From MarketWatch:
New-home sales fall to 7-year low in February
Sales of new-homes unexpectedly slowed again in February, falling 3.9% to a seasonally adjusted annual rate of 848,000, the lowest since June 2000, the Commerce Department reported Monday.
Economists surveyed by MarketWatch were expecting an increase in February to about 1.00 million units.
Sales were down 18.3% compared with February 2006. Sales in January were revised lower to show a 15.8% drop to an 882,000 annual rate compared with 937,000 reported previously. Reported sales in December and November were also revised lower.
Inventories of unsold homes rose 1.5% to 546,000, representing an 8.1-month supply, the largest inventory in relation to sales since January 1991. The inventory is up 26.6% in the past 12 months.
The number of completed but unsold homes rose to 179,000 from 177,000, up 43% from a year earlier.
The median price of a new home was $250,000, down 0.3% compared with February 2006.
From Bloomberg:
New-Home Sales in U.S. Fell 3.9% to 848,000 Pace in February
New-home sales in the U.S. unexpectedly fell in February to the lowest since June 2000, dimming prospects for a quick revival in housing.
Purchases declined 3.9 percent to an annual pace of 848,000 last month from a revised 882,000 rate in January that was lower than previously reported, the Commerce Department said today in Washington. The supply of unsold homes at the current sales pace rose to the highest in 16 years.
…
Economists had forecast new home sales would rise to a 985,000 rate from a previously reported 937,000 for January, according to the median of 63 projections in a Bloomberg News survey.The median price of a new home fell 0.3 percent in February to $250,000 from $250,800 a year earlier, today’s report showed.
The number of homes for sale at the end of the month rose to 546,000 from 538,000 in January. That left the supply of homes at the current sales rate at 8.1 months’ worth, compared with 7.3 months in January. The number of homes completed and awaiting a buyer rose to 179,000 last month.
From Marketwatch:
U.S. new-home sales down 18.3% year-on-year
U.S. six-month average new home sales falls to 992,000
U.S. Jan., Dec., Nov. new-home sales revised lower
U.S. Feb. median home prices nearly flat year-over-year
U.S. Feb. new-home inventories rise to 8.1 months’ supply
U.S. Feb. new-home inventories highest in 16 years
U.S. Feb. new-homes sales much weaker than 1 mln expected
U.S. Feb. new-home sales fall 3.9% to 848,000 annual pace
U.S. Feb. new-home sales lowest since June 2000
From the U.S. Census Bureau:
Did the stock market SLUMP right after these numbers were reported?
From the AP:
Sales of New Homes Fall Sharply
Sales of new homes fell sharply for a second consecutive month in February, a weaker-than-expected performance that dimmed hopes for a rebound in the troubled housing market.
…
By region of the country, sales were up 24.6 percent in the West, a rebound after a 25.8 percent plunge in January.
However, every other region showed weakness last month, led by a 26.8 percent drop in sales in the Northeast and a 20 percent decline in the Midwest, two areas which experienced a series of winter storm. Sales also fell in the South, dropping by 7 percent.
All-
Remember, look for the 800,000 numbers as a low point…we’re getting there.
JM
Timberrrrrrrrrrrrrr!
Waiting for the “blame game” to start..
“February was an unusually cold month…”
Remember, look for the 800,000 numbers as a low point…we’re getting there.
Why do you think 800k will be the low point? When do you think this will be reached?
Down 26.8% in the Northeast? D’oh!!
Did the stock market SLUMP right after these numbers were reported?
Yes it did. Big swing in the market. Dropped on a cliff at 10:00 am. It’s now down over 100 points.
I guess investors are starting to rethink the notion that housing woes won’t bleed over into the rest of the economy.
The sad part is, the news of housing starts will be overshadowed by the “official release” of the reason why Anna Nicole Smith died.
Pathetic media.
A person I’m close to owns a large building products manufacturer, he also has been in building and real estate development for 35+ years (also a PHD in finance), the lowest he’s ever seen it is 800k. He strongly feels that will be the bottom for new housing sales.
Can’t tell you when it will happen, but it’s heading that way, quickly.
JM
Caught without a chair as the music stopped:
60k income, 540k house, it is as simple as that. They could not afford it. Forget about the sweet talk, just plain common sense should have toald them.
Laying Blame and KB Home’s Results
watch http://www.paperdinero.com/BNN.aspx?id=108
The loan servicing company, American Home Services, will foreclose on the new house Saturday.
But if they can’t sell it, what is the lender going to do once it forecloses – the lender won’t be able to sell it, either, or the lender will sell it, but at a steep loss.
Wouldn’t it be in the lender’s best interests to try for a workout? Maybe reduce the monthly payments for six months or a year to give them more time to try to sell one property or the other?
