From the AP WASHINGTON – New home sales in June posted the fastest increase in more than eight years as buyers took advantage of bargain prices, low interest rates and a federal tax credit for first-time homeowners. While home prices are still falling, the figures released Monday were another sign the housing market is finally bouncing back. Earlier this month, the government reported that new... [more]
From the AP
WASHINGTON – New home sales in June posted the fastest increase in more than eight years as buyers took advantage of bargain prices, low interest rates and a federal tax credit for first-time homeowners.
While home prices are still falling, the figures released Monday were another sign the housing market is finally bouncing back. Earlier this month, the government reported that new home construction rose to the highest level since last fall. And data out last week showed home resales rose almost 4 percent in June, the third straight monthly increase.
"The worst of the housing recession ... is now behind us," said David Resler, chief economist at Nomura Securities. "We're turning the corner toward increased activity in housing."
New home sales rose 11 percent in June to a seasonally adjusted annual rate of 384,000, from an upwardly revised May rate of 346,000, the Commerce Department reported Monday.
Shares of big homebuilders soared on the news, with Beazer Homes USA up by more than 13 percent and Hovnanian Enterprises rising 8 percent in afternoon trading. But with home prices still falling, these companies won't be making much money anytime soon.
The median sales price of $206,200 was down 12 percent from $234,300 a year earlier and off nearly 6 percent from $219,000 in May.
In addition to lower prices, buyers are rushing to tax advantage of a federal tax credit that covers 10 percent of the home price or up to $8,000 for first-time buyers. Home sales need to be completed by the end of November for buyers to take advantage.
"The window of opportunity is closing," said Bernard Markstein, senior economist for the National Association of Home Builders.
June's results were the strongest sales pace since November 2008 and exceeded the forecasts of economists surveyed by Thomson Reuters, who expected a pace of 360,000 units. The last time sales rose so dramatically was in December 2000.
There were 281,000 new homes for sale at the end of June, down more than 4 percent from May. At the current sales pace, that represents 8.8 months of supply — the lowest level since October 2007. If that number falls to just over 6 months, analysts say, builders will feel more comfortable ramping up construction.
Fallout from the housing crisis has played a central role in the U.S. recession, now the longest since World War II. Foreclosures have spiked, homebuilders have slashed construction, and financial companies have lost billions.
But it will still be a while before homebuilders turn into an engine for the economic recovery. Construction levels are still weak because builders still have too many unsold homes sitting vacant.
[less]
Response by marco_m
about 17 years ago
Posts: 2481
Member since: Dec 2008
uh oh..its a bull market
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Response by GettingOut
about 17 years ago
Posts: 64
Member since: May 2008
From WSJ
Economists React: Housing ‘News Sounds Better Than It Looks’
The news sounds better than it looks … despite the jump in sales in June, new home sales remain at very low levels, and the not seasonally adjusted data show a total of 36,000 homes sold nationwide in June, the lowest sales total for June since 1982. –Richard F. Moody, Forward Capital
A couple of cautionary notes. First, the report showed a sharp 6% sequential decline in June suggesting that much of the sales activity was concentrated at the lower end of the market. Second, sales contracts that were signed in June may have been tied to the lows in mortgage rates that were recorded in April and May… If the June sales pace can be sustained then the months’ supply should approach the normal range of 5.5 to 6 months by early 2010. However, if the sales pace turns lower in coming months and housing starts continue to rebound, then the inventory imbalance will persist. –David Greenlaw, Morgan Stanley
Unlike the prices of existing homes, the median sales price of new homes sold fell in June by 5.8% from the May median and 12% from a year ago. However, the average sales price was essentially unchanged in June and down about 7.5% from a year ago). Underlying details show suggest that sales of lower priced homes improved more than of higher priced homes. –Nomura Global Economics
This was a surprisingly strong report, and it adds to the growing body of evidence pointing to a modest rebound in the U.S. housing market. In fact, it is hard not to get a tad bit excited about the outlook for the U.S. housing market, as it appears that U.S. homebuyers may be beginning to take advantage of the favorable buying environment, particularly given the low mortgage rate, affordable prices and the many inducements coming from the federal government. Even so, the dismal state of the U.S. labor market will continue to cast a long shadow over the prospects for a meaningful recovery in the sector in the near term. –Millan L. B. Mulraine, TD Securities
Although most evidence indicates that new housing activity (starts and sales) has bottomed, we do not anticipate anything resembling a “v-shaped” recovery. The same appears to be true of existing homes, where first-timers are being tempted by deeply discounted properties coming out of foreclosure, but activity up the price scale remains spotty at best. Moreover, supply will remain enormous, particularly with increased competition coming from distressed sales of existing homes. –Joshua Shapiro, MFR Inc.
