by Calculated Risk on 12/17/2013 08:21:00 PM

The long delayed housing starts report will be released tomorrow for September, October and November.

Starts are a key report, but the big story for the day will be the FOMC announcement, projections, and press briefing. The consensus is the FOMC will wait until early 2014 to start to reduce asset purchases, but it is possible that they will start the "taper" at this meeting.

Wednesday:
• 7:00 AM ET, The Mortgage Bankers Association (MBA) will release the results for the mortgage purchase applications index.

• At 8:30 AM, the Census Bureau will release Housing Starts for September, October and November. Total housing starts were at 891 thousand (SAAR) in August. Single family starts were at 628 thousand SAAR in August. The consensus is for total housing starts to increase to 952 thousand (SAAR) in November.

• During the day: The AIA's Architecture Billings Index for November (a leading indicator for commercial real estate).

• At 2:00 PM, the FOMC Meeting Announcement will be released. It is possible the FOMC will start to reduce QE purchases following this meeting.

• Also at 2:00 PM, the FOMC projections will be released. This will include the Federal Open Market Committee (FOMC) participants' projections of the appropriate target federal funds rate along with the quarterly economic projections.

• At 2:30 PM, Fed Chairman Ben Bernanke will hold a press briefing following the FOMC announcement.

by Calculated Risk on 12/17/2013 05:41:00 PM

Economist Tom Lawler sent me the updated table below of short sales, foreclosures and cash buyers for several selected cities in November.

From CR: This is just a few markets, but total "distressed" share is down significantly, foreclosure are down in most areas, and short sales are off sharply year-over-year.


The All Cash Share (last two columns) is mostly declining year-over-year.  As investors pull back in markets (like Vegas and Phoenix) the share of all cash buyers will probably decline.

Note: Existing home sales for November will be released on Thursday, and Tom Lawler is projecting the NAR will report sales of 4.98 million on a seasonally adjusted annual rate basis. The consensus is for sales to decline to a 5.05 million SAAR, down from 5.12 SAAR in October.

	Short Sales Share		Foreclosure Sales Share		Total "Distressed" Share		All Cash Share
	Nov-13	Nov-12	Nov-13	Nov-12	Nov-13	Nov-12	Nov-13	Nov-12
Las Vegas	21.0%	41.2%	7.0%	10.7%	28.0%	51.9%	43.7%	52.7%
Reno	17.0%	41.0%	6.0%	9.0%	23.0%	50.0%
Phoenix	7.8%	23.2%	8.0%	12.9%	15.8%	36.1%	34.0%	43.2%
Sacramento	11.0%	36.1%	4.6%	11.5%	15.6%	47.6%	25.0%	37.1%
Minneapolis	5.0%	11.1%	17.0%	24.5%	22.0%	35.6%
Mid-Atlantic	7.5%	11.9%	8.1%	8.7%	15.7%	20.6%	19.6%	20.0%
Orlando	13.5%	29.4%	20.3%	21.1%	33.8%	50.5%	46.5%	54.2%
California*	12.3%	26.2%	6.8%	16.9%	19.1%	43.1%
Bay Area CA*	9.1%	23.2%	3.7%	12.5%	12.8%	35.7%	22.0%	28.9%
So. California*	12.7%	26.6%	6.3%	15.4%	19.0%	42.0%	27.2%	34.0%
Hampton Roads					26.9%	28.3%
Northeast Florida					36.4%	41.8%
Chicago					35.0%	43.0%
Tucson							32.2%	0.338
Toledo							37.2%	0.409
Des Moines							19.9%	22.1%
Peoria							21.8%	21.2%
Omaha							21.6%	19.8%
Spokane			16.0%	9.1%
Houston			7.7%	15.0%
Memphis*			20.4%	24.4%
Birmingham AL			21.0%	26.5%
Springfield IL			17.0%	15.8%
*share of existing home sales, based on property records

by Calculated Risk on 12/17/2013 03:51:00 PM

Several years ago I started following the Sacramento market to look for changes in the mix of houses sold (conventional, REOs, and short sales).  For a long time, not much changed. But over the last 2 years we've seen some significant changes with a dramatic shift from foreclosures (REO: lender Real Estate Owned) to short sales, and the percentage of total distressed sales declining sharply.

