RSS Feed by Calculated Risk on 8/26/2012 10:18:00 AM
Sunday, August 26, 2012
Zillow: House Prices increased 1.2% Year-over-year in July
Notes: Every month Zillow uses their data to estimate the Case-Shiller index. On Friday I posted their estimate for the June Case-Shiller Composite 20 index showing a 0.3% year-over-year increase.
Of course Zillow has their own house price index that excludes foreclosure resales and they released their report for July last week and I rarely mention it - so here is their most recent release.
From Zillow: U.S. Home Values Climb for Eighth Consecutive Month; Over 60% of Metros Show Increasing Values
Zillow’s July Real Estate Market Reports ... show that home values increased 0.5 percent to $151,600 from June to July (Figure 1), marking another month of healthy monthly appreciation. Compared to July 2011, home values are up by 1.2 percent (Figure 2), supported in many places by low for-sale inventory. Inventory shortages are being fueled by negative equity and a slowed distribution of REOs. ... On an annual basis, rents across the nation are up by 5.4 percent
Click on graph for larger image. This graph from Zillow shows the national Zillow HPI.
The index was up 0.5% in July, and is up 1.2% over the last year.
The index is off 21.7% from the peak in April 2007. (This excludes foreclosures).
From Zillow:
The Zillow Real Estate Market Reports cover 167 metropolitan areas (metros) of which 102 showed monthly home value appreciation. Among the top 30 metros, 21 experienced monthly home value appreciation and 14 saw annual increases. The largest monthly decline among the top 30 metros took place in St. Louis, where home values fell by 0.4 percent from June to July. Leading the pack on the appreciation side are Phoenix, San Jose and San Francisco, which experienced 2.2, 1.2 and 1.2 percent home value appreciation, respectively
The second graph is also from Zillow. The year-over-year comparison has turned positive this year, and is positive for the first time since the housing bubble burst.Zillow also has data on rents and the rate of foreclosed homes.
Note: At the peak of the bubble, we only had the OFHEO HPI (now FHFA and for GSE loans only), and some median price indexes that are impacted by the mix. Now we have a number of house price indexes released every month: Case-Shiller, CoreLogic, LPS, Zillow, FNC and several others.
Saturday, August 25, 2012
Unofficial Problem Bank list declines to 898 Institutions
by Calculated Risk on 8/25/2012 06:39:00 PM
This is an unofficial list of Problem Banks compiled only from public sources.
Here is the unofficial problem bank list for Aug 24, 2012. (table is sortable by assets, state, etc.)
Changes and comments from surferdude808:
Only one change for the Unofficial Problem Bank List this week as the FDIC held to form and did not release its actions until the last Friday of the month. For next week, that means we will should get the second quarter industry earnings and the Official Problem Bank List on the 28th and FDIC's actions for July on the 31st.Earlier:
The Federal Reserve terminated the action against Valley Bank, Roanoke, VA ($781 million Ticker: VYFC). After removal, the Unofficial Problem Bank List holds 898 institutions with assets of $346.7 billion. A year ago, the list held 988 institutions with assets of $415.9 billion.
• Summary for Week Ending Aug 24th
• Schedule for Week of Aug 26th
Schedule for Week of Aug 26th
by Calculated Risk on 8/25/2012 01:05:00 PM
Earlier:
• Summary for Week Ending Aug 24th
The most anticipated events this coming are the speeches by Fed Chairman Ben Bernanke (Friday) and ECB President Mario Draghi (Saturday) at the Jackson Hole Economic Symposium .
Key economic releases include the Case-Shiller house price index on Tuesday, the second estimate of Q2 GDP on Wednesday, and July Personal Income and Spending on Thursday.
Note: The FDIC is expected to release the Q2 Quarterly Banking Profile this week.
10:30 AM: Dallas Fed Manufacturing Survey for August. The consensus is for -6.0 for the general business activity index, up from -13.2 in July.
