does a 8.5% decline get spun into an increase by the MSM? The report was gloomy if you read even the NAR's statement. Bizarre!
Is there anyone on the planet who buys into this weather garbage? I have heard that real estate is for sale all over the country. So, if there is unusually bad weather is one part of the country, there's probably unusually good weather in another part. And I don't see why the net effect would not be zero. Unless it just so happened that all the unusually bad weather was in the most populated areas. Right.
Please vote democrat, we need to subsidize liars and deadbeats and the destitute poor so they can outbid you on a house that will go to foreclosure in 2 years.
yeah democrats!
Funny I thought weather was better this year too?
Remember the deck of cards given to U.S. troops in '03 with photos of wanted Iraqis? Someone needs to come out with a deck of cards for the housing bubble. Greenspan gets the Ace of Spades. Learah the Ace of (broken) Hearts. Casey Serin gets to be the Joker.
NAR press release was FEBRUARY USED home sales data -- SUBPRIME melts in March- watch the coming several months !!!
That`s the real deal.
Yes the weather was 100% perfect countrywide from 1997 to 2005........yes please ignore Katrina and the other hurricanes and stuff, move along, move along......that explains the huge runup in prices, yeah, that's it, concentrate on the 0.7% UP ignore 8.5% down (unless you are a stupid pessimist), we all know year-over-year data doesn't count, only month-to-month, shhhhh, be quiet....we'll be getting back to normal soon! Back to housing prices at 8x annual income, 50% of monthly debt, free money for all, YIPEE!
'We don't know exactly who holds these risks, but, in a way, we all hold this risk. The risk doesn't go away. Somebody has to have it.'
— Joseph Mason, Drexel University
The weather in the Northeast (Massachusetts anyway) for February was better than typical. Yeah, there were two icy storms, but uh, there are usually 3 or 4 really heavy snowstorms and all the ice and crap to go with it. All in all, the winter in Massachusetts was far milder and far less snowy than usual.
Let's face it. Lereah is preying on the weak and the blind who have always bought into this housing (2001-2005) philosophy.
And, so too, those idiots will buy at these ridiculous prices.
I'm a potential buyer who is happily renting now. I will not buy until the truth emerges in at least another year, probably longer.
come on man you can't spin this away completely. yeah it is 8.5% below last year. BUT it's a lot better than what you were expecting. Sdmit it.
Despite all the overwhelming reasons NOT to buy a home, people are still buying. People have been so brainwashed into thinking that buying at any cost is the right thing to do that they'll pay anything just to get into the market. They'll give up the $5 latte, they'll give up the $300 jeans, they'll give up their first born just to say they own a home. I think we've way understimated the desire of people to be homeowners.
I was as much of a bubble head as the next guy but every month I get less and less sure. We have the subprime mess blowing up and yet prices stil haven't fallen by much. In some areas they are incredibly still going up. I mean shit how much more has to happen before people think hey maybe $700K for a 1200 sq ft shack might not be such a good idea?
I dunno guys, my optimism level is not what it used to be. I might have made a mistake getting out when I did.
They still don't get it. Yes there are some potential buyers out there with real money, and the intention of paying back any loan they might recieve, but those types absolutely will not buy until house prices come down. I will not overpay for a crapshack. I WILL WAIT UNTIL HELL FREEZES OVER IF I MUST.
The weather here in Nebraska was pretty bad last month. That's probably what DL was referring to.
uh, wouldn't bad weather also decrease the amount of new construction coming available?
COUNTRYWIDE’S CALIFORINIA REO’S UP 42% IN MARCH!
Posted on April 1, 2007
Filed Under Subprime Lending |
This is no April Fool’s joke.
So I have been off working really hard this month and I have neglected my blog (I know, lame excuse). But, I really haven’t had anything to add to the issue of Predatory Lending and the Subprime meltdown now that the MSM is on the bandwagon.
The two relevant things I have been doing is tracking foreclosures in San Diego, and more recently, Countrywide Home Loan’s inventory of California REO properties. These are properties taken back by Countrywide from failed borrowers and placed for sale with realtors and on their website here.
We all know foreclosures have spiked in the last few months, as pointed out by Piggington’s Rich Toscano here. However, tangible impacts of this have just been trickling in.
The mortgage lender Implode-O-Meter and the ABX index are really the only places I know to see more than anecdotal examples of foreclosures and the mortgage meltdown. Let me know if there are others.
