US: Home sale volumes see biggest gain since July 2003

[boz]

Might be the housing slump in US about to the end or all these money fleeing the share market are moving to property (like it happened before).
For sure increased volume mean increasing demand at these US home prices
From Reuters

By Patrick Rucker

WASHINGTON (Reuters) - Sales of previously owned U.S. homes rose 5.5 percent last month, the biggest gain since July 2003, and the inventory of unsold homes fell, a hopeful sign for a housing market mired in a long slump.

The National Association of Realtors said on Friday that sales of existing homes rose to a 5.18 million-unit annual rate from the 4.91 million unit pace set in August. Economists had expected sales to rise to only a 4.93 million unit rate.

It was the first time the sales pace had risen above its year ago level in nearly three years, a sign the market could be stabilizing.

The surprisingly large jump in sales pushed the inventory of unsold homes down by 1.6 percent to 4.27 million, or a 9.9 months' supply at the current pace, the lowest since February.

"We're not out of the woods yet by any means when it comes to falling house prices and our fundamental problem of an oversupply of homes, but we're getting near to the bottom every day," said White House spokeswoman Dana Perino.

Home prices, however, showed no signs of escaping their long, deep slide and economists said the number of homes on the market would likely have to fall further before they do.

The median national home price declined 9 percent from a year ago to $191,600, the lowest level since April 2004.

"As the median price continues to decline, seeking out that new equilibrium level, demand is -- slowly and hesitantly -- moving back into the market," said Lindsey Piegza, an economic analyst at FTN Financial in New York.

A Reuters poll taken October 21-24 found economists expect prices to continue to fall through next year. The median forecast from the survey was for a 15 percent drop this year and a 6.4 percent fall in 2009. Economists expect prices to turn up in 2010, but by a meager 1 percent.

'VULTURE INVESTORS'

Rising U.S. mortgage defaults have sent credit markets into a tailspin, threatening economies worldwide. A majority of economists polled said finding a floor for house prices is an essential condition for ending the financial crisis.

In order for prices to recover, the glut of unsold homes needs to be whittled down further, analysts said.

"Most, if not all, the rise in sales is due to vulture investors buying cheap foreclosed homes, but all sales reduce inventory," said Ian Shepherdson, the chief U.S. economist at High Frequency Economics in Valhalla, New York.

"If this continues, people will stop expecting further price falls and activity will start to recover."

Lawrence Yun, the chief economist for the Realtors' trade group, also pointed to a rise in foreclosure and other 'distress' sales in regions hard-hit by the housing downturn.

"In some regions, the lower prices are seeing buyers return to the marketplace," he said. "This was a nice jump and hopefully this trend can continue because the first step to stabilizing the market is an increase in home sales."

Sales jumped 16.8 percent in the West, while rising 4.4 percent in the Midwest and 2.2 percent in the South. In the Northeast, sales fell 1.2 percent.

Sales of single-family homes, which represent the lion's share of the market, rose 6.2 percent. Sales of condominiums held steady.

"We're still struggling with falling home prices and we will for a while, but we're forming a bottom here," said Bob Walters, chief economist at Quicken Loans in Livonia, Michigan.

(Additional reporting by Pedro Nicolaci da DaCosta, Ellen Freilich and Nick Olivari in New York; Polling by Bangalore polling unit; Editing by Andrea Ricci)

 

[grossreal]

hi boz
couple of things
first this pole is done from my reading of the post
Bangalore polling unit
now if thats Bangalore india they will understand the way to bargain.
and just because some one is buying alot of hosues at say $1.00 does not mean that the market has stabalised.
all it means is alot of people are bleeding and a few have died.
that does not mean that the gun man has gone home.
even in the article it say that the increase is from vulture funds.
well vulture funds pay under current market.
so if the buy at say 100k and they buy 50 houses the next 50 have to be 50k and so on
so they don't and they can't stabalise a market
as they live to be in a unstable market thats what they are.
they buy at the lowest price possible.
and they don't buy at the bottom.
they buy on the way down but they are are the group that put the floor in the price.
now if that floor does not hold they buy under it again.
so because you have sold alot of property for a fraction of its value and you think thats the bottom fine.
but for me its not
I would like to see steady growth of internal sales that are not vulture funds.
but for me the us market has very little to do with our market andwould like to here how the thailand changmai, china or indian markets are going.
as they are more relivent to our markets
and would buy into a changmai, vietnam, prague or china before a boston.
volume is not alot of good if it just to clear debt you need to look at value.
but that just me

 

[BV]

I think it's a smart move because those areas will be rebuilt.

