Source: Calculated Risk

 

Existing Home Sales were released today. To back out the strong effect seasonality has on this data, we prefer using the NSA chart (above).

Existing-home sales rose in April and remain above a year ago at a slightly better sales pace than April 2011, but they remains significantly lower than April 2010. (If you use seasonally adjusted data. The National Association of Realtors (a/k/a the hype-meisters of housing) touted a 10.1% increase in median price to $177,400.

Don’t be misled by this data point. The key driver of it price difference is the result of the voluntary foreclosure abatement while the robo-signing settlement was progressing. When we compare year-over-year distressed sales (foreclosures and short sales) we see they were down to 28% for April 2012 (17% foreclosures, 11% short sales), a whopping 9% lower than the 37% in April 2011.

Thus, the increase in price can be accounted for by lack of distressed sales in the mix — the price dispersion — and not by any actual increase in home prices.

Now that those legal issues are behind the banks, we should expect mortgage loan servicers to begin once again the foreclosure process — and that means more distressed sales to come . . .

 

 

Source:
April Existing-Home Sales Up, Prices Rise Again
Realtor.org May 22, 2012   
http://www.realtor.org/news-releases/2012/05/april-existing-home-sales-up-prices-rise-again

Existing Home Sales in April: 4.62 million SAAR, 6.6 months of supply
CalculatedRisk 5/22/2012
http://www.calculatedriskblog.com/2012/05/existing-home-sales-in-april-462.html

Category: Data Analysis, Real Estate

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

28 Responses to “Existing Home Sales: Without Foreclosures, Prices Pop 10.1%”

  1. BennyProfane says:

    It’s an election year. spin, spin, spin.

  2. BennyProfane says:

    Oh boy, this might get you going. Your tax dollars hard at work.

    http://lansner.ocregister.com/2012/05/22/half-of-local-fha-borrowers-made-100000-plus/162943/

    “Nearly one out of every two Orange County loans made by a government program started for low-income house shoppers went in 2010 to local homebuyers earning $100,000 or more, a George Washington University study reported.
    And 28% of those loans went to homebuyers with incomes above $130,000.
    Orange County ranked in the top 30 among U.S. counties where higher proportions of FHA loans – traditionally reserved for low-income, minority and first-time homebuyers – went to households that were better off than middle-income earners.
    “The Federal Housing Administration (FHA) is increasingly serving homebuyers whose income exceeds that of average Americans,” the study concluded. “In many cases, FHA loans are financing homes priced well above the neighborhood average. Specifically, in fiscal year 2011, more than half (54%) of FHA’s activity insured homes that were greater than 125% of an area’s median value. This is up from just 15% in 2007.”
    The study looked at FHA-backed mortgages issued in 2010 throughout the nation, with breakdowns for 138 counties where higher proportions of well-off households got FHA home loans.
    It determined that higher loan limits made FHA-backed loans easier to get for wealthier borrowers.”

  3. Joe Friday says:

    The National Association of Realtors (a/k/a the hype-meisters of housing) touted a 10.1% increase in median price to $177,400.

    Yes, and how did you like the play Mrs. Lincoln ?

    The National Association of Realtors should be taken out behind the barn and beaten.

  4. sailorman says:

    In 2007 I posted repeatedly that the housing crisis is much worse than people realize. I was looking for a house in south Florida then and could see the disaster unfolding.

    Now I post repeatedly that Sarasota has bottomed and is on the way back up. The inventory is the lowest in years and prices are climbing monthly. Every broker is busy with buyers looking at houses. Florida led the market down; is it leading it back up?

  5. S Brennan says:

    This post make the important point that the Foreclosure Fraud Diversion Settlement [from Prison Felony to minimal fine] which was shoved down the throats of American Citizens by the Obama Administration not only aided and abetted criminals, it sowed the seeds of a delayed housing recovery. President Obama and his minions have created yet another disaster by aligning themselves [once again] with the crimminal class that is often mistaken for America’s upper class.

