Housing data to set the stage

From CNBC:

Home prices rise 5% in June vs. expectations for 5.1% gain: S&P/Case-Shiller

U.S. home prices continued to rise in June, according to the S&P/Case-Shiller Home Price Index, but the increase fell short of analyst estimates.

The 20-city index rose 5 percent year-over-year in June. Analysts polled by Thomson Reuters had expected the index to increase to 5.1 percent. In May, the index increased 4.4 percent. The National Price index rose 4.5 percent in June.

From HousingWire:

FHFA: June 2015 house prices rose 5.6% from June 2014

he Federal Housing Finance Agency house price index rose 0.2% in June, below the low-end forecast for 0.3% but still a respectable gain.

Annualized price growth was 5.6%, while prices in the second quarter rose 5.4% compared to the second quarter of 2014.

Sales rates are tracking at roughly double the pace of price growth, a mismatch that points ahead to price acceleration given how thin inventories are right now in the housing sector.

From CNBC:

US new home sales rebound in July, supply improves

New U.S. single-family home sales rose a bit less than expected in July, but the trend pointed to housing market strength that should underpin economic growth for the rest of the year.

The Commerce Department said on Tuesday sales increased 5.4 percent to a seasonally adjusted annual rate of 507,000 units. June’s sales pace was revised slightly down to 481,000 units from the previously reported 482,000 units.

Economists polled by Reuters had forecast new home sales, which account for 8.3 percent of the market, rising to a 510,000 unit-rate. Sales were up 25.8 percent compared to July of last year.

The housing market is gaining stream, with data last week showing home resales jumped to a near 8-1/2-year high in July and groundbreaking on new home building climbing to its highest level since October 2007.

From MarketWatch:

The Conference Board Consumer Confidence Index® Rebounds

The Conference Board Consumer Confidence Index®, which had declined in July, rebounded in August. The Index now stands at 101.5 (1985=100), up from 91.0 in July. The Present Situation Index increased from 104.0 last month to 115.1 in August, while the Expectations Index improved to 92.5 from 82.3 in July.

Rally – ?

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59 Responses to Housing data to set the stage

  1. Essex says:

    Furst

  2. Essex says:

    http://www.theatlantic.com/entertainment/archive/2015/08/born-to-run-at-40/402137/

    Reflecting on his formative years in Freehold, New Jersey, Springsteen once described the home he grew up in as a “dumpy, two-story, two-family house, next door to the gas station.” Several companies had manufacturing plants there—3M, Nescafé, the odd rug mill or paper plant—but by the post-war era, the city, like so many other middling urban areas, was dying. “Freehold was just a … small, narrow-minded town,” Springsteen told the English radio interviewer Roger Scott in 1984, “no different than probably any other provincial town. It was just the kind of area where it was real conservative. It was just very stagnating. There were some factories, some farms and stuff, that if you didn’t go to college you ended up in. There wasn’t much, you know; there wasn’t that much.”

  3. grim says:

    Payback is a bitch, #lionsmatter

    Safari Guide Killed by Lion in Zimbabwe

    HARARE, Zimbabwe — A lion charged and killed a safari guide who was leading a group of tourists in the same national park in Zimbabwe that was the home of Cecil the lion who was killed by a bow hunter in July.

    Police spokeswoman Charity Charamba said Tuesday that Quinn Swales was in Hwange National Park when he spotted six lions on Monday.

    “One of the lions had cubs and they became hostile. Mr. Swales at first manage to scare the lions away but then the male lion later made a U-turn and attacked him,” Charamba told The Associated Press. None of the tourists was harmed, she said.

  4. grim says:

    From the NY Post:

    Homeowners’ fight against foreclosure ends with $264K bill

    The New York family that in 2009 became the national face of beating back “repugnant” and “repulsive” bank foreclosure practices after a judge ripped up the mortgage on their $525,000 ranch home, not only lost an appeal of the judge’s order — and eventually their home — but were also slapped with a $264,500 bill from the bank.

    The bill was to cover the difference between what was owed on the mortgage and what the bank got when it sold their 3,400 square-foot home, court records show.
    “That’s adding insult to injury,” Suffolk Judge Jeffrey Spinner said of the quarter-million-dollar-plus deficiency judgment.

