Doug Kass notes that how bad the inventory is in his neck of the
woods: here’s a chart of homes for sale, and those actually sold, in
North and Central Palm Beach County.
Note the ratio of actual and pending sales (bottom of bar chart) to inventory (tall light green bars)
Source: Doug Kass, Street Insight
>
Soft landing? Pshaw . . .
39 months of inventory! Someone tell the Katrina folks to head east.
Barry — There’s actually a local real estate broker that posts the numbers in advance of the “official” Florida Assocation of Realtors release. It doesn’t contain all the details that are shown above. But I have been monitoring it since I live in Palm Beach County.
Also, this link has the October figures — they just came out within the past two days. Looks like inventory down (customary for listings to get pulled heading into the fall, but it is a noteworthy decline because it’s the first one in several months). Sales were down to a fresh cycle low, however, and median prices are off about 6% ($19,000) from the year-earlier month.
Enjoy poking around here if you like …
http://www.ipre.com/trendg/index.htm
Barry did you mean to say Hosing Inventory and Sales, Palm Beach County
hey barry. your buddy cramer is calling a bottom in housing on his radio show today. what say you?
>>>Dear Barry,
more than a year ago your blog became my homepage.
Your take on the economy AND THE MARKET was crisp and fun to read. But let’s face it, since you have started your Pro-site there isn’t much more interesting here to read for an investor. Or is it that you have been wrong all the way up to new highs that you prefer to go on and on and on about a housing bubble where you were right instead.
Anyway, thank you for the nice time, but I’m moving on.
Sam<<< Seems to be a common theme. Chalk another one over to the other side.
Oooh. Barry, you hear that? Sam is moving on. One question for you Sam. Is that a threat or a promise?
~~~
BR: How dumb are these Trolls? Haven’t they ever heard of IP capture? Cookies? duh?
Sam’s IP address is : 84.176.121.234 He never posted a comment before, never bookmarked this page from that PC. And, an experimental new software ‘bot I am playing with also notes that he is a virgin, and likes to play with Barbies.
In the future, I am not even going to respond to guys like that — D&B — delete & ban — thats my new motto (aloing with GAPTFYS)!
reporting from sarasota fl
Home cancellations hit builders hard
The rate is at least double what it was last year
By STEPHEN FRATER
stephen.frater@heraldtribune.com
Ripping up a contract, abandoning a deposit and running away from a new home is a painful and expensive exercise, but it is one that more people are doing today than ever before.
Just this week, bellwether builders Toll Brothers and Beazer Homes reported cancellations that were running way above the norm. Viewed as a percentage of contracts signed during the fourth quarter of fiscal 2006, Toll’s cancellations were running at 37 percent compared with 18 percent during the same period last year.
The growth in people walking away is clear evidence that a recovery in residential real estate for most of the nation has yet to begin and that declines in general pricing have scared away some buyers who had locked in their home when building was still booming, experts said.
Miami-based Lennar Corp., Southwest Florida’s largest builder, and Fort Worth, Texas-based D.R. Horton Inc. have reported that cancellations are now running at 30 percent nationally, or about twice the normal rate, said Patrick Newport, an economist with Global Insight, a Massachusetts-based economic research firm.
Jerry Starkey, chief executive of Bonita Springs-based WCI Communities, told investors this week that “home cancellations were about twice our historical rate” during the third quarter.
Newport figures that is about the average nationally, though precise figures are difficult to pin down because “they are not tracked by anyone.”
He did an analysis recently that concluded “if cancellations were being counted, sales would be lower and inventory higher than currently estimated. How big of a problem are cancellations? No one knows for sure.”
Most vulnerable are the “national builders, who sold homes for as little as 5 to 10 percent down,” said Lee Wetherington, whose Lakewood Ranch-based company builds high-end custom homes and has yet to receive any cancellations.
Some builders made offers for $1,000 down or less and now are experiencing cancellations because the buyer has less at stake and sees new home prices falling below his or her own contract price.
“A lot of people are afraid of the fall off of pricing,” Wetherington said. “Almost any builder now is pricing at 10 to 15 percent less than during the summer of 2005,” including Wetherington’s company.
“It’s those people who signed contracts in the summer of 2005 who are the most likely to walk away,” he said. “They bought at the peak,” and are faced with closing now at a price that may be underwater for three years.
Bruce Williams Homes delivers about 350 homes each year in Southwest Florida. So far this year, the Manatee County company has had 10 cancellations, not a huge number but 40 percent more than prior periods, said Peter D. Mason, the company’s vice president of sales and marketing.
Wall Street shills
Government career bureaucrats
Main Stream Media
Independent, critical voices
Its up to you to pick whose information and analysis you choose to accept, questioningly or otherwise.
Do people really make blogs their homepage?
