Existing Home Sales Decline in June
Submitted by
CalculatedRisk on Thu, 07/24/2008 - 6:00am (119 comments)
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Hurray! A non-Tanta post!
Also, house sales are declining at a decelerating rate, so tout va bien!
It's a great time to....
...be foreclosed on a house.
This DOW JONES INDUSTRIAL AVERAGE thing... wow, what an elevator ride!
Yun has about as much credibility as the Easter Bunny.
Yun has about as much credibility as the Easter Bunny.
Nonsense. There was once a time where I relied on the Easter Bunny. Yun has never earned that privilege.
I'm off to Lake Winnepesaukee, NH, today...a big time second-home market for New England. Will be interesting to see what the inventory is like there.
CR isn't this now a lot worse than even you were expecting?
OT, sorta: Looks like WM is being repriced. Severely.
June is worse than May. Around here, June is typically the biggest selling month. Not a good sign.
The spring bounce that never was...
Mr. Paulson, still standing by that "housing will turn around in a few months" statement you made in the past week?
"...house sales are declining at a decelerating rate,..."
The derivative of acceleration is called "jerk."
Yun quote:
Lawrence Yun, NAR chief economist, said first-time home buyers are critical to the health of the housing market. About four in 10 homes are purchased by first-time buyers, which frees existing owners to trade up,
Great news! Countrywide, Fannie, Freddie and all those other sellers of entry level priced housing are now free to move up to something bigger and better!
house sales are declining at a decelerating rate, so tout va bien!
lol -- can it frenchie!
seriously, though, with sales so far down one has to ask how much further they can go -- and what any rebound would look like. a flood of REO sales boosting existing sales numbers may not be healthy, but they are sales nonetheless and will continue to be important for quarters to come.
but this should be the peak existing sales month for the year -- especially if mortgage hold their spike of the last couple weeks or move higher, as seems likely with the GSEs cutting back on loan purchasing.
Hasn't anyone noticed the implosion of home builder Ryland?
Expired
And, of course, we have the clueless Jim Cramer claiming the housing bill is "good" for builders. It isn't, Jimbo, it may help a few mortgage companies and, I truly hope, some struggly honest home owners. But builders? Ya gotta be kidding me.
June is worse than May. Around here, June is typically the biggest selling month. Not a good sign.
that has to be the effect of rising rates. scary.
Come on, you don't think that $7,500 "tax credit" that you have to pay back is going to make people start snapping up new homes and save the builders?
Now is most absolutely a great time to sell a home and rent.
"it may help a few mortgage companies"
It may help a few foreign investment companies.
Come on, you don't think that $7,500 "tax credit" that you have to pay back
How does that pass even the red-face test? Jeez.
According to Lawrene Yun, "short sales and foreclosures [account] for approximately one-third of transactions". That is not exactly a healthy market.
Go SoCal. Foreclosures alone are 41%!
house sales are declining at a decelerating rate, so tout va bien!
To think, commissions to Realtors (tm) only only have to drop 40% more to be at normal recession levels.
See... We're finally approaching one bottom!
Got Popcorn?
Neil
We here at the FDIC, want you all to know, that Washington Mutual(WM) is a-ok, and is not going to have a Bank Run, Starting right NOW.
Beir,
Could you hone in on that a little?
I'm off to Lake Winnepesaukee, NH, today...a big time second-home market for New England. Will be interesting to see what the inventory is like there.
If all else fails, people can blow up their homes and blame it on Bill Murray, a la "What About Bob?"
Anybody know where I can find homeowner rates by state or region?
(link would be awwwwweeeeesome)
30-year fixed-rate mortgage average was up from last week to 6.63%
Yay...
"Washington Mutual(WM) is a-ok, and is not going to have a Bank Run"
Might want to get the camera out and head down to a branch office and take a few photos for prosperity. I think they got kicked off survivor island. Nothing like a little run before the senate vote just to make sure all those critters understand the urgency of slipping a little pick to the taxpayers.
Washington Mutual Inc. WM (NYSE)
$3.92
Change:-0.73 -15.70%
Might want to get the camera out and head down to a branch office and take a few photos for prosperity. I think they got kicked off survivor island. Nothing like a little run before the senate vote just to make sure all those critters understand the urgency of slipping a little pick to the taxpayers.
Anonymous
Oops... That's going to leave a mark!