12:15 PM: Cleveland Fed President Sandra Pianalto speaks on the economic outlook and monetary policy in Newark (voting member of FOMC).
9:00 AM: S&P/Case-Shiller House Price Index for June. Although this is the June report, it is really a 3 month average of April, May and June. This graph shows the nominal seasonally adjusted Composite 10 and Composite 20 indexes through May 2012 (the Composite 20 was started in January 2000).
The consensus is for a no change year-over-year in the Composite 20 prices (NSA) for June. The Zillow forecast is for the Composite 20 to increase 0.3% year-over-year, and for prices to increase 0.9% month-to-month seasonally adjusted. The CoreLogic index increased 1.3% in June (NSA).
10:00 AM: Conference Board's consumer confidence index for August. The consensus is for a decrease to 65.0 from 65.9 last month.
10:00 AM: Richmond Fed Survey of Manufacturing Activity for August. The consensus is for an increase to -10 for this survey from -17 in July (above zero is expansion).
8:30 AM: Gross Domestic Product, 2nd quarter 2012 (second estimate); Corporate Profits, 2nd quarter 2012 (preliminary estimate). This is the second estimate from the BEA. The consensus is that real GDP increased 1.7% annualized in Q2, revised up from 1.5% in the advance release.
10:00 AM ET: Pending Home Sales Index for August. The consensus is for a 1.0% increase in the index.
11:00 AM: New York Fed to Release Q2 2012 Report on Household Debt and Credit.
2:00 PM: Federal Reserve Beige Book, an informal review by the Federal Reserve Banks of current economic conditions in their Districts. This will receive extra attention this month as investors look for any sign of a "a substantial and sustainable strengthening in the pace of the economic recovery" that might derail QE3. (quote from the recent FOMC minutes).
8:30 AM ET: Personal Income and Outlays for July. The consensus is for a 0.3% increase in personal income in July, and for 0.4% increase in personal spending. And for the Core PCE price index to increase 0.1%.
11:00 AM: Kansas City Fed regional Manufacturing Survey for August. This is the last of the regional surveys for August. The consensus is for an a reading of 5, unchanged from 5 in July (above zero is expansion).
9:55 AM: Reuter's/University of Michigan's Consumer sentiment index (final for August). The consensus is for a reading of 73.5, down from the preliminary August reading of 73.6, and up from the July reading of 72.3.
10:00 AM: Manufacturers' Shipments, Inventories and Orders (Factory Orders) for July. The consensus is for a 0.9% increase in orders.
10:00 AM, Speech by Fed Chairman Ben Bernanke, "Monetary Policy Since the Crisis", At the Federal Reserve Bank of Kansas City Economic Symposium, Jackson Hole, Wyoming
Summary for Week ending August 24th
by Calculated Risk on 8/25/2012 08:03:00 AM
The key sentence of the week was from the FOMC minutes of the last meeting: “Many members judged that additional monetary accommodation would likely be warranted fairly soon unless incoming information pointed to a substantial and sustainable strengthening in the pace of the economic recovery.”
“Substantial and sustainable”? Not any time soon. So the question is what is the meaning of “fairly soon”, and does that mean QE3, or an extension of the exceptionally low levels of interest rates until 2015?
We might get some hints next week when Fed Chairman Ben Bernanke speaks at the Jackson Hole Economic Symposium. But “fairly soon” probably means September ... for something!
The only significant economic releases this week were housing related – July new and existing home sales - and of course both were fairly positive.
For new homes, sales increased to 372,000 on an annual rate basis in July. New home sales have averaged a 360,000 pace through July, and that means sales are on pace to increase 18% from 2011 (with coming revisions, I expect sales to be up 20%+ this year). This is from a very low level, but how many sectors are seeing a 20% year-over-year increase in 2012?
For existing home sales, the key number is inventory. Although the NAR reported inventory increased slightly in July from June, inventory is still down 23.8% compared to July 2011. Another positive is that conventional sales in many areas are up sharply from last year, offsetting the decline in distressed sales.
