by Calculated Risk on 1/14/2012 12:19:00 AM

From the Las Vegas Review-Journal: Las Vegas home sales set record

A total of 48,186 single-family homes and condos were sold in Las Vegas last year, topping the previous record of 46,879 set in 2009, the Greater Las Vegas Association of Realtors reported ... Roughly half of all sales were cash-only transactions, while 46.8 percent were real estate-owned, or bank-owned properties returning to the market after foreclosure. Another 26.6 percent were short sales, or lender-approved sales for less than the principal mortgage balance.

... new-home sales plummeted from nearly 39,000 in 2006 to fewer than 4,000 in 2011, the lowest level since Home Builders Research began tracking the market in 1988.

Click on graph for larger image.

This graph shows the sales per year. The are more sales now than during the peak of the bubble! However new home sales are at record lows because of all the vacant housing units and distressed sales.

Also - as the article mentions - prices are still falling. According to Case-Shiller, prices in Las Vegas have fallen about 14% since June 2009, so those people who bought in 2009 have lost money (although many paid cash, so they don't have "negative equity").

by Calculated Risk on 1/13/2012 07:43:00 PM

From Bloomberg: Attorneys General Discuss Mortgage Probes as Bank Talks Drag On

About a dozen state attorneys general met this week to discuss their mortgage investigations and how they might work together as settlement talks with banks over foreclosures drag on, three people familiar with the matter said.

The group, which met in Washington, included New York Attorney General Eric Schneiderman, California's Kamala Harris and Martha Coakley of Massachusetts ...

This is new:

Over the weekend, the Justice Department contacted four smaller mortgage servicers, including U.S. Bancorp, PNC Financial Services Group Inc. and HSBC Finance Corp., with the goal of including them in any future settlement agreement. The overture was a first step meant to get reaction from the smaller banks.

More on the meeting from the Financial Times: State prosecutors confer over US mortgages probes. It doesn't sound like a deal is close.

by Calculated Risk on 1/13/2012 04:54:00 PM

As was widely rumored, Standard & Poor's lowered its long-term sovereign credit rating on France to AA+ and Spain to A.

From CNBC: S&P Downgrades Credit Ratings on Nine Euro Zone Nations, Including France, Spain, Italy, Portugal and Austria

The Greek debt talks are more important. From Bloomberg: Greece Creditors Break Off Debt Talks

Greece’s creditor banks broke off talks after failing to agree with the government about how much money investors will lose by swapping their bonds, increasing the risk of the euro-area’s first sovereign default.

Proposals by a committee representing financial firms haven’t produced a “constructive consolidated response by all parties,” the Washington-based Institute of International Finance said in a statement today. Talks with Greece and the official sector are “paused for reflection on the benefits of a voluntary approach,” the group said.

A few of key dates this month:
Jan 20th: The "troika" discussions with Greece are set to conclude.
Jan 24th: EU finance ministers meet in Brussels.
Jan 30th: European Union leaders meet in Brussels on crisis.

Meanwhile the Italian 10 year yield is up to 6.64%, and the Spanish 10 year yield is up to 5.22%.

by Calculated Risk on 1/13/2012 01:49:00 PM

This is the UCLA Anderson Forecast and Ceridian Corporation index using real-time diesel fuel consumption data: Pulse of Commerce Index Increased 0.2 Percent in December

The Ceridian-UCLA Pulse of Commerce Index® (PCI®), issued today by the UCLA Anderson School of Management and Ceridian Corporation, rose 0.2 percent in December following the 0.1 percent increase in November and the 1.1 percent increase in October.

Although December’s news is positive, the combined effect of the three consecutive positive months was not enough to offset the weakness of trucking last summer and the PCI in December 2011 is 1.2 percent below its June 2011 level.
...
Based on the latest PCI data, the forecast for December Industrial Production is a 0.29 percent increase when the government estimate is released on January 18.

Click on graph for larger image.

This graph shows the index since January 2000.

This index declined sharply in late summer and has only partially rebounded over the last three months. Mostly this index moved sideways in 2011 (down 0.7% from December 2010).

Note: This index does appear to track Industrial Production over time (with plenty of noise).



All current Transportation graphs

by Calculated Risk on 1/13/2012 11:39:00 AM

From the Financial Times: Eurozone nations face S&P downgrade

Eurozone governments are bracing ... after Standard & Poor’s, the rating agency, told them it would downgrade two of the eurozone’s six triple A nations.

One official told the Financial Times that France and Austria were due to be downgraded but this was not confirmed ...
excerpt with permission

From the Financial Times: Greek debt restructuring talks collapse

Talks over Greece’s debt restructuring collapsed on Friday ... makes it more likely Athens will become the first government of a developed country in more than 60 years to suffer a full-scale default on its debt.

Lead negotiators for Greek bondholders said the latest offer made by Athens “has not produced a constructive consolidated response from all parties”– a clear reference to International Monetary Fund conclusions that bondholder losses must be increased significantly or a second Greek bail-out would have to be bigger than the agreed €130bn.excerpt with permission

by Calculated Risk on 1/13/2012 09:55:00 AM

The preliminary January Reuters / University of Michigan consumer sentiment index increased to 74.0, up from the December reading of 69.9.


Click on graph for larger image.

Most of the recent sharp decline was event due to the debt ceiling debate, and sentiment has rebounded as expected. Now it is all about jobs, wages - and gasoline prices.

