US housing market finally improving?

[Puppycow]

Housing market recovery gains traction

Quote:

New home sales increased 3.3 percent to a seasonally adjusted 343,000-unit annual rate, the Commerce Department said on Wednesday. Compared with April last year, sales were up 9.9 percent.

The report came on the heels of news on Tuesday that home resales hit a two-year high, with the sector getting support from investors who are increasingly seeing value.

Even more encouraging, the median price for both new and previously owned homes surged last month, a further sign of life for a market that has struggled to come back from its 2006 collapse.

The improving tone could be a boon for President Barack Obama, whose housing policies have been decried by critics for doing too little to help distressed homeowners.

Finally a report with no mixed signals. Previously, if new home sales were up, existing home sales were down or vice versa. Or prices were down. Now all indicators are finally pointing in the right direction. This is the sector of the economy that's been the biggest drag on the rest of the economy for the last few years.

Maybe, just maybe, we might finally see some vigorous job growth in the next few months?

[kevsta]

Quote:

The recent buoyancy in housing market activity has raised hopes that this beleaguered sector may finally be on the verge of a rebound,"

or, as Schilling thinks, it could face up to another 20-35% downside yet

http://www.bloomberg.com/video/93207...-shilling.html

[Puppycow]

Originally Posted by kevsta

or, as Schilling thinks, it could face up to another 20-35% downside yet

http://www.bloomberg.com/video/93207...-shilling.html

I don't buy Schilling's arguments. I think the other guy is right.

1) Banks are not going to dump all this shadow inventory on the market all at once and drive prices down another 20% because doing that would be slitting their own throats. They lose money on short sales. There will be foreclosures of course, but it's in their interest to find ways to work with people to refinance when they can.

2) There's a reason why foreclosed houses typically cost 20% less than similar houses that aren't foreclosed. They are often damaged goods in various ways. The previous residents have no incentive to make it attractive to buyers. They may even damage things out of spite. So most people will still prefer a new house or an existing house that was well-cared for by it's owner.

3) In the worst-hit areas, cities are demolishing abandoned houses.

4) Schilling is contradicted by the most recent housing reports.

[kevsta]

Originally Posted by Puppycow

I don't buy Schilling's arguments. I think the other guy is right.

time will tell, but I wouldn't get your hopes up too much.

[Puppycow]

Hoboken Homes Gone in 60 Minutes Signal U.S. Recovery: Mortgages

Quote:

For the latest sign of a U.S. housing rebound, Toll Brothers (TOL) Inc. Chief Executive Officer Douglas Yearley points to Hoboken, New Jersey: A couple torn between two condos last month at the sales office for its Hudson Tea complex decided to think about it over lunch. When they returned an hour later, both units were gone.

“People feel like now is the time to buy and they aren’t isolated to one building in Hoboken,” Yearley said in a May 23 conference call with analysts after the Horsham, Pennsylvania- based luxury homebuilder reported that quarterly orders for new homes surged 47 percent. “Confidence is up. The interest rates are there and they’ve been waiting so long to move on with their lives that they came out this spring.”

U.S. homebuilders are reporting their most-improved spring selling season in seven years as record low mortgage rates, job gains, and shrinking inventories are drawing buyers to sales offices that have been quiet since the property market collapse. After dragging the economy into recession, housing is set to “contribute modestly” to growth, according to Vincent Foley, a credit analyst for Barclays Plc in New York.

[Skeptic Ginger]

House down the street went on the market at a low price and a bidding war started within hours. A number of other houses sold within days of going on the market. I'll keep you all informed.

[kevsta]

[Puppycow]

Originally Posted by Skeptic Ginger

House down the street went on the market at a low price and a bidding war started within hours. A number of other houses sold within days of going on the market. I'll keep you all informed.

Thanks. What state are you in, if you don't mind telling?

[Skeptic Ginger]

Originally Posted by Puppycow

Thanks. What state are you in, if you don't mind telling?

Bellevue, WA., in Microsoftlandia east of Seattle. We haven't had the worst of the collapse here. But house values in the neighborhood took about a 40% hit in value. Prior to the bubble popping people were buying $600,000 houses just to tear them down and build million+ dollar homes on the lots.

