The Federal Reserve soi-disant Beige Book reported today that economic activity grew at a lesser pace than in previous six-week reports; and increased consumer uncertainty curtailed housing sales in most areas.
According to RE/MAX Valley Real Estate’s Mahoning Valley Housing Report (MVHR) for August, 2011, single family residential sales (not seasonally adjusted) soared 26.1 percent from 272 units in July to 343 in August. Although the month over month increase was dramatic it was not enough to avoid yet another decrease of 0.7 percent annually. The seasonally adjusted, year over year comparison of closed transactions dropped again for the 42nd consecutive month.
“Due to the stubbornly high new home prices and lower existing home prices, the gap between the two has opened up. From consumers’ point of view, therefore, existing homes offer an increasingly better value. Because of this, we should expect new home sales to lag behind in the recovery as compared to existing home sales.”
— Lawrence Yun, Chief Economist & Senior Vice President, Research, Economist’s Outlook, September 1, 2011
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Yesterday, the S&P/Case-Shiller Home Price Indices reported that shifts in home … “suggest that we are back to regional housing markets, rather than a national housing market where everything rose and fell together.”
This new report from by Lender Processing Services, Inc. (LPS) sheds more light on why this shift to regional markets is happening. Areas that are drowning in foreclosure (i.e. Las Vegas, Miami, Phoenix, Tampa, Cleveland, and Detroit) continue to see falling home prices as the timeline for foreclosures increase; while cities in states that do a better job clearing their foreclosure dockets (i.e. California cities, Dallas, Denver and Washington D.C.) prices have remained above their lows and are even climbing, albeit slowly. Continue reading
Report shows that the Index’s earlier prediction of a double dip for home prices may have been premature as home prices in the second quarter gained back over 60 percent of the steep slide in the first quarter. However, we’re reminded that prices are still considerably below comparable 2010 periods and sustainable recovery is shaky at best. The report also suggests that the market might best be gauged regionally rather than nationally because of the wide differences exhibited at local levels.
After strong back to back showings for Pending Home Sales in May and June the forward-looking indicator declined in July but remained significantly above year-ago levels, according to the National Association of Realtors®. All regions joined the monthly decline except for the West, which continues to show the highest level of sales contract activity.
Signs of weakness in the housing market are abundant, according to the June 2011 RPX Monthly Housing Market Report released today by Radar Logic Incorporated. The RPX Composite price, which tracks housing values in 25 major metropolitan markets in the United States, declined 4.7 percent year over year through June, and this spring brought the smallest seasonal increase in the RPX Composite on record.
RealtyTrac® released its Q2 2011 U.S. Foreclosure Sales Report™, which shows that sales of homes in some stage of foreclosure or bank owned accounted for 31 percent of all U.S. residential sales in the second quarter of 2011, down from nearly 36 percent of all sales in the first quarter but up from 24 percent of all sales in the second quarter of 2010.
The economy was hit by a barrage of disappointing news during the last month, which led to a significant downgrade in the overall macro economic forecast released Monday by Fannie Mae’s (FNMA/OTC) Economics & Mortgage Market Analysis Group. While the August 2011 Economic Outlook does not forecast a double dip recession, the downgraded forecast reflects the Group’s view that the probability of another recession is close to a coin toss. For all of 2011, economic growth is expected to downshift to 1.4 percent from 3.1 percent in 2010. Growth is expected to pick up in 2012, but only to about 2.0 percent, compared with 3.1 percent projected in the July forecast.
Last week in Atkinson, Illinois, President Barack Obama conceded that it will take at least a year for housing prices and sales to even “start” rising. From the looks of the most recent new-home sales figures, he wasn’t kidding. July marked the third straight monthly new-home decline, and puts 2011 square on pace to become the worst year for new- home housing on record.
Sales of newly built, single-family homes dipped another 0.7 percent in July from the previous month to a seasonally adjusted annual rate of 298,000 units, according to newly released data from the U.S. Commerce Department.
“While new-home inventories are exceptionally thin, home builders are still competing with large numbers of foreclosed and distressed homes on the market and a climate of uncertainty in which consumers are reluctant to go forward with a major purchase for fear of what economic news tomorrow might bring,” said Bob Nielsen, chairman of the National Association of Home Builders (NAHB).
“The sales pace of newly built, single-family homes in July was in line with what it has been over the last year, and this is in keeping with our forecast,” said NAHB Chief Economist David Crowe. “While we expect to see some marginal gains in sales activity through the rest of 2011, we do not foresee any major advances until economic growth helps boost home buyers’ confidence.”
The inventory of new homes for sale in July fell to a 48-year record low of just 165,000 units, which represents a 6.6-month supply at the current sales pace.
“Putting this situation into perspective,” said Crowe, “The current nationwide inventory of completed new homes ready for occupancy – at 61,000 units – is in keeping with what a single major metropolitan area such as Atlanta might sell in a typical year.”
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In an article by Steve Neavling, Detroit Free Press, August 18, 2011 he reported that with the help of a grant from J.P. Morgan Chase Foundation, Detroit hopes to lure back city police officers and employees to foreclosed homes in targeted neighborhoods within the city. But, Detroit policemen aren’t exactly falling over one another to take the bait.