Another key sentence (and an old theme for this blog): As goes housing, so goes the economy. The general rule is housing leads the economy – there are exceptions like in 2001 following the popping of the stock bubble, and recently we’ve seen a recovery without housing – but the housing recovery suggests, barring a significant policy mistake in the US or Europe, the pace of the economic recovery should increase in 2013. Will it be “substantial and sustainable”? I doubt it will be "substantial" in the near term.
Here is a summary of last week in graphs:
• New Home Sales increased in July to 372,000 Annual Rate
Click on graph for larger image.
The Census Bureau reported New Home Sales in July were at a seasonally adjusted annual rate (SAAR) of 372 thousand. This was up from a revised 359 thousand SAAR in June (revised up from 350 thousand). Sales in May were revised down.
The first graph shows New Home Sales vs. recessions since 1963. The dashed line is the current sales rate.
On inventory, according to the Census Bureau:
"A house is considered for sale when a permit to build has been issued in permit-issuing places or work has begun on the footings or foundation in nonpermit areas and a sales contract has not been signed nor a deposit accepted."Starting in 1973 the Census Bureau broke this down into three categories: Not Started, Under Construction, and Completed.
This graph shows the three categories of inventory starting in 1973.The inventory of completed homes for sale was at a record low 38,000 units in July. The combined total of completed and under construction is at the lowest level since this series started.
This was another fairly solid report and indicates an ongoing sluggish recovery in residential investment.
• Existing Home Sales in July: 4.47 million SAAR, 6.4 months of supply
This graph shows existing home sales, on a Seasonally Adjusted Annual Rate (SAAR) basis since 1993. Sales in July 2012 (4.47 million SAAR) were 2.3% higher than last month, and were 10.4% above the July 2011 rate.
The second graph shows the year-over-year (YoY) change in reported existing home inventory and months-of-supply. Since inventory is not seasonally adjusted, it really helps to look at the YoY change. Note: Months-of-supply is based on the seasonally adjusted sales and not seasonally adjusted inventory.
Inventory decreased 23% year-over-year in July from July 2011. This is the seventeenth consecutive month with a YoY decrease in inventory, and near the largest year-over-year decline reported.Months of supply decreased to 6.4 months in July.
This was slightly below expectations of sales of 4.50 million. However, as I've noted before, those focusing on sales of existing homes, looking for a recovery for housing, are looking at the wrong number. For existing home sales, the key number is inventory - and the sharp year-over-year decline in inventory is a positive for housing.
• AIA: Architecture Billings Index Downturn Moderates as Negative Conditions Continue in July
Note: This index is a leading indicator primarily for new Commercial Real Estate (CRE) investment.
This graph shows the Architecture Billings Index since 1996. The index was at 48.7 in July, up from 45.9 in June. Anything below 50 indicates contraction in demand for architects' services.Note: This includes commercial and industrial facilities like hotels and office buildings, multi-family residential, as well as schools, hospitals and other institutions.
According to the AIA, there is an "approximate nine to twelve month lag time between architecture billings and construction spending" on non-residential construction. This suggests further weakness in CRE investment later this year and into next year (it will be some time before investment in offices and malls increases).
• Weekly Initial Unemployment Claims increased to 372,000
From the DOL: "In the week ending August 18, the advance figure for seasonally adjusted initial claims was 372,000, an increase of 4,000 from the previous week's revised figure of 368,000."The dashed line on the graph is the current 4-week average. The 4-week average post-bubble low is 363,000; this week the average was at 368,000.
This was above the consensus forecast of 365,000.
• Other Economic Stories ...
• FOMC Minutes: Discussion of policy tools the FOMC mioght use "fairly soon"
• From the Census Bureau: Durable Goods orders increase 4.2% in July
• From Zillow: Negative Equity Falls in Second Quarter; Nearly Half of Borrowers Under 40 Remain Underwater
• From the FHFA: U.S. House Prices Rose 1.8 Percent From First Quarter to Second Quarter 2012
Friday, August 24, 2012
Zillow forecasts Case-Shiller House Price index to show small Year-over-year increase for June
by Calculated Risk on 8/24/2012 08:22:00 PM
Note: The Case-Shiller report is for June (really an average of prices in April, May and June).