Zillow

[kevsta]

Originally Posted by kevsta

http://forums.randi.org/imagehosting...1ec9850e4a.jpg

S & P - Case Schiller dips again

Quote:

New York, May 29, 2012 – Data through March 2012, released today by S&P Indices for its S&P/CaseShiller 1 Home Price Indices, the leading measure of U.S. home prices, showed that all three headline composites ended the first quarter of 2012 at new post-crisis lows.

The national composite fell by 2.0% in the first quarter of 2012 and was down 1.9% versus the first quarter of 2011. The 10- and 20-City
Composites posted respective annual returns of -2.8% and -2.6% in March 2012

[Puppycow]

Well, Case-Schiller takes a little while to catch up. This is data through March. Still, the direction of the graph is pointing upward.

http://www.bloomberg.com/markets/economic-calendar/

Quote:

Highlights
Home prices were on the rise in March and February, up 0.1 percent in March for the adjusted composite 20 index and up 0.2 percent in February. This is the first back-to-back monthly gain since the spring of 2010. The year-on-year rate of minus 2.6 percent is the best reading since December 2010. Phoenix is really on the rebound with Miami, Tampa, Minneapolis and Dallas all showing a run of stand-out strength. But Atlanta shows continued contraction as does Chicago and New York.

Unadjusted data show no monthly change in March and, like the adjusted data, minus 2.6 percent contraction for the year-on-year rate. Home prices may finally be moving up from the bottom, and more recent data on existing home sales show a sharp upward spike in prices underway, the result of fewer distressed properties on the market.

[kevsta]

Originally Posted by Puppycow

Well, Case-Schiller takes a little while to catch up. This is data through March. Still, the direction of the graph is pointing upward.

http://www.bloomberg.com/markets/economic-calendar/

http://www.reuters.com/article/2012/...83P12E20120426

Quote:

Thu Apr 26, 2012 1:12pm EDT
(Reuters) - More than 1 million Americans who have taken out mortgages in the past two years now owe more on their loans than their homes are worth, and Federal Housing Administration loans that require only a tiny down payment are partly to blame.

That figure, provided to Reuters by tracking firm CoreLogic, represents about one out of 10 home loans made during that period.

It is a sobering indication the U.S. housing market remains deeply troubled, with home values still falling in many parts of the country, and raises the question of whether low-down payment loans backed by the FHA are putting another generation of buyers at risk.

As of December 2011, the latest figures available, 31 percent of the U.S. home loans that were in negative equity - in which the outstanding loan balance exceeds the value of the home - were FHA-insured mortgages, according to CoreLogic.

Many borrowers, particularly since late 2010, thought they were buying at the bottom of a housing market that had already suffered steep declines, but have been caught out by a continued fall in prices in wide swaths of America.

Even for loans taken out in December - less than four months ago and the last month for which data is available - nearly 44,000 borrowers, or about 7.5 percent of the total, now find themselves under water.

"The overwhelming majority of the U.S. is still seeing home prices decline," said CoreLogic senior economist Sam Khater. "Many borrowers continue to be quickly wiped out."

IMO it wont bottom and turn around until almost everyone has given up on RE as a very risky, if not terrible investment.

..bottoms are notoriously different to pick, and even more so in the middle of a generational crisis, but as an optimistic type, I personally would look for your capitulation

[Skeptic Ginger]

Originally Posted by kevsta

..... IMO it wont bottom and turn around until almost everyone has given up on RE as a very risky, if not terrible investment. ....

So we should all rent?

From Wiki:

Quote:

The homeownership rate in the United States[1][2] in 2009 remained similar to that in other post-industrial nations[3] with 67.4% of all occupied housing units being occupied by the unit's owner.

I'm on my third home and all three were profitable as investments even given the housing bubbles, (this was the third one in this area since the 80s). I paid $162K, invested another $130K (much of which was from capital gains from selling my previous house) over the years and the house is currently worth ~600K. I've owned the house 21 years and the mortgage was paid off about 10 years ago so you can add to the profit what I would have paid in 10 years of rent less taxes and insurance.

I honestly don't get where you've gotten the idea a house is a bad investment. It's not a good short term investment some of the time but neither is the stock market. And gold and silver are not the sure bets people believe. I recall the silver market collapsing a couple decades ago. Even with the housing market's ups and downs I still have the benefit of living in my investment.