  6. rktbrkr says:

    apres moi, le deluge

    once the banks resume selling foreclosures in the pipeline in FL it will be a deluge, bank owned properties suddenly increase hundred of % in various FL counties once the spigots are opened

  7. ConscienceofaConservative says:

    That’s a great point about short sales and reo sales which are done 15-20% below market.

  8. VennData says:

    …note the political cant in the anger above. White… Male… Anger…

    These are the same people who have convinced themselves Obama bailed out the banks, that Fannie Mae was the real problem, and thought Bill Clinton would send UN black helicopters after them. …oh and shouted Sell! in the Spring of 2009 and every chance they’ve had since.

    … you are of course, free to listen to them this time.

  9. mrg says:

    Does anyone think that absentee landlords are a good thing? I think that a significant portion of these sales are to henge funds and other investors. I can see this turning into a very bad situation:

    http://www.reuters.com/article/2012/05/22/us-investing-housing-morganstanley-idUSBRE84L0ZX20120522

  10. Joe Friday says:

    sailorman,

    Now I post repeatedly that Sarasota has bottomed and is on the way back up. The inventory is the lowest in years and prices are climbing monthly. Every broker is busy with buyers looking at houses. Florida led the market down; is it leading it back up?

    Florida is leading the way alright, but it’s back down. As I posted about two months ago:

    ~~~
    Surfs Up !

    NEW TSUNAMI WAVE OF FORECLOSURES SWELLING

    With the mortgage settlement among the nation’s five largest banks and state attorneys general behind them, lenders in twenty-one states are now seizing homes at rates not seen since November 2010, most dramatically in Florida. In Tampa, foreclosure filings in February were up 64 percent and in Miami they spiked by 53 percent.
    ~~~

    You may be seeing the effect of the South Americans investing in the high-end of the market, but that segment of the market is always on it’s own schedule and bears little resemblance to reality.

  11. whskyjack says:

    Here in Kansas City, I’m hearing anecdotal reports of houses moving quickly in the suburbs but from what I can see the urban housing is dead to slow. What is it they say,” location location location” If I could move my house 3 miles I could double the price.

    Jack

  12. Hammer of Thor says:

    Good analysis Barry. I’m not surprised that the NAR forgot to leave out that tidbit of information. I wonder how many people (if any) are sitting on the fence about buying a house and see that headline from the NAR and decide to purchase.

    It may also be worth noting when you show the NSA home sales chart the first time home buyer tax pulled demand forward in 2009 and 2010.

    As a side note, have you seen that commercial created by the NAR with grandfather and grandson? The kid says he wants to buy a house but the Grandfather looks sad and says I hope so, and people are being evicted from the house across the street? Can someone explain the point of this commerical?

  13. Bob A says:

    So what I would like to see is a chart showing numbers of homeowners underwater on their mortgages
    and how those numbers change if prices go higher/lower from here.

    At some point, if prices do ever start to increasie (as they are in some categories) those who are still underwater are going to become more and more reluctant to walk on their mortgage.

  14. S Brennan says:

    “White… Male… Anger…same people who have convinced themselves Obama bailed out the banks”

    Sure it is “VennData”.

    Or is it another a blatant use of racism by an Obama supporter…hmmm let’s look at the facts instead of conjuring racists images…shall we?

    Peabody,let’s use the WAYBAC machine to recall that BUSH/PAULSON’s TARP with calls going 99:01 was dead in the water…until then freshman Senator Obama after cinching the Democratic Nomination through delegate chicanery started whipping for…wait for it…BUSH/PAULSON’S TARP. This was about the same time freshman Senator Obama voted for FISA after he had campaigning in the primaries as being against…what difference a nomination makes eh?

    Obama’s policies have been line on line with Bush’s…and I spent 8 years railing against Bush’s policies, so I should damn well rant against Obama’s identical policies

    …whether it’s Obama’s National Defense Authorization Act which the “world renowned constitutional scholar” received a permanent injunction against enforcement by a judge appointed by Obama…

    …Obama’s escalation in Afghanistan from 18,000 to 138,000 troops in a idiotic war…

    Oh well, it’s an election year for Obama…and the use of race baiting by his supporters like VennData is in full swing as they try to keep the spotlight off Obama’s continuation of Bush’s policies.

