New Home Inventory Declines

from The Big Picture
New Home Inventory Declines: "

The Census Bureau reported that New Home Sales for October 2009:

Sales of new one-family houses in October 2009 were at a seasonally adjusted annual rate of 430,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development.

This is 6.2% (±17.6%)* above the revised September rate of 405,000 and is 5.1% (±14.9%)* above the October 2008 estimate of 409,000.

The median sales price of new houses sold in October 2009 was $212,200; the average sales price was $261,100. The seasonally adjusted estimate of new houses for sale at the end of October was 239,000. This represents a supply of 6.7 months at the current sales rate.

The standard disclaimers apply to this data point: Both the monthly and the annual data are below the margin of error. Monthly data was reported as +6.2%, +/- 17.6% (whoops!). Annually, sales improved 5.1% +/- 14.9%.

As Pete points out, all of the gains were in the South.

Assuming that the number turns out to be actually positive (something we cannot know for sure now), this will be the first year over year gain in new Home Sales since the market peaked in 2005.

The other decent news: Inventory is down significantly from the highs of 12.4 months supply to 6.7 in October.

gt;

Chart courtesy of Calculated Risk

There are some improvements in this report, but New Homes, which have been competing with foreclosures, likely have a ways to go before we can call this market healthy.gt;

Source:

NEW RESIDENTIAL SALES IN OCTOBER 2009

The Census Bureau

http://www.census.gov/const/newressales.pdf

"

Case Shiller Home Price Graphs

from Calculated Risk by CalculatedRisk
Case Shiller Home Price Graphs: "S&P/Case-Shiller released their monthly Home Price Indices for September this morning.

This monthly data includes prices for 20 individual cities, and two composite indices (10 cities and 20 cities). NOTE: This is the Not Seasonally Adjusted data - the link is broken for the SA data.

Click on graph for larger image in new window.

The first graph shows the nominal seasonally adjusted Composite 10 and Composite 20 indices (the Composite 20 was started in January 2000).

The Composite 10 index is off 29.9% from the peak, and up about 0.4% in September.

The Composite 20 index is off 29.1% from the peak, and up 0.3% in September.

The second graph shows the Year over year change in both indices.

The Composite 10 is off 8.5% from September 2008.

The Composite 20 is off 9.4% from September 2008.

This is still a very significant YoY decline in prices.

The third graph shows the price declines from the peak for each city included in S&P/Case-Shiller indices.

Prices decreased (SA) in 11 of the 20 Case-Shiller cities in September (NSA).

In Las Vegas, house prices have declined 55.4% from the peak. At the other end of the spectrum, prices in Dallas are only off about 4.7% from the peak - and up in 2009. Prices have declined by double digits from the peak in 18 of the 20 Case-Shiller cities.

I'll have more on prices (compare to stress, price-to-rent) later.

"

Case-Shiller Home Price Indices Fall 8.9% Yearly

from The Big Picture by Barry Ritholtz
Case-Shiller Home Price Indices Fall 8.9% Yearly: "

The latest Case Shiller Index is out, and it fell 8.9% year over year, but rose a modest 0.3% for the month. The Home Price Index improved in Q3 of 2009 — its 2nd consecutive quarterly increase. Prices declined 8.9% in the quarter versus Q3 2008.

Prior Quarterly falls were worse, with the index falling 14.7% Q2 ‘09, and 19.0% in Q1. The month-to-month data improved, albeit slightly, for the 5th consecutive month.

Other data points worth noting:

• 10-City and 20-City Composites posted their fifth consecutive monthly increase with September’s report.
• Nationally, the Composite rose by 3.1% in both Q2 & Q3 2009.
• Average home prices in Q3 2009 are at similar levels to Q3 2003 — 6 years earlier;
• Los Angeles, New York and Washington values are 70-80% above their 2000 averages;
• Detroit is still at only 73% of its 2000 value;
• Prices in Las Vegas (the most depressed market) have declined for 37 consecutive months; Peak-to-trough, Vegas is down -55.4%.

The charts:

>

>

Source:

Home Prices Show Sustained Improvement through the Third Quarter of 2009 (PDF)

Case-Shiller Home Price Indices, November 24, 2009

http://bit.ly/75169a

"

Case-Shiller House Prices Increase in September

From CalculatedRisk

"Case-Shiller House Prices Increase in September: "Note: I will have graphs as soon as S&P releases the data online.

S&P reports the Composite 10 index increased 0.3% in September, and the Composite 20 index increased 0.4% (both SA). Eleven cities posted increases, nine showed price declines.

From S&P:

“We have seen broad improvement in home prices for most of the past six months,” says David M. Blitzer, Chairman of the Index Committee at Standard & Poor’s. “However, the gains in the most recent month are more modest than during the seasonally strong summer months. Fewer cities saw month to month improvements in September than in August in both seasonally adjusted and unadjusted figures. Nationally, the U.S. National Composite rose by 3.1% in both the 2nd and 3rd quarters of 2009. Both the 10-City and 20-City Composites posted their fifth consecutive monthly increase with September’s report."
"

Existing Home Sales Graphs

from Calculated Risk
Existing Home Sales Graphs: "Here is another way to look at existing homes sales: Monthly, Not Seasonally Adjusted (NSA):

This graph shows NSA monthly existing home sales for 2005 through 2009. For the fifth consecutive month, sales were higher in 2009 than in 2008.

