by Calculated Risk on 11/18/2012 09:00:00 PM

First on the recession in the Euro Zone from Jim Hamilton: Europe in recession

The Business Cycle Dating Committee of the Centre for Economic Policy Research (the European counterpart of the U.S. NBER) last week issued a declaration that Europe entered a new recession a year ago, dating the business cycle peak at 2011:Q3.

This was pretty obvious a year ago.

Monday:
• At 10:00 AM ET, Existing Home Sales for October from the National Association of Realtors (NAR). The consensus is for sales of 4.74 million on seasonally adjusted annual rate (SAAR) basis. Sales in September 2012 were 4.75 million SAAR.  Economist Tom Lawler estimates the NAR will report sales at 4.84 million SAAR. Goldman Sachs is forecasting a decline in sales to 4.67 million, and Merrill Lynch is forecasting 4.60 million.

• Also at 10:00 AM, the NAHB will release their November homebuilder survey. The consensus is for a reading of 41, unchanged from October. Although this index has been increasing lately, any number below 50 still indicates that more builders view sales conditions as poor than good.

The Asian markets are green tonight, with the Nikkei up 1.5%.

From CNBC: Pre-Market Data and Bloomberg futures: the S&P futures are up 6 and DOW futures are up 46.

Oil prices are up slightly with WTI futures at $87.48 per barrel and Brent at $109.46 per barrel. Gasoline prices are still falling a little.

Weekend:
• Summary for Week Ending Nov 16th
• Schedule for Week of Nov 18th

And on mortgage delinquencies:
• Press Release: Q3 National Delinquency Survey
• Q3 MBA National Delinquency Survey Graph and Comments
• Mortgage Delinquencies by Loan Type in Q3
• Serious Mortgage Delinquencies and In-Foreclosure by State
• Percent of Mortgage Seriously Delinquent over time, Selected States

Two more questions this week for the November economic prediction contest (Note: You can now use Facebook, Twitter, or OpenID to log in).

by Calculated Risk on 11/18/2012 05:26:00 PM

Economist Tom Lawler sent me the table below of short sales and foreclosures for a few selected cities in October. Keep this table in mind when the NAR releases existing home sales tomorrow.

The NAR headline number will probably be close to the 4.75 million SAAR in September, but there are other signs of significant change in the housing market. First, inventory has declined sharply, and there is very little inventory in many areas. Second, it appears that the share of conventional sales in certain markets has increased significantly (these are normal sales - not foreclosures or short sales). Both the decline in inventory, and the increase in conventional sales, are signs of moving towards a more normal housing market.

Look at the right two columns in the table below (Total "Distressed" Share for Oct 2012 compared to Oct 2011). In every area that reports distressed sales, the share of distressed sales is down year-over-year - and down significantly in most areas. The NAR will release some distressed sales measurements tomorrow from an unscientific survey of Realtors - and I have little confidence in the survey results - but these local reports suggest distressed sales have fallen sharply in many areas.

Also there has been a decline in foreclosure sales just about everywhere. Look at the middle two columns comparing foreclosure sales for Oct 2012 to Oct 2011. Foreclosure sales have declined in all these areas, and some of the declines have been stunning (the Nevada sales were impacted by a new foreclosure law).

Also there has been a shift from foreclosures to short sales. In most areas, short sales now far out number foreclosures, although Minneapolis is an exception with more foreclosures than short sales.

Imagine that the number of total sales doesn't change over the next year - some people would argue that is "bad" news and the housing market isn't recovering. But also imagine that the share of distressed sales declines 25%, and conventional sales increase to make up the difference. That would be a positive sign! As I noted a week ago, conventional sales in Sacramento were up 55% year-over-year in October (there were 2 more selling days in Oct 2012, but that is still a stunning increase). Too bad we don't have better national numbers on the share of distressed / conventional sales, but this table suggests some improvement.

Table from Tom Lawler:

	Short Sales Share		Foreclosure Sales Share		Total "Distressed" Share
	12-Oct	11-Oct	12-Oct	11-Oct	12-Oct	11-Oct
Las Vegas	44.7%	25.4%	11.6%	48.1%	56.3%	73.5%
Reno	40.0%	32.0%	12.0%	38.0%	52.0%	70.0%
Phoenix	26.2%	29.2%	12.9%	35.6%	39.1%	64.8%
Sacramento	35.7%	26.8%	12.0%	37.3%	47.7%	64.1%
Minneapolis	10.5%	12.6%	25.1%	33.6%	35.6%	46.2%
Mid-Atlantic (MRIS)	11.7%	15.2%	9.1%	16.0%	20.7%	31.2%
California (DQ)*	26.0%	24.9%	17.4%	34.0%	43.4%	58.9%
Lee County, FL***	20.4%	19.8%	16.4%	33.7%	36.8%	53.5%
Hampton Roads VA					28.3%	33.2%
Northeast Florida					44.7%	48.4%
Chicago					42.5%	43.6%
Charlotte					13.2%	17.4%
Spokane WA			8.4%	20.4%
Memphis*			26.3%	30.8%
Birmingham AL			30.8%	35.5%
Metro Detroit			32.5%	38.3%
*share of existing home sales, based on property records
*** SF only

by Calculated Risk on 11/18/2012 01:32:00 PM

A key question is: What has happened to the mortgage delinquency rate over time by state?

