Reuters: Existing Home Sales Rise at Fastest Pace in Two Years

there ya are! was wondering what took so long.

A healthy correction of 10% would be welcome. But remember when the market hit it's lows in March 03 during the last recession it went up for a whole year without correcting 10% even once.

I was waiting for the other bulls to post it. But I couldn't take it anymore! :)

Did you see Riversiders post on another thread this morning?:

http://online.wsj.com/article/SB125081143925447971.html

A survey conducted in June of 1,500 real-estate agents sponsored by the trade publication Inside Mortgage Finance found that 36% of all sales involve "nondistressed" properties.

Of the nondistressed sales, only 31% were what the survey described as "unforced or optional." The rest were sales by homeowners in some kind of financial or personal crisis.

"Think about that for a minute," John Mauldin of Millennium Wave Advisors wrote this week. "Two-thirds of home sales are either foreclosures or banks taking a loss on the mortgage." And only a third of the remaining one-third -- roughly 10% of overall sales -- comes from "something we could call a normal selling process."

its nice to see these numbers, and comforting to see the trend too. After the destruction, its clear the worst is over for many markets outside NYC. But we still have structural problems here and this rebound, while nice and natural after such fierce destruction, is likely not sustainable. Its mostly lower end and foreclosue and bank REO sales and first time buyers that used the govt tax credit. At some point, the distress sales and credits and stimulus induced confidence will wane. Thats all. Its not a strong foundation for sustainable growth. Its the reaction after you see fierce destruction, tons of foreclosures at big discounts, and govt subsidies and stimulus keepin rates low

Urbandigs,
I agree but this may be the start of a psychological shift which may pull in buyers on the sidelines. Once people on the sidelines come in, then it will be sustainable.

Volume is up but prices are down 15%. I'm not sure that is a bullish technical indicator.

"I agree but this may be the start of a psychological shift which may pull in buyers on the sidelines. Once people on the sidelines come in, then it will be sustainable."

Of course, continued reports of price decreases will push MORE people to the sidelines.

Guys like SteveF said as soon as folks saw prices down 5-10%, they'd come rushing in. Except that never happened.

Price declines in RE don't generally bring confidence, they actually destroy it...

see, this is what happens when Steve an't finish an article..

"The national median home price was $178,400 in July, down 15.1 percent from the same period last year, weighed down by distressed sales as they typically sell for 15 to 20 percent less than traditional homes. "

and, ruh row...

"A report from the Mortgage Bankers Association on Thursday showed late home loan payments jumped to a record high in the second quarter, with almost one in eight homeowners delinquent or in the process of foreclosure."

LookPied - i agree. About 2 months ago or so I came to a realization that the 2nd wave will have to be pushed out. I still think it will come and be less fierce and more drawn out and encompass endgame with its unintended consequences, but it has to be pushed back. Maybe 2011, maybe 2012. who knows. This sentiment and inventory restocking and stimulus induced effects on data is likely to be around for a few more quarters at least. Stocks will follow as long as path of least resistance is UP, and it big time is now. Sentiment feeds off stocks. But structurally, fundamentally, issues seem in hiding to me. We must get through those, then I feel way better. So for now, this could easily last and feed on itself for a while

Now, the prevailing wisdom is that the economy has bottomed, but, as Mr. Bernanke said today, “The economic recovery is likely to be relatively slow at first.”

I tend to think he is right. But I wonder whether one part or the other of that forecast — whether the economy has bottomed, or the recovery will be slow — will seem similarly foolish a few years from now.

Gotta love the Bloomberg radio commercials for Trump something or other in Stamford. "Why rent when you can afford to buy for only 10% down. But hurry, this offer is only available to the first 50 buyers!"

LOL!!! Only 50 units available for sale...better hurry before they're all gone! What a joke.

well it could be sustainable until sellers start raising their prices are start expecting levels closer to peak - then its a question if buyers play along. It takes two to Tango!

http://www.urbandigs.com/2009/08/equity_rally_may_cause_disconn.html

thoughts?

"well it could be sustainable until sellers start raising their prices are start expecting levels closer to peak - then its a question if buyers play along. It takes two to Tango!"

Yes, but remember.... you'll be adding MORE sellers if that happens.

The zillow survey says 2/3 of owners would sell their houses if prices rose overall.

LookPied, what you seem to be missing is that RE doesn't follow stocks like that.

87 stock market bottom and rally still took FOUR YEARS for RE to stop falling. And 4 years is also the historical norm a national analysis did (posted earlier this week).

Your expectation of RE being correlated to stocks is not only off, it was one of the biggest points bulls tried to make when stocks went down.

true that and 87 was a blip compared the the shitstorm still in progress

stox schmox

also recall that post 87 crash nyre continued to trade higher for a year then crapped out 40+% and remained flat til the early 90's

never a V botom in re

big wide U bottom trough

less a U, more an L, some underlines, and then a wait until another letter shows up eventually

"The zillow survey says 2/3 of owners would sell their houses if prices rose overall."

I still don't know why you find this stat so interesting. I'm surprised it isn't higher.

As a person on the sideline waiting to come in, this news and how the stock market is doing contribute to my sense when to come in. I define people on the sidelines as financially set who can afford at current prices and are definitely going to buy. It doesn't affect me how the stock market does in terms of my ability to buy. But when I see listings going under contract (slowly) and open houses having good traffic and small bits of news pointing to a bottom and a rising stock market, psychologically that affects me (not necessarily logically!). My definition of a sideliner may be too narrow, but for NYC I think there are enough of these types to start a sustained rally.

Hello!!!!
We are talking about the BOTTOM of the market. The only thing relative to Manhattan is that high end RE is selling slower!!! Read the report, the segment that's improving is no even on this island!

this doesn't impress me that much. yes, due to factors like distress sales, foreclosures, falling prices, extremely low mortgage rates and tax credits sales increased somewhat, but it still looks pretty fugly to me, especially given all the assistance being poured on. months of inventory remained the same.

The second chart:

http://www.calculatedriskblog.com/2009/08/existing-home-sales-increase-in-july.html

First comes volume then comes price increases. There's demand for properties out there. Prices down 15% from last year is pretty light considering the difficulties in the economy, and what you really need to look at is recent trend, which is strong.