Here are the Countrywide California REO numbers from February 17 to April 1:
Countrywide’s California REO inventory went up by by over 40%!
Explanations Anyone?
I am cautions of drawing too many conclusions from this data as it is such a short sample period. It could be Countrywide dumped a backlog onto their website this month, or they could have missed some the prior month, yadda, yadda.
However, the numbers look suspiciously like some other trends we are seeing in San Diego foreclosure statistics
Time will tell, I can’t wait for Countrywide’s next 10-Q. It should be good reading. I just hope they continue to publish this data.
Next month, I promise to graph these numbers.
Some additional comments about these numbers:
The values are Countrywide’s listing price. I have no Idea how they arrive at those numbers although it may include an appraisal or broker price opinion or both.
The size of the total portfolio is not as relevant to me, as the trend of it’s change.
I include the average and the median not only because they are marginally interesting, but to act as a check on the data. As you can see, they are relatively constant month to month. If they were not, I would consider an error in the data.
As I noted last month, the February number is not February 1. It was the date I first had the idea to track this statistic. I thought it was from the first week of February. I have since gone back and looked at the date my Excel file was created (February 17, 2007) so I have corrected that date.
Cheers,
Ken
I was in Santa Barbara Presidents Day weekend. Sunny and 80s all weekend long, I think a new high was set that Friday. I was also in Phoenix the weekend after that. 70s and sunny all weekend long.
I live in Las Vegas and the only shitty weather we had was in January when it got in the 20s. February was - as all Februarys are - perfect weather.
Yet bad weather gets the blame for sales falling in Necada, Arizona and Coalifornia? Priceless.
Anonymous
We've just had 1/10 the snow we usually get in CO in Feb and March.
Notice also that the number is up 0.7% vs. the downwardly revised January #. Naturally, the Feb will be downwardly revised (so it will be down vs Jan) in order that the March # will show an increase.
The NAR can walk the figures down for years at this rate, all the while proclaiming m/o/m increases.
Lies, damn lies and statistics.
I've sent my parrot's resume into Bloomberg. I think he may have a shot.
He's pretty too, maybe I should put him in for an on-air job at fox news.
First they revise January down so February looks like an increase. This is the oldest trick in the book. Stock market is going up because investors know the game and they are expecting an interest rate drop.
Heh, the weather was good in California in February every buying weekend, and I even went out to a few new home sites just to see what was up (although I decided NOT to buy in the near future). It was like a ghost town in most of these sales offices, and this was even BEFORE the sub-prime meltdown issue hit the MSM.
Hint: the lack of buyers in Feb wasn't because of the weather....
"The weather here in Nebraska was pretty bad last month. That's probably what DL was referring to."
Who wants to live in Nebraska anyway - 1 home sale for the whole state is a bubble. hahahaha
Unbelievable! The data look terrible, and the market is up 100 points!
I think everyone's lost their minds! Housing activity is down 10%, Prices are down 8% since July. What is going on?!?!
I can't wait until April 25, to get the NAR's report on existing sales for March. Maybe they'll revise last month's data down 15% and say we have another 0.7% gain.
Funny thing is, all the relatively good sales data is in the lower-priced Midwest and South.
Anonymous said...
come on man you can't spin this away completely. yeah it is 8.5% below last year. BUT it's a lot better than what you were expecting. Sdmit it.
Despite all the overwhelming reasons NOT to buy a home, people are still buying. People have been so brainwashed into thinking that buying at any cost is the right thing to do that they'll pay anything just to get into the market. They'll give up the $5 latte, they'll give up the $300 jeans, they'll give up their first born just to say they own a home. I think we've way understimated the desire of people to be homeowners.
I was as much of a bubble head as the next guy but every month I get less and less sure. We have the subprime mess blowing up and yet prices stil haven't fallen by much. In some areas they are incredibly still going up. I mean shit how much more has to happen before people think hey maybe $700K for a 1200 sq ft shack might not be such a good idea?
I dunno guys, my optimism level is not what it used to be. I might have made a mistake getting out when I did.
April 03, 2007 6:28 PM
---------------------
We are still in the very early stages of a slow-motion crash. It takes time for the downward spiral to gather momentum. Yeah, most people are financial idiots, and that's exactly why the backside of the bubble will last for years and years. Patience is most definitely a virtue these days. It sucks having to delay purchasing a home for perhaps a decade, but it sure beats the alternative of becoming a debt serf.