    Spinner, the judge who tossed Diana Yano-Horoski and Gregory Horoski’s $292,500 mortgage, with an interest rate of 12.375 percent, told The Post that in more than 17 years on the bench and thousands of cases, he has had only three requests for deficiency judgments.

    And all three, he said, were on commercial mortgages with deep-pocketed borrowers.
    “I think it was grossly unfair what ended up happening to the Horoskis,” Spinner said. “It’s bad enough that these folks had health problems, and even worse that a high-rate refinancing deal … was the result of uncovered medical bills they tried to pay because they are honest people. Then they lost their home. Now they have a deficiency judgment to follow them around. That’s frightening.”

  5. anon (the good one) says:

    @realDonaldTrump:

    Asians are very offended that JEB said that anchor babies applies to them as a way to be more politically correct to hispanics. A mess!

  6. The center will not hold…

  7. anon (the good one) says:

    @pdacosta: Inflation is around the corner, just over the bend.

  8. FKA 2010 Buyer says:

    I’m going to call BS on this story. Well actually there has to be more to this story. He must have a credit score of 400 to not get a loan with 25% down.

    ‘Why I can’t get a mortgage’

    Last month I bought a house in Potomac, Md., a trade up on my current home, and was shocked to learn in the ensuing weeks that I couldn’t get a mortgage loan. First, I went to PNC bank. Then Wells Fargo. Then another. Denied. Denied. Denied…..All the bankers told me the same thing: “Steve, if you’d walked in our bank eight years ago with this mortgage application, we would have rubber stamped it in five minutes and you would have walked out with a bag of money.”…. My situation was doubly frustrating because I’m making a 25 percent down payment on the house.

    The main reason I was denied a loan was because of a below-average credit score. This was infuriating on several levels. First, I have had two previous mortgages and in 25 years I’ve never missed a payment. How can I be a high-risk borrower? The answer is twice in 30 years I was 30 days late paying my credit card bill — and paid the hefty late fee. Even more ridiculous, I, Steve Moore, have $300 of unpaid parking tickets. The horror. How does that data point provide any useful information to a bank about whether I’m going to pay my mortgage?

    http://www.washingtontimes.com/news/2015/aug/23/stephen-moore-mortgage-woes-of-the-middle-class/?utm_source=RSS_Feed&utm_medium=RSS

  9. FKA 2010 Buyer says:

    Toll’s home orders up as housing gathers steam

    Toll Brothers, the largest U.S. luxury home builder, said orders have risen 16 percent so far in the quarter started August, outpacing the 12 percent rise in the third quarter, indicating that the housing recovery is gathering steam.

    Toll Brothers, which builds homes that can cost upward of $2 million, forecast an average selling price of $745,000 to $760,000 for 2015, compared with its forecast of $730,000 to $760,000 issued in May.

    “Consistent new order growth and modestly higher prices should result in double-digit earnings growth in 2015, 2016 and 2017 if current trends persist,” RBC Capital Markets LLC analyst Robert Wetenhall wrote in a preview note.

    http://www.cnbc.com/2015/08/25/orders-up-as-housing-gathers-steam.html

  10. grim says:

    8 – Either BS or he’s left out the real reason he was denied.

  11. FKA 2010 Buyer says:

    The low interest rates has made it easy for some novices to tip toe into the RE market, even commercial RE.

    Surge in Commercial Real-Estate Prices Stirs Bubble Worries

    Investors are pushing commercial real-estate prices to record levels in cities around the world, fueling concerns that the global property market is overheating.

    The valuations of office buildings sold in London, Hong Kong, Osaka and Chicago hit record highs in the second quarter of this year, on a price per square foot basis, and reached post-2009 highs in New York, Los Angeles, Berlin and Sydney, according to industry tracker Real Capital Analytics.

    Deal activity is soaring as well. The value of U.S. commercial real-estate transactions in the first half of 2015 jumped 36% from a year earlier to $225.1 billion, ahead of the pace set in 2006, according to Real Capital. In Europe, transaction values shot up 37% to €135 billion ($148 billion), the strongest start to a year since 2007.