It's a matter of time before the remaining subprime loans get refinanced
and that will put a stop to falling property prices and will help restore confidence in the market.

http://www.latimes.com/news/printedition/front/la-fi-countrywide24-2008oct24,0,5547798.story

 

[boz]

hi boz
couple of things
first this pole is done from my reading of the post
Bangalore polling unit
now if thats Bangalore india they will understand the way to bargain.
and just because some one is buying alot of hosues at say $1.00 does not mean that the market has stabalised.
all it means is alot of people are bleeding and a few have died.
that does not mean that the gun man has gone home.
even in the article it say that the increase is from vulture funds.
well vulture funds pay under current market.
so if the buy at say 100k and they buy 50 houses the next 50 have to be 50k and so on
so they don't and they can't stabalise a market
as they live to be in a unstable market thats what they are.
they buy at the lowest price possible.
and they don't buy at the bottom.
they buy on the way down but they are are the group that put the floor in the price.
now if that floor does not hold they buy under it again.
so because you have sold alot of property for a fraction of its value and you think thats the bottom fine.
but for me its not
I would like to see steady growth of internal sales that are not vulture funds.
but for me the us market has very little to do with our market andwould like to here how the thailand changmai, china or indian markets are going.
as they are more relivent to our markets
and would buy into a changmai, vietnam, prague or china before a boston.
volume is not alot of good if it just to clear debt you need to look at value.
but that just me

I agree with you that doesn't mean that the fall is finished, but it is a good sign, if volume would have been down more wouldn't you think it is a worst news? I also agree with you that more data need to be analised and later tonight the number of new home sold in september is released, it is expected to drop again (and it has been like that for months), usually it is correlated with the existing sales, if number are up on the new sales as well it is another good sign for the US property market.
After all, the value like you said is a key element and with the falling US stock market value of shares gets much better against property, while the value of homes get better compare to money holded in US treasury.
Another thing that worried me is that houses are somewhat like gold and good protection against inflation, might be that lots of investor are worried about a change of scenario where the US$ stop rising and inflation kick in big time.

 

[boz]

Here is also the unexpected climb of new home sales in US:
bloomberg

U.S. Economy: New-Home Sales Rose in September From 17-Year Low

By Bob Willis

Oct. 27 (Bloomberg) -- Sales of new houses in the U.S. were unexpectedly rising before credit markets froze this month, having rebounded from a 17-year low thanks to a drop in prices.

Purchases increased 2.7 percent in September to an annual rate of 464,000 from 452,000 the prior month that was less than previously estimated, the Commerce Department said today in Washington. The median sales price decreased to a four-year low.

The sales increase may be short-lived after the collapse of Lehman Brothers Inc. in the middle of last month led to a slump in lending among banks, making it harder to get a mortgage. Tumbling stock prices and mounting job losses signal some of these prospective buyers may walk away from their purchase contracts.

``Sales are likely to get a bit worse from here as the reports start to reflect the periods affected by the credit crisis,'' said Russell Price, a senior economist at H&R Block Financial Advisors Inc. in Detroit. ``Most of the contracts for new home sales in September were likely signed before the credit crisis really took hold.''

Economists had forecast new home sales would drop to a 450,000 annual pace from an originally reported 460,000 rate the prior month, according to the median estimate in a Bloomberg survey of 59 economists. Forecasts ranged from 400,000 to 501,000.

Stocks dropped on concern the global economic slump would deepen. The Standard & Poor's 500 Index was down 8 points, or 1 percent, to 868.4 at 11:56 a.m. in New York. Treasuries securities were little changed.

Prices Fall

The median price of a new home decreased 9.1 percent from a year earlier to $218,400, the lowest since September 2004. Sales were down 33 percent from September 2007, the Commerce report showed.

``Builders are seeing the light,'' Mark Zandi, chief economist at Moody's Economy.com in West Chester, Pennsylvania, said in a Bloomberg Television interview. ``They are cutting prices more aggressively.'' Still, ``there may be more cancellations than normal in September.''

