NAR Home Sales Hit 10 yr Low; REO's up 184%
NAR Headline reads... survey shows home buyers responding to lower metro prices.
Q1 Existing home sales rose in 13 states. Q2 35 out of 150 metro areas shows price gains.
Under the sheets: Q1 prices declined in 37 states; Q2 prices declined in 115 metro areas,
as existing U.S. home sales fell to a 10 year low and the median price for a single- family house dropped 7.6%.
Q2 sales -0.8% vs Q1; -16.3% Yoy; Q2 SFR sales -16%
July Foreclosures +8% Full Report
Yoy +55%. auctions +11%; default notices +53%; Bank REO's +184%; James J. Saccacio, RealtyTrac CEO:
"The sharp rise in REOs, combined with slow sales, has resulted in a bloated inventory of bank-owned properties for sale."
Rick Sharga, RealtyTrac's EVP for marketing: "It's getting worse. The number of properties that have been foreclosed on by the banks and still haven't sold is the highest we've ever seen."
The Cape Coral-Fort Myers, Fla., metro area registered the highest foreclosure rate among the 230 metro areas tracked in the July report.
That's 1 in 64 or 7X the national average. Prices in the area are down 33% this year and are now 30 cents on the dollar from their 2006 peak.
Putting out the fire with kerosene.. a rare utterance of truth from NAR President Dick Gaylord:
"In many areas with large concentrations of foreclosure sales, homes are being purchased below replacement cost values."
This will only add to the economic malaise as prices decline further... Trying to apply positive spin... Lawrence Yun, NAR chief economist:
“The biggest home-sales gains over the previous quarter have been in some of the markets with the steepest and fastest price drops."
Compared with the first quarter, existing-home sales increased 25.8% in California, 25% in Nevada, 20.5% in Arizona and 10.1% in Florida.
"Buyers in these areas are responding to deeply discounted home prices."
The Nattering One muses... yeah we got some spin for Mr. Yun alright... to put his stats in perspective...
The Cleveland area led the nation for home price gains in April and May with an 18% jump after values fell to levels last seen in 2000.
More good news for Yun and his cheerleader realtor's, right? Wrong. Dead Wrong.
Prices for entry level homes in Cleveland had to tumble 37% from a September 2005 peak to an almost 11 year low in March before enticing first time buyers.
Here's the catch, they tumbled after only rising 3% per year...
Cleveland never saw the lofty gains that markets like New York +15% and Los Angeles +23% per year, enjoyed from 2000 through 2005.
This is a sign that U.S. markets with the biggest price increases during the 2000 to 2005 boom have much further to fall before stabilizing.
David Blitzer, chairman of Standard & Poor's Index Committee:
"The areas of the country that saw prices go through the roof and then fall into the basement won't be the first ones to see an upturn.
It's more likely to come in a place like Cleveland or other Midwestern cities that largely missed the boom."
Justin Walters, co-founder of Bespoke Investment Group:
"If you look at Cleveland or Minneapolis, they're almost back to where they started. Most other parts of the country have a ways to go before they can say that."
For Los Angeles home prices to reach their 2003 levels it would require another 14% decline, on top of the 28% tumble since peaking in September 2006.
Las Vegas prices would have to decline 13% to reach 2003 levels, on top of its 31% drop since peaking in August 2006.
Miami would have to see home prices drop 16% to erase the gains of the last five years, in addition to the 31% decline since December 2006.
Furthermore, Realtytrac's foreclosure database at 750K now accounts for 17% of the inventory of existing homes for sale.
That's right, not counting new homes, almost 1 in every 5 existing homes for sale, is a foreclosure.
30 cents on the dollar in Cape Coral, FLA. that's 70% off. How much lower can it go?
For the still lofty priced areas such as Los Angeles, San Francisco & New York, much lower than a mere 30% off.
In the middle of it? Echoing our trainwreck sentiment, Joseph Veranth, chief investment officer at Dana Investment Advisors:
"It's going to be like a long slow car crash to work through the housing situation, and we're still in the middle of it."
So if at halfway, we are at 2002-2003 levels from 2006 peaks, then as we've nattered before,
we suspect the bottom is somewhere around 1999 price levels and will occur around 2011.
No stated income, higher rates... BofA, Countrywide and most major lenders have completely suspended all stated income loan programs, even for their most preferred clientele.
Worse yet, despite 2% fed funds and 3.8% 10 yr bond, higher rates: A fixed 30, owner occ, 20% down, no points, is now 7%. 2-4 units are now 25% down and at 7.25%.
Trading down debt... Many homeowners that bought in the last 5 years, who still have good credit are trading their good credit for a lower debt service. Say what?
Buying at $250K in 2003, same house down the block now $80K. Why pay on a $250K loan for a home only worth $80K.
If you plan on staying in the hood for quite awhile. Simply buy the $80K clone on your still good credit...
then jingle keys and walk away from the $250K mortgage, for a massive debt reduction of $190K. Don't laugh, their doing it in droves...
and its driving the lenders insane and deservedly so. I couldn't think of a better bunch to suffer... well, maybe not...
It would be funny if it weren't so sad: This link on the NAR web site: REALTORS® Recognized for Increasing Affordable Housing
You just gotta be kidding... Outside of Wall Street and the lenders, no single group of industry cheerleaders,
sleazy used car sales graduates, and usurious speculating whores is more responsible for the economic disaster we now find ourselves in...
and the still unrealistic and absurdly high priced real estate led asset deflation that is about to befall us.
We know that this doesn't apply to ALL realtors, however it probably covers a good 98% of them.