Zillow Forecast: Zillow Forecast: June Case-Shiller Composite-20 Expected to Show 0.3% Increase from One Year Ago
On Tuesday, August 28th, the Case-Shiller Composite Home Price Indices for June will be released. Zillow predicts that the 20-City Composite Home Price Index (non-seasonally adjusted [NSA]) will be up by 0.3 percent on a year-over-year basis, while the 10-City Composite Home Price Index (NSA) will be flat on a year-over-year basis. The seasonally adjusted (SA) month-over-month change from May to June will be 0.9 percent for both the 20-City Composite and the 10-City Composite Home Price Index (SA). All forecasts are shown in the table below and are based on a model incorporating the previous data points of the Case-Shiller series and the June Zillow Home Value Index data, and national foreclosure re-sales.Zillow's forecasts for Case-Shiller have been pretty close.
This will be the first month with positive annual appreciation in the 20-City Index since September of 2010. In 2010, home prices showed increases due to the Federal home buyer credit, which artificially lifted the market. This time around the home price appreciation is organic and represents a recovering housing market. Zillow has called a home value bottom for the national real estate market with many regional markets experiencing inventory shortages and strong near-term price appreciation. While the Case-Shiller indices have been appreciating at a healthy clip for the past few months, we do expect them to moderate and likely report monthly declines towards the end of the year, largely as a function of declining overall monthly sales volume which will increase the percentage of foreclosure re-sales in the transactional mix being tracked by Case-Shiller.
For those of you interested in more recent data on the housing market, Zillow’s July 2012 data was released this week, Tuesday, August 21st and can be found here. The Zillow Home Value Index does not include foreclosure re-sales, and we expect it to increase 1.2% between June 2012 and June 2013.
If the Zillow forecast is correct, this will be a significant milestone for the Case-Shiller as year-over-year prices turn positive.
| Case Shiller Composite 10 | Case Shiller Composite 20 | ||||
|---|---|---|---|---|---|
| NSA | SA | NSA | SA | ||
| Case Shiller (year ago) | June 2011 | 154.87 | 154.35 | 141.50 | 140.78 |
| Case-Shiller (last month) | May 2012 | 151.79 | 152.88 | 138.96 | 139.93 |
| Zillow June Forecast | YoY | 0.0% | 0.0% | 0.3% | 0.3% |
| MoM | 2.1% | 0.9% | 2.2% | 0.9% | |
| Zillow Forecasts1 | 154.9 | 154.3 | 142.0 | 141.2 | |
| Current Post Bubble Low | 146.51 | 149.21 | 134.08 | 136.49 | |
| Date of Post Bubble Low | Mar-12 | Jan-12 | Mar-12 | Jan-12 | |
| Above Post Bubble Low | 5.7% | 3.4% | 5.9% | 3.4% | |
| 1Estimate based on Year-over-year and Month-over-month Zillow forecasts | |||||
Lawler: Updated Distressed Home Sales Share Table
by Calculated Risk on 8/24/2012 03:59:00 PM
CR Note: Tom Lawler thanks everyone for voting his horse "Dealer" to victory in the best pet contest. My congratulations to Rosemary and Tom who are celebrating their anniversary today!
Economist Tom Lawler sent me the table below for several more distressed areas. For almost of these areas (except Rhode Island), the share of distressed sales is down from July 2011 - and for the areas that break out short sales, the share of short sales has increased (except Minneapolis, and Lee County, FL) and the share of foreclosure sales are down. In most areas, short sales are higher than foreclosures, and for some areas like Phoenix, Reno and Las Vegas, short sales are now double the rate of foreclosures.