Got Popcorn?
Neil
Down another 5% in a matter of minutes!
Washington Mutual Inc. WM (NYSE)
$3.72
Change:-0.93 -20.00%
Volume:65,650,572
take a few photos for prosperity
Posterity maybe?
At this rate, WM will have an announcement on Friday afternoon.
Good grief.
Option arms are a killer for Wamu.
Also, since Wamuis not on the naked short protection list, they are now receiving extra special attention from the market. Some of the short woney would have bet against other banks.
The city of Los Angeles has filed two lawsuits against more than 30 Wall Street finance firms, including some top investment banks, alleging municipal bond collusion that cost taxpayers millions of dollars.
Los Angeles sues Wall St banks, bond insurers
| Reuters
GET THOSE BASTARDS!
I just read on another blog that the bailout bill includes a provision requiring credit card companies to report all transactions to the IRS. I have not verified this. This is very interesting. What does this have to do with "saving those poor forclosure victims"? If this is true, I swear, this government is out of control.
For those of you planning to photograph the next bank run, be sure to post the photos in black and white. Or sepia--even better.
" Mutual(WM) is a-ok, and is not going to have a Bank Run, Starting right NOW"
Ya know, my mother in SoCal went to a WaMu branch during the IMB collapse and found LONG lines, no parking and a lot of concerned customers. I am reasonably confident the deposits numbers won't be going higher. The IMB vice tightening exercise.
Sheila, Where's Schumer?
Might want to get the camera out and head down to a branch office and take a few photos for prosperity.
I'm feeling more prosperous already!
Goldilocks. BOOOOOYAAA. Growth story.
JP,
Ha! good catch. Posterity.
A reverse Freudian slip, I suppose.
Sheila, Where's Schumer?
I would like to see honest chuck's assessment of the place. Every second that he doesn't say something nice about WM causes more worry.
hone1
noun 1. a whetstone of fine, compact texture for sharpening razors and other cutting tools.
2. a precision tool with a mechanically rotated abrasive tip, for enlarging holes to precise dimensions.
Kou Jie writes:
Beir,
Could you hone in on that a little?
ok....
GET OUT , GET OUT, GET OUT
RUN FOR YOUR LIFE!
Now that F&F have an "all you can eat" line of credit it is time to bailout the NAR. Keep in mind that without these great organisations you would be paying ~50% less for a house. You wouldn`t want that, would you?
WAMU isn't going to get outed. Indymac was still making garbage loans at the time of Schumer's letter. Every day it remained an independent bank cost the FDIC extra money. WAMU went to reform school last December and is now at least trying to clean up its act. Letting WAMU run itself isn't any worse than having the FDIC run it for now.
12th Percentile writes:
Come on, you don't think that $7,500 "tax credit" that you have to pay back is going to make people start snapping up new homes and save the builders?
Maybe when homes are going for $7500. Interest free loan
I know many people who are ready to buy and will not pull the trigger. Many others who would love to sell but won't even try right now. Unless my experience is unique, the shadow market is going to be huge when this works through. And it sure seems like there are a lot more sellers-in-waiting than there are buyers.
Builders Sue Banks That Pull Financing As Construction Projects Lie Unfinished - WSJ.com
Builders Sue Banks That Pull Financing
As Construction Projects Lie Unfinished
The love affair between banks and builders during the housing boom has deteriorated into a series of divorces now spilling into the courts.
Any more lower and it will cause a bigger stampede.....not that -21.5% in 2 hours is not...have a looksey at it's five minute chart. IF that doesn't say panic to you then I shudder to think what would.
They "might" make the week but not next week that's for sure. Anyone staking out the Pizza joints up yonder??
Ciao
MS
I'm very suspicious of these WAMU run rumors. A large section of the regulars on this blog - including me - went out to check on WAMU branches during the IndyMac run and none of us found any indication whatsoever of a run. Given that there's a lot of short interest in WAMU but their cash position is still pretty good (longterm looks bad, but they've got lotsa cash) - well, let's just say there's motivation to spread rumors.
"GET OUT" he said.
plenty honed, thanks.
Buyer Removal Creme, $1.99 per tube.
What's it going to take?
I really don't see any way to stop the housing carnage. Several trillion of write offs will occur. Even inflation won't work as it would cause higher unemployment and higher interest rates.
