March existing home sales generally stable

The NAR reported that

Existing-home sales – including single-family, townhomes, condominiums and co-ops – declined 3.0 percent to a seasonally adjusted annual rate1 of 4.57 million units in March from a downwardly revised level of 4.71 million in February, and were 7.1 percent lower than the 4.92 million-unit pace in March 2008.

You'll probably read in most places how existing home sales were "down" again. True, but there is a big "BUT..."

Existing home sales from March through August of last year were stable at 4.9 million/year seasonally adjusted (+/-.05 million). In the wake of Black September they immediately declined into the 4.5-4.7 range and have remained there for 5 months.

While existing home sales aren't improving, they aren't meaningfully contracting any more. Barring another Black September-like shock in the next 6 months, they should bottom about the end of this year.

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Generally Stable???


Bloomberg has a little problem with your assesment.

April 23 (Bloomberg) -- Sales of U.S. previously owned homes fell in March after jumping a month earlier by the most in more than five years, indicating the market will remain depressed for much of the year.
Purchases decreased 3 percent to an annual rate of 4.57 million, lower than forecast, from 4.71 million in February, the National Association of Realtors said today in Washington. The median price slumped 12 percent from a year ago and distressed properties accounted for about 50 percent of all sales.

It seems the February bounce was short lived as the prime borrowers begin to reset this year.

According to many reports the next shock is coming. While the bubble states are still seeing increases in foreclosures there is a
new trend emerging.

New problem cities: Meanwhile, some metropolitan areas had a surge in foreclosures. Boise City-Nampa, Idaho, in 27th place, Provo-Orem, Utah, in 37th, and Charleston-North Charleston, S.C., in 51st were examples Sharga gave of areas that had particular strong gains in filings.
Sharga said the rise of foreclosures in additional regions indicates new factors influencing the housing market as the recession drags on.
"What we believe we are seeing is some of the areas with unemployment problems," said Sharga. "These are people living paycheck to paycheck and, when the paycheck is gone, suddenly they can't afford to make their mortgage payments."

Less bad will be questioned here.

It has always been about class warfare.

Click on

this graph from Calculated Risk's article today. The last 5 months are a sideways squiggle.

The last five months

have seen moritoriums placed on foreclosures by various states and agencies like Fannie, Freddie and FHA. These are now coming off.

For months prior to March, banks/servicers were on and off of foreclosure moratoria with many on a complete hold awaiting Pres. Obama’s plan to save the housing market and homeowners.
[..]
The bottom line is that there is a massive wave of actual foreclosures that will hit beginning in April that can’t be stopped without a national moratorium

According to Mr. Mortgage almost 80% of all NOD turn into defaults. Of those defaults 90% are turned into bank REO's.

New Loan Defaults Surging - forward looking. But coming down the pipe is a massive wave of mortgage Notice-of-Defaults (NOD) that dwarfs the highs we saw when things began to get really out of control in Q1 2008. In the month of March new CA loan defaults hit a record high of over 50k for the very first time. This translates into approximately 150k defualts nationally. Actual foreclosures lag NOD’s by 4-5 months so it is no guess that there is a massive foreclosure wave bearing down with the first part of the lip from the Dec NOD surge hitting in April/May.

Speculation on my part looks to me like we are setting up for another leg down.

It has always been about class warfare.

Let's assume your speculation is correct

The landslide of REO properties flooding the market should drive prices further down, and if anything cause volume of sales to pick up.

I do agree that we're nowhere near a bottom in housing in terms of prices.

Thats just the thing...

The REO's aren't making it to the market as fast as they are going on the banks books. I keep waiting for the banks to finally give up the ghost as RE management is not what they want to do. Having all those depreciating assets on their books is costing them lots of money.
I expect that a new wave of foreclosures might convince them to unload ... we'll just have to wait and see.

I agree that more inventory coming to the market will drive home affordability even further. But its the type of new inventory that is the game changer.

So far though, all we have seen is the implosion of the subprime market which has translated into 50% of sales being foreclosures. The thing about those are only first time home buyers and investors and not the meat of the housing market.

Prime mortgages that about to reset will dwarf the subprime market and effect a larger swath of housing ... the all important move up buyer. Without the move up buyer any RE recovery will stall. And with increasing unemployment more foreclosures will be on the way.

It has always been about class warfare.