Housing continuing to recover as investors step aside

From Bloomberg:

Gain in U.S. Pending Home Sales Shows Market Is Stabilizing

A rebound in contract signings for the purchase of previously owned U.S. homes shows housing demand is stabilizing after a three-month downturn, National Association of Realtors figures released Monday showed.

The increase puts the group’s gauge in line with its average since the start of 2016 and shows growth in the residential real estate market is being sustained while contributing little to the economy. Housing remains driven by trade-up purchasers who have taken advantage of low mortgage rates and are taking in stride higher asking prices. Limited choices of cheaper properties, however, are hindering entry-level buyers.

June saw a decline in sales to investors and those paying cash, according to the NAR. Less competition from investors may help alleviate the tight supply issue, which is good news for first-time buyers.

“Market conditions in many areas continue to be fast paced, with few properties to choose from, which is forcing buyers to act almost immediately on an available home that fits their criteria,” Lawrence Yun, NAR’s chief economist, said in a statement. “Low supply is an ongoing issue holding back activity. Housing inventory declined last month and is a staggering 7.1 percent lower than a year ago.”

This entry was posted in Economics, Housing Recovery, National Real Estate. Bookmark the permalink.

79 Responses to Housing continuing to recover as investors step aside

  1. grim says:

    It would be our luck that the only thing Donald Trump gets passed is to eliminate the mortgage and state tax deductions.

  2. The Great Pumpkin says:

    “Equity bears hunting for excess in the stock market might be better off worrying about bond prices, Alan Greenspan says. That’s where the actual bubble is, and when it pops, it’ll be bad for everyone.

    “By any measure, real long-term interest rates are much too low and therefore unsustainable,” the former Federal Reserve chairman, 91, said in an interview. “When they move higher they are likely to move reasonably fast. We are experiencing a bubble, not in stock prices but in bond prices. This is not discounted in the marketplace.””

    https://www.bloomberg.com/news/articles/2017-07-31/no-bubble-in-stocks-but-look-out-when-bonds-pop-greenspan-says

  3. The Great Pumpkin says:

    Don’t jinx us! lol

    grim says:
    August 1, 2017 at 7:26 am
    It would be our luck that the only thing Donald Trump gets passed is to eliminate the mortgage and state tax deductions.

  4. The Great Pumpkin says:

    Sorry about all the posts, but thought this one was interesting too.

    “What’s remarkable is that the terms of the wasps’ trade are determined by supply and demand. When the paper’s authors increased the number of nests in the field, they found that females were willing to tolerate smaller contributions from their helpers. The paper wasps behaved like any rent-seeking landlord, just as an economist would predict. A greater overall supply of wasp nests lowers the price of entry into any single nest. “In order to predict the level of help provided by a subordinate, it is necessary to take into account the state of the surrounding market,” the authors wrote.”

    https://www.bloomberg.com/features/2017-biological-markets/

  5. Grim says:

    I think Kelly is going to give the Trump Kids the boot too.

  6. The Original NJ ExPat says:

    This will one day be true, but for many decades anybody who said this was wrong. Here’s what you need to understand and what you need to watch out for.

    Stocks go up in price for exactly 3 reasons.
    1. Dividend growth.
    2. Earnings growth.
    3. P/E Expansion.

    Only during low and steady inflation can stocks expand P/E ratios far beyond historical norms. That’s where we are now. That’s also where we were in ’98-2000. We are sitting on the fence between inflation and deflation but nobody is smart enough to know which is around the next corner, so the stock market keeps going up. Either one will bring down the stock market (force P/E ratios back towards the norm), but until one or the other shows their ugly face this bull market will continue.