This is going to hurt. The best we can hope for is a reasonably orderly decline.
Full faith and credit will be shaken for a generation.
Just talking from the standpoint of stock action...that is all.
Ciao
MS
MS,
Anyone staking out the Pizza joints up yonder??
Here's a blog where you can check out for yourself.
Seatle Pizza Blog
Cheers,
Fair Economist,
I don't think anybody is suggesting that there is a run on WM right now. I think it's just a discussion about who and when.
gaius marius writes:
seriously, though, with sales so far down one has to ask how much further they can go -- and what any rebound would look like. a flood of REO sales boosting existing sales numbers may not be healthy, but they are sales nonetheless and will continue to be important for quarters to come.
sales volume may decline for years given the foreclosure stats and its effect on buyers in future years not to mention the generational issues, so 4 to 4.5 million could be the standard for years if not lower.
Schumer Posterity. Sorry my poor English.
safe,
Rumor during IMB run. It was on Mr. Mortgage.
Cheers,
I think it's just a discussion about who and when.
Righto. In fact, for the regulators in the audience: I'm sure I speak for all of us when I say that we all think WaMu is a solid bank.
with sales so far down one has to ask how much further they can go
A lot. The governator just announced he's cutting civil servants to federal minimum wage until a budget is passed. Of course, once the budget is passed they'll get everything that was deferred, but they'll also get pink slips.
Misean,
Right, I know. Then. But I'm defending the present discussion.
civil servants to federal minimum wage
Just who is included?
JP,
Not sure, just heard it on the news last night. I imagine those employed directly by the state.
Fair Economist,
Wamu is in bad shape. That is obvious and now widely known. Why would anyone take a chance and leave money over the FDIC limit in a Wamu account? Moving money is free and easy. Making it takes work.
What's really scary is that in a fractional reserve banking system, all banks are insolvent absent faith and a lender of last resort.
CR,
When do we get a post on the big rise in weekly jobless claims?
Rob Dawg,
You're a leading indicator for banks. If you had a CD at WAMU, would you pull it?
safe_as_apartments writes:
"I don't think anybody is suggesting that there is a run on WM right now. I think it's just a discussion about who and when."
I've told my sister to get her $$ out of WaaaMu. Not that she has a lot, but she couldn't afford for it to be bound up for even a short period. Just in case.
JP,
Mish has a post on the min wage stuff plus a link to the newspaper story:
Mish's Global Economic Trend Analysis: Schwarzenegger To Slash State Workers' Pay Till Budget Passes
Funny how the NAR reminds us often that "all real estate is local" but it remains convenient for them to always quote national stats.
Certainly, one third of sales being short sales or foreclosures sounds better than the actual truth (that for example in the "local" SoCal market, this number is actually more like 50%)
tj-
My parents have CD's at WAMU and I've pleaded with them to at least be aware that you may not have access however pulling them may be a bit of an over-reaction. It's all about your own individual comfort level IMO. If this was a year from now, when we will have seen many more banks fail I'd be very inclined to pull most and stuff it under a mattress. This is just the start of what will become a very long line. I think WM is BSC at this point, if they do fail. The stock price action tells me things are not looking so good for them at present.
Ciao
MS
This ought to help CA's economy:
The order also calls for the state to immediately lay off 19,000 part-time workers, stop overtime payments for almost all employees and cease all hiring until a budget is enacted.
Everyone sing along!
I need my PPT ! ! ! ! !
to the tune of "I need my MTV!"
.................
safe,
Ah.
Cheers,
errr.... or was that "I want my MTV"
duuhhhoooo !
...............
Thanks TJ.
MS,
Totally agree.
BTW, anyone think it's hilarious that the housing bill "permanently" raises the conforming limit to $625K? Like J6P could ever really afford to max the $417 limit.
you should convince your parents that it's in their best interest to move to treasury direct bill auction's. they'll suffer on yield a little, but be magnitudes better off on risk profile.
Misean, your link asks "Is the best pizza in the U.S. in Arizona or in Seattle? I say ask the FDIC.
Cox is spouting off again....
"intend to extend short-sale protections marketwide"
nevermind the rule already exists but again make it the short sellers fault now. May be if your industry actually enforced it's own rules we wouldn't be in this mess. But blaming shorties for years of gross negligence in the banking sector is just too cute.
Rot in Hell Chris Cox
Sorry...
