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FORBES FINANCIAL MAGAZINE 2013

2013 Housing Report

Home Sales January 2013

Homes Sold January 2013

Homes Sold 15 Month Audit January 2013

Housing Starts January 2013

Housing Starts January 2013 Continued

Median Housing Prices Rise Homes Sold Drop

Economagic: Economic Chart Dispenser

FORBES FINANCIAL MAGAZINE 2013

Back in 2008 we set a target for the number of houses for sale to decline to a level compared to the 1960’s.  In the sixties the number of homes for sale monthly average was around 250,000 homes per month.  As various recessions happened back then and in the early 70’s these periods show that the number of homes for sale can even drop below the 250,000 homes for sale number.

 

5 years ago when we tracked and wrote about this trend we expected some dipping below 250,000 units but it dipped down to 150,000 units for sale.   This was well below what we had expected on the downside however the extreme exaggeration to the upside that occurred from 2005 - 2008 was enormous.

 

When the economy runs at normal levels and housing is not the source of the economic problem the number of homes for sale should be about 325,000 units in a non-recession period (recessions shown in pink on the left).  There will be dips down to the 250,000 level.

 

What we now see is that the homes for sale finally reached bottom at the 150,000 unit level as shown on the left and you can now finally see a small increase in the number of homes for sale.

 

Many factors play a role in the composition of this number however we think this is one of the best single indicators of a recession bottom.  Keep in mind the chart shows a little bit more of a curve up because this chart is a forty year chart which can exaggerate the small curve you see.

 

If we look at the same chart but for only 10 years you will understand better.  Look at the 10 Year graph on the left.  The entire year of 2012 shows us that the number of homes for sale sat at about 150,000 units for sale for the entire year.  The numeric data shows us that the number of homes for sale in 2012 were running at about 145,000 units for sale with a small lift up in November to 151,000 units for sale.

January 16 2013 Houses For Sale

November 23 2009 Houses For Sale

Our Target Level Shown in Green

HOMES FOR SALE JANUARY 2013

 

Housing Market Signals January 2013

 

The chart on the right shows that in 2012 the number of homes for sale sat for an entire year at about 150,000 units for sale. 

Economagic: Economic Chart Dispenser

FORBES FINANCIAL MAGAZINE 2013

Now lets look at the number of single family  homes sold in the US since 1963.  You will see that this is currently the lowest number of homes sold  in 50 years.

 

So what’s been happening in the last 2 years?  The number of homes sold has gone from about 300,000 units per month in 2011 to  about 370,000 per month in 2012.

 

When looking at the numbers more closely  we find that the number of homes sold in the upper north, mid US and west are declining while the numbers in the south have increased slightly.

 

Based on what we can see two factors seem to correlate with this.  We are now seeing new people leaving the northern states and the west and buying homes in the south.

 

Personal interviews with people in Houston  indicate the majority of people have decided to move from the faltering states to the more robust growing states in the south.

 

Because home prices appear to have stopped falling and some time has passed people have had to go outside of their states to get work.  They have been stuck holding their home and many have found that they need to sell but can’t even in 2013.  Many people we talk with have sold their home for a loss and packed up and moved to anther state to start over.

 

We have found that the number of the foreclosed homes and undervalued short sale homes have been picked up by local investors.  There is no point in putting money into the stock market for many real people out there because they know the stock market is a gambling casino.  We have run into several small home investors that have been buying homes with cash not credit for the last  4 years and on average they all seemed to hold  anywhere from 20 - 50 homes.  These investors are renting them out to people that can’t buy a home.

January 16 2013 Houses For Sale

January 16 2013 Houses Sold Entire US

HOMES SOLD JANUARY 2013

 

Housing Market Signals January 2013

The chart on the above shows that in 2012 the number of homes for sale sat for an entire year at around the 150,000 units for sale level. 

 

(© 2013 The Forbes Corporation All rights reserved.  This material may not be published, broadcast, rewritten or redistributed without permission.)

 

(© 2013 The Forbes Corporation All rights reserved.  This material may not be published, broadcast, rewritten or redistributed without permission.)

FORBES FINANCIAL MAGAZINE 2013

January 16 2013 Houses Sold Entire US for 15 Months

HOMES SOLD 15 MONTH AUDIT

 

 

The chart above shows that the trend of home sales is in the south not the rest of the country.  You can also see that in the later months of 2012 homes sales dropped off.  The Midwest has held at the same range with no major upside increase over several months.

 

Questions of how can the number of houses sold increase and  fool investors and analysts?  You will need to look at the fact that circular homes sales contribute to higher numbers in total homes sales during a period that is being measured during a recover period for the type of recovery we are currently in.

 

Circular sales occur when slow parts of the country have problems during a recover period and after time during that recovery period people take what they have and move elsewhere selling current homes for a loss.

 

A new buyer or investor buys the home at a discount while the family moves to a different location buying another new or existing property.