    So how do we know when the end is near and it is time to sell our stocks? I guess you can watch the 10 year Note or tens minus twos, the spread between German Bunds and the US 10 year, etc. Here’s an easier way. There used to be a closed end bond fund, mostly US treasuries with the symbol ACG. I’ve owned it since 1998 and I accidentally found out about it from someone who owned it for much longer before that. Last year it converted to a mutual fund, ACGYX. It will move a penny a day, two pennies on a big day, 3 pennies on a huge day. Just watch it and wait for it to move out of range. I’d say say below 7.70 start looking out for inflation, above 8.30 deflation may be straight ahead.

    BTW, if you actually own ACGYX while you watch it, you’ll earn about a 5% annual dividend, so you’ll actually get paid to watch.

    Equity bears hunting for excess in the stock market might be better off worrying about bond prices, Alan Greenspan says. That’s where the actual bubble is, and when it pops, it’ll be bad for everyone.

  7. D-FENS says:

    If he does one thing…make congress buy their own health insurance in the Obamacare exchange without subsidies like everyone else.

  8. The Original NJ ExPat says:

    Better to keep them. As West Wing employees, they can be (somewhat) forced into a new infrastructure. As Daddy’s little girl and her hubby…maybe not so much? Think about John-john playing under his Daddy’s desk in the oval. If he was an employee you could bar him access. As the kid his Daddy loves…not so much.

    I think Kelly is going to give the Trump Kids the boot too.

  9. The Original NJ ExPat says:

    BTW, who really thinks Jared and Ivanka fall completely out of their public persona and bark at The Donald, “Yeah! Yeah! Do you know what you should tweet next!”

    I think Jaranka might be the two most level heads in the West Wing. Maybe Ivanka as a running mate in 2020? Who could argue against a woman in 2024 with a supportive, intelligent, soft-spoken husband for president? Granted, she is white, but they could probably work around that.

  10. chicagofinance says:

    Not incorrect, but a really inelegant way to describe it…….

    The Original NJ ExPat says:
    August 1, 2017 at 9:34 am
    Stocks go up in price for exactly 3 reasons.
    3. P/E Expansion.

  11. The Original NJ ExPat says:

    A good communicator adjusts for his audience.

    Recall I was responding to Pumps;-)

    Not incorrect, but a really inelegant way to describe it…….

  12. chicagofinance says:

    booya

  13. Bystander says:

    D-FENS,

    That would be a nice start but I wish the orange fool would focus on H1B reform as promised.

  14. Grim says:

    All public sector should be forced to use that option – not because of ideological reasons but to provide a more diversified and larger risk pool.

  15. Grab them by the puzzy says:

    @gabrielsherman

    Wow: new federal lawsuit alleges Trump White House reviewed Fox News article about murdered DNC staffer Seth Rich prior to publication.

  16. The Original NJ ExPat says:

    (Chicken Lady voice) – Wh-wh-WHA – WHAT? Someone inside the beltway had communication/approval with the media PRIOR to publication? First time ever?

    Hahahahahahahahahaha

    Wow: new federal lawsuit alleges Trump White House reviewed Fox News article about murdered DNC staffer Seth Rich prior to publication.

  17. JJ fanboy says:

    Dropping the mortgage and state income tax deduction would benefit trumps base and penalize the blue states. I am surprise d this wasn’t done years ago under W

  18. Steamturd supporting the Canklephate says:

    “Wow: new federal lawsuit alleges Trump White House reviewed Fox News article about murdered DNC staffer Seth Rich prior to publication.”

    Like when Cankles was fed the questions prior to a debate, multiple times?

    Just shut up already Moana.

  19. Phoenix says:

    Expat, thanks for being a good communicator and for adjusting that the audience. Judging by the ticker you listed, are we closer to deflation or inflation? I read deflation but then again this is not my scope of practice.

  20. chicagofinance says:

    check jobs number Friday and here….
    https://www.bls.gov/news.release/cpi.toc.htm

    Phoenix says:
    August 1, 2017 at 11:19 am
    Expat, thanks for being a good communicator and for adjusting that the audience. Judging by the ticker you listed, are we closer to deflation or inflation? I read deflation but then again this is not my scope of practice.