[kevsta]

Originally Posted by Skeptic Ginger

So we should all rent?

From Wiki:

I'm on my third home and all three were profitable as investments even given the housing bubbles, (this was the third one in this area since the 80s). I paid $162K, invested another $130K (much of which was from capital gains from selling my previous house) over the years and the house is currently worth ~600K. I've owned the house 21 years and the mortgage was paid off about 10 years ago so you can add to the profit what I would have paid in 10 years of rent less taxes and insurance.

I honestly don't get where you've gotten the idea a house is a bad investment. It's not a good short term investment some of the time but neither is the stock market. And gold and silver are not the sure bets people believe. I recall the silver market collapsing a couple decades ago. Even with the housing market's ups and downs I still have the benefit of living in my investment.

you would have to factor in inflation, and your total mortgage payments (or differential between that and comparable rent) and property taxes, sales and purchase fees, money spent on the properties etc.

given that an estimated $200k in 1985 would inflate to approx £430k in 2012 (even using fuzzy Fed numbers) you might find that over the period you didnt make as much as you thought.

rent free living into the future is of course a big bonus though.

[Skeptic Ginger]

Originally Posted by kevsta

you would have to factor in inflation, and your total mortgage payments (or differential between that and comparable rent) and property taxes, sales and purchase fees, money spent on the properties etc.

given that an estimated $200k in 1985 would inflate to approx £430k in 2012 (even using fuzzy Fed numbers) you might find that over the period you didnt make as much as you thought.

rent free living into the future is of course a big bonus though.

According to this site, $200K in 1991 would be ~$338K today. And my house will probably go back up in value soon as it's 3 miles from the city center of the 5th largest city in the state and backs to 160 acres of park that includes forest, a botanical garden and ballfields. It's also a very big house on a very big lot. I expect the house to be in the millon dollar range in the next decade. There are million+ dollar houses in the neighborhood.

Or, I can turn it into a MIL and rent out a portion of it.

Bottom line, houses have been an excellent investment for me.

[kevsta]

Originally Posted by Skeptic Ginger

According to this site, $200K in 1991 would be ~$338K today.

ok, sorry you said 80's so I guesstimated 85

Originally Posted by Skeptic Ginger

I expect the house to be in the millon dollar range in the next decade.

I'm sure it will, as fuel goes past the $10 mark.

Originally Posted by Skeptic Ginger

Bottom line, houses have been an excellent investment for me.

I didnt say housing has always been a bad investment, like all assets it fluctuates from undervalued to over and back again.

however going forwards I would not expect the investment opportunity to be much like the last 30 years, not if you're buying now anyway.

[Skeptic Ginger]

Originally Posted by kevsta

ok, sorry you said 80's so I guesstimated 85

Yeah, 2 houses prior to owning this one. I bought my first 2 houses in the 80s and the third in 1991. I kept the first house as a rental but eventually sold it, bought the 3rd house while keeping the second as a rental and then sold the second house and improved the 3rd which I still live in and own.

Originally Posted by kevsta

....however going forwards I would not expect the investment opportunity to be much like the last 30 years, not if you're buying now anyway.

I've heard that from more than one person, however, housing bubbles are nothing new. And if we could just get the radical right out of their obstructionist government positions and properly regulate the banks again the recession will end and things will be moderately stable again.

When is a big if, but I have no doubt the cycle will cycle again. I do believe you are overly pessimistic.

[kevsta]

ok, so you would need to start your inflation calculations from earlier than 1991 then?

and yes I owned 3 properties in the UK from 1990 -2005 and have seen the bubble / crash cycle a few times too.

but there are major differences between normal cycles and what's to come in the next 10 years, we have never been here before.

[Skeptic Ginger]

Originally Posted by kevsta

ok, so you would need to start your inflation calculations from earlier than 1991 then?

You seem to be having trouble getting it. The house I bought in 1991 vs the value of said house now was the discussion. The first house I bought in the 80s was $45K, the second one $95K and both sold for more than double. If you want to calculate from 1980 then start with $45K and end at $600K.

Originally Posted by kevsta

...but there are major differences between normal cycles and what's to come in the next 10 years, we have never been here before.

I don't see the evidence for your doom and gloom with the exception the wealth is too concentrated at the top and that needs to change. I'm pretty sure such cycles are nothing new including a top heavy economic system.