 

(© 2013 The Forbes Corporation All rights reserved.  This material may not be published, broadcast, rewritten or redistributed without permission.)

FORBES FINANCIAL MAGAZINE 2013

January 16 2013 North East Housing Starts 1 Unit Homes NSA

HOUSING STARTS JANUARY 2013

 

Not Seasonally Adjusted Homes in the 4 areas of the US show slow movement.  Compared to other time periods you can see nothing to get excited about.  2012 - 2013 is slowing.  We looked at the Multi unit homes and found this was a large increase.  Be cautious when looking at building permits that have multi family added into the total number, when this is done housing starts are going to look higher.  Multi family permits are up but single family is running low and slow.

January 16 2013 North East Housing Starts 5 Or More Unit Homes NSA

You can see that in the Northeast where the economy was strong that from 2009 - 2013 there is no real increase in home building permits.

 

Look at the difference below with Multi Family units for the same period.

Northeast  from 2009 - 2013 there is a real increase in home building permits for home with 5 or more units.

 

This tells you the state the country is in.

 

(© 2013 The Forbes Corporation All rights reserved.  This material may not be published, broadcast, rewritten or redistributed without permission.)

FORBES FINANCIAL MAGAZINE 2013

 

January 16 2013 Midwest Housing Starts 1 Unit Homes NSA

HOUSING STARTS JANUARY 2013

 

 

January 16 2013 West Housing Starts 1 Unit Homes NSA

Twenty Six years of  housing starts shown on the left indicate that the housing market is in a range bound level when it comes to single unit new homes starts.

 

Immigration for each year occurs adding to an overall increase in population.  Many of these people having been buying homes after accumulating money in other countries and becoming more wealthy.

 

We have talked to many people that have moved from emerging markets to the US to buy a home while working here in the US and running business both here and abroad.

 

Most analyst just see the housing numbers going up and they assume US citizens are working again and the US citizens are buying the new homes. This is not 100% correct because the many homes purchased were not from organic US labor growth.

 

What we find is that many US citizens have lost a good paying job and then if they are lucky they take a lower paying job and become renters.  Few people are buying homes in the same areas they have lived in over the past 10 years and they have taken jobs down south or other in other areas.

 

Keep in mind that some people have sold there current home at a loss on the West Coast or up North while buying a lower cost home in the south where opportunities are growing.

 

Emerging market investors and businessmen are also buying up both new US homes as well as foreclosed homes.   While this helps reduce inventory it is not a clear sign that a US citizen is the person contributing to the recovery.

January 16 2013 South Housing Starts 1 Unit Homes NSA

 

(© 2013 The Forbes Corporation All rights reserved.  This material may not be published, broadcast, rewritten or redistributed without permission.)

FORBES FINANCIAL MAGAZINE 2013

January 28 2013 Housing Prices

2012-2013 MEDIAN HOUSING PRICES RISE

HOMES SOLD DROP

 

 

Median Prices of Homes increased dramatically in the Northeast during 2012.  Yet another reason why people are moving away from expensive states to cheaper states in the US.  You may have heard from some analyst that increased home prices are a good thing.  So who is it good for?  When home prices increase you can sell your home and move to the cheaper state if you can find a buyer.

 

When home prices being sold increase as you see in the Northeast its not surprising you see the total number of homes sold drop as we saw in October 2012 - January 2013.  Home inflation prices make a seller feel good and a buyer run to another state.  The total number of sales is very small so when you see home prices increase most people just think everything is like it was 5 years ago.  You may think things are back to normal when you look at the Blue Line below for the Northeast.  If you don’t sell your home and move you can count on a bigger TAX bill to suck more money out of your paycheck as home prices go higher and the average US House Hold is already tapped out.

 

The average number of home sales is about 70,000 units per month when the economy is normal in good times but during 2002 –2007 there was the housing bubble and the homes sold moved to 100,000 units per month, this was the time when people were flipping homes like a pair of underwear.  So if we take 70,000 units per month as the normally level when things run properly and now we see a drop in homes sold in the last 3 months from a current average of 30,000 units down to 25,000 there could be a combination of issues here.  Increased home prices create less qualified buyers and when you combine this with high gas prices and the social security tax rate for employees now back to the normal rate because the temporary Employee SS TAX  Break has ended you are going to see more unqualified buyers.  Higher prices increase cost to live because this is a form of inflation directly related to home prices and taxation of the homes by the cities.  So not only will the home cost you more to buy but the tax rate has now increase dramatically making it impossible to buy homes again.  Wages are declining, layoffs are still happening and home prices are increasing as well as Home Taxes and HOME TAX Rate Percentages.  What does that mean? Expect a slowdown to come shortly.

 

(© 2013 The Forbes Corporation All rights reserved.  This material may not be published, broadcast, rewritten or redistributed without permission.)