Once it goes to foreclosure, selling the house for something close to market value becomes a lot less likely.
from the weekend thread
att Says:
March 25th, 2007 at 7:32 pm
CF(#166) – Here are the answers to the questions in your post:
1. How comfortable are you with mathematics?
Pretty comfortable
2. How much statistics do you know?
Studied as part of maths some years ago. Know some simple terms, but nothing too deep.
3. How much accounting do you know?
Very little – none
4. How familar are you with the concept of discounted cash flows?
none.
Please let me know what would be good options for me.
att-sbc: To start….I have a document that used to be available on the net, but it was pulled. It functions as a marketing piece for Rydex Investments. It has two killer charts, one relates to Sectors and the Economic Cycle, and the other breaks down Sectors and Industry groups. The working assumption is that you are looking to “learn stuff”. Good place to start learning about equity investing from a “macro-economic” viewpoint. Since you do not have fundamental financial analysis skills, your approach to education is going to have to be “top-down” by necessity. Contains the concept of correlation, but you should be able to hit that Uncle Charlie pretty easily.
First lesson – separate “the company” from the financial instruments that derive their value from the company. It is the best way to understand why a good “story” or a well managed comapny can be a bad stock.
Fixed Income is much more difficult, and should wait until you digest this stuff.
From Reuters:
INSTANT VIEW: Feb new home sales down 3.9 pct
T.J. MARTA, FIXED INCOME STRATEGIST, ROYAL BANK OF CANADA CAPITAL MARKETS, NEW YORK:
“Big Picture: In a word: bleak. The new homes market continues to tank, but the builders appear to be digging in their heels as to price. The overhang of new home inventory, in conjunction with inventory of existing homes that is likely to result from rising foreclosures as well as tightened lending underwriting, represents a significant threat to the economy.”
GARY SHILLING, PRESIDENT, A. GARY SHILLING & CO. IN SPRINGFIELD, NEW JERSEY,
“Homebuilders (stocks) are getting slaughtered on the basis of this. I think people have been living in a state of denial they’ve been thinking the subprime is a funny little area of its own. That it is just a bunch of lower income people. Our judgment is that subprime is just the tip of the iceberg. This thing is spreading and it is spreading rapidly.”
Housing Bubbles don’t pop; they deflate slowly
http://www.youtube.com/watch?v=tkzb5cmmma8
It`s a very nice concise, brief explantion of the current Real Estate mess !!!
It sad that poor to lower middle class people are the ones that get affected in all this madness. It is quite legitimate to pursue profits and make money. It is a God given right. The sad part is that information which is absolutely necessary in this pursuit is only available to people who ask for it, and sadly this is the domain of the rich or literate people. The poor people get screwed all the time. Look at the ex HomeDepot CEO who made 200M in 4 years for doing nothing.
Who was cheering the existing home sales last week? Then there was someone called Sally..
Some bearish comments from Hatzius over at Goldman. From Bloomberg:
U.S. Foreclosure Filings Rise 12 Percent in February
U.S. foreclosure filings last month jumped 12 percent compared with a year ago as homeowners struggled with declining home values and higher adjustable mortgage rates.
More than 130,000 homes entered foreclosure last month, according to a report from RealtyTrac, an online listing of foreclosed properties. That’s the second-highest since RealtyTrac began collecting data in January 2005.
The worst housing slump in more than a decade is pushing down home prices and hampering the ability of owners to refinance their mortgages. Borrowers with poor or incomplete credit are also vulnerable to mortgages that are resetting at higher rates than introductory or so-called teaser rates.
“The rise in foreclosures over the past year probably only marks the beginning of the problem,” Jan Hatzius, a Goldman, Sachs & Co. economist, wrote in a March 23 report. “The main reason to expect further deterioration is that house prices are likely to fall significantly in 2007, with further declines possible in subsequent years.”
Here’s an interesting bit from Morningstar today…. the figures tell the story.
“Homebuilders: The Current Situation
To gauge the outlook for the homebuilding industry, it’s helpful to examine the recent past, as its excesses are likely to reverberate for years. The year 2005 culminated a multiyear boom with 1.3 million single-family home sales. At 1.04% of total households, that year’s sales were the highest percentage in the history of the series going back to 1965. Sales topped 1% of households only one time before–1977’s peak of 820,000. Production bottomed at 413,000 units five years later, indicating that 2006’s 17% drop is just the beginning.
Yes folks, homebuilders are suffering the aftermath of a bubble, complete with a glut of unsold homes and the beginnings of what’s likely to be a severe credit contraction. True, demographic trends are likely to increase demand over the next decade or so. Baby boomers are entering prime second-home-buying age, echo boomers are maturing, and immigration is strong. But these factors are likely to be overwhelmed for the next few years as the industry works off prior excesses. It’s likely that 2005 set the high-water mark for new home sales for several years hence.
