Existing Home Sales Decline
Hot off the wire..
Existing Home Sales Decline in October.
Home Sales in the Northeast Decline 7.4% compared to last month (seasonally adjusted). The unadjusted fall in the Northeast was 10.6% vs last month, and 1.1% versus last year.
Existing Home Sales were expected to come in anywhere from 7.20M to 7.30M, but instead dropped significantly to 7.09M.
Nationally, the months supply increased from 4.6 in September to 4.9 in October, a whopping 14.0% percent from last year.
Existing Home Sales
More to Follow.
Caveat Emptor,
Grim
Existing Home Sales Decline in October.
Home Sales in the Northeast Decline 7.4% compared to last month (seasonally adjusted). The unadjusted fall in the Northeast was 10.6% vs last month, and 1.1% versus last year.
Existing Home Sales were expected to come in anywhere from 7.20M to 7.30M, but instead dropped significantly to 7.09M.
Nationally, the months supply increased from 4.6 in September to 4.9 in October, a whopping 14.0% percent from last year.
Existing Home Sales
More to Follow.
Caveat Emptor,
Grim
12 Comments:
U.S. October Existing Home Sales Fall 2.7% to 7.09 Million Rate
U.S. sales of previously owned homes fell a larger-than-expected 2.7 percent in October to the lowest level since March, evidence that rising mortgage rates and skyrocketing prices are putting buying out of reach for some. The inventory of unsold homes rose to the highest since April 1986.
...
Sales were lower in all four regions. They dropped 7.4 percent in the Northeast to a 1.12 million-unit pace, 1.9 percent in the Midwest to a rate of 1.58 million units, 1.8 percent in the South to 2.76 million units, and 1.2 percent in the West to 1.64 million units.
grim
Here's some more startling numbers from this link below. BTW all these layoffs have to be taking it's toll. Pfizer was just a few months ago. The lawsuits with Big pharma and the lack of new product in the pipeline. Northern NJ is losing much of it's high paying jobs. Telecommunication-At&t, High Tech-Lucent.
"New Jersey foreclosure rates were the highest in the country, with one foreclosure for every 422 households, and New Mexico foreclosures ranked third highest, with one property in every 601 in foreclosure."
http://getforeclosures.blogspot.com
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Anyone buying a home at these prices deserves the loss they are going to get if they want to sell in next 8-10 years.
Incomes going down but morons sign up for the most risky loanns to get.
It's funny how eager these morons are to sign up for financial despair.
There are no free lunches folks.
Paying 8-9 times incomes to buy a house is stupid!
With inventory levels at 20 year highs, it's hard to argue that there is any sort of shortage of housing. In fact, with the level of building we've seen nationally, we're likely to be sitting in a position of significant oversupply when demand begins to break down.
grim
The panic has only started and the reality of owning an asset falling in price will force more and more to sell. Inventory levels are going to skyrocket.
Alot of people sucked in to the real esatte industries con-job are going to be shocked at the losses they are about to face. Many will face financial ruin when this all ends.
November sales will be much lower.
I think a lot of houses are being pulled from the market right now. People will try to relist them around Feb-March (the beginning of the spring season). We will be in limbo with respect to prices until then. People will remain in denial-- realtors keep insisting it's the typical winter slowdown. There will be an explosion of listings this spring. That is when the real correction will begin.
Keep in mind Existing Home Sales is a lagging indicator. This is a confirmation of the anecdotal evidence we were seeing in September. Quite a bit has happened since then. With the media fixated on the bubble, reports such as these will only serve to emphasize the fact that the bubble is quickly deflating.
grim
Skep-tic
Long-time homeowners can sell at significantly reduced prices and will still be making handsome rewards. If demand shifts, it will be these long-time homeowners that can flex comfortably with the market. I'd wager a guess and say we probably have more long-time homeowners than folks that have purchased in the past 5 years. It doesn't matter if recent buyers refuse to sell, longer term buyers will be able to sell, and will still be laughing all the way to the bank.
You say that people have come to expect massive appreciation. Wouldn't the realization that appreciation has come to a grinding halt be enough of a trigger to destroy any demand associated with housing as a high-gain investment?
jb
Anyone who purchases with an Interest Only or other type of Neg-Am loan is speculating, whether they realize it or not.
Now, to get a handle on the level of speculation within the market, we can look at the ratio between traditional fixed loans and these high leverage speculative plays.
I'll reference an oldie but goodie.
Interest-only loans offer payment shock down the road
The percentage of homebuyers using interest-only loans has skyrocketed.
National 2005* 22.9%
National 2004 30.9%
National 2003 13.4%
National 2002 6.0%
National 2001 1.6%
New Jersey 2005* 20.0%
New Jersey 2004 19.4%
New Jersey 2003 9.3%
New Jersey 2002 6.2%
New Jersey 2001 2.4%
* Through May
Source: LoanPerformance, a subsidiary of First American Real Estate Solutions
The fact of the matter is, there is a significant amount of speculation in NJ.
grim
I agree with skep-tic that they can keep their homes if theyt keep making payments.
But these are the factors against them.
1) 5 years in their payment increases 40%.
2) The ARM folks will see payments increment with the fed actions (likely to go up
3)Low down payments less to lose and if they are below median income according to the new bankruptcy law, they can walk away.
4) Energy costs will likely remain high pinching homeowners and I believe it is part of the story in NJ with the defaults this past month.
5) Property taxes have jumped incredibly over the last few years. This is a national trend BTW.
6) IO's are marginal loan candidates and in january credit card min. payments will double. (again bankruptcy law)
If that doesn't knock more than a few homeowners down?
By the way my brother in law worked at fannie mae when the idea for IO loans was hatched. It's original intent was for the executive with IBM syndrome (i've been moved) It was a way to backload the transaction costs when these guys got moved in thre years or less.
Skep-tic,
Points well taken, I just see that these factors will in the aggregate hit people who 2-3 years ago thought all the other factors would remain static. If you go to the blog another f'd borrower there is a story about some guy making $28K/yr with a $40K suv wanting to borrow $400,000. The guy who runs the blog is a loan officer in So. California. He says that he would not touch it with a ten foot pole but he claims that there are other who don't care because they sell they paper to fannie mae. Check it out it is very scary.
I have been following a site now for almost 2 years and I have found it to be both reliable and profitable. They post daily and their stock trades have been beating
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Take a look at Wallstreetwinnersonline.com
RickJ
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