    Low interest rates and a flood of cash being pumped into economies by central banks have made commercial real estate look attractive compared with bonds and other assets. Big U.S. investors have bulked up their real-estate holdings, just as buyers from Asia and the Middle East have become more regular fixtures in the market.

    http://www.wsj.com/articles/surge-in-commercial-real-estate-prices-stirs-bubble-worries-1439415930

  12. FKA 2010 Buyer says:

    Last one, back to grind.

    What else does the Fed have in their arsenal at this point?

    A lot of analysts are saying the Fed will chicken out in September

    After Monday’s market turmoil, when a Chinese market crash boiled over into the rest of Asia, then Europe and the US, analysts are rushing to change their forecast for the Federal Reserve’s first postcrisis interest-rate hike.

    For quite some time, analysts have been pegging September as the month of the first increase in rates since 2006. But that call (known as Team September) is getting less and less consensual by the hour.

    Analysts are piling out of September, rushing to call a rate hike in December or even the first half of 2016, reckoning that the additional strengthening of the dollar and a bit of market panic will be enough to give the Fed cold feet.

    http://www.businessinsider.com/what-analysts-are-saying-about-the-federal-reserve-hiking-rates-in-september-2015-8

  13. Ben says:

    Its his income. I put 40 percent down and was almost denied. 800 credit score and zero debt

  14. FKA 2010 (9)-

    Here is the best tell you can possibly have that the current boomlet has top-ticked.

    “Toll Brothers, the largest U.S. luxury home builder, said orders have risen 16 percent so far in the quarter started August, outpacing the 12 percent rise in the third quarter, indicating that the housing recovery is gathering steam.”

  15. FKA 2010 (12)-

    Get ready for QE4. And don’t take it from tinfoil pimps like me…Ray Dalio said it yesterday:

    http://www.zerohedge.com/news/2015-08-24/forget-rate-hikes-bridgewater-says-qe4-next-warns-world-approaching-end-debt-supercy

  16. Visualizing those recent “record” home sales in the NE:

    http://www.zerohedge.com/news/2015-08-25/how-much-longer-can-record-new-home-sales-price-divergence-continue

    There will be blood, gnashing of teeth, 50-100 years of wandering in the wilderness, etc…

  17. grim says:

    Chipotle CEO makes more than 1000x the median worker, millennials line up for carnitas tacos and guac to celebrate.

  18. grim says:

    16 – Makes no sense to me, builders can easily alter the types of homes they construct, the perceived “gap” is largely driven by builders catering to wealthier buyers. The premise might be sound if the sales and inventory were largely fixed, but they are not.

    In addition, it does not take into account the fact that there is a floor under which you can not economically construct a new housing unit. So assuming some sort of perfect correlation between volumes and prices is nonsense.

    The phenomenon is easily explained by elimination of low-end construction and the impact of that mix shift on the median price data.

    Much ado about nothing.

  19. Libturd in Union says:

    “Chipotle CEO makes more than 1000x the median worker”

    That’s OK. The CEO is environmentally conscious. He’s obviously not paid enough.

  20. leftwing says:

    16. Supply constrained inflation. Only way to make prices go up after you literally cannot give away money for free is to reduce supply.

  21. leftwing says:

    18. And while mostly agree with you grim if builders could put out (profitably) 1.3m units at a median price of $225k they can certainly find a way to build more than what they are now. Input costs have not increased that much and many large ones have actually come down.

  22. Ponderer says:

    Jill @WT (from yesterday)

    Info for the home inspector:

    Anthony J Chimko
    DICO Building Inspection Service, inc.
    42 Lenape Ave, Andover, NJ 07860
    973-857-4220~ 908-362-1456 – fax
    http://www.dicoinspect.com
    tchimko@dicoinspect.com
    anthonychimko@aol.com

    Good luck. (Hopefully Grim gets a little something from this – as he should!)

  23. Wily Millenial says:

    I just took a bike ride down Woods Road in Little Falls where they just cleared the trees for “Oakwood Estates”, which is like two dozen “Tudors” on what was originally supposed to be an affordable housing site. The sign said “new homes starting in 600s”, not bad for Little Falls. I googled it and the developer was saying he would sell at 400k in 2013.