[kevsta]

Originally Posted by Skeptic Ginger

I don't see the evidence for your doom and gloom

what apart from an insolvent global banking system and inbound global recession this year?

Quote:

http://www.streettalklive.com/daily-...d-reality.html
The chart shows the home ownership rate in the U.S. As of the latest quarter the level of home ownership has declined back to levels last seen in 1980 before the Savings & Loan crisis.

That particular real estate related debacle had a profound effect on the real estate market at that time as homeowners mailed their keys back to the banks. It was then that the government set up the Resolution Trust Corporation to efficiently dispose of the houses that were required to be foreclosed on. While the level of home ownership "bottomed" in the early 80's it took more than a decade before housing, and consequently home "ownership" truly began to recover.

While there is a tremendous amount of hope for a housing recovery in 2012, just as there has been during the last 3 years, the simple reality is that a "real recovery" may be a very long time away.

A weak economic environment growing at a sub-par rate, burdened by excessive debt levels which sap potential growth, high unemployment and rising temporary work suppressing wages, tight credit standards and trapped borrowers all work against a housing recovery at the current time.

Unfortunately, for many Americans, the dream of home ownership turned into a horrifying nightmare. The psychological impact caused by the housing bust is also something that will impede a real housing recovery in the future until the painful memories have faded into the mist.

[psionl0]

Originally Posted by kevsta

but there are major differences between normal cycles and what's to come in the next 10 years, we have never been here before.

I think you might be underestimating the value of owning the roof over your head.

I have heard many an investment analyst point out that there is more money to be made from the stock market than in bricks and mortar. They have the figures to prove it too. However, what they ignore is that householders always need to be able to pay rent and home ownership is insurance against being kicked out in the street during the bad times.

All I can say is that rents all around me are shooting through the stratosphere and I am immune from all of it. And when governments are forced by their creditors to abolish the old age pension, I will be able to use the equity in my house to prevent myself from starving.

[kevsta]

Originally Posted by psionl0

I think you might be underestimating the value of owning the roof over your head.

I have heard many an investment analyst point out that there is more money to be made from the stock market than in bricks and mortar. They have the figures to prove it too. However, what they ignore is that householders always need to be able to pay rent and home ownership is insurance against being kicked out in the street during the bad times.

only full ownership? not paying a mortgage should have you out on the streets too, although not so much in the USA any more/

as I said, I owned 3 properties, and am now very happy renting for the 7th year, rents are about 2/3 of a mortgage cost here and without all the property bills.

and the freedom to just move somewhere better/cheaper any time you find it is not comparable to the ball and chain of mortgage payment responsibility.

Originally Posted by psionl0

All I can say is that rents all around me are shooting through the stratosphere and I am immune from all of it. And when governments are forced by their creditors to abolish the old age pension, I will be able to use the equity in my house to prevent myself from starving.

where are you based, Sydney isnt it? seen Steve Keen's latest post on US & AU housing prospects?

http://www.debtdeflation.com/blogs/2...lly-look-like/

Quote:

Though US house prices have now returned to their 1986 level, mortgage debt has not. All the “froth” pumped into the market by 30 years of rising mortgage debt has now gone, but the level of mortgage debt is far higher.

This is why house prices could fall a lot further in the USA—even though they’re now a relative hair’s breadth from the long term average. As I’ve argued regularly here, the real driver of change in asset prices is the acceleration of debt.

There revision has intriguing consequences for the Australian market. My Australian data comes from cobbling together Nigel Stapledon’s PhD research into long term real house prices from the late 1800s to the ABS data which began in 1986—and it too is hardly data of the standard that the physical sciences expect.

But that said, the Australian house price bubble appears even more extreme: 3 times the long term average, versus “only” twice the long term average when Greenspan told Congress that there was no bubble in US house prices.

[psionl0]

Originally Posted by kevsta

where are you based, Sydney isnt it?

lol Yes and I know your friend who lives next door in Melbourne. (Seriously though, Google Earth will pinpoint my location to within 30 seconds of arc).

I'm not sure what the housing situation is like in Sydney ATM but in my home state (Western Australia) you can see the two-speed economy all over the place. WA is the only state earning enough export income (through mining) to keep the country afloat. The result of this is severe housing shortages. For the second time in 5 years we see prospective tenants engaging in bidding wars for the few rental properties available here. We see people people paying hundreds for the few motel rooms that are available here or palatial rents for a site at a caravan park.