On a positive note, builders cut inventories at a record pace. The number of homes for sale fell to a seasonally adjusted 394,000, the fewest since June 2004. The 7.3 percent decline from August was the biggest since record keeping began in 1963.

The supply of homes at the current sales rate fell to 10.4 months' worth from 11.4 months. A five to six months' supply is often cited as signaling a stable market.

`Another Down Leg'

``Over time, shrinking inventories should help stabilize prices,'' Joseph LaVorgna, chief U.S. economist at Deutsche Bank Securities Inc. in New York, said in a note to clients. ``Conceivably, there is another down leg to home sales that is coming, in light of tighter financial conditions and greatly reduced economic growth prospects.''

The increase in purchases was paced by a 23 percent surge in the West. Sales dropped 21 percent in the Northeast and 5.8 percent in the Midwest.

Home resales rose a more-than-forecast 5.5 percent in September to a 5.18 million pace, the highest level in a year, the National Association of Realtors said on Oct. 24. The gain was driven by sales of distressed properties, which comprised up to 40 percent of the total, the Realtors group said. The median price fell 9 percent.

Sales of previously owned homes are compiled from closings and reflect contracts signed weeks or months earlier. New-home purchases, while accounting for only about 10 percent of total sales, are considered a timelier indicator because they are based on contract signings.

Signs of Stabilization

The biggest housing recession in a generation was showing signs of nearing a bottom in sales when financial markets began to implode in September, leading to the government takeover of mortgage finance companies Freddie Mac and Fannie Mae. A $700 billion rescue plan and coordinated rate cuts by central banks around the world followed.

Home prices have fallen by about a fifth from their highs in mid-2006, according to the S&P/Case-Shiller home prices index of 20 major cities. Falling prices mean more Americans can't refinance their mortgages, prompting foreclosures to surge to record levels in the third quarter. That, in turn, may cause prices to fall further.

``This vicious feedback loop is still in play,'' David Seiders, chief economist of the National Association of Home Builders, said in an interview on Oct. 17. That, he said, is ``putting a nail'' in the coffin of the new-home market. New-home sales have declined 67 percent from their peaks in July 2005.

Work began last month on the fewest single-family homes in 26 years, the Commerce Department reported on Oct. 17. The number of building permits issued also fell, a sign that declines in construction will continue to hurt the economy.

Growing Pessimism

Confidence among U.S. homebuilders slid in October to the lowest level since record-keeping began in 1985, figures from the National Association of Home Builders/Wells Fargo showed earlier this month.

At least a dozen homebuilders have sought bankruptcy protection since June 2007, including billionaire Carl Icahn's WCI Communities Inc.

Pulte Homes Inc., the third-largest U.S. builder, last week reported a net loss of $280.4 million for the third quarter, more than double what analysts had projected.

``The homebuilding operating environment significantly worsened during the third quarter of 2008,'' Richard Dugas, the chief executive officer of Bloomfield Hills, Michigan-based Pulte said in a statement. ``The industry continues to be plagued by tighter mortgage availability, a growing number of foreclosures, and a historically high supply of unsold homes.''

To contact the reporter on this story: Bob Willis in Washington at [email protected]

 

[warmed_cockles]

That article is a load of crap. New home sales are at their lowest since 1981.

 

[boz]

That article is a load of crap. New home sales are at their lowest since 1981.

It reports the fact, the lowest sales for new homes are at lowest but the data of september is at 464 k new homes against the revised 452 k of august and the expected number for september was 452k. This is not REIV crap but reliable data reported by the most reliable source (Bloomberg).
Anyway, I don't read out of those number that housing is recovering but it is a change that might lead to a recovery sooner then I would have bet 1 month ago.

 

[manderson]

``Builders are seeing the light,'' Mark Zandi, chief economist at Moody's Economy.com in West Chester, Pennsylvania, said in a Bloomberg Television interview. ``They are cutting prices more aggressively.'' Still, ``there may be more cancellations than normal in September.''

On a positive note, builders cut inventories at a record pace. The number of homes for sale fell to a seasonally adjusted 394,000, the fewest since June 2004. The 7.3 percent decline from August was the biggest since record keeping began in 1963.

Sounds like over there builders do a big heap of spekies themselves where as over here it is more individuals placing orders for houses.

Could that account for the US oversupply and Australia's apparent undersupply?