This data suggests healing in the Sacramento market, although some of this is due to investor buying.  Other distressed markets are showing similar improvement.  Note: The Sacramento Association of REALTORS® started breaking out REOs in May 2008, and short sales in June 2009.

In November 2013, 15.5% of all resales (single family homes) were distressed sales. This was down from 16.7% last month, and down from 47.6% in November 2012.

The percentage of REOs was at 4.4%, and the percentage of short sales decreased to 11.0%. (the lowest percentage of distressed sales since the Sacramento Realtors started tracking the data).

Here are the statistics.

Click on graph for larger image.

This graph shows the percent of REO sales, short sales and conventional sales.

There has been a sharp increase in conventional sales recently (blue). 

Active Listing Inventory for single family homes increased 56.8% year-over-year in November.  This is the seventh consecutive month with a year-over-year increase in inventory.

Cash buyers accounted for 25.0% of all sales, down from 37.1% a year ago (frequently investors).  This has been trending down, and it appears investors are becoming less of a factor in Sacramento.

Total sales were down 29% from November 2012, but conventional sales were up 14% compared to the same month last year. This is exactly what we expect to see in an improving distressed market - flat or even declining overall sales as distressed sales decline, and conventional sales increasing.

As I've noted before, we are seeing a similar pattern in other distressed areas.  This suggests what will happen in other areas: 1) Flat or declining overall existing home sales, 2) but increasing conventional sales,  3) Less investor buying, 4) more inventory, and 5) slower price increases.

by Calculated Risk on 12/17/2013 12:49:00 PM

The Cleveland Fed released the median CPI and the trimmed-mean CPI this morning:

According to the Federal Reserve Bank of Cleveland, the median Consumer Price Index rose 0.2% (2.2% annualized rate) in November. The 16% trimmed-mean Consumer Price Index increased 0.1% (1.2% annualized rate) during the month. The median CPI and 16% trimmed-mean CPI are measures of core inflation calculated by the Federal Reserve Bank of Cleveland based on data released in the Bureau of Labor Statistics' (BLS) monthly CPI report.

Earlier today, the BLS reported that the seasonally adjusted CPI for all urban consumers was unchanged (with annualized rate of 0.4%) in November. The CPI less food and energy increased 0.2% (1.9% annualized rate) on a seasonally adjusted basis.

Note: The Cleveland Fed has the median CPI details for November here.

Click on graph for larger image.

This graph shows the year-over-year change for these four key measures of inflation. On a year-over-year basis, the median CPI rose 2.0%, the trimmed-mean CPI rose 1.6%, the CPI rose 1.2%, and the CPI less food and energy rose 1.7%. Core PCE is for October and increased just 1.1% year-over-year.

On a monthly basis, median CPI was at 2.2% annualized, trimmed-mean CPI was at 1.2% annualized, and core CPI increased 1.9% annualized.

These measures indicate inflation remains below the Fed's target.

by Calculated Risk on 12/17/2013 10:00:00 AM

The National Association of Home Builders (NAHB) reported the housing market index (HMI) was at 58 in December, up from 54 in November. Any number above 50 indicates that more builders view sales conditions as good than poor.

From the NAHB: Builder Confidence Rises Four Points in December

Builder confidence in the market for newly built, single-family homes improved four points to a 58 reading on the National Association of Home Builders/Wells Fargo Housing Market Index (HMI) for December, released today. This gain reflected improvement in all three index components – current sales conditions, sales expectations and traffic of prospective buyers.
...
All three HMI components posted gains in December. The index gauging current sales conditions jumped six points to 64, while the index gauging expectations for future sales rose two points to 62. The index gauging traffic of prospective buyers gained three points to 44.

Looking at the three-month moving averages for regional HMI scores, the South edged one point higher to 57 while the Northeast, Midwest and West each fell a single point to 38, 59 and 59, respectively.
emphasis added

Click on graph for larger image.

This graph show the NAHB index since Jan 1985.

“This is definitely an encouraging sign as we move into 2014,” said National Association of Home Builders (NAHB) Chairman Rick Judson, a home builder from Charlotte, N.C. “The HMI is up 11 points since December of 2012 and has been above 50 for the past seven months. This indicates that an increasing number of builders have a positive view on where the industry is going.”