The evidence continues to grow that single-family housing activity has bottomed out. Single-family new home sales have risen for three straight months (with the caveat that this series does not track cancellations, but our guess is that cancellations are declining as the financing environment improves for conforming mortgages), single-family housing starts have risen for four straight months, and the NAHB’s housing market index bottomed in January. –RDQ Economics
The new home sales estimates are extremely “noisy.” For this reason, we recommend focusing on recent trends instead of the latest monthly estimates. A three-month moving average shows that new home sales appeared to have hit a bottom in January, and are starting to grow ever so slightly. By region, sales have started to pick up in the West and Midwest, and are leveling off in the South and Northeast… Although the market for new homes is improving, selling a new home has never been harder. The median time that a new home sits on the market before selling rose to an all-time high of 11.8 months. The number is rising because builders must cover their costs, and do not have the option of selling homes at “fire sale” prices… One unknown is how much of the increase in sales is coming from new homeowners taking advantage of up-to-$8,000 tax credit that expires November 30. The National Association of Homebuilders in a January study estimated that the credit would boost new construction by about 40,000 units. If this is so, we are likely to see the new home sales and housing starts numbers level off for a while near the end of the year. –Patrick Newport, IHS Global Insight
We believe, new home sales is probably a better reflection of the underlying demand than the existing home sales which have been highly boosted by the increasing foreclosure numbers recently. The real improvement was in the months’ supply of inventories which dropped significantly to 8.8 months from 10.2 in May and its peak of 12.4 in January. Recent improvement in sales has been led by the NAHB builders’ sentiment index. It has been gradually rising this year as builders become more optimistic about the future of the housing industry in spite of high unemployment rates which still weigh heavily of housing demand. Nevertheless, the recent improvement in new home sales provides further evidence that housing cycle is on its way to recovery and that the economy is headed for a rebound. –Yelena Shulyatyeva, BNP Paribas
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Response by anonymous
about 17 years ago
"The median sales price of $206,200 was down 12 percent from $234,300 a year earlier and off nearly 6 percent from $219,000 in May."
Wow...M-to-M May to June was down 6%....
Its going to get ugly in the slow season of the summer....
And what happens at the end of Nov when the tax credit runs out.....and now with "Pay Go" and anymore spending "off the table" you can forget anymore $$$ being allocated to that program...
And once again, people get screwed into buying an over inflated asset since its true price was impaired....sure you can rush to buy with low interest rates and a Gov't subsidy but what happens when both those are taken away and wage deflation continues....
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Response by waverly
about 17 years ago
Posts: 1638
Member since: Jul 2008
What does it mean when they say, "not seasonally adjusted data". How mcuh are they adjusting it and what factors are they considering?
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Response by waverly
about 17 years ago
Posts: 1638
Member since: Jul 2008
mcuh = much...sorry.
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Response by Lecker
about 17 years ago
Posts: 219
Member since: Feb 2009
speaking of bias in the data, consider this story (repost from Patrick.net)
Monday, July 20, 2009
Housing sales data contaminated in Florida's most populous county ... by gimleteye
This remarkable piece appears in The Miami Herald: a surprising story about data publicly available on the website of the Miami Dade Property Appraiser. Apparently properties being bought out of foreclosure are not listed at the current sales price. "Instead, the site shows the date and price of the previous sale. With foreclosures accounting for a large percentage of sales today, that means that potentially thousands of properties have or will have misleading information on the site."
It means more than that. It means that aggregate statistics for the performance of the housing market are being flagrantly skewed. It means that what is printed and reported in the mainstream media is inaccurate, too and that actual price declines--factoring in foreclosures--are deeper than economists are reporting, too.
"Patrick Smikle, a spokesman for the Property Appraiser's Office, confirms that sales dates and prices of foreclosed properties are not being updated online. ''We do not list sales information for sales we consider as not qualified,'' he said." Not qualified, and, we are not in the steepest recession since the 1930's. It was called a Depression, then.
But we have other reasons to disguise the nature of our economic emergency. Perhaps they are along the lines of the PR missive that landed in my email recently: ""... since mid-March 2009, recession buzz has dropped 47 percent in the U.S., UK, Germany, Italy, Spain, Australia and New Zealand. James Russo, Vice President, Global Consumer Insights for The Nielsen Company says: “While discussions about the recovery are still quite low, we have seen that the public is talking less about the recession -- often dramatically less. ... There appears to be a strong correlation between what consumers are saying in discussion groups and their subsequent actual purchase behavior. From the end of 2008 to March 2009, when recession discussions were highest, we found that sales actually declined by 2.3 percent. From mid-March to early June, as recession chats dropped, we found that sales actually showed a modest increase."