For the graph below I plotted the serious delinquency rate for several states over time (states selected by serious delinquency rate in Q1 2010 - at the national peak). Although the national delinquency rate has been steadily declining, the state level data shows different patterns. There has been dramatic improvement in some non-judicial states, like Arizona and California - and some judicial foreclosure states are still seeing the seriously delinquent rate increase, like New Jersey and New York.

Previous posts on Q3 delinquencies:
• Press Release: Q3 National Delinquency Survey
• Q3 MBA National Delinquency Survey Graph and Comments
• Mortgage Delinquencies by Loan Type in Q3
• Serious Mortgage Delinquencies and In-Foreclosure by State

Click on graph for larger image in graph gallery.

I picked the states with the highest serious delinquency rate in Q1 2010 (Serious delinquencies peaked nationally in Q1 2010).

The red column for each state is the Q1 2010 data.

The light blue column was for Q2 2007. This was just as the serious delinquency rate started to increase nationally. Even then, the serious delinquency rate was elevated in some states like Michigan, Ohio and Indiana.

The states that have seen the most improvement - Arizona, California, Michigan, Nevada - are all non-judicial states. Florida is a judicial state that has seen some decline in the seriously delinquent rate. However the serious delinquency rate in New Jersey and New York has increased since Q1 2010.

The national data is useful, but with the different foreclosure processes, we also need to look at state and local data. Some states will be back to a "normal" delinquency rate soon - other states will take years.

by Calculated Risk on 11/18/2012 10:15:00 AM

Last week the MBA released the results of their Q3 National Delinquency Survey. One of the key points was the difference in the number of mortgages in the foreclosure process between judicial and non-judicial foreclosure states.

The first graph below (repeat) is from the MBA and shows the percent of loans in the foreclosure process by state.

The second graph shows all stages of delinquency (and in-foreclosure) by states, sorted by the percent seriously delinquent (90+ days plus in-foreclosure).

Previous posts on Q3 delinquencies:
• Q3 MBA National Delinquency Survey Graph and Comments
• Mortgage Delinquencies by Loan Type in Q3

Click on graph for larger image in graph gallery.

This graph is from the MBA and shows the percent of loans in the foreclosure process by state. Posted with permission.

The top states are Florida (13.04% in foreclosure down from 13.70% in Q2), New Jersey (8.87% up from 7.65%), Illinois (6.83% down from 7.11%), New York (6.46% down from 6.47%) and Nevada (the only non-judicial state in the top 13 at 5.93% down from 6.09%).

California (2.63% down from 3.07%) and Arizona (2.51% down from 3.24%) are now well below the national average.

The second graph includes all delinquent loans (sorted by percent seriously delinquent).

Florida and New Jersey have the highest percentage of serious delinquent loans, followed by Nevada, Illinois, New York, Maine and Maryland. Nevada still leads with the highest percent of loans 90+ days delinquent.

Previous high delinquency states like California and Arizona are now well down the list.

by Calculated Risk on 11/17/2012 09:20:00 PM

Recently I've been talking to a few friends from around the country, and they all seemed unaware that the California economy is clearly improving. California is seeing a pickup in employment, the delinquency rate is falling, and I wouldn't be surprised if California reports a balanced budget soon.

Note: when the MBA quarterly delinquency data was released earlier this week,  Mike Fratantoni, MBA’s Vice President of Research and Economics, said there has been "dramatic" improvement in California and Arizona.

From California's Employment Development Department: California’s unemployment rate decreases to 10.1 percent, Nonfarm payroll jobs increase by 45,800

California’s unemployment rate decreased to 10.1 percent in October, and nonfarm payroll jobs increased by 45,800 during the month for a total gain of 574,900 jobs since the recovery began in February 2010, according to data released today by the California Employment Development Department (EDD) from two separate surveys.

This is the lowest unemployment rate for California since Jan 2009. There are only three states still with double digit unemployment: Nevada, Rhode Island, and California.

The BLS will release data for all states on Tuesday.

Earlier:
• Summary for Week Ending Nov 16th
• Schedule for Week of Nov 18th