  21. chicagofinance says:

    Fire Bird: just remember, it isn’t expat scope of practice either……

  22. JCer says:

    Phoenix the higher the 10 yr trades the more likely for deflation in the near term, it is the market signaling demand for moderate term bond instruments(read fixed coupons and face value) with a fair amount of safety. The market is seeking fixed denomination secure investments because all assets will fall in dollar denominated terms, it is safe haven parking of funds until a time it makes sense to purchase assets without a fixed and secure dollar value. Depending on the actions the fed takes we could go either way, the unprecedented actions the FED took have us in uncharted territory, deflation must be avoided at all costs due to the credit bubble, so it even if we start to see deflation expect QE to infinity to turn on. I don’t foresee an end anytime soon to loose credit, I expect the fed to try to add some turbulence to reduce the bubble. Some shocks here and there to discourage rampant speculation.

  23. Steamturd supporting the Canklephate says:

    Speaking of inflation. I noticed that the cost of crossing bridges in the New York area is rising quicker than even the cost of movie tickets. For a long time, they were in parity. Now I wait for it to catch up to a Broadway show.

  24. Steamturd supporting the Canklephate says:

    JCer, I am with you on your FED prediction. I expect there to be lots of talk of ending accommodation, with little actual action.

  25. JJ fanboy says:

    I refuse to pay $12 a person for us to go see a $3 movie. No matter the special effects, if you wait a few months you can stream it at home on a 4K tv for $3. And at least at home I know why my seat is sticky

  26. The Original NJ ExPat says:

    Phoenix – Therein lies the rub. Nobody knows. It’s not how close you are to one rail or the other, it’s whether you go over the rail. My personal opinion is that we have engineered an artificial avoidance of deflation, but I don’t trade on that. I trade on the actual market levels and I’m bullish right now. I use only two indicators to determine my posture. VIX/VXV between .80 and .90 is half of it, a proprietary S&P 500 indicator is the other half, both bullish right now.

    Judging by the ticker you listed, are we closer to deflation or inflation?

  27. The Original NJ ExPat says:

    VZ & NGLOY – anybody who knows me knows I’m not a pumper, I’ve made maybe 6 stock recommendations in 10 years. Anybody making money in the last two months?

  28. chicagofinance says:

    Bad back to back posts……

    JJ fanboy says:
    August 1, 2017 at 11:50 am
    I refuse to pay $12 a person for us to go see a $3 movie. No matter the special effects, if you wait a few months you can stream it at home on a 4K tv for $3. And at least at home I know why my seat is sticky

    The Original NJ ExPat says:
    August 1, 2017 at 11:51 am
    Therein lies the rub.

  29. Steamturd supporting the Canklephate says:

    Terrible!

  30. Steamturd supporting the Canklephate says:

    They should put Moana up for adoption.

  31. chicagofinance says:

    I think I built an argument with grim about 10 years ago along the lines of “risk is being severely underpriced in the market right now…..”

    Bear in mind, the Fed may have started this trend in 2008, but the ECB and BOJ are in control right now…..it is not direct….risk premia are being suppressed across the board in those countries, and the marginal global investor is shunting money to the U.S. and buying UST…….. don’t be fooled….buying a premium bond or else a runt coupon is going to make your “safety” trade have an uncomfortably high duration and put your principal at risk.

    JCer says:
    August 1, 2017 at 11:38 am
    Phoenix the higher the 10 yr trades the more likely for deflation in the near term, it is the market signaling demand for moderate term bond instruments(read fixed coupons and face value) with a fair amount of safety. The market is seeking fixed denomination secure investments because all assets will fall in dollar denominated terms, it is safe haven parking of funds until a time it makes sense to purchase assets without a fixed and secure dollar value. Depending on the actions the fed takes we could go either way, the unprecedented actions the FED took have us in uncharted territory, deflation must be avoided at all costs due to the credit bubble, so it even if we start to see deflation expect QE to infinity to turn on. I don’t foresee an end anytime soon to loose credit, I expect the fed to try to add some turbulence to reduce the bubble. Some shocks here and there to discourage rampant speculation.