And for the second straight month, sales in 2009 were higher than in 2007 (two years ago).

Of course many of these transactions in October were due to first-time homebuyers rushing to beat the expiration of the tax credit (that has now been extended). This has pushed sales far above the historical normal level; based on normal turnover, existing home sales would be in the 4.5 to 5.0 million SAAR range.

The second graph shows nationwide inventory for existing homes. According to the NAR, inventory decreased to 3.57 million in October from the upwardly revised 3.71 million in September. The all time record was 4.57 million homes for sale in July 2008. This is not seasonally adjusted.

Typically inventory peaks in July or August, so some of this decline is seasonal.

The third graph shows the 'months of supply' metric for the last six years.

Months of supply declined to 7.0 months in October.

Sales increased sharply, and inventory decreased, so 'months of supply' declined. A normal market has under 6 months of supply, so this is still high - and especially considering sales were artificially boosted by the tax credit.

"

Existing Home Sales (SA) Surge on Cheap Condos

from The Big Picture by Barry Ritholtz
Existing Home Sales (SA) Surge on Cheap Condos: "

Existing-home sales gained in October on a monthly basis as prices fell and cheaper homes predominated sales. Elevated inventory levels also declined.

Existing-home sales gained 10.1%, reflecting in large part an outsized seasonal adjustment. Sales were 23.5% above the 4.94 million-unit level in October 2008, when the collapse of Fannie, Lehman, AIG, Bank of America and Citigroup had paralyzed the nation.

Median existing-home price was $173,100 in October, down 7.1% from October 2008.

The biggest gains were found in the cheapest homes – especially condominiums and co-ops. Their sales surged 13.2% (seasonally adjusted) and were up an astonishing 40.8% above a year ago. Median prices for condos fell 10.4% below October 2008.

As expected, the prior month’s initial report was revised downward to annual pace of 5.54 million in September (originally reported as 5.57mm annualized). These revisions effectively eliminated the upside surprise of 220k sales last month.

It is noteworthy that the NAR claims the seasonally adjusted sales activity is at the highest level since February 2007 (6.55 million). CNN bought this nonsense hook line and sinker (Existing home sales at highest level since 2007) but it is not actually true without some accounting sleight of hand.

Ultra low interest rates are helping sales somewhat. A 30-year, conventional, fixed-rate mortgage fell to 4.95% Last week, the 30-year rate dropped to 4.83%.

In addition to the low rates and the now extended first time homebuyers’ tax credit, a big spike in foreclosures is attracting bargain hunters. In parts of the country, some foreclosed units are selling for less than 50% of the peak 2005-06 price – especially on the low-end of the price scale. Foreclosure units have been selling briskly in California, Florida, Arizona, and Las Vegas.

Total housing inventory for sale fell 3.7% to 3.57 million existing homes, a 7.0-month supply at the current sales pace. This does not include a variety of so-called shadow inventory: REOs, rental units, vacation properties, and bank-owned strategic non-foreclosures.gt;

Seasonal Adjustments Continue to Skew Data:

Mark Hanson notes the ongoing skew of Seasonal Adjustments, and the continuing spin of the NAR:

1) The month of October was thought to be the end of the stimulus, so it reflects a last minute dash to get in before the tax credit sunset

2) Rates fell sharply to below 5% in Sept/Oct 2009

3) Despite this, Oct YTD sales are DOWN a whopping 716k from 2007

4) NSA sales were up 31k sales MoM to 499k in Oct — the exact same as Aug

5) NSA sales were up 86k sales from Oct 2008 – but in Oct 2008 rates were high (pre Fed QE) and there was not stimuli of any kind

6) Median and Avg prices fell again – about 1.5% MoM and 6% YoY – price drop accelerated into shoulder season as price dumping and short sales picked up

7) Year to date Oct 2008 vs Oct 2009 – 2009 sales finally passed 2008 sales by only 61k houses.

So in a nutshell, prices keep falling month after month and 2009 has produced 61k more real sales over 2008.t;

chart courtesy Barron’s Econoday

t;

Source:

Existing-Home Sales Record Another Big Gain, Inventories Continue to Shrink

National Association of Realtors, November 23, 2009

http://www.realtor.org/press_room/news_releases/2009/11/record_big

"

Existing Home Sales increase sharply in October

from Calculated Risk

Existing Home Sales increase sharply in October: "The NAR reports: Existing-Home Sales Record Another Big Gain, Inventories Continue to Shrink

Existing-home sales – including single-family, townhomes, condominiums and co-ops – surged 10.1 percent to a seasonally adjusted annual rate1 of 6.10 million units in October from a downwardly revised pace of 5.54 million in September, and are 23.5 percent above the 4.94 million-unit level in October 2008. Sales activity is at the highest pace since February 2007 when it hit 6.55 million.
...
Total housing inventory at the end of October fell 3.7 percent to 3.57 million existing homes available for sale, which represents a 7.0-month supply2 at the current sales pace, down from an 8.0-month supply in September. Unsold inventory totals are 14.9 percent below a year ago.

Click on graph for larger image in new window.

This graph shows existing home sales, on a Seasonally Adjusted Annual Rate (SAAR) basis since 1993.

Sales in Oct 2009 (6.10 million SAAR) were 10.1% higher than last month, and were 23% higher than Oct 2008 (4.94 million SAAR).

"