Monday, January 26, 2015

Tuesday: New Home Sales, Case-Shiller House Prices, Durable Goods and More

by Bill McBride on 1/26/2015 08:11:00 PM

I was looking at the outer Los Angeles and Long Beach harbor today, and I realized I've never seen so many loaded freighters queued up to unload at the port. The West Coast port slowdown is getting serious.

The Long Beach Press Telegram had an editorial today: Enough is enough on West Coast port labor dispute

West Coast dockworkers and their employers need to stop holding the economy hostage and sign a labor contract. ...

Meantime, both sides are blaming the other for slowdowns at the port.

But the real issues, the ones that are being discussed at the table, need to be resolved. Earlier this month, both sides agreed to bring in a federal mediator to do just that.

It’s unclear what’s going on beyond closed doors, but it has become apparent that both parties are going to have to work harder to get this contract signed.
Hopefully this will get resolved soon.

Tuesday:
• At 8:30 AM ET, Durable Goods Orders for December from the Census Bureau. The consensus is for a 0.7% increase in durable goods orders.

• At 9:00 AM, S&P/Case-Shiller House Price Index for November. Although this is the November report, it is really a 3 month average of September, October and November prices. The consensus is for a 4.6% year-over-year increase in the National Index for November, down from 4.7% in October.

• At 10:00 AM, New Home Sales for December from the Census Bureau. The consensus is for an increase in sales to 450 thousand Seasonally Adjusted Annual Rate (SAAR) in December from 438 thousand in November.

• Also at 10:00 AM, Conference Board's consumer confidence index for January. The consensus is for the index to increase to 95.0 from 92.6.

• Also at 10:00 AM, Regional and State Employment and Unemployment (Monthly) for December 2014

• Also at 10:00 AM, Richmond Fed Survey of Manufacturing Activity for January.

Lawler: Updated Table of Distressed Sales and Cash buyers for Selected Cities in December

by Bill McBride on 1/26/2015 05:05:00 PM

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

On distressed: Total "distressed" share is down in almost all of these markets, mostly due to a decline in short sales.

Short sales are down in these areas (except Sacramento).

Foreclosures are up in a few areas (working through the logjam, mostly in judicial states - especially in Florida).

The All Cash Share (last two columns) is mostly declining year-over-year.

  Short Sales ShareForeclosure Sales Share Total "Distressed" ShareAll Cash Share
Dec-14Dec-13Dec-14Dec-13Dec-14Dec-13Dec-14Dec-13
Las Vegas10.0%20.7%8.0%8.5%18.0%29.2%34.1%44.4%
Reno**8.0%24.0%5.0%4.0%13.0%28.0%   
Phoenix4.6%9.5%5.2%7.5%9.8%17.1%29.2%34.6%
Sacramento6.2%6.1%7.1%5.4%13.3%11.5%15.4%**19.5%**
Minneapolis3.7%5.5%12.6%17.1%16.3%22.7%   
Mid-Atlantic 4.9%8.0%11.2%9.3%16.1%17.3%20.3%19.3%
Orlando4.8%13.5%26.7%19.1%31.5%32.7%40.0%45.0%
California *6.3%10.3%5.7%6.9%12.0%17.2%   
Bay Area CA*4.0%7.9%3.7%4.6%7.7%12.5%19.0%23.5%
So. California*6.2%10.2%5.0%5.8%11.2%16.0%23.8%28.8%
Tampa MSA SF6.2%11.9%23.4%18.2%29.6%30.1%36.9%42.0%
Tampa MSA C/TH3.3%8.4%18.4%15.8%21.7%24.2%60.3%62.8%
Tampa MSA C/TH3.3%8.4%18.4%15.8%21.7%24.2%60.3%62.8%
Florida SF5.3%11.0%21.8%19.5%27.1%30.5%38.4%42.5%
Florida C/TH3.3%9.0%17.6%16.0%20.9%25.1%65.3%68.4%
Northeast Florida        30.6%37.9%   
Hampton Roads        21.5%29.1%   
Tucson            28.7%32.3%
Toledo            37.9%36.5%
Wichita            26.8%30.2%
Des Moines            20.3%23.1%
Peoria            23.6%23.0%
Georgia***            25.5%N/A
Omaha            20.5%23.9%
Pensacola            33.1%35.5%
Knoxville            25.0%25.0%
Memphis*    15.0%21.0%       
Rhode Island            14.7%19.1%
*share of existing home sales, based on property records
**Single Family Only
***GAMLS