  32. joyce says:

    Ditto

    Bystander says:
    August 1, 2017 at 10:06 am
    D-FENS,

    That would be a nice start but I wish the orange fool would focus on H1B reform as promised.

  33. Grab them by the puzzy says:

    @washingtonpost

    Opinion: President Trump is now directly implicated in trying to cover up the Russia scandal

  34. Fast Eddie says:

    The DOW is up 22% since election day.

    Thank you, President Trump!

  35. The Original NJ ExPat says:

    A lot of people confuse price inflation (as opposed to monetary inflation – what the Fed does) with rising prices in one area. If health insurance goes up in price, but purchase prices of cars, gasoline, and groceries go down, that is not price inflation. Price inflation is when *EVERYTHING* goes up in price, and you’ll probably notice it weekly. If you want to expend little effort and determine the direction of price inflation just buy yourself a little spiral-bound notebook and record the price of an 8 pack of hot dog rolls every week.

    Speaking of inflation. I noticed that the cost of crossing bridges in the New York area is rising quicker than even the cost of movie tickets. For a long time, they were in parity. Now I wait for it to catch up to a Broadway show.

  36. 3b says:

    Except a lot of the crap that goes down in price is just that crap in many respects.

  37. Steamturd supporting the Canklephate says:

    Like the $1 package of Shoprite hotdog rolls.

  38. JCer says:

    Chi my point is in a deflation scenario stable USD denominated instruments become more valuable and furthermore as the central banks try to prop up asset markets(which they indubitably will) interest rates will fall further(if that’s even possible) and the notes will go up as coupon rates go down. Conversely in an inflation scenario nominal instruments are an inherent liability as inflation diminishes your principal and as the central banks try to fight inflation rates go up forcing the value of your (safe?) fixed income position down.

    I think confusion reigns at the moment and holding any position could carry significant downside or upside risk.

  39. Steamturd supporting the Canklephate says:

    “holding any position could carry significant downside or upside risk.”

    Thanks for the advice. Which is why I think the old adage about diversification should once again be taken seriously.

  40. JCer says:

    Steam in real terms food is crazy cheap, there hasn’t been a significant change in price in many food staples in the last 15 years(wages have gone up, rents and taxes have gone up way more but food prices are pretty stable, only temporary increases in price due to weather or energy costs have occurred).

  41. No One says:

    After watching the latest Game of Thrones episode, I think Hillary will wear some really glossy lipstick and suddenly kiss Invanka on the lips.

  42. Steamturd supporting the Canklephate says:

    JCer…air travel really hasn’t gone up much either nor has gas prices. Though the taxes on both…well, that’s a different story.

  43. No One says:

    Just as a public service announcement I’m offering up this info.
    I’m about to go on a Baltic cruise over the next couple of weeks.
    During my prior 3 cruise trips over the past 20 years, markets have freaked out while I was away. Maybe this time will be different, maybe not.

  44. JCer says:

    No One, I think the FED wants a mini-crash so we are likely to get one. They need to sting the speculators to restore some semblance of normalcy to the markets. Also the powers that be are going to want to swing clowngress to the democrats, they don’t like Trump and honestly want to keep the status quo. I can see a crash before the election as economic turmoil favors the Democrats and in general is bad for the incumbent.

  45. Steamturd supporting the Canklephate says:

    I use canned pancake batter for my best market predictor.

  46. JCer says:

    Just remember the rich need the unwashed masses to be too distracted to revolt so they create a two party system to distract the masses while they argue over things of personal significance(religion, etc) but distract from what is truly important. Also the rich have built the system we have now(it is purposely convoluted and carves out numerous benefits for the .0001%), it is in their best interest to minimize disruptive change, the trick is played out at the moment as a deadlocked government has been the case more often than not. The rich are neither republicans or democrats, they are self interested and politicians are a tool to be used much like a tractor or a crane.