Ciao
MS
BTW, anyone think it's hilarious that the housing bill "permanently" raises the conforming limit to $625K? Like J6P could ever really afford to max the $417 limit.
tj & the bear
I didn't know that. I havent actually read much about it. There haven't been any uber posts on it have there?
..............
advice from you DB???
Paleeze....
Ciao
MS
OT - I wanted to let all the hyperinflationists know, if they don't already, that natural gas is down 30% from its peak 3 weeks ago, with no end in sight from a look at its chart. So much for the Zimbabwe route.
Rot in Hell Chris Cox
Actually, he's your friend.
Shorting is not allowed in the Chinese market, and all it did was exacerbate volatility.
It's the little guys who should be pissed. You know, the ones who think that the SEC actions are helping them.
MS,
The bigger issue with WAMU is, well, it's so much bigger. A failure there will empty the coffers at the FDIC pretty fast. Gotta figure DSL, WB, etc. in close proximity, too.
Things could get real interesting real quick, ya know?
lol...that was pretty tame.
fair enough. but the advice is px'les
there's a great sale on WM stock for ya as well.
treasury bonds.....pathetic....
Ciao
MS
My prediction for new home sales tomorrow is 6.
CR,
We may already be at the 12-months-sales level of inventory, because the NAR noted that their data does not include all REOs for sale. If a REO is not on the MLS then it is not included in NAR inventory of homes for sale.
I'm not sure how NAR handles sales of REOs that were not in the MLS.
It's ok all. The debt ceiling has been raised to 10.5 Trillion (+/-).
I'd love it if they enforced the naked short rule; that'd eviscerate those that continually suppress the juniors.
Rents in my neck of the woods (inside the beltway) are shooting up. Our area has not seen too many forclosures and prices have dropped maybe 10-15 % off peak but rents are through the roof. Go figure.
WaMu cut to BBB- by S&P
NEW POST!!!
IH,
There is no doubt we are well above a ONE YEAR inventory of actual existing homes for sale. When sales stagnate, the actual number is much higher than any published number.
WAMU is as solid as the ground I am standing on! of course I can see the San Andreas Fault from my window...umm,"Safe as Houses"?
Do you think Washington Mutual will hand out sandwiches ,water and umbrellas on Friday for the people in line, if so I am going, nothing like a free lunch FDIC sponsored...This could start a real nice cultural event: every Friday free sandwiches for everyone....
WM is the proverbial boiling frog at this point.....if it gets over 4 and stays then they may have a little more breathing room. Not very likely IMO...
but stranger things can and do happen.
Someone is buying it as we speak....
Ciao
MS
Lucky's Liquors,
They'll be experts by year's end for sure.
Cheers,
OT- Hey there's 2 cd's, since I'm in lower case it means I'm under the 100K limit...Cheers Big CD! Stay away from my lady, you dog...
OT-Friend pulling RMCR's for some large brokers is closing shop, went from 12000 a month to 3k a mos...
Anonymouse | Homepage | 07.24.08 -
And then go to Baker/Hughes and look at rig counts drilling for gas...
Wooot!!!
Chris
"Cox is spouting off again....
"intend to extend short-sale protections marketwide"
1- the rule exists already anyway
2- traders job #1: adapt (and faster than you can even change the rules). Changing the rules is just another enjoyable challenge to them.
3- who does he think is creating those bogus rallies? In the absence of shorts (who will cover "periodically") you are left with... an absence of buyers. Everybody knows you need volume to go up, however there is no need for volume to drift down with no end in sight.
Why do they keep sawing the few branches they can still sit on?
"Mr. Paulson, still standing by that "housing will turn around in a few months" statement you made in the past week?"
Housing will turn around in a few months. Once the Bail-out Bill passes, all taxpayers will, indirectly, own a house or two.
And, if that fails, Hanky-Panky Paulson and his pals can maybe force people to buy homes or something...
"And, if that fails, Hanky-Panky Paulson and his pals can maybe force people to buy homes or something..."
as in "you have only one right: to shut up, and we can even take that away too"?
How does WaMu raise new capital now, with stock where it is and debt listing into junk territory? Change the ticker to GSE and they get the Fed to buy in?
How much gold should i have to get through this thing? Is 20 ozs enough? How much in foreign currency.
WM can't raise any more money without paying a penalty to TPG. If they raise over $500 million a portion of that amount is too be paid to TPG.
