by Calculated Risk on 1/24/2012 10:17:00 PM

Below is a graph that compares the Ceridian diesel fuel index and the ATA trucking index.

The ATA index showed a sharp increase in December: ATA Truck Tonnage Index Posts Largest Annual Gain in 13 Years

The American Trucking Associations’ advanced seasonally adjusted (SA) For-Hire Truck Tonnage Index jumped 6.8% in December after rising 0.3% in November 2011. The latest gain put the SA index at 124.5 (2000=100) in December, up from the November level of 116.6.

But the Ceridian index showed only a small increase: Pulse of Commerce Index Increased 0.2 Percent in December

The Ceridian-UCLA Pulse of Commerce Index® (PCI®), issued ... 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.

Click on graph for larger image.

Here is a graph comparing the two indexes. In general the two indexes move together, but there are periods when one index is strong than the other. As an example the ATA trucking index was moving sideways prior to the recession, but the Ceridian index was still increasing.

And recently the ATA index is showing a strong increase, but the Ceridian index is only increasing slightly. Perhaps rail traffic is the tie breaker: AAR: Rail Traffic increased 7.3 percent YoY in December

by Calculated Risk on 1/24/2012 08:55:00 PM

Transcript: 2012 SOTU. Not much on housing ...

I'm sending this Congress a plan that gives every responsible homeowner the chance to save about $3,000 a year on their mortgage, by refinancing at historically low interest rates. No more red tape. No more runaround from the banks. A small fee on the largest financial institutions will ensure that it won't add to the deficit, and will give banks that were rescued by taxpayers a chance to repay a deficit of trust.
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And tonight, I am asking my Attorney General to create a special unit of federal prosecutors and leading state attorneys general to expand our investigations into the abusive lending and packaging of risky mortgages that led to the housing crisis. This new unit will hold accountable those who broke the law, speed assistance to homeowners, and help turn the page on an era of recklessness that hurt so many Americans.

Ezra Klein SOTU liveblogging

by Calculated Risk on 1/24/2012 06:56:00 PM

The State of the Union Address is at 9 PM tonight.

President Obama will probably mention some housing policy initiatives that do not require Congressional approval: 1) the updated HARP program (refinance activity will increase in March), 2) an REO to rental program for Fannie and Freddie, and 3) the mortgage settlement agreement.

On the possible REO to rental program, here is a story from Patrick Coolican at the Las Vegas Sun: Your next landlord in Las Vegas could be a hedge fund

Hedge funds could be the next big player in the Las Vegas real estate market. ...

“We’ve been contacted by a number of different groups who have never considered owning single-family residences as rental properties in their investment portfolios,” says Brian Krueger, vice president for strategic services at Coldwell Banker, the real estate firm.

They are organizing money and have started to come in and do due diligence,” he says.

Doug Brien, managing director and co-founder of Waypoint Homes, tells me he was in Las Vegas last week to survey the landscape. Waypoint, an Oakland, Calif.-based company, has bought 1,000 homes as rental properties in other markets.

However in many areas selling REO in bulk doesn't seem to make much sense - since there are so many small investors already buying. Here is an excerpt of a piece from economist Tom Lawler:

Contrary to what some espousers of “bulk” REO sales to large investors to rent our SF properties might suggest, the number and % of single-family detached homes occupied by renters increased significantly during the latter half of last decade, with the largest gains coming in “bubbly” areas. The table below is based on data from the American Community Survey. The 2000 data are from Census 2000, while the 2006-07 and 2008-09 averages are derived from the 5-year, 3-year, and 1-year ACS results for the 2006-10, 2008-10, and 2010 periods released this year.

Percent of Occupied SF Detached Homes Occupied by Renters
	2000	2006-07	2008-09	2010
US	13.2%	12.8%	14.3%	15.1%
Maricopa County	10.4%	13.5%	16.8%	19.8%
Clark County	12.5%	18.2%	22.0%	24.4%
Sacramento County	18.8%	16.7%	20.2%	22.4%
Lee County	10.6%	12.3%	14.6%	17.3%
Source: Decennial Census 2000, American Community Survey 5-, 3-, and 1-year Estimates

According to ACS estimates – which sadly are just estimates – for the US as a whole the % of occupied SF detached homes that were occupied by renters increased from an average of 12.8% in the 2006-07 period to 15.1% in 2010. That % increase translated into a 3,637,349 jump in the number of renters occupied SF detached homes. By comparison, the number of owners occupied SF detached homes declined by 1,333,747.

For “distressed” areas, the numbers were even more striking, as the above table suggests.

In Maricopa County (home of Phoenix), the estimated number of SF detached homes occupied by renters increased to about 182,251 on average in 2010 from about 123,553 on average during the two-year 2006-07 period.