  47. chicagofinance says:

    I enjoy buying corporate floaters when the markets get all bent out of shape…..the spreads blow out, and then tighten back up, so there is a slight cap gain that is generated at maturity along with the spread during life……so hard to find them though……you have to be careful though, the recent ones have caps on them, so you need to read the offering sheet closely…..

    JCer says:
    August 1, 2017 at 2:15 pm
    I think confusion reigns at the moment and holding any position could carry significant downside or upside risk.

  48. 3b says:

    Chop meat seems pretty pricey. Just saying.

  49. Nimby says:

    The nimby trojan horse: “luxury” . . . any NJ examples ?

    “… today’s affordable housing often started life as self-described “luxury” housing when it was originally built.”

    https://www.citylab.com/equity/2017/08/how-luxury-housing-becomes-affordable/535563/?utm_source=feed

  50. Bagholder says:

    ‘It would be our luck that the only thing Donald Trump gets passed is to eliminate the mortgage and state tax deductions.’

    I really hope this is one of those things they just float out there, like the border adjustment tax.

  51. Blue Ribbon Teacher says:

    No One, I think the FED wants a mini-crash so we are likely to get one. They need to sting the speculators to restore some semblance of normalcy to the markets.

    At some point, the fed won’t be able to drive a market one way or another. That’s when they are in trouble.

  52. Bagholder says:

    Over/under on Jay Sekulow’s resignation?

  53. The Original NJ ExPat says:

    Some of you are too young to remember. When real price inflation hits, you *RUSH* to the Shoprite (that’s where we used to shop) to buy groceries. You can feel it in the air. If you’re a kid, it’s great in some ways. I remember the minimum wage going up in successive years, 2.50, 2.65, 2.90, 3.10, 3.25, 3. 35. When I graduated college I was thrilled to make $27K in 1984. Kids at my company received “compaction increases” of about $1,000 per year so they wouldn’t get mad about new graduates being hired at a higher salary than they started out the year before.

    We now have a complete generation that knows absolutely zero about rising interest rates.

    Like the $1 package of Shoprite hotdog rolls.

  54. The Original NJ ExPat says:

    Midway through the year, I can tell you “kind of” how it will turn out, and I conveyed this to my other audiences 6 months ago:

    This will be either a big up year or a big down year. I have no technical indicators that tell me this, only a crowded trade. The consensus 6 or 7 months ago was that this will be an average year, 6-8% returns. When everyone is in the middle, they are all wrong.

  55. The Original NJ ExPat says:

    A game I play after the US stock market close is how much ACGYX will move when mutual funds are priced at 6:30PM. My guess for today is up one penny.

  56. The Original NJ ExPat says:

    I think the opposite. I think the FED wants a strong market so they can test how they can diddle themselves with tiny balance sheet roll-offs.

    No One, I think the FED wants a mini-crash so we are likely to get one. They need to sting the speculators to restore some semblance of normalcy to the markets. Also the powers that be are going to want to swing clowngress to the democrats, they don’t like Trump and honestly want to keep the status quo. I can see a crash before the election as economic turmoil favors the Democrats and in general is bad for the incumbent.

  57. Comrade Nom Deplorable, surfacing for air says:

    Fast Eddie says:
    July 30, 2017 at 2:05 pm

    Nom,

    I heard you were an Eagles fan now. ;)

    **********

    Feh! Not only was I NEVER an iggles fan, I have disassociated myself from any duty to support Philadelphia area teams in any way, shape or form, and will resort to mocking them mercilessly and cheering for their rivals.

    Yes, I still live in the area (for now). But my two close friends make sure I am safe.

  58. Comrade Nom Deplorable, surfacing for air says:

    But that doesn’t mean I can bring myself to cheer for the Gints, Rangers or Devils. I’ll sit those out.