Meanwhile, I sit in my ball and chain and wonder at the insanity of it all.

[kevsta]

Originally Posted by psionl0

lol Yes and I know your friend who lives next door in Melbourne. (Seriously though, Google Earth will pinpoint my location to within 30 seconds of arc).

I'm not sure what the housing situation is like in Sydney ATM but in my home state (Western Australia) you can see the two-speed economy all over the place. WA is the only state earning enough export income (through mining) to keep the country afloat. The result of this is severe housing shortages. For the second time in 5 years we see prospective tenants engaging in bidding wars for the few rental properties available here. We see people people paying hundreds for the few motel rooms that are available here or palatial rents for a site at a caravan park.

Meanwhile, I sit in my ball and chain and wonder at the insanity of it all.

haha, yea, do you know Jeff in Brisbane then? well Im glad to know you will be ok when the zombie apocalypse descends on us

[psionl0]

Originally Posted by kevsta

well Im glad to know you will be ok when the zombie apocalypse descends on us

Oh! ZOMBIE apocalypse! I thought you were talking about normal apocalypses.

Obviously, zombies aren't going to recognize the equity I have in my home so I will be screwed in this worst case scenario. I wonder if you can buy them off with your gold?

[kevsta]

Originally Posted by psionl0

Oh! ZOMBIE apocalypse! I thought you were talking about normal apocalypses.

Obviously, zombies aren't going to recognize the equity I have in my home so I will be screwed in this worst case scenario. I wonder if you can buy them off with your gold?

no but you can clump them over the head with it

[psionl0]

If you can do that then you are probably strong enough to do more harm with your bare fist.

[kevsta]

Originally Posted by psionl0

If you can do that then you are probably strong enough to do more harm with your bare fist.

a roll of 6 x 1oz coins in a rugby sock impacts an impact that only top boxers could match and has no knuckles to worry about breaking.

"the silver bullet"

[kevsta]

so now the anti-Zombie techniques are all clear, back to this..

Originally Posted by Skeptic Ginger

I don't see the evidence for your doom and gloom..

would this kind of thing factor into your evidence gathering at all?

http://www.standardandpoors.com/rati...=1245333370039

Quote:

A formidable wall of debt maturities and new money requirements over the next five years or so (which Standard & Poor's estimate at $43 trillion to $46 trillion), along with a volatile geopolitical climate that is causing skittishness in financial markets, poses downside risk of a perfect storm for global credit markets.

and although they "say" they think it will all muddle through somehow..

Quote:

Notwithstanding this downside risk, our current view is that most nonfinancial corporate debt issuers will be able to continue to manage their forthcoming refinancings, although credit rationing may constrain new term bank financing to fund growth.

..don't they always? lets remember these are the people who rated subprime and various (now) failed banks AAA .. they continue..

Quote:

Governments and central banks have less fiscal and monetary flexibility to prevent serious problems emanating from future market disturbances. A perfect storm scenario would likely cause financing disruptions even for borrowers that are not highly leveraged.

the point is that the exponential debt creation we have experienced for the last 2 or 3 decades cannot continue, at least not until the un-payable portion of the last lot has been destroyed.

IMO there are just too many potential causes of real trouble out there, for there not to be real trouble arriving at some point.

[kevsta]

If anybody is wondering about the likely macro future of the housing market I would highly recommend watching this.

YouTube Video This video is not hosted by the JREF. The JREF can not be held responsible for the suitability or legality of this material. By clicking the link below you agree to view content from an external website.

I AGREE

if anybody doesnt want to watch the video you can listen to the audio and flick through the slides from here

http://www.gordontlong.com/Macro_Analytics.htm

its about halfway down search the page for

"Thursday May 3rd 2012 HOUSING - SHIFTING PERCEPTIONS & DEMOGRAPHICS"

or dont say you weren't warned.

[Skeptic Ginger]

Well the house down the street listed for $410K that resulted in a bidding war on the first day is set to close at $450K. A young couple working at Microsoft wanting that 3 mile commute are buying it.

