We know we're coming off the bottom of the housing crash, but over the summer it felt to some like we were rocketing off the bottom. Now, not so much.
It is a matter of perspective. New home construction is still barely half of what a normal, non-bubble market would look like. Existing home sales are coming off lows from last year, but last year was the hangover from the 2010 home buyer tax credit, so again, a little perspective.
"The year-over-year gain was the smallest of the year and comps against last year when the housing market was in a full blown double-dip mode," notes analyst Mark Hanson.
Hanson expects a drop-off in home sales this fall, due to lack of supply out West, where home sales had been fueled by distressed properties (foreclosures and short sales).
We are already seeing weakness. California home sales fell 16.5 percent in September from August and were down nearly 3 percent from a year ago, according to DataQuick. Foreclosure activity in California is at its lowest since 2007. ...
While the nation's home builders are seeing improvements in gross margins and big gains in new orders, they are coming off such historic lows that their overall volume is still quite weak. Another problem is that investors rushed into the builder stocks the moment they got a whiff of any recovery last year.
2--Why is the left defending Obama?, Salon
Obama came into office with a massive mandate, overwhelming control of Congress, hundreds of billions of TARP money to play with, the ability to prosecute Wall Street executives and break their power, and the opportunity for a massive stimulus. Most importantly, the country was willing to follow – the public believed his calls for change. Yet, instead of restructuring the economy and doing obvious things like hardening infrastructure against global warming, he entrenched oligarchy. This was explicit. Obama broke a whole series of campaign promises that would have helped the middle class. These promises would have reduced household debt, raised the minimum wage, stopped outsourcing, and protected workers. He broke these promises for a reason – Barack Obama uses his power for what he believes in, and Barack Obama is a conservative technocrat. Obama sided with Wall Street. He probably made the foreclosure crisis worse with a series of programs designed to help banks but marketed to help homeowners. These were his policies, they reflected the views of his most valued advisors like Robert Rubin and his Treasury Secretary Tim Geithner. Moreover, he’s proud of this record – ...
Obama broke a significant number of campaign promises from 2008, promises that would have secured bargaining leverage for debtors and labor. These included : a higher minimum wage, a ban on the replacement of striking workers, seven days of paid sick leave, a more diverse media ownership structure, renegotiation of NAFTA, letting bankruptcy judges write down mortgage debt, a ban on illegal wiretaps, an end to national security letters, stopping the war on whistle-blowers, passing the Employee Free Choice Act, restoring habeas corpus, and labor protections in the FAA bill
ELECTION Day is upon us, and neither President Obama nor Mitt Romney has really addressed one of the nation’s most pressing economic issues: the risk that one day taxpayers might have to bail out swashbuckling financial institutions again
5--Sept Existing House Sales…beneath the headlines, Mark Hanson
It is very important to remember that September Existing Sales come from July & August contracts, which is still peak season. This is unlike next week’s Pending and New Sales, which are from the month of September, when I believe this year’s stimulus-induced ‘demand’ it an important inflection point.Many think the number of days in the subject month greatly effect existing sales closings. This is mostly incorrect. The number of days in the subject month effect Existing Sales closings — contracted 30 to 60 days prior – to a far less extent than Pendings, New Home Sales and refi’s for example, which are counted at execution.
Bottom line: September Existing Sales (a result of July / Aug contacts) FELL 100k unit or 21% MoM. This is huge. On a YoY basis they were only up 2.2%, the smallest gain in a year
6--Real estate investors are optimistic about housing market, WA Post
Still, from my experience in the Washington area, business conditions are changing with rising home prices, stiffening competition and shrinking margins. Anyone seeking to get into real estate investing should proceed with caution and not expect to earn the same money that has been made in the past few years.
The report points out that investors played a fairly substantial role in the housing recovery. The housing crisis pushed nearly 4 million foreclosures onto the open market, devastating home values. This and the coinciding financial crisis squashed homebuyers’ confidence and their ability to buy. At that time, real estate investors began buying up the foreclosures when few other people could enter the market. They bought up so many properties that they established single-family rentals as a $100 billion business. In fact, the report says that single-family rentals now outnumber apartment units...
Even more interesting, the report tells us that this group of active investors does not plan to slow down despite rising home prices and increased competition. About 65 percent of the active investors plan to buy as many or more properties in the next 12 months as they did in the past 12 months. This is big news considering that fact that real estate investors accounted for as much as 25.3 percent of all home purchases as of May 2012. This indicates that investors have confidence that the housing recovery will continue and their robust activity will help ensure it
7--What Today's Jobs Report Says About the Housing Market, CNBC
One of the biggest barriers to entry for potential home buyers, new and move-up, has been uncertainty in employment. So this positive report can only add to rising consumer confidence and wealth.
When you dig down into the numbers, however, you can see where the numbers are not quite as rosy as some would hope for both home buyers and builders.
While overall construction added 17,000 jobs in October, residential-building construction employment fell by 2,000. Residential specialty contractor jobs increased by 6,700, which speaks to the real root of today's housing recovery.
All-cash investors are leading the gains; they buy distressed properties and then repair and remodel them to turn them into rentals. It's no wonder remodelers are seeing greater gains than the home builders.
An industry index of remodeling finally climbed into the positive in October, making a significant jump to its highest level since the end of 2005. Both current conditions and future expectations saw gains on the National Association of Home Builders' remodeling index (RMI). The builders claim it is not just investors, but a result of rising home equity.