So what is a reasonable rate of new home sales going forward? Let’s start with the headwinds. There were over 2.1 million vacant homes for sale as of the fourth quarter of 2006, a full 2.7% of all owner-occupied homes. This is unprecedented, as the highest annual vacancy rate recorded prior to this cycle was 1.8% in 1985. If one assumes an equilibrium rate of about 1.5% (the average going back to 1965), there’s roughly 900,000 extra empty homes waiting for buyers. Combine this with an oversupply of occupied homes for sale, and we think there are more than 1 million extra units out there.”
Hi,
Can some one let me know what happened to this listing?
MLS# 2365971
Thanks in advance
jb – getting 500 errors quite frequently.
Have you narrowed down any IP addresses that could be trying to bring this site down?
Also, maybe it’s time to have some sort of symbol verification before posts to prevent the bots.
my 2c.
I still talk to people who say “If you don’t buy a house soon, you’ll miss out on all the equity.”
Meanwhile, the person saying this, bought a house for $600K from a guy who paid $350K only 3 years before.
Lemmings.
This site is slowing down, it used to be very fast.
Trying to get the performance issues resolved. This site is just way too popular.
jb
“Foreclosure Wave Bears Down on Immigrants
Economic Success Story Turns Sour as Thousands May Face Losing Homes
By Kirstin Downey
Washington Post Staff Writer
Monday, March 26, 2007; Page A01
Immigrants are emerging as among the first victims of a growing wave of home foreclosures in the Washington area as mortgage lending problems multiply locally and across the country.
Nationally, 375,000 high-interest-rate loans were made to Hispanics in 2005, and nearly 73,000 of them are likely to go into foreclosure, said Aracely Panameno, director of Latino affairs for the Center for Responsible Lending. About 1.1 million homes in the United States are expected to go into foreclosure in the next six years, and many native-born Americans are likely to be stuck with burdensome loans. But immigrants are getting hit first in part because their incomes tend to be lower and many have lost construction jobs.”
From Bloomberg:
Connecticut Seeks Arrest of Former Mortgage Executive Heffernan
Connecticut officials asked for an arrest warrant against Mitch Heffernan, saying the former head of Mortgage Lenders Network USA, the second-biggest subprime lender to go bankrupt in the past year, didn’t pay employees as the company slid toward insolvency.
The state Department of Labor accuses Heffernan of failing to pay at least $1.9 million to 61 employees, said Gary Pechie, director of wage and workplace standards. The request for a warrant was sent about two weeks ago to Timothy Liston, the state attorney in Middletown, Pechie said. Heffernan, who was chief executive officer of Mortgage Lenders Network, won’t be charged unless Liston and a judge approve, Pechie said.
“We take pretty strongly the payment of wages in Connecticut,” Pechie said. “If you work, you should be paid. We’ve had people arrested over $125.” Each count of not paying a worker is a felony punishable by as much as $5,000 or five years in prison, he said.
I’m actually a bit worried I might have to go the route of a dedicated server (mucho $$$).
jb
open a “server fund” via paypal
grim: please remove moderation for #14
Open a server fund where all income is generated based upon the investment recommendations of posters here.
:-P
JB,
Could you allow advertising? I know you have taken a position against allowing advertising on your site, but if you have to shell out mucho dinero, I don’t know, it could help defray the cost.
existing sales typically lag new sales so these appear to be weak numbers for the overall market. question is how do expectations/prices react? since RE is highly localized we’ll have to continue to watch the GSMLS for inventory, anecdotal evidence from folks on this board, etc.
From the Star Ledger:
14 Paterson, Passaic officials accused of taking bribes
Federal investigators have charged 14 former and current public officials in Paterson and Passaic, accusing them of accepting bribes from a local property manager who was secretly cooperating with FBI agents.
About half of the officials from the two cities were rounded up and arrested this morning and are scheduled to make initial court appearances in federal district court in Newark this afternoon.
Interesting piece from GlobeSt.com:
Argent’s Consolidation Leaves 500,000 SF Vacant
Except to say that it was closing its wholesale loan-production operations in Westchester, specifics about the downsizing of Argent Mortgage’s operations are still sketchy. But the move is likely to have lasting implications on the county’s market and the Downtown White Plains availability rate.
Last week ACC Capital Holdings, the Orange, CA-based parent of subprime lender Argent Mortgage, announced a reduction in its work force across all lines of its business and noted that it was centralizing its retail origination and portfolio retention operations to Southern California and consolidating its New York wholesale loan production operations to facilities in Illinois. It is believed the company’s wholesale loan production operations were housed at 44 South Broadway (also known as the Westchester One office building) in Downtown White Plains. Those Argent Mortgage operations were shut down last week.