It helps the cause of disinformation on the economy, if foreclosures are under-reported. Too, it would be interesting to know what kind of consultations occurred and who is responsible--if not the Property Appraiser in Florida's most populous county--for this egregious mistake if the facts are being suppressed.
Posted on Sun, Jul. 19, 2009
Foreclosure data comes up short on Dade website
By JACKIE BUENO SOUSA
jsousa@MiamiHerald.com
M iami-Dade County's online property information has a cult-like following in some circles. There are the professionals who rely on the information for business matters, and home buyers who use it to help measure property values. And then there are the just plain curious, who'll enter the site to snoop at how much their neighbor's house cost or to compare tax bills.
In fact, since January the website has had almost three-quarters of a million visitors, who visited a total of about two million times. Among them was Grisel Lopez. Today, however, she no longer gives the information the credibility she once did.
The reason? She recently learned that if a property was bought out of foreclosure the sales date and price won't be reflected. Instead, the site shows the date and price of the previous sale. With foreclosures accounting for a large percentage of sales today, that means that potentially thousands of properties have or will have misleading information on the site.
OUT OF DATE
Last September, Lopez purchased a home out of foreclosure for just over $292,000. The house had previously sold during the real estate frenzy for $495,000. Curious, she went online a few weeks ago to look up the county's information about her new house.
''It had my name,'' she says, ``but it had the old sales date and price.''
Assuming it was a simple data-entry mistake, she called the county Property Appraiser's Office. It wasn't an error, she was told. Because the sale was a foreclosure, and the Property Appraiser's Office isn't recognizing foreclosure sales, the new sales price wasn't listed and the old, previous price and date remained -- with her name attached to it.
'I told them, `That's misleading information; you're falsifying records,' '' recalled Lopez, exasperated. Certainly, she thought, someone higher in the command chain would correct the problem. So she made more calls, to no avail.
Then her father visited the site, www.miamidade.gov, to look at information on other properties he knew had been purchased out of foreclosure. Sure enough, she says, the new owners were listed but the old sales prices remained.
That the Property Appraiser's Office is knowingly putting out misleading property information is disturbing on many levels, particularly when many of the site's users deem its content to be official and reliable. It is one more consequence of the office's decision to ignore foreclosure sales when assessing values, a move that is helping to prop up property taxes.
`NOT QUALIFIED'
Patrick Smikle, a spokesman for the Property Appraiser's Office, confirms that sales dates and prices of foreclosed properties are not being updated online. ''We do not list sales information for sales we consider as not qualified,'' he said.
Understood. But, I emphasized, the information being given to the public is not correct. Lopez, for example, did not buy her house on the date nor for the price the county shows online. Why not simply list the sales date and price as ''unqualified'' or, perhaps leave it blank?
Smikle wasn't sure of the answer. But he said the office is planning to revamp the site so that more information about a property's sales history can be included. Among the changes, he said, would be to include the prices of foreclosed homes and have a way to indicate that those are unqualified sales.
When will that happen? There's no telling, he says; no deadline or time frame has been established.
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Response by aboutready
about 17 years ago
Posts: 16354
Member since: Oct 2007
waverly, for the story in pictures, check out this from calculated risk, notice the margin of error for the numbers:
If you do the math, the seasonally adjusted number was 32,000 units. Note that inventory numbers do not generally include condos. ritholtz had something up comparing the number of new housing units sold to foreclosures in California. Foreclosures in CA won.