    The whole block used to be crummy little old houses, now nearly every house is being sold, flipped, demo’d, or expanded. Lot of contractors going up and down the road. Kinda jarring.

  24. NJT says:

    I wouldn’t go through obtaining a mortgage with Wells F again unless four guys were holding me down and a fifth had a gun to my head.

    Bought a $100,000 two family rental (needed some work) with 20% down and had a credit rating in the mid 700s. They put me through hell! Almost got fired the HR people at my employer were so annoyed by them. It seemed they wanted to find ANY reason NOT to give me the mortgage.

    F Wells.

    Man, I STILL get angry thinking about that… rental worked out well, though. One of the best margins I’ve ever had.

  25. grim says:

    Patiently waiting for the 3/46/Valley intersection work to begin

  26. Libturd in Union says:

    Not a bad location…definitely walk to the train. In all the years I spent living in close proximity to that road, I never once drove or biked down it. I did climb about 2/3rds the way up that transmission tower when in college. We got spooked by the radiation signs.

  27. Libturd in Union says:

    Speaking of Valley, what’s your take on Valley and Bloom. Montclair has managed to build their own Canyon of Zeros.

  28. grim says:

    I think that lot on Church is going to get built up (I think that is private), and I also think the Whole Foods property is going to be redone too. Other than those two, it’s going to be hard to find property to continue this.

  29. Ponderer says:

    Grim – looks like the home inspector info for Jill got caught in your filter. Can you check?

  30. grim says:

    Now that I look at the sat map, Whole Foods is a nice option. If the developer can acquire few of the surrounding properties, that’s a fantastic lot. You could even keep the whole foods on the first level, add additional retail, or expand it out.

  31. Fast Eddie says:

    I just realized that I’m moving to a train town in Bergen County. Does this mean I’m prestigious now? ;) In other news, I am home today and on muscle relaxers because I pulled out my lower back (real bad) this past Saturday lifting and cutting up heavy sh1t that’s not coming with me. I mean, not that anyone really gives a f.uck. Wow, these pills are nice! lol!

  32. Libturd in Union says:

    Back pain blows. I sympathize. Be careful. Celebrex will give you the sh1ts.

  33. NJT says:

    Friend gave me a Percoset after helping him move (HEAVY furniture). Two guys had to lift me outta a chair and wife pick me up later. I’ll stick with booze.

  34. Fast Eddie says:

    Lib,

    Pain killers do the opposite to the digestive system. I’d rather that than constipation. Tylenol is the only thing I’m taking. I went to work yesterday and re-aggravated this thing. That’s why I went to the doc today.

  35. Comrade Nom Deplume with jet lag says:

    Have had good results and no side effects with Percocet and flexiril for back pain but I’m not willing to take them together. Docs also prescribed an NSAID called meloxican and pred.

  36. grim says:

    Flexaril is amazing stuff

  37. Fast Eddie says:

    I’m taking Chlorzoxazone. I guess it’s the same stuff as Flexaril. Regardless, it’s nice to at least move without groaning in pain. It’s not completely gone but it certainly helped.

  38. Jill says:

    Hey Fast Eddie…you’ve been sorta looking for years. What train town did you decide on?

    @Ponderer: Thanks for the inspector info!

  39. Libturd in Union says:

    Paterson!

  40. Comrade Nom Deplume with jet lag says:

    Anyone else find this quote vaguely troubling?

    “Jim Chanos, the hedge fund manager known for betting against companies, said he would back Vice President Joe Biden, who is considering seeking the Democratic nomination for president.”

  41. Comrade Nom Deplume, sipping a fruity drink by the pool. . . says:

    I saw this while trying to get details on the nut job knife attack in our courthouse. Should get some nods or laughs from the long time regulars.

    http://www.myfoxphilly.com/story/29866573/diners#at_pco=cfd-1.0

  42. Libturd in Union says:

    JJ has been awfully quiet lately.