Of course, SF homes lost to foreclosure rose sharply in Maricopa County in 2008, and remained at elevated levels through last year – though foreclosures in 2011 were down from 2010. Investor buying also appeared to pick up dramatically in 2008, as (NOT coincidentally) the all-cash share of home sales in the county.

The ACS data, combined with investor/all-cash shares, suggests by 2010 a SIGNIFICANT share of SF homes lost to foreclosure in 2008-2010 period (1) were purchased by “investors;” and (2) had by 2010 been successfully rented out.
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It is not clear why folks focusing on the rental market for SF housing have not actually looked at any data, much less analyzed or commented on the truly astounding increase in the rental share of the SF housing market in many parts of the country. The astounding increase in the number of foreclosed SF detached homes in Maricopa County occurred, of course, without any mandated program to have bulk sales of REO at discounts to “large” investors.

CR note: Foreclosures will probably pick up significantly once (and if) a mortgage settlement is reached. But right now it doesn't appear a bulk REO program is needed in most areas. Hopefully, if a program is announced, it will be limited to areas where small investors will be overwhelmed by the volumes (perhaps Las Vegas and parts of Florida).

by Calculated Risk on 1/24/2012 03:58:00 PM

From DataQuick: California Foreclosure Activity Drops

The number of California homes going into foreclosure dropped in the fourth quarter of 2011 to the second-lowest level in more than four years, the result of evolving lender and mortgage servicer policies as well as shifting market conditions, a real estate information service reported.

A total of 61,517 Notices of Default (NODs) were recorded at county recorders offices during the fourth quarter. That was down 13.7 percent from 71,275 for the prior three months, and down 11.9 percent from 69,799 in fourth-quarter 2010, according to San Diego-based DataQuick.

Last quarter's 61,517 NODs marked the lowest level since 56,633 NODs were filed in second-quarter 2011, and the second-lowest since 53,943 NODs were recorded in second-quarter 2007. New foreclosure filings (NODs) peaked in first-quarter 2009 at 135,431.

"We are certainly seeing a lower level of foreclosure activity than a year or two ago. The question is, how much of that decline is due to market conditions, and how much is due to policy changes that try to address economic distress and lower home values," said John Walsh, DataQuick president.

"Five years ago almost all mortgage payment delinquencies would have triggered a default notice after a certain amount of time. Strategies now include short sales, refinances, interest rate changes, principal reduction as well as just plain waiting longer. It will be interesting to see how this plays out as the economy improves and the housing market finds its footing," Walsh said.

As Walsh noted, some of the decline is probably due to process issues. California is a non-judicial state, and it still takes an average of 9.7 months to foreclose after the Notice of Default is filed (the shortest possible period is 3 months and 21 days).

Click on graph for larger image.

This graph shows the annual Notices of Default (NODs) filed in California.

California had a significant housing bust in the early '90s, with defaults peaking - and prices bottoming - in 1996. That bust was mild compared to the recent housing bust - and defaults are still way above the 1996 peak.

by Calculated Risk on 1/24/2012 01:15:00 PM

From ATA: ATA Truck Tonnage Index Posts Largest Annual Gain in 13 Years

The American Trucking Associations’ advanced seasonally adjusted (SA) For-Hire Truck Tonnage Index jumped 6.8% in December after rising 0.3% in November 2011. The latest gain put the SA index at 124.5 (2000=100) in December, up from the November level of 116.6.

For all of 2011, tonnage rose 5.9% over the previous year – the largest annual increase since 1998. Tonnage for the last month of the year was 10.5% higher than December 2010, the largest year-over-year gain since July 1998. November tonnage was up 6.1% over the same month last year.
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“While I’m not surprised that tonnage increased in December, I am surprised at the magnitude of the gain,” ATA Chief Economist Bob Costello said.
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“Not only did truck tonnage increase due to solid manufacturing output in December, but also from some likely inventory restocking. Inventories, especially at the retail level, are exceedingly lean, and I suspect that tonnage was higher than expected as the supply chain did some restocking during the month.” he said.

Click on graph for larger image.

Here is a long term graph that shows ATA's For-Hire Truck Tonnage index.

The dashed line is the current level of the index. This index stalled early in 2011, but increased sharply at the end of the year. From ATA:

Trucking serves as a barometer of the U.S. economy, representing 67.2% of tonnage carried by all modes of domestic freight transportation, including manufactured and retail goods. Trucks hauled 9 billion tons of freight in 2010. Motor carriers collected $563.4 billion, or 81.2% of total revenue earned by all transport modes.

All current Transportation Graphs