Sales UP/ Inventory Shrinks AGAIN

A picture is worth a thousand words;

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The NAR reported total sales were up 9.1% from January 2012, but conventional sales are probably up closer to 20% (or more) from January 2012, and distressed sales down.  The NAR reported (from a survey): 

Distressed homes - foreclosures and short sales - accounted for 23 percent of January sales, down from 24 percent in December and 35 percent in January 2012.

Although this survey isn't perfect, if total sales were up 9.1% from January 2012, and distressed sales declined from 35% of total sales to 23%, this suggests conventional sales were up sharply year-over-year - a good sign. 

And what matters the most in the NAR's existing home sales report is inventory. It is active inventory that impacts prices (although the "shadow" inventory could come on the market and keep prices from rising). For existing home sales, look at inventory first and then at the percent of conventional sales.
Read more at http://www.calculatedriskblog.com/#2AAzzgLb33VA8c2t.99 

Whats Happening with Foreclosures

The most notable point is the return to 2007 levels for 30 day delinquencies, and 2008 levels for the other categories with a continuing trend lower.

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From Calculated Risk;

"A few comments from Mike Fratantoni, MBA Vice President, Single-Family Research and Policy Development, on the Q4 MBA National Delinquency Survey conference call.

• There was a significant drop in most measures of delinquencies.

• Overall delinquencies are still elevated, but the movement is in the right direction.

• Fratantoni expects that we will eventually see lower than historical delinquency rates because of the strong credit quality of recent originations.  In response to a question from me, he said that he expects most deliquency measures will be back to normal in "2 to 3" years, but that it will take much longer for the foreclosure inventory to return to normal because of the backlog in judicial states. Jay Brinkmann, MBA’s Chief Economist and Senior Vice President of Research added that some measures (like the 30 delinquency rate) are already back to normal, and that some measures will take longer than others.

• The FHA is showing strong credit quality for origination in 2010, 2011 and 2012. Most of the delinquent loans are from the 2008 and 2009 vintages.

Read more at http://www.calculatedriskblog.com/#qSgBqFckKpbkt2Rz.99 "

The other point to make is that states utilizing judicial process, like NJ, are creating a lot of pseudo vacancies and inventory over the market. NJ has an unbelievably slow foreclosure process, virtually closed to 3rd party participation, that takes years and years to clear. Many of these properties are NOT going to obtain certificates of occupancy without major work and are frequently rented out to groups of individuals that exceed the legal occupancy limits. As they are eventually cleared they will likely create MORE demand as illegal occupants seek new housing.

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Come On NY!

Gains across the board in RE YoY acording to Case Schiller's latest Jan.29 release; 5.5% for the 20 city composite. YEA!
Except Boston, Chicago, and NY.

NY Commuter High Tier, which is what interests me most (and also Mr Schiller no doubt), is firming from the lows of Spring 2012 but down YoY  about 1%.

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Yo Real Estate

Exactly what we like to see in a market entering it's busy season.....

1.Long term inventory shrinkage.....



from Calculated Risk

Note the above chart is Year over Year to to counter the seasonal January inventory drop.

2. EASY MONEY 3.75% 30 year fixed. 

3. An improving Employment picture...

also from Calculated Risk
"Think of this as a measure of how widespread job gains are across industries. The further from 50 (above or below), the more widespread the job losses or gains reported by the BLS."

4. And did I mention the equities markets? 

Classic set up for a great housing market. In fact it may turn out to be frustrating for those that have been waiting and are trying to enter the market...lots of competion at the lower end and trailing appraisal values.

For those thinking about selling you might ask how yourself how often all these factors are present together. 

Good R.E. News...Again!

From the WSJ: Home Prices Could Jump 9.7% in 2013, J.P. Morgan Says

J.P. Morgan Chase & Co. expects U.S. home prices to rise 3.4% in its base-case estimate and up to 9.7% in its most bullish scenario of economic growth. Standard & Poor’s, which rates private-issue mortgage bonds, on Friday said it expects a 5% rise in 2013.

Read more at http://www.calculatedriskblog.com/2012/12/some-bullish-2013-house-price-forecasts.html#0qFHh8dwh82KtMom.99

http://www.calculatedriskblog.com/2012/12/some-bullish-2013-house-price-forecasts.html

And he goes on to say;

At the beginning of the year, the consensus was that house prices would decline for at least another year. When I posted The Housing Bottom is Here in early February, many people were surprised. How views change!
Read more at http://www.calculatedriskblog.com/2012/12/some-bullish-2013-house-price-forecasts.html#0qFHh8dwh82KtMom.99

 

However I would like to that yours truly actually put his money where his analysis leads him...

From Crudewire Friday, January 6, 2012

Back to Reality

Or is it vituality? Anyway;
Ever the contrarian I closed on a 100 yr. old house last Dec.14th. It's taken every last ounce of time and energy over the holidays to try and get it livable.  ...

BTW going long real estate deserves explanation;
First of all it's the right house ...got it at 44 % of the 2007 price of the clone next door.
Secondly it's 10/15 min walking distance to the train, high school, library etc.
Thirdly the town is fun and growing.
Finally she would have left me if I didn't.

Fun With R.E Market Values

Go to the link;
 http://www.standardandpoors.com/indices/sp-case-shiller-home-price-indices/en/us/?indexId=spusa-cashpidff--p-us----

Lots of fun to be had on this site.ie

Go to  "Download Data " box
and     "Home Price Tiered Index Levels"
click    "non seasonally adjusted"  ,  open in Excel
 at the page bottom choose location tab " New York Commuter"




   

Pump It Up

From Assoc Press;

Housing Revival

"Fed purchases of mortgage bonds have helped revive the housing market by pushing down the rate on a 30-year, fixed-rate mortgage last month to a record 3.31 percent.
New-home sales rose 17 percent in October compared with the prior year, while existing-home sales increased 11 percent. Home prices gained 3 percent from a year earlier in September, according to the S&P/Case-Shiller 20-city home-price index.
“Pent-up demand, rising home prices, low interest rates and improving customer confidence motivated buyers to return to the housing market,” Douglas Yearley Jr., chief executive officer of Toll Brothers Inc., the largest U.S. luxury-home builder, said in a Dec. 4 earnings call."

And today we can expect a little fuel for the fire....

Fed Seen Pumping Up Assets to $4T in New Buying

By Joshua Zumbrun and Catarina Saraiva on December 11, 2012

The Federal Reserve will amplify record accommodation tomorrow by announcing $45 billion in monthly Treasury buying that will push its balance sheet almost to $4 trillion, according to a Bloomberg survey of economists.

Forty-eight of 49 economists predict the Federal Open Market Committee will purchase Treasuries to bolster an existing program to buy $40 billion in mortgage bonds each month. The panel pledged in October to continue that plan until the labor market improves “substantially.”
“It’s going to be massive and open-ended in size,” said Joseph LaVorgna, chief U.S. economist at Deutsche Bank Securities Inc. in New York and a former New York Fed economist.