Lawrence Yun and the NAR's new theme song:
Been Down So Long -- the Doors
Well, I've been down so Goddamn long
That it looks like up to me
Well, I've been down so very damn long
That it looks like up to me
Yeah, why don't one you people
C'mon and set me free
Two issues regarding short selling here. The first is altering the rules by which legal short sellers initiate positions -- the uptick rule is a red herring in my view. As long as there are shares available to short, what does it matter?
The other, far bigger, issue is naked short selling. This is an ILLEGAL activity. And the SEC has DONE NOTHING to enforce the law. Just how damn difficult is it to identify who some of these people are and frog march them to justice?
The markets remain a ridiculous farce. And the politicians charged with maintaining a fair marketplace are bought-and-paid-for clowns.
tj & the bear writes:
Rob Dawg,
You're a leading indicator for banks. If you had a CD at WAMU, would you pull it?
Not investment advice, yadda, yadda. Depends. If it were a really low rate and/or short term, yes I'd consider it. Last thing you want is to wait 2 hours for a routine transaction. It's unlikely this early in the rolling debacle that the FDIC will exercise their full powers and freeze CDs with no interest until maturity so if the note(s) mature after the expected short term disruptions they are also likely to be carrying high rates so let 'em ride.
In retrospect given what they did with IndyMac the smart move would have been to take the highest rate regardless of term because they are allowing CDs to be withdrawn no penalty at any time. Long rates, short term of your choosing; win-win.
These NASA Freaks are at it again.
First , the jealous crosscountry jaunt chasing lover's .
Now this.
FORMER NASA astronaut and moon-walker Dr Edgar Mitchell - a veteran of the Apollo 14 mission - has stunningly claimed aliens exist.
And he says extra-terrestrials have visited Earth on several occasions - but the alien contact has been repeatedly covered up by governments for six decades.
Does anyone remember the % fall in prices of Tokyo RE in the early t mid 90's?
Was it 60% or more?
Anyway, let's hope Bernake's research on Japanese Blues stops our FED from making the same mistakes as their Central Bank.
p.s. Given all of the populist political pressure, I might as well proclaim, we are screwed! (in the next 5 years)...
Perhaps this week we'll see more homes for sale start slashing prices. The ones that I've been watching have been cutting prices very slowly.
I'm guessing that most sellers are still in the mindset of getting every dime they can out of their home. I'm curious at what point we'll see sellers start to realize
karen writes:
Perhaps this week we'll see more homes for sale start slashing prices.
karen,
The couple of weeks are the last weeks to sell before school starts. After that price will get hammered if you need to sell.
jm,
I've been commenting here for years as jm. Please choose another handle to avoid confusion.
Thanks in advance.
"I'm guessing that most sellers are still in the mindset of getting every dime they can out of their home. I'm curious at what point we'll see sellers start to realize"
In my area, they're still chasing the market down in increments, at intervals of several months. Those who can't -- because they've got almost no equity left -- are just hanging there at high prices, hoping.
If the inventory of houses actively on the market spikes, I would expect things to change fairly rapidly. That would happen if 1) there is a phantom REO inventory in a particular market, and the lenders were to start dumping it, perhaps because there was no choice; or 2) Option ARM resets next year really are the big deal they're supposed to be, which also chases much more inventory onto the market, and into REO. And then there are so many empty houses around that no one can pretend things will improve.
"Buyer Removal Creme, $1.99 per tube."
You rang?
"short sales and foreclosures [account] for approximately one-third of transactions"
It's twice that in bubble markets.
Why can't I be jm too? Or jm2? Whaddya think?
Thousands of people at IndyMac were put out of a job because of the run caused by Charles Schumer's reckless mouth. Thousands more paid CD penalties because they bought into his hysteria (rather than recognizing that their funds were insured). Evidently this was the "prescriptive measure" Schumer had in mind. Like the OTS said, we'll never know if IndyMac Bank would have survived or failed, absent the panic caused by Schumer. But at least the employees would've enjoyed longer employment and health insurance coverage, and the customers who pulled their CDs prematurely would've been spared the penalty consequences of overreaction. Some public servant, that guy.
House inventories bank owned, Riverside county:
07/12: 16,400
07/21: 17,300
07/23: 17,900
07/26: 18,300
Up 11% in 2 weeks.