    BTW VennData, Obama’s first contact with the African American community occurs at the tender age of 24 years old…until then he lived in whitest, wealthiest…most 1%ish part of Hawaii.

  15. Shiller’s data is based on only 10-20 cities and compares to “a year ago” … not last month, thus those subscribing to his methodology have missed the bottom.

    Using April 2012 data, the median national New Home Price bottomed in Oct/2010, has since risen $30,000 and is only 1% below the long-term Price/family-income trend line. The median nat’l Existing Home Price bottomed in Jan/2012, has since risen $24,000 and is 10% below trend. Sales volume for both is also far above the recent lows.

    http://trendlines.ca/free/economics/RealtyBubbleMonitor/RealtyBubbleMonitor.htm

  16. Joe Friday says:

    Freddy Hutter,

    Shiller’s data is based on only 10-20 cities and compares to ‘a year ago’ … not last month

    That’s the metric, a comparison to the same month the year prior (but even this is warped for now because of the foreclosure abatement as BR referenced). One cannot contrast a month to the previous month, as has been elucidated here numerous times, it is beyond meaningless.

  17. Keep on drinkin’ that koolaid, Joe.

  18. BennyProfane says:

    Again, Freddy, you really have to hire a professional web designer.

  19. Joe Friday says:

    Freddy,

    The standard metric utilized by economists is to only compare housing data to the same month of the previous year, not month to month. Even the whores at the National Association of Realtors have that standard on their own website (it doesn’t prevent them from blatantly ignoring it with their incessant propagandizing, but it’s there).

    There’s more to it, but basically, housing normally rises every month as the weather warms and falls every month as the weather cools, which is why comparing one month to the previous is meaningless.

    So, on one side we have the nation’s economic community and even the NAR, while on the other side we have you.

    Better check your mirror, as I’m not the one with the purple tongue.

  20. Joe, having kept realty & mortage stats since 1973, I concede the seasonal effect on prices & sales volume. My RBM generally uses annual and YTD data. I have no issue with your using y/y: April home prices are $16k higher than last year. April sales are running at a 4.6 million units/yr pace compared to 4.2 mu/yr twelve months ago.

    I am monitoring for higher lows and higher highs within the monthly data. Presently we have lower lows and higher highs, so I can understand why some are still hesitant to call the bottom. My confidence comes from New Homes ability to pull up the Existing market having firmly set its bottom in 2009; along with my TRI projections for falling unemployment and rising GDP over the next eight quarters.

    A major question is whether rising interest rates (Aug/2013) will dampen housing sector or serve to draw out pent-up demand.

  21. Joe Friday says:

    Freddy,

    I concede the seasonal effect on prices & sales volume

    If true, you would have never proffered contrasting one month to the previous.

    I have no issue with your using y/y

    Eh, you’re the one that complained about “Shiller’s data is based on only 10-20 cities and compares to ‘a year ago’ … not last month“.

    And once again, it’s not my use, but the entire economic community as well as the federal government. It is not a case of ‘you can do it your way and I’ll do it my way’. The one metric is valid, the other is meaningless.

  22. Joe, Case-Shiller has a narrowly defined universe which cannot discover the realty bottom for American new and existing homes ’til long after the event has occurred … for all the same reasons the S&P500 is a far better metric than the DJI.

  23. Joe Friday says:

    Which has WHAT to do with Shiller utilizing the correct metric and you utilizing a faulty meaningless metric ?

  24. The RBM uses annual median for both New Homes & Existing Homes…

  25. Joe Friday says:

    Bully for them.

    Again, what’s it got to do with YOU insisting on utilizing a faulty meaningless metric ?

  26. [...] of the National Association of Realtors monthly housing “data” in his blog, “The Big Picture.”  Without fail, the NAR comes out with a very rosy headline based upon a single data point [...]