Sentiment is still fairly weak, although above the consensus forecast of 71.5.

by Calculated Risk on 1/13/2012 08:48:00 AM

The Department of Commerce reports:

[T]otal November exports of $177.8 billion and imports of $225.6 billion resulted in a goods and services deficit of $47.8 billion, up from $43.3 billion in October, revised. November exports were $1.5 billion less than October exports of $179.4 billion. November imports were $2.9 billion more than October imports of $222.6 billion.

The trade deficit was above the consensus forecast of $45.0 billion.

The first graph shows the monthly U.S. exports and imports in dollars through November 2011.

Click on graph for larger image.

Exports decreased and imports increased in November. Imports had been mostly moving sideways for the past six months (seasonally adjusted). Exports are well above the pre-recession peak and up 10% compared to November 2010; imports are up about 13% compared to November 2010.

The second graph shows the U.S. trade deficit, with and without petroleum, through November.

The blue line is the total deficit, and the black line is the petroleum deficit, and the red line is the trade deficit ex-petroleum products.

Oil averaged $102.50 per barrel in November. The trade deficit with China declined slightly to $27 billion.

Exports to eurozone countries declined 6.9% in November. And the trade deficit with the European Union widened to $9.7 billion from $7.2 billion in November 2010.

by Calculated Risk on 1/12/2012 09:45:00 PM

CR Note: There are only a few areas where the MLS breaks down monthly sales by foreclosure, short sales and conventional (non-distressed) sale. I've been tracking the Sacramento market to watch for changes in the mix over time. (here was my post earlier this week: Distressed House Sales using Sacramento Data)

Economist Tom Lawler sent me the following today for a few other areas:

"The below table is based on reports from local realtor associations/boards based on MLS data, which may not be fully and completely accurate (heh, heh!)

Note that (1) for most of the areas, the distressed share of sales is down from last December, though in many cases it remains quite elevated; and (2) the short-sales share of sales increased in all areas – in some cases by quite a bit – while the foreclosure-sales share fell in all areas, in a few cases by a boatload, especially Phoenix."

	Short Sales Share		Foreclosure Sales Share		Total "Distressed" Share
	Dec-10	Dec-11	Dec-10	Dec-11	Dec-10	Dec-11
Las Vegas	25.3%	26.6%	49.8%	46.0%	75.1%	72.6%
Reno	30.0%	35.0%	39.0%	34.0%	69.0%	69.0%
Phoenix	21.3%	32.2%	48.3%	27.6%	69.6%	59.8%
Sacramento	22.6%	30.2%	44.4%	33.9%	67.0%	64.1%
Minneapolis	12.7%	14.6%	41.7%	34.6%	54.4%	49.2%
Mid-Atlantic (MRIS)	11.3%	14.3%	23.7%	15.4%	35.0%	29.7%

CR Note: The table is a percentage of total sales.

Short sales are up in all areas, and foreclosures are down. It appears that the total percent of distressed sales is declining too - although this could be related to the foreclosure process issues. At some point, the number and percent of distressed sales should start to decline significantly.

by Calculated Risk on 1/12/2012 06:48:00 PM

From economist Tom Lawler:

Based on the incoming reports I’ve seen so far, I estimate that existing home sales based on the NAR’s methodology and reflecting last month’s controversial benchmark revisions, ran at a seasonally adjusted annual rate of about 4.64 million, up about 5% from November’s pace, and up about 4.3% from last December’s pace.

On the inventory front, MLS across the country reported some hefty monthly declines in listings, and most reported YOY declines for December that exceeded November. As I’ve noted before, however, “matching” reported listings with the NAR inventory numbers has been challenging in any given month. My “best guess” is that the NAR will report an existing home inventory number in December of around 2.44 million, down 5.4% from November and down 19.2% from last December.

The plunge in home listings, to levels not seen since 2005, has only been highlighted by a few analysts and folks in the media, but it’s actually a BIG DEAL.

On the median sales price front, I expect the NAR to report a median existing home sales price that is about 3.5% lower than last December.

CR Note: The NAR is scheduled to release December existing home sales on Friday, January 20th at 10:00 AM ET. Based on Tom's estimates of sales and inventory, this would put months-of-supply at around 6.3 months (lowest since early 2006), and would put listed inventory at the lowest level since early-2005.

by Calculated Risk on 1/12/2012 04:11:00 PM

From Freddie Mac: Mortgage Rates Continue Trend of Record-Breaking Lows

Freddie Mac today released the results of its Primary Mortgage Market Survey® (PMMS®), showing mortgage rates easing to new all-time record lows for all products covered in the survey ... The average for the 30-year fixed mortgage rate has been below 4.00 percent for six consecutive weeks.
...
30-year fixed-rate mortgage (FRM) averaged 3.89 percent with an average 0.7 point for the week ending January 12, 2012, down from last week when it averaged 3.91 percent. Last year at this time, the 30-year FRM averaged 4.71 percent.

Click on graph for larger image.

This graph shows the MBA's refinance index (monthly average) and the the 30 year fixed rate mortgage interest rate from the Freddie Mac Primary Mortgage Market Survey®.

The Freddie Mac survey started in 1971. Mortgage rates are currently at the record low for the last 40 years.

It usually takes around a 50 bps decline from the previous mortgage rate low to get a huge refinance boom - and rates might not fall that far - 30 year conforming mortgage rates were at 4.23% in October 2010, so a 50 bps drop would be 3.73%.

However there will probably be a significant increase in refinance activity in March from borrowers with negative equity and loans owned or guaranteed by Fannie or Freddie (the automated HARP starts in March).