by Calculated Risk on 8/06/2009 12:59:00 PM

Note: Graph is for Orange County only.

From Matt Padilla at the O.C. Register: Foreclosure wave gathers momentum

“To say there is a second wave implies the (current) wave has receded,” [Sam Khater, senior economist, First American CoreLogic] “I don’t see that the wave has receded.”

Click on graph for larger image in new window.

This graph is from Matt based on data from American CoreLogic.

Khater said ... federal and state efforts have mostly delayed foreclosures, preventing few. ... So to tune out the noise, just look at the 90-day rate. In Khater’s view it shows “one giant wave.”

UPDATE: Matt provided me with the definitions:

90 day delinquency rate: "everything 3 months late or more. Likely includes most all Foreclosures in Process. The categories are not separate."

Foreclosure Rate is actual foreclosures in process: "Everything with NOD and Trustee's Sale filing."

REO Rate: "Everything foreclosed but still held by bank or servicer. This category is separate from other two."

by Calculated Risk on 8/06/2009 11:48:00 AM

From HotelNewsNow.com: STR reports US performance for week ending 1 August 2009

In year-over-year measurements, the industry’s occupancy fell 6.4 percent to end the week at 66.5 percent. Average daily rate dropped 9.6 percent to finish the week at US$97.48. Revenue per available room for the week decreased 15.5 percent to finish at US$64.86.

Click on graph for larger image in new window.

This graph shows the YoY change in the occupancy rate (3 week trailing average).

The three week average is off 7.6% from the same period in 2008.

The average daily rate is down 9.6%, and RevPAR is off 15.5% from the same week last year.

Comments: This is a multi-year slump. Although the occupancy rate was off 6.6 percent compared to last year, the occupancy rate is off about 10 percent compared to the same week in 2007.

Also, the end of July and beginning of August is the peak leisure travel period. The peak occupancy rate for the year was probably two weeks ago at 67%.

Note: Graph doesn't start at zero to better show the change.

Business travel is off much more than leisure travel, so the summer months are not as weak as other times of the year. September will be the real test for business travel.

Data Source: Smith Travel Research, Courtesy of HotelNewsNow.com

by Calculated Risk on 8/06/2009 09:31:00 AM

Here is a graph of office, mall and lodging investment through Q2 2009 based on the underlying detail data released yesterday by the BEA ...

Click on graph for larger image in new window.

This graph shows investment in offices, lodging and malls as a percent of GDP.

The recent boom in lodging investment has been stunning. Lodging investment peaked at 0.32% of GDP in Q2 2008 and has started to decline (0.27% in Q2 2009). There was a small increase in Q2 2009 that is probably related to projects being completed. I expect lodging investment to continue to decline through at least 2010, to perhaps one-third of the peak.

Investment in multimerchandise shopping structures (malls) peaked in 2007 and has fallen sharply. As projects are completed, mall investment will probably continue to decline through next year. As David Simon, Chief Executive Officer or Simon Property Group, the largest U.S. shopping mall owner said earlier this year:

"The new development business is dead for a decade. Maybe it’s eight years. Maybe it’s not completely dead. Maybe I’m over-dramatizing it for effect."

Office investment as a percent of GDP peaked at 0.46% in Q3 2008 and has started to decline sharply. With the office vacancy rate rising sharply, office investment will also probably decline through at least 2010.

Notice that investment in all three categories typically falls for a year or two after the end of a recession, and then usually slowly recovers. Also - usually office investment is the most overbuilt in a boom, but this time the office market struggled for a few years after the stock market bubble burst and there was comparatively more investment in malls and hotels.

As projects are completed there will be little new investment in these categories probably at least through 2010. This will be a steady drag on GDP (nothing like the decline in residential investment though), and a steady drag on construction employment.

by Calculated Risk on 8/06/2009 08:31:00 AM

The DOL reports weekly unemployment insurance claims fell to 550,000 from 588,000 the week before.

In the week ending Aug. 1, the advance figure for seasonally adjusted initial claims was 550,000, a decrease of 38,000 from the previous week's revised figure of 588,000. The 4-week moving average was 555,250, a decrease of 4,750 from the previous week's revised average of 560,000.
...
The advance number for seasonally adjusted insured unemployment during the week ending July 25 was 6,310,000, an increase of 69,000 from the preceding week's revised level of 6,241,000.

Click on graph for larger image in new window.

This graph shows the 4-week moving average of weekly claims since 1971.

The four-week average of weekly unemployment claims decreased this week by 4,750 to 555,250, and is now 103,500 below the peak of 17 weeks ago. It appears that initial weekly claims have peaked for this cycle.

The level of initial claims has fallen fairly quickly - but the number is still very high (at 550,000), indicating significant weakness in the job market. The four-week average of initial weekly claims will probably have to fall below 400,000 before the total employment stops falling.

After earlier recessions (like '81), weekly claims fell quickly, but in the two most recent recessions, weekly claims declined a little and then stayed elevated for some time. A jobless recovery, with elevated weekly claims, seems likely this time too.

When the BLS reports tomorrow, I will graph the number of workers unemployed for 27 or more weeks. These workers have exhausted their regular benefits, although most are still on extended benefits.

by Calculated Risk on 8/05/2009 11:26:00 PM

From CNBC: Senate Reaches Deal on $2 Billion 'Clunkers' Refill

The Senate reached a deal on saving the dwindling "cash for clunkers" program ... that would add $2 billion to the popular rebate program ...

... The Toyota Corolla is the top-selling vehicle on the list, followed by the Ford Focus, Honda Civic, Toyota Prius and the Toyota Camry. There is one SUV on the list, the Ford Escape, which also comes in a hybrid model. Six of the top-10 selling vehicles are built by foreign manufacturers, but most are built in North America.

The deal is to allow some amendments to be offered that will be voted down, and then the bill will be passed exactly as it is.