uh oh..its a bull market
From WSJ
Economists React: Housing ‘News Sounds Better Than It Looks’
The news sounds better than it looks … despite the jump in sales in June, new home sales remain at very low levels, and the not seasonally adjusted data show a total of 36,000 homes sold nationwide in June, the lowest sales total for June since 1982. –Richard F. Moody, Forward Capital
A couple of cautionary notes. First, the report showed a sharp 6% sequential decline in June suggesting that much of the sales activity was concentrated at the lower end of the market. Second, sales contracts that were signed in June may have been tied to the lows in mortgage rates that were recorded in April and May… If the June sales pace can be sustained then the months’ supply should approach the normal range of 5.5 to 6 months by early 2010. However, if the sales pace turns lower in coming months and housing starts continue to rebound, then the inventory imbalance will persist. –David Greenlaw, Morgan Stanley
Unlike the prices of existing homes, the median sales price of new homes sold fell in June by 5.8% from the May median and 12% from a year ago. However, the average sales price was essentially unchanged in June and down about 7.5% from a year ago). Underlying details show suggest that sales of lower priced homes improved more than of higher priced homes. –Nomura Global Economics
This was a surprisingly strong report, and it adds to the growing body of evidence pointing to a modest rebound in the U.S. housing market. In fact, it is hard not to get a tad bit excited about the outlook for the U.S. housing market, as it appears that U.S. homebuyers may be beginning to take advantage of the favorable buying environment, particularly given the low mortgage rate, affordable prices and the many inducements coming from the federal government. Even so, the dismal state of the U.S. labor market will continue to cast a long shadow over the prospects for a meaningful recovery in the sector in the near term. –Millan L. B. Mulraine, TD Securities
Although most evidence indicates that new housing activity (starts and sales) has bottomed, we do not anticipate anything resembling a “v-shaped” recovery. The same appears to be true of existing homes, where first-timers are being tempted by deeply discounted properties coming out of foreclosure, but activity up the price scale remains spotty at best. Moreover, supply will remain enormous, particularly with increased competition coming from distressed sales of existing homes. –Joshua Shapiro, MFR Inc.
The evidence continues to grow that single-family housing activity has bottomed out. Single-family new home sales have risen for three straight months (with the caveat that this series does not track cancellations, but our guess is that cancellations are declining as the financing environment improves for conforming mortgages), single-family housing starts have risen for four straight months, and the NAHB’s housing market index bottomed in January. –RDQ Economics
The new home sales estimates are extremely “noisy.” For this reason, we recommend focusing on recent trends instead of the latest monthly estimates. A three-month moving average shows that new home sales appeared to have hit a bottom in January, and are starting to grow ever so slightly. By region, sales have started to pick up in the West and Midwest, and are leveling off in the South and Northeast… Although the market for new homes is improving, selling a new home has never been harder. The median time that a new home sits on the market before selling rose to an all-time high of 11.8 months. The number is rising because builders must cover their costs, and do not have the option of selling homes at “fire sale” prices… One unknown is how much of the increase in sales is coming from new homeowners taking advantage of up-to-$8,000 tax credit that expires November 30. The National Association of Homebuilders in a January study estimated that the credit would boost new construction by about 40,000 units. If this is so, we are likely to see the new home sales and housing starts numbers level off for a while near the end of the year. –Patrick Newport, IHS Global Insight
We believe, new home sales is probably a better reflection of the underlying demand than the existing home sales which have been highly boosted by the increasing foreclosure numbers recently. The real improvement was in the months’ supply of inventories which dropped significantly to 8.8 months from 10.2 in May and its peak of 12.4 in January. Recent improvement in sales has been led by the NAHB builders’ sentiment index. It has been gradually rising this year as builders become more optimistic about the future of the housing industry in spite of high unemployment rates which still weigh heavily of housing demand. Nevertheless, the recent improvement in new home sales provides further evidence that housing cycle is on its way to recovery and that the economy is headed for a rebound. –Yelena Shulyatyeva, BNP Paribas
"The median sales price of $206,200 was down 12 percent from $234,300 a year earlier and off nearly 6 percent from $219,000 in May."
Wow...M-to-M May to June was down 6%....
Its going to get ugly in the slow season of the summer....
And what happens at the end of Nov when the tax credit runs out.....and now with "Pay Go" and anymore spending "off the table" you can forget anymore $$$ being allocated to that program...
And once again, people get screwed into buying an over inflated asset since its true price was impaired....sure you can rush to buy with low interest rates and a Gov't subsidy but what happens when both those are taken away and wage deflation continues....
What does it mean when they say, "not seasonally adjusted data". How mcuh are they adjusting it and what factors are they considering?
mcuh = much...sorry.
speaking of bias in the data, consider this story (repost from Patrick.net)
http://eyeonmiami.blogspot.com/2009/07/housing-sales-data-contaminated-in.html?ref=patrick.net
Monday, July 20, 2009
Housing sales data contaminated in Florida's most populous county ... by gimleteye
This remarkable piece appears in The Miami Herald: a surprising story about data publicly available on the website of the Miami Dade Property Appraiser. Apparently properties being bought out of foreclosure are not listed at the current sales price. "Instead, the site shows the date and price of the previous sale. With foreclosures accounting for a large percentage of sales today, that means that potentially thousands of properties have or will have misleading information on the site."
