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Purveyor

(29,876 posts) Mon Nov 19, 2012, 11:19 AM Nov 2012

Existing Home Sales Climb, Housing Recovery Gains Traction

(Reuters) - Home resales unexpectedly rose in October, a sign that slow improvements in the country's labor market are helping the housing sector recovery gain traction.

The National Association of Realtors said on Monday that existing home sales climbed 2.1 percent last month to a seasonally adjusted annual rate of 4.79 million units.

That was above the median forecast of a 4.75 million-unit rate in a Reuters poll.

NAR economist Lawrence Yun said superstorm Sandy, which slammed in the U.S. East Coast on October 29, had only a slight impact on home resales. The only region where the pace of sales slipped was the Northeast. But Yun said the storm could temporarily hold back the pace of sales in November and December.

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http://www.reuters.com/article/2012/11/19/us-usa-economy-housing-idUSBRE8AI0N020121119

3 replies

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Existing Home Sales Climb, Housing Recovery Gains Traction (Original Post) Purveyor Nov 2012 OP

Slowly digging out from the Bush debacle Kingofalldems Nov 2012 #1

IMO Real estate market is a dead cat bounce, not a recovery. Ya Basta Nov 2012 #2

In LA one thing pushing up prices is that people have simply waited so long flamingdem Nov 2012 #3

Kingofalldems

(38,496 posts)

1. Slowly digging out from the Bush debacle

Reply to Purveyor (Original post)

Mon Nov 19, 2012, 11:21 AM

Nov 2012

Ya Basta

(391 posts)

2. IMO Real estate market is a dead cat bounce, not a recovery.

Reply to Purveyor (Original post)

Mon Nov 19, 2012, 02:39 PM

Nov 2012

I hope I'm not correct, but here's why I think the real estate market is a dead cat bounce and not a recovery.

http://www.latimes.com/business/money/la-fi-mo-fha-federal-housing-administration-bailout-20121116,0,1915053.story

The FHA is saying its in a situation where they're going to need a bailout because of all the defaulted loans they insured. If this is true then obviously they're very under capitalized and the only way they're going to be able to meet the requirements for the insurance they sell is to get bailout money from the government. Of course this money will have to come from the Treasury issuing more bonds bought by more FED inflation to paper over these losses.

Basically no one can get a housing loan at this point unless its an insured loan. Because of this the FHA is a very large portion of the housing market at this point and will continue to be a very large portion of the housing market if they want to have a housing market for the foreseeable future because nobody wants to take on mortgage backed securities unless they're insured.

Interestingly enough, a lot of the subprime loans that blew up the housing market the last time became the primary customers of the FHA. So that's why at this point the market is largely proportioned toward FHA.

This IMO is a strong indicator that the real estate market is likely just in a dead cat bounce. Adding to that, I still just don't see enough wages to afford current housing prices enough to have a real estate market recovery. I just don't. I hope I am incorrect though.

flamingdem

(39,332 posts)

3. In LA one thing pushing up prices is that people have simply waited so long

Reply to Ya Basta (Reply #2)

Mon Nov 19, 2012, 02:45 PM

Nov 2012

and they are now biting but there is limited supply.

So once that group is settled things will soften.

Also consortiums are buying up cheap apartments and houses to rent further tightening the market. The rental market is super hot in nice areas. If this continues the gains will continue as well as disgustingly high rental prices.

That leaves the issue of wages, no one likes to face that this is the long term problem. Unless foreigners are coming here to take up the slack there's no way we're going anywhere near previous levels.

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