  59. The Original NJ ExPat says:

    I love the Gints, especially when they beat the Pts in the Super Bowl, like they always do;-)

  60. PumpkinFace says:

    I thought the border adjustment tax had potential.

    Bagholder says:
    August 1, 2017 at 3:33 pm
    ‘It would be our luck that the only thing Donald Trump gets passed is to eliminate the mortgage and state tax deductions.’

    I really hope this is one of those things they just float out there, like the border adjustment tax.

  61. Grab them by the puzzy says:

    @Harpers

    Rank of “smart” among words that occur to U.S. voters when they think of Donald Trump : 28

    Of “idiot” : 1

    Index: harpers

  62. JCer says:

    ExPat, interesting thought. I don’t see the fed being interested in making a profit, I see them trying to unload as much as they can at no or minimal loss and using the market’s current strength to cleanup their balance sheet, before a potential crash….every fiber of by being tells me there will be a crash in the next 3 years, just a gut instinct..I feel like the investor is being played like a fiddle right now. Their unwind of QE will be the bonds maturing, in my mind with sales being limited to bad assets they want to recover on.

  63. Bagholder says:

    ‘I thought the border adjustment tax had potential.’

    Declared DOA.

  64. Grab them by the puzzy says:

    @nycjim

    WH now says Trump “weighed in, as any father would” on Junior’s Russia statement. But ABC confirmed WashPost report. abcnews.

  65. Pr0udL1beral says:

    @F-Eddie

    >>The DOW is up 22% since election day.
    >> Thank you, President Trump!

    You should thank Obama, since it is technically still his fiscal year – until Oct.

  66. PumpkinFace says:

    Very true. Let me rephrase: I thought it had potential to help the average person, not be signed into law.

    Bagholder says:
    August 1, 2017 at 5:23 pm
    ‘I thought the border adjustment tax had potential.’

    Declared DOA.

  67. The Original NJ ExPat says:

    Spot on. Up one penny to 8.20

    The Original NJ ExPat says:
    August 1, 2017 at 4:04 pm
    A game I play after the US stock market close is how much ACGYX will move when mutual funds are priced at 6:30PM. My guess for today is up one penny.

  68. Hillary's Cankles are ground zero for Zika virus says:

    Chop meat seems pretty pricey. Just saying.

    I paid $1.75 a pound recently at ShopRite and $2 a pound for the good stuff at Fairway. Seems pretty cheap to me.

  69. Hillary's Cankles are ground zero for Zika virus says:

    I knew that price was awesome!

    http://beef2live.com/story-retail-ground-beef-prices-year-january-0-111644

    Captain Cheapo doesn’t do inflation.

  70. Grab them by the puzzy says:

    @chrislhayes

    “The White House is a dump” would’ve been a week-long scandal/PR crisis in the Obama admin, crowing out all talk of everything else.

  71. Fabius Maximus says:
  72. Fabius Maximus says:

    “Anybody making money in the last two months?”

    I trade very very little. But I have to give props to JJ. He threw out Lufthansa a while back. I took a look at DLAKY and I liked what I saw.
    http://njrereport.com/index.php/2015/03/25/otteaus-forecast-for-2015/#comment-675356
    It’s still booking a dividend two years later and is recovering well. I’ll leave it in the long term pile.

    I threw some house money at Sears. If there is a takeover I’ll get a pop, if it goes belly up, I’ll ride the warrants as they unwind the assets.

  73. Fabius Maximus says:

    Interesting, the Mooch Scrwed the pooch before his official start date. Do you think he qualifies for COBRA?

  74. Pr0udL1beral says:

    @TooFastForYourself,
    The whole “Obama made Putin take Crimea” is historically debunked and only propagated by right wing nuts. There’s plenty of analysis of this – if you really care to understand.

    So cut it out. Call this POTUS for what he is – a lying piece of orange sh1t and let Obama’s legacy be what it is.

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