[Tippit]

Originally Posted by kevsta

a roll of 6 x 1oz coins in a rugby sock impacts an impact that only top boxers could match and has no knuckles to worry about breaking.

"the silver bullet"

Silly Europeans and Australians! Get yourself one of these:

http://en.wikipedia.org/wiki/Benelli_M4_Super_90

I have an EOTech holographic weapon sight on mine, plus a 170 lumen tactical light and 5mw laser as well as numerous modifications and improvements. Guaranteed to stop most zombies. And that's just for if they actually make it inside the property 8)

[psionl0]

Originally Posted by Tippit

Silly Europeans and Australians! Get yourself one of these:

http://en.wikipedia.org/wiki/Benelli_M4_Super_90

I have an EOTech holographic weapon sight on mine, plus a 170 lumen tactical light and 5mw laser as well as numerous modifications and improvements. Guaranteed to stop most zombies. And that's just for if they actually make it inside the property 8)

Zombies, yes but will it keep the banksters at bay?

[kevsta]

Originally Posted by Tippit

Silly Europeans and Australians! Get yourself one of these:

http://en.wikipedia.org/wiki/Benelli_M4_Super_90

I have an EOTech holographic weapon sight on mine, plus a 170 lumen tactical light and 5mw laser as well as numerous modifications and improvements. Guaranteed to stop most zombies. And that's just for if they actually make it inside the property 8)

lol, I used to have a Franchi Spaz 20 odd years ago, but that was more suitable for London than Ibiza.

Originally Posted by psionl0

Zombies, yes but will it keep the banksters at bay?

I recommend these, dual purpose

[Puppycow]

The recovery does seem to be continuing:

The economic impact of a slight increase in house prices

Quote:

If I’m correct about house prices bottoming earlier this year – and the CoreLogic report released this morning is another indicator that prices might be increasing a little - a key question is: What will be the economic impact of slightly increasing house prices?

We saw the impact on Freddie Mac this morning. Freddie reported net income of $3 billion compared to a $2.4 billion loss in Q2 2011. Freddie noted that the decline in its loss provision was due to “improvements in the number of newly impaired loans and to lower estimated future losses due to the positive impact of an increase in national home prices.”

Also I expect CoreLogic and Zillow to report a meaningful decline in the number of homeowners with negative equity in Q2. We might see something like 1 million households that regained a positive equity position at the end of Q2 2012. These are borrowers who might find it easier to refinance, or sell if needed.

We will probably also see a meaningful decline in the number of newer mortgage delinquencies. Note: The MBA Q2 National Delinquency Survey results will be released this Thursday.
Read more at http://www.calculatedriskblog.com/20...bGywIlUe78o.99

Freddie Mac has finally stopped bleeding money, which is good for taxpayers.
Meanwhile Fannie Mae reported $5.1 billion in quarterly profit.
Maybe Freddie and Fannie can begin to pay back taxpayers now, although they will need a lot more profitable quarters to pay back the $142 billion they still owe taxpayers.

Quote:

Fannie reported a major drop in anticipated losses from bad loans it bought or guaranteed during the subprime mortgage boom. Because of that, Fannie did not have to set aside any additional money for future loan losses.

The company actually reported a $3-billion benefit from its $68-billion fund to cover future losses because losses in the second quarter and anticipated future write-offs were both down sharply.

Fannie Mae’s upbeat earnings followed a similar report Tuesday by Freddie Mac, which posted a $3-billion second quarter profit and also said it would not need more bailout money for that period.

The two companies, which are in government conservatorship and owned by the taxpayers, have received a combined $188 billion in federal money since 2008. Fannie and Freddie have repaid about $46 billion to the Treasury in dividends, leaving taxpayers on the hook for about $142 billion.

For every quarter that neither company needs additional bailout funds the dividend payments further reduce the amount owed to taxpayers. Combined, Fannie and Freddie own or back about 60% of all U.S. mortgages.

Fannie’s $5.1-billion second-quarter profit was the most the company has reported since 2004, when it restated its past earnings.

“It’s probably one of the most profitable quarters the company has ever had, pre- or post-conservatorship,” said Susan McFarland, Fannie’s chief financial officer. “Most of the things that affect our bottom line, with one exception, moved in a positive direction.”

