Posts filed under “Fixed Income/Interest Rates”

Chart of the Week: 10 Year Yield, 30 year chart

John Roque notes most investors he’s spoken with “continue to have difficulty considering the major transition that’s occurred for the 10 year Treasury yield – it was going down and is now, incontrovertibly, going up.”

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10 Year Yield, 30 year chart 

10_year_yield

Source: Natexis Bleichroeder

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Even the more modest downtrend (the lighter less severe line) has been penetrated to the upside with the 10 Year hitting 5.143% on Monday.

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Quote of the Day

“Great spirits have always encountered violent opposition from mediocre minds.” 

Albert Einstein (1879-1955)

Category: Fixed Income/Interest Rates, Inflation, Investing, Markets

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Existing Home Sales Data (California Real Estate: On Sale!)

Sales of existing homes surprised to the upside yesterday. But one data point does not make a trend. This is the first rise (sequential monthly change) after 5 straight months of falling Home Sales. And that’s before we examine the data.

Before you declare the end of the housing slow down, consider:

- Existing Home sales actually slipped vs. last year by -0.7%; The reported gain was over last month’s data;

- the Inventory of unsold homes soared 7 percent in March, hittting an all-time record; There are now 3.19 million existing homes for sale, or  5.5 months’ supply; That’s the largest inventory since July 1998

- Existing homes edged up 0.3% last month to a seasonally adjusted annual rate of
6.92 million units; (we know that seasonally adjusted data is not always accurate)

- Year over year, the Northeast and Midwest gained, while the previously hot housing markets in the South and the West slipped;

- median home prices are still rising, albeit nmore slowly — up 7.4% year over year, to $218,000.

Here’s a data point that has me scratching my head:  Why are there different numbers for the year-over-year changes for seasonally and not seasonally adjusted?  Was this March somehow in a different season than last year’s March? I am perplexed.

Note that data for existing home sales comes from National Association of Realtors, a group that is certainly an interested party; Of course, as a homeowner, investor, and someone with a public bearish tilt for the second half, I’m hardly objective myself (hey, I try). But this oddity — down -0.5% for the not seasonally adjusted year over year versus down -0.7% for the seasonally adjusted year over year — is beyond my comprehension.

So much for the hard data on existing sales; Today, we get New Home Sales. Recall our prior admonishments that monthly New Home Sales Data are unreliable; look instead to a moving average.

Let’s move onto some anecdotal evidence.  A friend writes:

"Flop! Wow, KB running blue light specials in California. Not surprising,
Chico area was rated one of the most overvalued markets in the country. Houses
in the $200k space.  When was the last time you saw that in California? "

 
Oak Knoll Place Live Oak, CA

Oak Knoll Place Slideshow

Here’s the sales pitch:

"Oak Knoll Place in Live Oak is located in a beautiful
community near the majestic Sutter Buttes. With easy access to Highway 99, it is
ideally located for easy access to Sacramento, Lake Tahoe, Reno and a wide
variety of recreational opportunities. Yuba City and Marysville are
approximately 10 minutes south, Chico is approximately 35 miles north and the
Gray Lodge Wildlife area is approximately 10 minutes west. Live Oak has a
quaint, small-town atmosphere with many nearby recreational water activities,
including the Feather River, Yuba River and Sacramento River. Prices starting
from the High $200′s.
"

I don’t know Live Oak, but houses like that in California are hard to imgaine . . .

More after the jump.

Sources:
Existing-Home Sales Rise Again in March
NATIONAL ASSOCIATION OF REALTORS
WASHINGTON (April 25, 2006)
http://www.realtor.org/PublicAffairsWeb.nsf/Pages/MarchEHS06?OpenDocument

Existing Home Sales  data
NATIONAL ASSOCIATION OF REALTORS
http://www.realtor.org/Research.nsf/files/REL0603EHS.pdf/$FILE/REL0603EHS.pdf

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Category: Data Analysis, Federal Reserve, Fixed Income/Interest Rates, Real Estate

Smackdown: Fleckenstein vs Yardeni

Category: Federal Reserve, Fixed Income/Interest Rates, Inflation

One Last Comment on M3

Category: Economy, Federal Reserve, Fixed Income/Interest Rates, Psychology

Mortgages, Foreclosures & the Fed

Category: Federal Reserve, Fixed Income/Interest Rates, Inflation, Real Estate

10 Year Yield: 5.043%

Category: Fixed Income/Interest Rates, Inflation

Quote of the day

Category: Fixed Income/Interest Rates, Real Estate

Then & Now

Category: Commodities, Consumer Spending, Earnings, Economy, Employment, Fixed Income/Interest Rates, Inflation, Psychology, Real Estate

Chart of the Week: Yield Curve, 2002 versus 2006

Category: Economy, Federal Reserve, Fixed Income/Interest Rates, Inflation