Would that make Barry some sort of fallen hero with regards to Sam? Or has Sam, through reading Barry’s blog, become a more fulfilled self-actualized person who no longer needs to “channel” his economic thought patterns through the filter of Barry’s blog? Sam is now ready to step out on his own! That would make Barry’s blog sort of liberating.
I never realized such important issues of self realization were involved.
THIS BLOG A S AHOME PAGE? PUH-LEEZE!
How dumb are these Trolls?
In the future, I am not even going to respond to guys like that — D&B — delete & ban — thats my new motto (aloing with GAPTFYS)!
and for the record: Sam’s IP address is : 84.176.121.234 He never posted a comment before, never bookmarked this page from that PC. And, an experimental new software ‘bot I am playing with also notes that he is a virgin, and likes to play with Barbies.
Haven’t the toads ever read this:
*The information on this site is provided for discussion purposes only, and are not investing recommendations. Under no circumstances does this information represent a recommendation to buy or sell securities. *
Here and Roubini’s site…good reading that attracts morons like a magnet. You two authors deserve better.
I heard there were rumors of another hedge fund blow up. Anybody know anything?? :)
polly anna, rumors were that Citadel (the hedge fund that took over some of Amaranth’s positions along with JPM) was in trouble, which is BS. spokesman for the fund denied the rumors and investors in Citadel report that the fund is up over 20% YTD. the rumor was started by some bored FX traders (u know the ones who 4 yrs ago said bin laden had been captured every other week) who were trying to explain the Yen being up vs. the USD-
good read on the housing problem:
http://www.investorsinsight.com/thoughts.aspx
It is amazing how human emotions work. Just because Barry is bearish and the market has continued to rise doesn’t mean he is wrong, just bad timing. As of this friday the net short position in the large and small contract on the S&P futures was the highest it’s ever been in history. In fact it’s more than 10 billion dollars higher than ever before. If the smartest and most capitalised traders in the market are selling like crazy into this rally it seems highly unlikely that it will continue up forever like the talking heads (Cramer) would like their viewers to believe. Sure it can continue up for another week, month or several months. However if the big money is selling then I find it hard to believe that we’re going to be looking at huge gains from this level. I would rather be on the same side of the fense as the big boys. BTW they sold heavily into the the May top also. So what if you miss some gain on the top side if you can avoid a huge loss by getting out in time or perhaps making a huge profit on the short side if one is so inclined. Sam, there will come a time to go long and big money will be made but it’s not after a parabolic spike at the end of a 4 year bull market. The big money will be made by buying at the bottom of a recession and I suspect Barry will be begging everyone to buy but I doubt that few will have the courage to act just like few have the common sense to sell now.
Gary, you’re talking nominal value of those contracts, vice absolute number of contracts right?
The net position: commercial longs minus commercial shorts was -49987 this week for the large contract. When you add in the e-mini contracts you have a nominal value of 48 billion dollars more on the short side than the long side. I tend to lend more weight to what market participants are actually doing rather than listening to talking heads on TV that need to sell advertising.
I understand, I was just clarifying that you didn’t intend to say we were at an “all time record short # of contracts” in the COT, because I don’t think that’s the case. We’ve exceeded 100000 contracts net short before (combined) and I think we’re at 90something now. Small point, but wanted to make sure I understood.
Correct. We are not at an all time high net short position in the large contract. However over the last three years the commercials have dramatically increased their interest in the e-mini contract. If you add the two contracts together then this week represents the largest short position by a long shot.
“As of this friday the net short position in the large and small contract on the S&P futures was the highest it’s ever been in history. In fact it’s more than 10 billion dollars higher than ever before. ”
Gary, I’m on this side (short), but BR made the point a few weeks ago that the heavy short position can serve as a market floor. Then, if the longs get any juice running at all, some or many shorts cover, driving the market higher. Then, even more shorts enter the game, and the cylce repeats. All the while, CNBC can crow “Forward P/E only 16! Still reasonable!”
So, my point is: At what point do the shorts win? What does it take? War in the Middle East? (Apparently not). Crashing home sector? (Apparently not). Only when there is a handful of shorts left standing? Must the GDP actually come in negative before the market gets the hint?
What’s the trigger? IS there a trigger?
(Actually, I have my own theory as to what the trigger might be, barring exogenous events, but I want to see other ideas).
50,000 net short big contract, 412,000 net short emini for total 462,000. Question: does it make sense to divide the eminis by 5 (=92,000) and then add those to the 50,000 to come up w/ 142,000 “eqivalent” big contracts? I don’t have historical data in front of me, but I’ll take your word for it that either way, the # of contracts is record short, NOT just the nominal $ value. Record short positions on NYSE 3 months running hasn’t dented this rally yet… I’m inclined to agree that record shorts provide a floor, until they don’t. Is “exhaustion” (ala DeMark sells currently littering the tape) enough to get the ball rolling? Hmmm.
winjr-
The trigger is data that says the consumer says “No mas”. Until that happens, party on. Every other piece of bad news can be spun “Fed to the rescue with rate cuts”. But after the consumer quits, no more spinning, rate cut doesn’t mean a thing.