Argent also leases a considerable amount of space at 333 Westchester Ave., in White Plains. An ACC Capital Holdings spokesman, says that some sales and “other functions remain in New York.” However, he did not provide any further specifics on how many employees were let go and the size of its present operation in White Plains. Last year Argent pared down its work force at its Westchester offices that at one time totaled approximately 1,000 workers.
From Reuters:
Subprime mortgage crisis may hurt auto loans: S&P
The crisis in risky subprime mortgages may be bleeding into lower-quality auto loans, Standard & Poor’s said.
A slight increase in delinquent payments on subprime auto loans, or loans to borrowers with damaged credit, may be “an initial trickle-down of the fallout from the subprime mortgage crisis,” S&P said in a recent report.
Homeowners with subprime mortgages may face difficulty making payments on auto loans as interest rates on their adjustable-rate mortgages reset higher.
Borrowers faced with resetting home loans may have “less cash flow available for other expenses, including auto loan payments,” S&P analyst Mark Risi said.
From #35,
ACC Capital Holdings;
Clot/Pro??
From Reuters:
OceanFirst sees rise in loan repurchase reserve in Q1
Bank holding company OceanFirst Financial Corp. (OCFC.O: Quote, Profile , Research) said it expects an additional provision in the first quarter to repurchase subprime loans due to first-payment defaults.
In a conference call, the company said it may consider the sale of its mortgage banking subsidiary, Columbia Home Loans LLC., which originated the loans and added that it has suspended its share buyback program.
On Friday, OceanFirst had revised fourth-quarter results to reflect a $9.6 million reserve for the repurchase of a type of subprime product offered by Columbia that had been given extended first-payment dates by the unit’s officers.
In its call, the Toms Rivers, New Jersey-based company said there will be a spike in non-performing assets in the first quarter due to the loan repurchases.
The company said its absolute exposure to subprime loan repurchase as of year end was about $46 million to $47 million, and it has repurchased about $11.2 million of these loans till March 21
Here’s another sad story foreclosure. It seems like these people tried to keep afloat, but just couldn’t get it done, kind of feel for them.
Subprime bust forces families from homes
http://news.yahoo.com/s/ap/20070325/ap_on_bi_ge/house_of_cards_6
“The Snearys say they expected to borrow at a fixed rate of 6.5 percent. That would put monthly payments at about $1,290, a little more than rent.
But at the closing in August, all the numbers were higher. The Snearys were offered two loans, both from a Texas subprime lender, Sebring Capital Partners. The first, for 90 percent of the purchase price, was at 8.31 percent, set to adjust after two years. The second, for the remainder, was at 13.69 percent.”
The last time I got a mortgage, I was quoted a rate and had it locked for 60 days or something. I wasn’t told, this is our rate today, but at the closing it will be whatever we feel like. Do subprime borrrowers not have lock periods? The diff between a 6.5 fixed and a 8.31 2 year arm is ridiculous.
Gotta love the realtor denying the people, the deal, the whole thing.
“More than two years and 100-plus homes later, agent Kent Widmar says he has no memory of the couple or the deal. “
Get rid of your gold as hedge against inflation :
http://www.msnbc.msn.com/id/17796834/
Is not it something like introducing new currency?? – next – forever gallon of milk and all you have to do is figure out the traiding values between two.
anybody know anthing interesting about MLS #2290447?
Oddly, it was listed for $959k, raised to $979k and again to $999.
Is it being listed by Bugs Bunny?
Should we call and tell them that we’re offering $799k, and if they don’t respond, call them a week later and offer $729?
The report was particularly disappointing after the National Association of Realtors on Friday reported an unexpected jump in existing home sales in February – a report that gave a lift to stocks that day. But new home sales, while a smaller part of the housing market, are more of a leading indicator since they are booked when a sales contract is signed, not when the sale is closed, as is the case with existing home sales.
http://money.cnn.com/2007/03/26/news/economy/new_home_sales/index.htm?postversion=2007032612
test test test
Pine Brook and NJ Patient,
Which MLS are you referring too?
GSMLS #2290447
BC (37)-
Urrrp…brrrfff.
Somewhat off topic. Does anyone have an Amboy Direct savings account? I need to open a second account and it pays higher than my Emigrant Direct. I just want to make sure they are decent before transferring over huge sums.
Rachel
Just rented a place in Chatham for a year.
Any idea if 2008 will be a good time to buy?
renting in Chatham Says:
March 26th, 2007 at 5:30 pm
Just rented a place in Chatham for a year.
Any idea if 2008 will be a good time to buy?
I would let you know in 2009. Just kidding, however 2008 would def be better than 2007.
CC
#47
I opened an account with Amboy Direct a couple of months ago. So far no problems… I have transferred a couple of CDs that matured.
AK
njpatient,
Sorry, I only have access to NJMLS…
JB,
sorry to hear that you are having a router problem. What kind of a router do you need? what kind of line is it?
Would you like to set up a PO Box where people can send donation?
David