It means more than that. It means that aggregate statistics for the performance of the housing market are being flagrantly skewed. It means that what is printed and reported in the mainstream media is inaccurate, too and that actual price declines--factoring in foreclosures--are deeper than economists are reporting, too.
"Patrick Smikle, a spokesman for the Property Appraiser's Office, confirms that sales dates and prices of foreclosed properties are not being updated online. ''We do not list sales information for sales we consider as not qualified,'' he said." Not qualified, and, we are not in the steepest recession since the 1930's. It was called a Depression, then.
But we have other reasons to disguise the nature of our economic emergency. Perhaps they are along the lines of the PR missive that landed in my email recently: ""... since mid-March 2009, recession buzz has dropped 47 percent in the U.S., UK, Germany, Italy, Spain, Australia and New Zealand. James Russo, Vice President, Global Consumer Insights for The Nielsen Company says: “While discussions about the recovery are still quite low, we have seen that the public is talking less about the recession -- often dramatically less. ... There appears to be a strong correlation between what consumers are saying in discussion groups and their subsequent actual purchase behavior. From the end of 2008 to March 2009, when recession discussions were highest, we found that sales actually declined by 2.3 percent. From mid-March to early June, as recession chats dropped, we found that sales actually showed a modest increase."
It helps the cause of disinformation on the economy, if foreclosures are under-reported. Too, it would be interesting to know what kind of consultations occurred and who is responsible--if not the Property Appraiser in Florida's most populous county--for this egregious mistake if the facts are being suppressed.
Posted on Sun, Jul. 19, 2009
Foreclosure data comes up short on Dade website
By JACKIE BUENO SOUSA
jsousa@MiamiHerald.com
M iami-Dade County's online property information has a cult-like following in some circles. There are the professionals who rely on the information for business matters, and home buyers who use it to help measure property values. And then there are the just plain curious, who'll enter the site to snoop at how much their neighbor's house cost or to compare tax bills.
In fact, since January the website has had almost three-quarters of a million visitors, who visited a total of about two million times. Among them was Grisel Lopez. Today, however, she no longer gives the information the credibility she once did.
The reason? She recently learned that if a property was bought out of foreclosure the sales date and price won't be reflected. Instead, the site shows the date and price of the previous sale. With foreclosures accounting for a large percentage of sales today, that means that potentially thousands of properties have or will have misleading information on the site.
OUT OF DATE
Last September, Lopez purchased a home out of foreclosure for just over $292,000. The house had previously sold during the real estate frenzy for $495,000. Curious, she went online a few weeks ago to look up the county's information about her new house.
''It had my name,'' she says, ``but it had the old sales date and price.''
Assuming it was a simple data-entry mistake, she called the county Property Appraiser's Office. It wasn't an error, she was told. Because the sale was a foreclosure, and the Property Appraiser's Office isn't recognizing foreclosure sales, the new sales price wasn't listed and the old, previous price and date remained -- with her name attached to it.
'I told them, `That's misleading information; you're falsifying records,' '' recalled Lopez, exasperated. Certainly, she thought, someone higher in the command chain would correct the problem. So she made more calls, to no avail.
Then her father visited the site, www.miamidade.gov, to look at information on other properties he knew had been purchased out of foreclosure. Sure enough, she says, the new owners were listed but the old sales prices remained.
That the Property Appraiser's Office is knowingly putting out misleading property information is disturbing on many levels, particularly when many of the site's users deem its content to be official and reliable. It is one more consequence of the office's decision to ignore foreclosure sales when assessing values, a move that is helping to prop up property taxes.
`NOT QUALIFIED'
Patrick Smikle, a spokesman for the Property Appraiser's Office, confirms that sales dates and prices of foreclosed properties are not being updated online. ''We do not list sales information for sales we consider as not qualified,'' he said.
Understood. But, I emphasized, the information being given to the public is not correct. Lopez, for example, did not buy her house on the date nor for the price the county shows online. Why not simply list the sales date and price as ''unqualified'' or, perhaps leave it blank?
Smikle wasn't sure of the answer. But he said the office is planning to revamp the site so that more information about a property's sales history can be included. Among the changes, he said, would be to include the prices of foreclosed homes and have a way to indicate that those are unqualified sales.
When will that happen? There's no telling, he says; no deadline or time frame has been established.
waverly, for the story in pictures, check out this from calculated risk, notice the margin of error for the numbers:
http://www.calculatedriskblog.com/2009/07/new-home-sales-increase-in-june-highest.html
If you do the math, the seasonally adjusted number was 32,000 units. Note that inventory numbers do not generally include condos. ritholtz had something up comparing the number of new housing units sold to foreclosures in California. Foreclosures in CA won.