by Calculated Risk on 4/20/2011 09:13:00 PM

I've been more upbeat lately, but even as the economy recovers - and I think the recovery will continue - we need to remember a few facts.

There are currently 130.738 million payroll jobs in the U.S. (as of March 2011). There were 130.781 million payroll jobs in January 2000. So that is over eleven years with no increase in total payroll jobs.

And the median household income in constant dollars was $49,777 in 2009. That is barely above the $49,309 in 1997, and below the $51,100 in 1998. (Census data here in Excel).

Just a reminder that many Americans have been struggling for a decade or more. The aughts were a lost decade for most Americans.

And I'd like to think every U.S. policymaker wakes up every morning and reminds themselves of the following:

There are currently 7.25 million fewer payroll jobs than before the recession started in 2007, with 13.5 million Americans currently unemployed. Another 8.4 million are working part time for economic reasons, and about 4 million more workers have left the labor force. Of those unemployed, 6.1 million have been unemployed for six months or more.

So even as we start to discuss how to fix the structural budget deficit, and also to address the long term fiscal challenges from healthcare costs, we can't forget about all of these Americans.

Earlier:
• Existing Home Inventory decreases 2.1% Year over Year
• March Existing Home Sales: 5.10 million SAAR, 8.4 months of supply

by Calculated Risk on 4/20/2011 05:07:00 PM

The Department of Transportation (DOT) reported that vehicle miles driven in February were up 0.9% compared to February 2010:

Travel on all roads and streets changed by +0.9% (2.0 billion vehicle miles) for February 2011 as compared with February 2010. Travel for the month is estimated to be 214.8 billion vehicle miles.

Cumulative Travel for 2011 changed by +0.6% (2.8 billion vehicle miles).

Click on graph for larger image in graph gallery.

This graph shows the rolling 12 month total vehicle miles driven.

Note: in the early '80s, miles driven (rolling 12 months) stayed below the previous peak for 39 months. Currently miles driven has been below the previous peak for 39 months too - so this record will be broken in March!

The second graph shows the year-over-year change from the same month in the previous year. The DOT reported vehicle miles driven in February were up 0.9%.

No signs of demand destruction yet, however in February U.S. oil prices averaged $90 per barrel, and we might see $100+ oil lead to a decrease in driving in March or April.

Earlier:
• Existing Home Inventory decreases 2.1% Year over Year
• March Existing Home Sales: 5.10 million SAAR, 8.4 months of supply

by Calculated Risk on 4/20/2011 02:16:00 PM

Moody's reported today that the Moody’s/REAL All Property Type Aggregate Index declined 3.3% in February. Note: Moody's CRE price index is a repeat sales index like Case-Shiller - but there are far fewer commercial sales and there are a large percentage of distressed sales - and that can impact prices and make the index very volatile.

Below is a comparison of the Moodys/REAL Commercial Property Price Index (CPPI) and the Case-Shiller composite 20 index. Beware of the "Real" in the title - this index is not inflation adjusted.

The Moody’s/REAL Commercial Property Price Index fell 3.3 percent from January and 4.9 percent from a year earlier. It’s up 0.8 percent from an eight-year low in August, Moody’s said in a statement today.

Click on graph for larger image in graph gallery.

CRE prices only go back to December 2000. The Case-Shiller Composite 20 residential index is in blue (with Dec 2000 set to 1.0 to line up the indexes).

According to Moody's, CRE prices are down 4.9% from a year ago and down about 44.7% from the peak in 2007. Prices are just above the post-bubble low last August - and about at the levels of 2002.

Earlier:
• Existing Home Inventory decreases 2.1% Year over Year
• March Existing Home Sales: 5.10 million SAAR, 8.4 months of supply

by Calculated Risk on 4/20/2011 11:30:00 AM

Earlier the NAR released the existing home sales data for March; here are a couple more graphs ...