" Must have been the weather "
When you acknowledge the fact that the stat's you are using are "volatile" you are not dealing with good stats. Let’s be frank the NAR has stats coming out of their @sses, they have numbers on anything and everything regarding homes. I bet the NAR has a stat that could tell you how many Americans have sexual fantasies about their home. With all that blinding data they show boat a stat that is “Volatile”!?!
Let’s look at synonyms’ for the word Volatile. These are words you could use in place of the word “Volatile” and be grammatically and logically correct.
According to MS Word I have ”Unstable”, “unpredictable”, “ explosive”, “ impulsive”, and “fickle”.
How does that work, a statistic that is “Unpredictable” is being used to “Predict” a market trend.
This housing market is going to crash, that light you think you see at indicating an end of the tunnel, well buddy it’s a train.
Stock market is going up because investors know the game and they are expecting an interest rate drop.
-------
Never we are way to inflated..I say go for a hike...and lets really get this shit moving,,
I want carnage, blood in the street, screaming women, crying children, fires!!...opps! my bad I was thinking out loud.. I was watching the Embarrassment in our White House, and the Dolts in the congress degrade out Military by playing sticks and stones...asswholes!! & International Embarrassment's.
Metro Peak to trough from the last bubble was 4 years (late 88 to late 92) not including the flat portion of 88. All the gains of 86-87 were wiped out. The trough lasted from 93-98. The current run up exceeded that prior run up in terms of years & percentages. However, we did not have toxic loans last time. The exburbs slide first and then it rippled inside the beltway. After a year of plateau the flood gates opened up and substantial Y-O-Y drops occurred for 4 years.
The same things is currently happening. Exburbs are getting hit first. 06 was the plateau year. 07 should thus be the first year of at least four where it will crack. It might take longer due to the higher run-up but with toxicity of loan products it might just be the same amount of time but with a sharper drop to get back to real pricing. Anyone who is looking to buy need to just rent from the homedebtor for the next 4 years. Otherwise even if you have 20% to put down, it will be all wiped out!! The tax benefits will not offset. So just rent, save more money for the four years & invest it wisely. You'll have a huge down payment and get a 20-40% drop from current pricing.
Keith what do you think? interest rate still low and people still able to bs on loans. The houses are way over priced but what has happened to real estate prices have already happened in the leasing of expensive cars. It used to be porsche, mercedes etc were only for the rich but with the invention of leasing not buying anybody can get into a car. The same has became true of homeownership. I believe truth will only come out in 20 years when the majority has never paid there house off. unLike my grandparents who paid there house off and were able to retire on a small savings and no mortgage. If they had had io loan and small savings they would have never retired. When these people get to be 50,60 and still have rent mortgage and social security is gone thats when they will realize, but it will be to late. House price will remain high as long as people are willing to make interest payments only.
Wouldn't it only take a 3% pullback or so to cause a serious recession??? So in that case a fall of 8.5 percent is pretty serious.
This must be crazy..alittle tweeked upbeat news on housing and all is good in OZ. The markets rallied 130 plus today overnight Japan rallying.. Australia hit a new high based on the home sales in the US. This has to be a Bad Joke. Dead Cat Bounce? Forclosures everywhere..People not even buying at the court house auctions, Subprime Blow ups, Alt -A Loans going bad in droves. In the papers recently how people arent spending money going out to eat also furniture companies are on the brink...Word to the wise dont be suckered into the stock market Now..Things are going to get really ugly fast..When No SPRING Selling Season happens.. I just dont understand the market pshychology..Dont they live in the real world..Florida Real Estate is in the midst of its biggest recession ever..Inventory will take 5 years in some markets to burn off unless prices crash... I hope the average Joe doesnt get suckered into the stockmarket now..THe "correction" doesnt only last 5 weeks to rebound to all time highs..This Market is a Scam! This Monopoly game is over..
That "Pending Home Sales" report is bullshit! That just happened for the first time this month. It doesn't even show up on the normal list of economic reports! I can't believe CNBC even reported on it. It's a blatant, last desperate push to pump up housing.
These stocks are terminal. The end is inevitable. I see no good news coming down the line.
If the President is a bad boy, Congress has to take away his allowance. If he keeps playing with his toys and breaks them and doesn't have money to fix them, he shouldn't play with them.
