October existing home sales blowout
Sorry for the delay -- Had to do a video segment on the existing home sales numbers with CNBC, which can be viewed here. As I said in various forums six months ago, I believe the housing market has started to turn -- in construction, sales, inventory, but not in pricing (yet). The numbers continue to validate that thesis.
Specifically, existing home sales soared 10.1% in October. That was much better than the 2.3% increase in sales that was expected. At 6.1 million units, the seasonally adjusted annual rate of sales was the highest since February 2007.
Importantly, the supply of homes for sale dropped again -- by 14.9% year-over-year to 3.57 million. That is the lowest level since January 2007 and good for about 7 months of inventory at the current sales pace (down from 8 a month earlier). We are still oversupplied, and that's why median home prices fell 7.1% from a year earlier. But the excess inventory mountain is clearly shrinking.
We will clearly see some give back or "hiccup" in the numbers over the next couple of months as the lagged impact of the tax cut uncertainty makes its way into the numbers. But with the credit extended and expanded, the Fed continuing to manipulate the mortgage market, and the supply overhang shrinking, my forecast of stabilization remains on track. Or in plain English, the massive housing bust earthquake is behind us -- any setbacks from here on out will be more like mild aftershocks.
Specifically, existing home sales soared 10.1% in October. That was much better than the 2.3% increase in sales that was expected. At 6.1 million units, the seasonally adjusted annual rate of sales was the highest since February 2007.
Importantly, the supply of homes for sale dropped again -- by 14.9% year-over-year to 3.57 million. That is the lowest level since January 2007 and good for about 7 months of inventory at the current sales pace (down from 8 a month earlier). We are still oversupplied, and that's why median home prices fell 7.1% from a year earlier. But the excess inventory mountain is clearly shrinking.
We will clearly see some give back or "hiccup" in the numbers over the next couple of months as the lagged impact of the tax cut uncertainty makes its way into the numbers. But with the credit extended and expanded, the Fed continuing to manipulate the mortgage market, and the supply overhang shrinking, my forecast of stabilization remains on track. Or in plain English, the massive housing bust earthquake is behind us -- any setbacks from here on out will be more like mild aftershocks.
posted by Mike Larson at
12:23 PM
1 Comments:
Seems unlikely:
1. 1 in 7 mortgages are either in the process of foreclosure or are deliquent.
2. Housing rebound is purely gov't driven handouts and 96% to 98% of all recent new mortgages are held either by the insolvent GSE's or the FHA. How does an insolvent company with 10 of billions in losses per quarter still find capital to buy even more mortgages?
3. No Jobs. Never in Western history (or probably during civilization) has then been a real estate recovery with double digit unemployment, especially during a period when unemployment continues to rise.
The only reason why home sales are going up is because the gov't is buying them indirectly, by offering Ninja loans to people to buy homes.
4. Commerical Real estate is now crashing. The gov't will soon have to change tracks from bailing out residental real estate to commerial real estate.
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Anonymous, at November 23, 2009 at 7:46 PM
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