From Lawler: For the combined markets below showing the “total” distressed share of home sales, total home sales in July were up 8.7% from last July, but “non-distressed” sales were up by over 30%!
| Short Sales Share | Foreclosure Sales Share | Total "Distressed" Share | ||||
|---|---|---|---|---|---|---|
| 12-July | 11-July | 12-July | 11-July | 12-July | 11-July | |
| Las Vegas | 40.0% | 20.2% | 20.7% | 50.2% | 60.7% | 70.4% |
| Reno | 38.0% | 28.0% | 15.0% | 37.0% | 53.0% | 65.0% |
| Phoenix | 29.5% | 23.6% | 14.6% | 43.1% | 44.1% | 66.7% |
| Sacramento | 32.0% | 22.3% | 22.4% | 39.0% | 54.4% | 61.3% |
| Minneapolis | 9.3% | 11.0% | 24.8% | 34.4% | 34.1% | 45.4% |
| Mid-Atlantic (MRIS) | 11.3% | 10.2% | 8.7% | 15.1% | 20.0% | 25.2% |
| Orlando | 28.2% | 29.4% | 23.7% | 28.2% | 51.9% | 57.6% |
| California (DQ) | 19.0% | 17.3% | 22.0% | 34.5% | 41.0% | 51.8% |
| Lee County, FL | 17.3% | 18.8% | 15.9% | 30.6% | 33.2% | 49.4% |
| Hampton Roads VA | 29.1% | 30.3% | ||||
| Northeast Florida | 39.0% | 44.1% | ||||
| Sarasota | 32.4% | 38.0% | ||||
| Chicago | 36.1% | 36.7% | ||||
| Rhode Island | 24.8% | 20.3% | ||||
| Miami-Dade | 47.0% | 52.0% | ||||
| Memphis | 26.7% | 31.9% | ||||
| Birmingham AL | 27.2% | 28.4% | ||||
| Houston | 16.3% | 19.6% | ||||
Merkel and Samaras Press Conference
by Calculated Risk on 8/24/2012 01:29:00 PM
From the Athens News: Merkel lays down the law
“We expect Greece to deliver all that has been promised,” Merkel declared. In remarks that were unusually sharp for a joint news conference, she stressed that Berlin has heard words in the past but now expects deeds.Here is a transcript in Greek from the Greek government.
The tough talk contrasted sharply with the head of state honours and diplomatic smiles with which Samaras was received on his first official visit, complete with red carpet and band.
Merkel said that Samaras’ visit is a sign of the “very close ties” between the two countries, only to add later that each side had lost credibility in the eyes of the other and that trust must be regained.
“Our aim is for Greece to remain in the eurozone, despite all the problems that exist,” Merkel said, noting that the euro is more than a currency, that it is the embodiment of European unification.
Moreover, Merkel noted the tremendous sacrifices that the Greek people have made over the last years, underlining that the weaker classes have borne the brunt of austerity and that those who profited during previous years of prosperity have not done their part.
The remark was a thinly veiled barb against the handling of austerity measures by successive Greek governments, which have done nothing to combat rampant tax evasion among the higher income brackets, opting instead for repeated horizontal wage and pension cuts.
...
For his part, Samaras pledged that his government will pursue reforms on a strict timetable and that he is determined to “bring results”.
“I am certain that the troika report will signal that the new coalition government will deliver,” he said.
“We are eliminating two deficits at once – the country’s budget deficit and the credibility deficit,” he said.
But the prime minister underlined that “a revival of the economy and growth is of crucial importance to meet our obligations soon”.
And a google translation.
BLS: Displaced Workers Summary
by Calculated Risk on 8/24/2012 10:13:00 AM
This is an interesting biennial survey that tracks people who lost jobs that they had held for 3+ years ...