The housing good news isn't the reason for the market going up. It's a lack of bad news that does it.
There is a huge house of cards that depends on activity in the stock market. Remember brokers only make money when you buy and sell. All the more reason to keep the "churn" going. Hedge funds buy a bunch of stuff to make a little spike then a bunch of idiots pile in thinking something is happening.
Where can you get a $1200 shack for only 700k? Suck on these babies in a dismal, West Los Angeles neighborhood where the houses where built in the 1920's and 1930s....
$1,049,000
2 br 2 ba
2249 Veteran Ave
Los Angeles, 90064
From: californiamoves.com
$1,399,000
3 br 3 ba
3113 Gilmerton Ave
Los Angeles, 90064
From: californiamoves.com
$1,099,000
2 br 2 ba
2321 Kelton Ave
Los Angeles, 90064
From: californiamoves.com
$1,350,000
3 br 3½ ba
1,900 sqft
10320 Northvale Rd
Los Angeles, 90064
From: Keller Williams Realty
$1,350,000
4 br 4 ba
12240 Sunset Pkwy
Los Angeles, 90064
From: californiamoves.com
$1,329,000
3 br 2 ba
2301 Glendon Ave
Los Angeles, 90064
From: californiamoves.com
$895,000
2 br 2 ba
10364 Almayo Ave #205
Los Angeles, 90064
From: californiamoves.com
$995,000
4 br 3 ba
1,841 sqft
2362 Overland Ave
Los Angeles, 90064
$899,500
2 br 1 ba
1,386 sqft
10640 Butterfield Rd
Los Angeles, 90064
$1,080,000
3 br 1 ba
8,712 sqft
2726 Dunleer Pl
Los Angeles, 90064
$1,200,000
2 br 2 ba
10285 Kilrenny Ave
Los Angeles, 90064
From: californiamoves.com
Everyone is just polishing brass on the Titanic. It's all going down soon.
Gotta love this NAR report - "pending cancellations"
Don't know why, but that's the funniest thing I've read all day. "Pending Cancellations". LOL!
Lereah is a liar. I am not saying that because I have any personal vendetta against him. His quote that lower "pending home sales" for the Northeast as compared to the South and Midwest(West was lower too) was because of "un usually bad weather in the Northeast for February."
What is he talking about? February weather in the Northeast is usually very bad. It is the messiest, stormiest, nastiest, iciest month of the year. January is usually colder, but drier.
This year, in the Northeast, February was much, much better than usual. February was the worst month this winter (as always), but relatively speaking, this February was nice. This winter was like an extended late Fall, all three months.
Again, what the hell is he talking about?
Wall street should be ashamed of it's criminal reaction.
Home sales for Jan-March should have been through the roof compared to other winters. It was, by far, the mildest winter (February too) that I can remember.
Everyone keeps saying "Well, I used to believe in the bubble, but I guess we were wrong. Housing isn't wavering. There is no bust, despite what HP'ers think."
People, people, people. C'mon now. The housing market is collapsing. It isn't happening as soon as predicted by some, but that denial is what's really going to blow out this bloated, over-priced bubble.
Don't you get it? Let Lereah and Wall St. thin out the stupidity herd. Don't be the idiot who buys now. Look at the real data, not the spin. If you don't have to buy, then do your family a favor and don't mortgage their future on fear.
This one's easy. The great reward will come to those who are smart and wait.
This country, which is way behind in debt, cannot sustain the housing prices from 2001-2005. Only the fools who didn't lose their shirts, yet, would be dumb enough to buy. The others who bought in the last few years are really heading for some scary times. Real scary times. Foreclosures, homelessness, legal problems, jail. Having to look at their children and say "We can't afford anything. Even the house." Bye, Bye good credit. Hello divorce court and evaporating college tuition money.
That is what's real. Not the spin.
It's coming down folks. Look at the numbers, not the spin. Not the 3 or 4 idiots who are buying now.
This is coming down hard and ugly, if not fast and clear.
Weather in the Northeast for April has been cold and icy. It is far colder than usual.
When the numbers for housing comes out for April, and they are abyssmal, Lereah will say it was because of the bad weather.
Even though he'll be lying about why people aren't buying. (it's the cost of housing, stupid), at least he'll be right about April weather in the Northeast.
...uh, that it was colder than usual.
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