[Robrob]

Market has bumped up enough that I have the equity required to refinance at what is still an extraordinarily low rate. I now have a brand new 15 year fixed loan for just a couple hundred over what I was paying on my old 30 year (26 years remaining) fixed loan.

[kevsta]

Originally Posted by Puppycow

The recovery does seem to be continuing:

The economic impact of a slight increase in house prices

McBride is a housing optimist, its a dead cat bounce IMO

Schiller's latest in WSJ

Quote:

All that might make it tempting to call the “all clear” once and for all. But one of the earliest experts to identify the real-estate bubble, Yale University professor Robert Shiller, isn’t convinced we’ve crossed into safe territory just yet.

His reasoning? The home-price rebound, if that’s what it is, doesn’t yet have momentum – which Shiller’s research has found is the most powerful driver of home prices.

Momentum is the tendency for prices to keep moving in the same direction. It exists, but is a relatively weak force, in the stock market. In the housing market, though, it’s proven to be a reliable predictor of where prices will go in the future.

That’s in part because of what Shiller calls “feedback loops.” When someone makes a lot of money off of home-price increases, his friends hear about it and maybe the media takes note. Others who hear those stories decide to take their chances buying a home themselves. That leads to further price increases and more success stories, and the loop continues.

Feedback loops can help home prices – as they did during the housing boom – or hurt them, as they have with all the bad real-estate news over the last few years.

With several successive months of price increases, you’d think that momentum would finally be in the real-estate market’s favor. But Shiller says he stills sees reason to be skeptical.

“It could be [a bottom]. It’s a real possibility. I just don’t know,” he says.

Among the reasons to be wary, according to Shiller: a large overhang of homes that are either in foreclosure or near it. If those homes flooded the market, it could push prices down even further.

And though momentum is the No. 1 driver of home prices, the No. 2 driver, the unemployment rate, is still well over 8%.

Shiller thinks speculative bubbles might already be forming in some cities, namely San Francisco and Phoenix, which have risen 5.7% and 14%, respectively, on a seasonally-adjusted basis since bottoming.

Prospective buyers in those markets remember the huge run-ups in their markets in the last decade and so have been “primed to think speculatively,” in Shiller’s words. “At other times in history, little attention has been paid to timing the housing market,” he says. “There was a change in our mindset. Now we start thinking about the housing market as like the stock market.”

How long until the momentum effect takes hold? Shiller says he’d want to see home prices continue to increase through the fall and spring before he’s comfortable that it’s here to stay.

it wont make it through fall and spring

[Puppycow]

U.S. Home Prices Rose More Than Forecast in Year to July

Quote:

Home prices in the U.S. climbed more than forecast in July from a year earlier, adding to signs that housing will spur economic growth.

The S&P/Case-Shiller index of property values in 20 cities increased 1.2 percent from July 2011, the biggest 12-month advance since August 2010, a report from the group showed today in New York. The median forecast of 23 economists surveyed by Bloomberg called for a 1.1 percent gain.

The lowest mortgage rates on record are attracting buyers, helping absorb the supply of distressed properties that had depressed values. A stabilization in residential real estate may also be contributing to recent gains in consumer confidence that, combined with improving household wealth, will lead to a pickup in spending, the biggest part of the economy.

[RedRatSnake]

I have seen a lot of house for sale signs come down in the last few months and some new construction on new ones, i take that as a sign things are lifting up somewhat, i don't think we here in Mass got hit as bad as some places so we might be recovering a bit sooner than other states, Good thing is the news lately has been on the upswing.

On an unrelated subject i have seen more made in USA stickers on products and some that boast proud to be made in USA, Awesome

Tim

[Puppycow]

Shadow inventory nowhere in sight:

Home Sales Rise for 15th Month

Quote:

The 2.32 million homes listed for sale in September was 20% below last year's level and down by 3.3% from August. Inventory hasn't been lower since 2005. At the current pace of sales, there were 5.9 months of supply in September, the lowest level since March 2006, before housing markets went into free fall.

Housing demand has climbed this year as mortgage rates have fallen to their lowest levels on record. Applications for home-purchase mortgages last week rose 12% above last year's levels, according to a separate report from the Mortgage Bankers Association this past week.

Meanwhile, rising rents and improving consumer confidence has created urgency. Prices are also rising. Median home prices rose 11.3% from one year ago, to $183,900, the NAR said.