New Home Sales, Permits & Starts
By Barry Ritholtz - May 28th, 2009, 9:45AM
This morning, I am in Indianapolis, delivering the keynote speech to the ACES Power conference, an annual gathering of regional power providers. I won’t get to look at the New Home Sales for a while.
Y’all can fill in the details when the 10:00am news gets released. Meanwhile, let’s contextualize the data, by looking at a longer chart of Permits and Starts, (via Ron Griess of The Chart Store):
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May 28th, 2009 at 10:14 am
Found this an interesting read – why long-term rates are going up
http://www.businessinsider.com/henry-blodget-why-are-long-term-interest-rates-going-up-because-investors-think-were-screwed-2009-5
Question: What implications do these higher yields have for housing, economy and share market?
Clearly the Fed/Treasury is concerned – what’s there next move here?
May 28th, 2009 at 10:22 am
Cramer is a genius. His June housing bottom call will only be off by 2 years. He’s improving.
http://theburningplatform.com/economy/aint-no-rest-for-the-wicked-1
May 28th, 2009 at 10:32 am
Green……shoots!, damn!, rats!, darn!
Obama said yesterday that his 1st 4 months was the greatest 4 months for a president since FDR. That guy’s got ego. How do big egos work out for powerful leaders?
May 28th, 2009 at 10:40 am
Obama IS Franklin…..
May 28th, 2009 at 10:40 am
April sales -34% YoY, median price down 14.9% YoY.
March sales were -31% YoY.
Feb sales were -37% YoY.
Here’s a number nobody’s talking about: Median #months on the market. It continued to climb — steeply — up to about 11 months. Almost double what it was in April 2007.
http://www.census.gov/const/newressales.pdf
May 28th, 2009 at 10:44 am
Hey Barry! I just noticed it. You cracked the 40K mark for RSS feed readers. Congrats dude!
Very 8)
May 28th, 2009 at 10:46 am
callable cd’s now .5% higher (36 months) than they were 10 days ago at Schwab….very interesting…
May 28th, 2009 at 10:47 am
@Bruce
You honor me! :)
May 28th, 2009 at 10:49 am
European shares are diving going into the close…what’s up?
May 28th, 2009 at 10:49 am
@jqui
Re: Cramer “June bottom” call…
I lived in Italy for 12 years…
There was this highway through the mountains being repaired (the E45 stretch between Cesena and San Sepolcro)…So they had to close down the main highway and re-route traffic through these small winding roads (which made about a 12 mile stretch take about an hour to navigate because of all the trucks passing)…
Anyway, they hung a sign out at the DETOUR saying “Grand Re-Opening June!”…
That was in 1998…I moved back here to the US in 2006 and the sign was still there…
So JUNE, YES, Cramer might be right…WHICH June is a tricker question
May 28th, 2009 at 10:53 am
as a mortgage banker in Indpls i can tell you that new construction is “nearly” non-existent. we’ve done a few spec loans over the last year, but only for the strongest builders (yes, there are a couple left) and construction-perms in the above $500k range are slim-to-none; over $1m even worse. the fear is will the house being started today for say $650k be worth $650k 7-8 months later at modification even at this point in the cycle?
relative to rates rising (conforming from 4.750% on tuesday closing at 5.375% yesterday) will kill the refi market for awhile. rates hung in the mid-to-high 4′s range for so long, it will take a while for the public mindset change to kick-in again.
i live in a nice, quiet neighborhood in carmel (burb just north of Indy). my neighbor had his house listed for about 10 months, 3 price reductions, no offers.. . none. at least he didn’t dump it and kill the rest of us.
May 28th, 2009 at 10:57 am
@Transor
Good point re: Median #months on the market
This is what David Rosenberg was saying about that today
“Keep an eye on the unsold inventory (was 10.7 months’ supply in March — needs to dip below 8.0
months’ supply before home prices bottom out).
May 28th, 2009 at 11:04 am
http://www.cnbc.com/id/30980236
GM to Announce 14 Plant Closures Monday
So much for the unemployment rate…and where are those census workers??
May 28th, 2009 at 11:20 am
@Bill:
Thanks. Did you also catch Rosenberg’s statement about inflation being -.7%, to approach -2.0% annualized?
People need to keep their eyes on pricing. Sales of existing homes where 45% of sales are distressed, new houses languishing for a year. A 15% price drop is a direct hit to builder’s bottom line — plus inventory maintenance costs over a year. 12% of mortgages are in arrears/foreclosure. . . unemployment continuing to chug along at 626k 4-week MA.
Highly recommend the terrific 2007 Elizabeth Warren lecture video Bruce posted yesterday when they’ve got a spare hour.
http://www.youtube.com/watch?v=akVL7QY0S8A also at http://www.disclose.tv/action/viewvideo/13534/The_Coming_Collapse_of_the_Middle_Class/
May 28th, 2009 at 11:44 am
@Transor
Agree with everything – housing, durable goods, unemployment all terrible, but the market is still UP?? I call it the “propaganda bubble”
Great – I am going to watch that video before I go to sleep tonight.
I normally watch Bloomberg before bed, and as soon as I hear the drone about 3rd quarter recovery, Armageddon been avoided, green shoots, housing bottom, China single handedly moving the World out of recession, I am normally in la la land well before my 30 minute auto shut down kicks in.
May 28th, 2009 at 1:06 pm
In 1970 the population was 200M, now it’s over 300M. Is this series really comparable without adjusting for population, or are the numbers even worse than the chart implies?
May 28th, 2009 at 3:35 pm
I did some research on the performance of the housing permits numbers as a leading indicator to the market and found some interesting characteristics from a past bear market.
From my analysis it seems that these numbers are a good leading indicator for market tops, but no so good for market bottoms.
Take a look and let me know what you think.. thanks :
Building Permits Analysis