Actually the commercial short position in my opinion is the catalyst for the eventual turn. They are so heavily capitalized that they don’t cover when the market goes up. They tend to just add more shorts. They realize that all markets will eventually regress to the mean so they don’t worry if the market goes against them for a few weeks or months. The same thing happend in May. They gradually kept building a larger and larger short position from the end of Dec. They were wrong for 5 months but when the market did finally correct, I dare say most of those contracts became profitable. BTW they covered and became bullish at the begining of Aug. From my experience a parabolic run generates the most optimism in the market but by the same token it is the most dangerous pattern. At some point they all exhaust themselves and the correction is generally violent and swift (witness gold & natural gas this year). The smart money is selling into this rally because they tend not to let emotions control their trading and they know a regression to the mean is coming and they don’t care if it comes tomorrow or in 5 months. CNBC would like you to believe that we are in a new secular bull market but history just doesn’t support this view. Sure the fed can devalue the dollar by 30% and we can make a nominal new high on the Dow after 6 years but all secular bull markets in history have started with valuations extremely depressed and dividend yields close to P/E ratios. This bull started in 2002 with PE’s above 20 and dividends under 2. Doesn’t sound like the start of a secular bull market to me. The last secular bear market saw the Vietnam war, sharp increases in commodity prices and rampant monetary inflation, sound familar? That bear market lasted 16 years. With the same conditions happening today, does anyone think that somehow this bear market ended after only 2 years and a new secular bull market started at levels that have topped all other bull markets? The generally negative bias in the COT report for the last 6 years would suggest that the smart money doesn’t.
winjr.
The trigger is the assasination of the Archduke Ferdinand.
Is there a way to assign anything we are taking about in relation to a norm as a factor of standard deviation? There is a book b y the trader Marty Schwartz which basicly says “Give him a situaion where the price is off by 3 standard deviations and he can make money off it. ”
Sure Barry was wrong about timing the market on the short term if you think he said you should go short. Did he? I don’t recall that. Seems a bit more like the “The ice seems a bit thin and soft, skate at your own risk. ”
I have not done as well as I would prefer this year and only now have gotton a bit of clarity in the market. That’s my problem.
“What ever happened to the little engine that could”?
In the great depression who made the money? Someone got to buy Dusenburg’s. How? In any one situation we have to make sure we are asking the right question.
Am I even thinking of the right situation?
Peace and health.
By the way: Google Mice , red wine, NYT then find subsequant articles on reservatrol. Then ask me how to get the stuff cheap. (No I do not sell it) I have been conducting my own personal experiment with a substance that contains a lot of it and it seems to be beneficial. Very.
So the homebuilders are slowing production to align with the current demand? Isn’t this what Wall Street wants ouf of these “new era”, “better managed”, “different that the 1990’s” homebuilding corporations? This is quite healthy and will hasten the balancing of supply and demand from the speculative hangover. I predict a stabilization in housing first half of 2007 in markets that led the slowdown such as San Diego and Sacramento. It’s already stabilizing in Los Angeles. Barry, I know you’re a bear on the economy as I’ve seen you many times on Kudlow, but if you want to hear the other side visit my site.
http://www.drbrightside.blogspot.com
The Case-Shiller housing futures have improved recently and are now projecting a 4.8% decline in the average home price over the next 7 months
We’ve probably seen the worst of the housing slump, although it may not have entirely bottomed out yet. On the other hand, lower mortgage rates should help stimulate activity in the housing market.”
Frank Nothaft, Freddie Mac vice president and chief economist
Case-Shiller is a pathetic way of “calculating” home futures, they can move up and down based “on contract” which many are never fullfilled.
Horrid post tt, Housing took another big dive in October and will again in the months ahead, posts like you made are pathetic and clear trolling. Interest rates won’t stimulate housing activity, the damage to the mortgage has been intense and not seen through simple weak analysis like MBA.
Same thing brightside, they are slowing demand because the market can’t handle anymore and that demand will be slow FOR YEARS.
Both of you made ATROCIOUS posts. No stable in LA man, they will be the next to cut production, .8-1.000 starts by Summer.
i don’t mind your ad hominem attacks Cherry ,
but your arguments are constantly filled with your perceptions of what will happen …. I’d rather stick with what the markets say … they may be wrong , but at least someone has made a bet with their wallets and not their mouths
there’s a reason the homebuilders are 20% off their summer lows , there’s a reason why the futures are not as bad as they were in July and August
Cherry,
I don’t know if “LA” is Los Angeles, but if so, according to the LA Times (not know as a housing cheerleader) prices have stabilized over the last few months and median priced actually increased the last month. But I agree with tt, don’t want the facts to get in the way of being depressed. Below is the link.
http://www.latimes.com/business/la-fi-homes15nov15,1,6623680.story?coll=la-utilities-business