  43. SPY just turned negative. Technicians will not like that.

  44. NJGator says:

    Lib 42 – Probably because he is too busy stiffing the wait staff at Djais.

    http://www.nbcnewyork.com/news/local/LOL-Receipt-Photo-New-Jersey-Belmar-NJ-DJais-Viral-322697311.html

  45. NJCoast says:

    Best Painkiller
    1 part OJ
    4 parts pineapple juice
    1 part cream of coconut
    2-4 parts Pusser’s Rum
    Freshly grated nutmeg
    Mix together the first 4 ingredients. Pour over ice. Grate nutmeg on top. Drink until your back stops aching.

  46. NJGator says:

    Grim – Re Montclair and Whole Foods lots of interesting possibilities.

    A&P bankruptcy leaves the possibility of two empty locations in Montclair – the Upper Montclair A&P on Valley Road as well as the Pathmark in Crackawanna. The A&P location was on the list of locations to be sold to ACME, but the staff there just got WARN notices, so it is possible that sale won’t go through. Apparently A&P gave lots of union concessions in the last bankruptcy that they are trying to get the unions to waive or a bankruptcy judge to toss in order to get their store sales through. I believe the big bone of contention is seniority based layoffs that are binding on the purchaser.

    Crackawanna would be a much more contentious location. The town wants to gentrify that neighborhood and Whole Foods would be a better fit for what they would like to do there, but there’s a decent sized population in the 4th Ward that can’t afford to shop there and will have no other neighborhood location for a full service grocery store. That still doesn’t stop Graydon and Ellery’s newly relocated from Brooklyn’s parents from dreaming of a Whole Foods or Wegmans or a Trader Joe’s for that location.

  47. Wily Millenial says:

    > Patiently waiting for the 3/46/Valley intersection work to begin

    I hate this project, I wish it would die or get rescoped. From the plans I’ve seen, I’m not optimistic that they can eliminate the permanent westbound traffic jam. And it totally ruins my local access routes with new traffic circles and lights. I don’t wanna have to use Clove and get pulled over by MSU cops.

  48. Wily Millenial says:

    ACME just closed in Clifton, surprised they’d want to reopen so close by. Looking forward to an endless multi stakeholder “redevelopment” process for the Valley Road property, though.

  49. Juice Box says:

    Raise rates? Where is the inflation?

    “Traders who bet on rate hikes using Fed funds futures contracts currently project only a 21% chance of a first rate hike occurring after the two-day meeting, which begins on Sept. 16, according to CME FedWatch. This is down from around 50% in late July.”

  50. grim says:

    47 – To do any better would have cost a fortune as it would have required buying the Fette Ford property, and a handful of other large commercial properties (Gensinger VW, Six Brothers and the Gas Station, etc).

  51. joyce says:

    49
    Now that the stock market is falling, I guess health care, college tuition, and rental prices would be where.

  52. Grim says:

    No rally?

  53. Wily Millenial says:

    IMO they should just remove the exits to northbound Valley Road and widen 46 WB with the saved space from that stupid u-turn ramp. The weaving double merge from 3-46-Valley is half the problem. Maybe the grade makes this impossible? I got a C+ in traffic engineering.

    Traffic to NB Valley from 46 can get there on Van Houten and traffic from 3 can go to hell in service of the greater good. Or use route 19.

  54. chi at Citizen Bank Park says:

    Kelly Johnson is a scrub. Let’s go Mets!

  55. Juice Box says:

    Lol Trump

    “Congrats @LindseyGrahamSC. You just got 4 points in your home state of SC—far better than zero nationally. You’re only 26 pts behind me.”

  56. Comrade Nom Deplume, no longer sipping a fruity drink by the pool. . . says:

    Isn’t JJ now posting as HeHateMe?

  57. Juice Box says:

    I could fix the Intersection of 3/46 with a few daisy cutters.

  58. Juice Box says:

    Anecdotal – Grandma is a music teacher, she told us today kids do not have the ability to memorize music anymore, the way they learn is google searches etc, so they don’t have to remember stuff and apparently they never fully develop the ability to memorize.

  59. The Great Pumpkin says:

    Pretty cool. Thought you guys might like this. I hope some of you are taking advantage of the buying opportunities. No reason to panic, don’t be an idiot and sell when you should be buying.

    http://www.engadget.com/2015/08/25/harvard-3d-world-economy-map/

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