What do you call 10,000 realtor's chained and anchored at the bottom of the ocean? A good start... Hattip to Bloomberg
Q1 Existing home sales rose in 13 states. Q2 35 out of 150 metro areas shows price gains.
Under the sheets: Q1 prices declined in 37 states; Q2 prices declined in 115 metro areas,
as existing U.S. home sales fell to a 10 year low and the median price for a single- family house dropped 7.6%.
Q2 sales -0.8% vs Q1; -16.3% Yoy; Q2 SFR sales -16%
July Foreclosures +8% Full Report
Yoy +55%. auctions +11%; default notices +53%; Bank REO's +184%; James J. Saccacio, RealtyTrac CEO:
"The sharp rise in REOs, combined with slow sales, has resulted in a bloated inventory of bank-owned properties for sale."
Rick Sharga, RealtyTrac's EVP for marketing: "It's getting worse. The number of properties that have been foreclosed on by the banks and still haven't sold is the highest we've ever seen."
The Cape Coral-Fort Myers, Fla., metro area registered the highest foreclosure rate among the 230 metro areas tracked in the July report.
That's 1 in 64 or 7X the national average. Prices in the area are down 33% this year and are now 30 cents on the dollar from their 2006 peak.
Putting out the fire with kerosene.. a rare utterance of truth from NAR President Dick Gaylord:
"In many areas with large concentrations of foreclosure sales, homes are being purchased below replacement cost values."
This will only add to the economic malaise as prices decline further... Trying to apply positive spin... Lawrence Yun, NAR chief economist:
“The biggest home-sales gains over the previous quarter have been in some of the markets with the steepest and fastest price drops."
Compared with the first quarter, existing-home sales increased 25.8% in California, 25% in Nevada, 20.5% in Arizona and 10.1% in Florida.
"Buyers in these areas are responding to deeply discounted home prices."
The Nattering One muses... yeah we got some spin for Mr. Yun alright... to put his stats in perspective...
The Cleveland area led the nation for home price gains in April and May with an 18% jump after values fell to levels last seen in 2000.
More good news for Yun and his cheerleader realtor's, right? Wrong. Dead Wrong.
Prices for entry level homes in Cleveland had to tumble 37% from a September 2005 peak to an almost 11 year low in March before enticing first time buyers.
Here's the catch, they tumbled after only rising 3% per year...
Cleveland never saw the lofty gains that markets like New York +15% and Los Angeles +23% per year, enjoyed from 2000 through 2005.
This is a sign that U.S. markets with the biggest price increases during the 2000 to 2005 boom have much further to fall before stabilizing.
David Blitzer, chairman of Standard & Poor's Index Committee:
"The areas of the country that saw prices go through the roof and then fall into the basement won't be the first ones to see an upturn.
It's more likely to come in a place like Cleveland or other Midwestern cities that largely missed the boom."
Justin Walters, co-founder of Bespoke Investment Group:
"If you look at Cleveland or Minneapolis, they're almost back to where they started. Most other parts of the country have a ways to go before they can say that."
For Los Angeles home prices to reach their 2003 levels it would require another 14% decline, on top of the 28% tumble since peaking in September 2006.
Las Vegas prices would have to decline 13% to reach 2003 levels, on top of its 31% drop since peaking in August 2006.
Miami would have to see home prices drop 16% to erase the gains of the last five years, in addition to the 31% decline since December 2006.
Furthermore, Realtytrac's foreclosure database at 750K now accounts for 17% of the inventory of existing homes for sale.
That's right, not counting new homes, almost 1 in every 5 existing homes for sale, is a foreclosure.
30 cents on the dollar in Cape Coral, FLA. that's 70% off. How much lower can it go?
For the still lofty priced areas such as Los Angeles, San Francisco & New York, much lower than a mere 30% off.
In the middle of it? Echoing our trainwreck sentiment, Joseph Veranth, chief investment officer at Dana Investment Advisors:
"It's going to be like a long slow car crash to work through the housing situation, and we're still in the middle of it."
So if at halfway, we are at 2002-2003 levels from 2006 peaks, then as we've nattered before,
we suspect the bottom is somewhere around 1999 price levels and will occur around 2011.
No stated income, higher rates... BofA, Countrywide and most major lenders have completely suspended all stated income loan programs, even for their most preferred clientele.
Worse yet, despite 2% fed funds and 3.8% 10 yr bond, higher rates: A fixed 30, owner occ, 20% down, no points, is now 7%. 2-4 units are now 25% down and at 7.25%.
Trading down debt... Many homeowners that bought in the last 5 years, who still have good credit are trading their good credit for a lower debt service. Say what?
Buying at $250K in 2003, same house down the block now $80K. Why pay on a $250K loan for a home only worth $80K.
If you plan on staying in the hood for quite awhile. Simply buy the $80K clone on your still good credit...
then jingle keys and walk away from the $250K mortgage, for a massive debt reduction of $190K. Don't laugh, their doing it in droves...
and its driving the lenders insane and deservedly so. I couldn't think of a better bunch to suffer... well, maybe not...
It would be funny if it weren't so sad: This link on the NAR web site: REALTORS® Recognized for Increasing Affordable Housing
You just gotta be kidding... Outside of Wall Street and the lenders, no single group of industry cheerleaders,
sleazy used car sales graduates, and usurious speculating whores is more responsible for the economic disaster we now find ourselves in...
and the still unrealistic and absurdly high priced real estate led asset deflation that is about to befall us.
We know that this doesn't apply to ALL realtors, however it probably covers a good 98% of them.
What do you call 10,000 realtor's chained and anchored at the bottom of the ocean? A good start... Hattip to Bloomberg
Comments