click for giant graphic

Source: Calculated Risk

 

The NAR reported that Existing Home Sales rose 2.1% in October, better than 2011 and 2010, but still below the tax credit driven activity in 2009.

The key difference between 2012 and the prior two years has been how far the Fed has driven rates — about 3.375% for a 30 year fixed mortgage.

We continue to see Distressed homes (foreclosures and short sales) below where they were prior to the voluntary foreclosure abatements — they are about 24% of October sales versus high 30% in years gone by. The NAR estimates these foreclosures sold for an average of 20% less than “market value,” but I have no idea what their basis of claiming that is. How does the NAR “know” a distressed house goes for 20% off market value — what actually is market value, and how do they assess that measure? I will see if I can dig up their methodology.

The other details of the housing data were fairly decent:  They were 10.9% above October 2011. The national median existing-home price was $178,600 in October, up 11.1% year-over-year, the eighth consecutive monthly year-over-year increases. Inventory also fell to 2.14 million existing homes available for sale, a 5.4-month supply.

The initial monthly data continues to be a bit optimistic — September EHS were revised downwards.

All-cash sales were 29% of all transactions — the combination of private equity investors, overseas buyers and high end homes being the drivers of this stat.

 
Update 12:59 pm 11/19/12: I see that Bill at Calculated Risk notes that NAR Distressed Sale data are “questionable,” and are the results unscientific survey of Realtors. This is a better methodology)

 

Sources:
Existing-Home Sales Rise in October with Ongoing Price and Equity Gains
NAR November 19, 2012
http://bit.ly/UP4G64

Category: Markets

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.

17 Responses to “Home Sales Remain Bright Spot in Economy”

  1. DeDude says:

    Inventory down, prices and sales up, that would be very bullish. Increased prices will also help reducing the underwater mortgage problem and create a positive feed-back. The shadow inventory will remain a drag on recovery but it will only slow it down, not kill it. Banks are beginning to use short sales more than foreclosure, saving everybody a lot of money and stabilizing prices. I think the lows are behind us, but it will be a long long time before we see any new highs.

  2. rd says:

    It is not possible to use the terms NAR and methodology together in a sentence that is not nonsensical.

  3. rtfull says:

    I see. So if you bought prior to 2003, you just bought two more houses for the grandkids. if you bought 2008-2012, you buy the extra GI Joe with the kung fu grip, a pool, and a Mercedes . If you bought in between, kids may not go to college and you dont recoup the family’s investment in your lifetime. All because of markets? really? Senator, I served with markets, I knew markets, markets were a friend of mine, Senator, this was not markets.

  4. Hammer of Thor says:

    What will happen if interest rates begin to rise? Will people rush to buy a house to catch the low rates, or will demand collapse?

  5. BuildingCom says:

    “The NAR reported”

    This is where you stop reading folks.

    There is 20-30 milllion excess empty houses in inventory, housing demand is still at an anemic 16 year lows, prices resumed their declines last month (as they should), and bottom is still a long way down.

    ____

    BR: You know I am no Housing Bull, but 20-30 million empty houses? C’mon, Thats a ridiculous number. PLease give us a source.

  6. Conan says:

    Read this about inventories:

    http://ochousingnews.com/news/september-delinquencies-skyrocket-7-72-foreclosure-filings-decline-20-4-shadow-inventory-grows

    Now Zillow will track Shadow Inventor, is this a sign?

    http://www.housingwire.com/content/zillow-expands-home-search-includes-pre-market-inventory

    All Real Estate is local – 5 states account for 50% of the foreclosure market. Arizona, California, Michigan, Florida, and Illinois. So a lot of the generalizations would vary greatly depending on where you live. Nationwide is much different than maybe someone’s local situation.

  7. BuildingCom says:

    Hello Mr. R,

    Start here.

    http://www.census.gov/compendia/statab/2012/tables/12s0984.pdf

    As I recall, we discussed 20 million of them here on the blog.

    And don’t forget the 35 million housing units that are beginning to empty as the boomer demographic passes.

  8. philipat says:

    Typo correction. Paragraph 3, Line 4 should read “20% OFF market value”, not “20% OF market value as posted.

    ~~~

    BR: Oops! heh heh Freud would be proud

  9. kek says:

    I would never question $50 per foot in Westchester County.

  10. BuildingCom says:

    That sounds about right… never question, therefore remain a sucker.

  11. wally says:

    Bloomberg story:
    “Sales of previously owned U.S. homes unexpectedly climbed in October”

    So now we’re going to play the ‘unexpectedly’ game all the way back up after having already played it all the way down?
    Spare us.

  12. philipat says:

    Barry, incidentally, you seem to be silent on your latest position regarding the trend. I still very much agree with your previously stated postion and will stick my neck out. This is a “Dead Cat bounce” and/or a :Suckers Rally” to draw in some innocents to slaughter. We’ll see, but IMHO, we will go back down again and then bounce along the bottom for a very long time. I’ll be the first to confess if I’m wrong but the underlying fundamentals just don’t support a rally in housing.

    ~~~

    BR: As I’ve written, the bounce is artificially driven, by ultra low Fed rates, the (now expired) voluntary foreclosure abatements, and some hot private equity money chasing “cheap” housing. Whatever stabilization and/or strength there is is mostly a sugar high.

  13. Zillow expands home search to include shadow inventory
    10/25/12 at 2:30pm
    http://www.housingwire.com/content/zillow-expands-home-search-includes-pre-market-inventory

    Zillow ($25.11 0%), an online real estate marketplace, expanded its home-search experience by adding pre-market inventory for home shoppers. 

    It said 1.2 million pre-foreclosure and foreclosed properties — part of the nation’s shadow inventory — will now be viewable for no cost. Overall, the nation had 2.3 million homes sitting on the sidelines that were either seriously delinquent, in foreclosure and real-estate owned in July, CoreLogic said.

  14. DeDude says:

    @BuldingCon;

    Not only are you using a RepubliCon type of math where 18.7 million vacant housing units become “20-30 million excess empty houses, you are also pointing to 2010 data in a debate about the current situation. Did you even look at that table and realized how many of the total are “seasonally vacant” or held off the market due to “occasional use” or “usual residence elsewhere”. The fact that the number (18.7 mill = 20-30 mill?) you are referring to was 15.7 million in the red hot housing market of 2005 should have tipped you off to the fact that it has little to do with “excess empty houses”. But you were just out there desperately trying to find a really large number that could support your “gut feeling” that Armageddon is near. And I guess in that condition a single seasonally expected bend in a number for October (provided its going your way) is sufficient proof that you were right all along. Well at least your can be used as a classic example of confirmation bias – too bad because I would actually like to see a strong fact-based case for a dip rather than a long drawn-out recovery in housing.

  15. BuildingCom says:

    DeDudd,

    What are you yammering about now? Invoking silly election/political tripe?

    We know all about you housing crime syndicate operators. I have a bulletin for you. You post misrepresentations about housing and we will be here calling you out on it. every. single. time.

    For my friends, the reading public, just know that;

    -Housing Demand is at 16 year lows and falling

    -Housing prices resumed their decline

    -There are over 20 MILLION excess empty housing units in the US today

    Some folks like Jones, Mish and to a lesser extent BR have done a great job at exposing the housing crime syndicate propaganda and just what kind of mistake it is to buy housing at the current inflated asking prices of resale housing.

  16. DeDude says:

    Just yammering about data, facts, reality and other boring irrelevant things.

  17. BuildingCom says:

    Uh huh. We know about all your “facts”, “data” and “reality”.