From the BLS: Displaced Workers Summary
From January 2009 through December 2011, 6.1 million workers were displaced from jobs they had held for at least 3 years, the U.S. Bureau of Labor Statistics reported today. This was down from 6.9 million for the survey period covering January 2007 to December 2009. In January 2012, 56 percent of workers displaced from 2009-11 were reemployed, up by 7 percentage points from the prior survey in January 2010.Some improvement for the previous survey (that included 2008). But, as of January 2012, only 56 percent of these workers had found new employment. And about 1/3 of those who were reemployed, took 20%+ pay cuts. From the survey:
Of the 3.0 million displaced workers who lost full-time wage and salary jobs during the 2009-11 period and were reemployed, 2.4 million had full-time wage and salary jobs in January 2012. Of these reemployed full-time workers who reported earnings on their lost job, 46 percent were earning as much or more in January 2012 as they did at their lost job. About one-third reported earnings losses of 20 percent or more.
Durable Goods orders increase 4.2% in July
by Calculated Risk on 8/24/2012 08:30:00 AM
Durable goods is always very volatile. This increase was related to a large increase in aircraft orders (Nondefense aircraft and parts increased 14.1%), Ex-transportation, orders fell 0.4% in July.
From the Census Bureau: Advance Report on Durable Goods Manufacturers’ Shipments, Inventories and Orders
January 2012
New orders for manufactured durable goods in July increased $9.4 billion or 4.2 percent to $230.7 billion, the U.S. Census Bureau announced today. This increase, up three consecutive months, followed a 1.6 percent June increase. Excluding transportation, new orders decreased 0.4 percent. Excluding defense, new orders increased 5.7 percent.Expectations were for a 1.9% increase in orders.
Transportation equipment, up five of the last six months, had the largest increase, $9.9 billion or 14.1 percent to $80.4 billion.
Thursday, August 23, 2012
Friday: Durable Goods, Europe, and requesting a favor
by Calculated Risk on 8/23/2012 09:04:00 PM
First, my friend Tom Lawler has been very kind and allowed me to excerpt pieces from his daily newsletter to share with everyone. The Lawler's beloved horse "Dealer" has had some lameness issues this year, and to cheer up his wife (and himself) Tom entered Dealer in a local best pet contest and hopes to surprise his wife with "Dealer" being named best pet. Right now Dealer is trailing in the voting, and Tom needs your help. If you could spare a few seconds, please go to this site and vote for "Dealer". Thank you so much!
A few articles on global issues ...
From the NY Times: French and German Leaders Meet as Fresh Signs Point to Regional Recession
Returning to business after their summer breaks, the German and French leaders met here Thursday to discuss the continuing crisis in the euro zone, even as fresh economic data reinforced fears that the region was sliding into recession.From the NY Times: China Confronts Mounting Piles Of Unsold Goods
After three decades of torrid growth, China is encountering an unfamiliar problem with its newly struggling economy: a huge buildup of unsold goods that is cluttering shop floors, clogging car dealerships and filling factory warehouses.From the Financial Times: Athens and Berlin in spat over funds
The glut of everything from steel and household appliances to cars and apartments is hampering China’s efforts to emerge from a sharp economic slowdown. It has also produced a series of price wars and has led manufacturers to redouble efforts to export what they cannot sell at home.
Leaders in Athens and Berlin wrangled publicly over how to deal with Greece’s plea for further assistance as fears of a renewed eurozone recession mounted yesterday.On Friday:
...
Wolfgang Schäuble, finance minister, said on German radio that there was “understanding” for Athens’ predicament, but giving it more time was “not the solution”, adding: “More time implies . . . more money.”
excerpt with permission
• At 8:30 AM ET, Durable Goods Orders for July from the Census Bureau. The consensus is for a 1.9% increase in durable goods orders.
• At 10:00 AM, the Worker Displacement report from the BLS for January 2012 will be released. This report will probably receive some attention because of weak labor market.
• Europe Note: the Spanish Government is expected to announce the details of the bank bailout. Also on Friday, Greek Prime Minister Samaras and German Chancellor Merkel will meet in Berlin with a press conference to follow.
Earlier:
• New Home Sales increase in July to 372,000 Annual Rate
• New Home Sales and Distressing Gap
• New Home Sales graphs