The first graph shows the year-over-year (YoY) change in reported existing home inventory and months-of-supply. Inventory is not seasonally adjusted, so it really helps to look at the YoY change.

Click on graph for larger image in graph gallery.

Although inventory increased from February to March (as usual), inventory decreased 2.1% year-over-year in March (from March 2010). This is the second consecutive month with a small YoY decrease in inventory.

Inventory should increase over the next few months (the normal seasonal pattern), and the YoY change is something to watch closely this year. Inventory is already very high, and any YoY increase in inventory would put more downward pressure on house prices.

The second graph shows existing home sales Not Seasonally Adjusted (NSA).

The red columns in January, February and March are for 2011.

Sales NSA are below the tax credit boosted level of sales in March 2010, but above the level of March sales in 2008 and 2009.

The bottom line: March is the beginning of the selling season, and sales activity (so far) is above the 2008 and 2009 levels. Much of this activity is from all cash-sales (both investors and homebuyers). The NAR reported "All-cash sales were at a record market share of 35 percent in March, up from 33 percent in February; they were 27 percent in March 2010."

The NAR also mentioned: "Distressed homes – typically sold at discounts in the vicinity of 20 percent – accounted for a 40 percent market share in March, up from 39 percent in February and 35 percent in March 2010." A higher percentage of distressed sales probably means lower prices - and we should expect the repeat sales indexes to show further price declines in March.

The year-over-year decline in inventory will put less downward pressure on house prices, although the level is still very high (and this is just the visible inventory).

Note: The Case-Shiller price index will be released next Tuesday (April 26th), and is released with a significant lag. The Case-Shiller report will be for February (average of three months) - and the NAR report, with the high level of distressed sales and cash buyers, suggests further price declines in March.

by Calculated Risk on 4/20/2011 10:00:00 AM

The NAR reports: Existing-Home Sales Rise in March

Existing-home sales1, which are completed transactions that include single-family, townhomes, condominiums and co-ops, increased 3.7 percent to a seasonally adjusted annual rate of 5.10 million in March from an upwardly revised 4.92 million in February, but are 6.3 percent below the 5.44 million pace in March 2010.
...
All-cash sales were at a record market share of 35 percent in March, up from 33 percent in February; they were 27 percent in March 2010. Investors accounted for 22 percent of sales activity in March, up from 19 percent in February; they were 19 percent in March 2010.
...
Total housing inventory at the end of March rose 1.5 percent to 3.55 million existing homes available for sale, which represents an 8.4-month supply4 at the current sales pace, compared with a 8.5-month supply in February.

Click on graph for larger image in new window.

This graph shows existing home sales, on a Seasonally Adjusted Annual Rate (SAAR) basis since 1993.

Sales in March 2011 (5.10 million SAAR) were 3.7% higher than last month, and were 6.3% lower than March 2010.

The second graph shows nationwide inventory for existing homes.

According to the NAR, inventory increased to 3.549 million in March from 3.498 million in February.

Inventory is not seasonally adjusted and there is a clear seasonal pattern with inventory peaking in the summer and declining in the fall and winter. Inventory will probably increase significantly over the next several months.

The last graph shows the 'months of supply' metric.

Months of supply decreased to 8.4 months in March, down from 8.5 months in February. The months of supply will probably increase over the next few months as inventory increases. This is higher than normal.

Special Note: Back in January, I noted that it appeared the NAR had overestimated sales by 5% or so in 2007, and that the errors had increased since then (perhaps 10% or 15% or more in 2009 and 2010). I reported in January that the NAR was working on benchmarking existing home sales for earlier years with other industry data, and I expected "this effort will lead to significant downward revisions to previously reported sales". The numbers reported today were estimated using the old method and will probably be revised down significantly, but they are still useful on a month-to-month basis.

These sales numbers were above the consensus of 5.0 million SAAR, and are about what I expected (Lawler's forecast was 5.08 million). I'll have more soon.