Lawler: D.R. Horton reports Home Sales Soared Last Quarter

by Bill McBride on 1/26/2015 02:24:00 PM

From housing economist Tom Lawler:

D.R. Horton, the nation’s largest home builder, reported that net home orders in the quarter ended December 31, 2014 totaled 7,370, up 35.1% from the comparable quarter of 2013. Net orders per active community were up about 27% YOY. Horton’s average net order price last quarter was $286,000, up 3.8% from a year earlier. Home deliveries last quarter totaled 7,973, up 28.8% from the comparable quarter of 2013, at an average sales price of $281,000, up 6.6% from a year earlier. A company official said that the YOY increase in its average sales price reflected a 4% increase in the average size of a home closed and a “small” increase in the average price per square foot. Company officials said that they expect the company’s average sales price in 2015 to be “flat” relative to 2014. The company’s order backlog at the end of December was 9,285, up 20.8% from last December, at an average order price of $293,600, up 6.8% from a year ago.

“Express” Homes, Horton’s “lower priced/fewer amenities” brand targeted at “entry-level” buyers, accounted for about 13% of last quarter’s net home orders (in units), up from 7% in the previous quarter and 3% in the comparable quarter of 2013, and about 10% of home deliveries, up from 5% in the previous quarter and 4% a year ago.

The company’s gross margin last quarter was down both from the previous quarter and a year ago, but was in line with guidance given by officials in the previous two quarters.

Horton “surprised” many analysts and competitors last spring by saying that it had increased its sales incentives from “unusually” low to “more normal” levels in order to drive its unit sales pace. As a result, Horton’s market share increased significantly since last spring. More recently a number of other builders have “warned” that they have had to increase incentives.

Vehicle Sales Forecasts: "Best January in 8 Years"

by Bill McBride on 1/26/2015 12:57:00 PM

The automakers will report January vehicle sales on February 3rd. Sales in December were at 16.8 million on a seasonally adjusted annual rate basis (SAAR), and it appears sales in January will be lower - but will probably be the best January in eight years.

Note:  There were 26 selling days in January this year compared to 25 last year.

Here are two forecasts:

From WardsAuto: Forecast: U.S. Automakers to Record Best January in Eight Years

A WardsAuto forecast calls for U.S. automakers to deliver 1.13 million light vehicles in January, marking the industry’s best kickoff since January 2006. ... the report puts the seasonally adjusted annual rate of sales for the month at 16.4 million units, compared with a year-ago SAAR of 15.2 million and December’s 16.8 million mark.
And from TrueCar: TrueCar forecasts strong start for 2015 auto sales with 13.2% volume gain and 16.6 Million SAAR in January
TrueCar, Inc. ... forecasts the pace of auto sales in January expanded to a seasonally adjusted annualized rate (SAAR) of 16.6 million new units on continued consumer demand.

New light vehicle sales, including fleet, should reach 1,446,600 units for the month, up 13.2 percent over a year ago. On a daily selling rate (DSR) basis, adjusting for one additional selling day this January versus a year ago, deliveries will likely rise 8.9 percent.
Another strong month for auto sales.

Dallas Fed: Texas Manufacturing Activity Stalls and Outlook Worsens

by Bill McBride on 1/26/2015 10:37:00 AM

From the Dallas Fed: Texas Manufacturing Activity Stalls and Outlook Worsens

Texas factory activity was flat in January, according to business executives responding to the Texas Manufacturing Outlook Survey. The production index, a key measure of state manufacturing conditions, came in at 0.7, indicating output was essentially unchanged from December.

Other survey measures also reflected sluggish activity during the month. The capacity utilization index fell to 5.1, its lowest reading in five months. The shipments index plunged from 20.8 to 6, due to a much higher share of respondents noting a decline in shipments in January than in December. The new orders index moved down from 2.7 to -7.7, registering its first negative reading since April 2013.

Perceptions of broader business conditions worsened this month, with both the general business activity index and the company outlook index dropping below zero for the first time in 20 months. The general business activity index dropped to -4.4, and the company outlook index fell 13 points, coming in at -3.8.

Labor market indicators reflected unchanged workweeks but continued employment increases. The employment index was 9.0 in January, slightly below last month’s level but close to its average reading over the past two years.
emphasis added
With lower oil prices, a slowdown in Texas should be expected.

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