by Calculated Risk on 7/12/2012 02:12:00 PM

Another house price index, this one is based on prices per sq ft ...

From Glenn Kelman at Redfin: June Prices Increased 3.0%, But Sales Slowing

Across 19 major metropolitan markets, June prices increased 3.0% year over year, and 2.6% month over month. The number of homes for sale declined 25.3% from June 2011 to June 2012, and by 2.4% since May. Sales increased 4.3% over last year, but actually slipped 1.1% since May. The percentage of listings that sold within 14 days of their debut remained steady since May at 28.5%.
...
Inventory has been slow to rise because some home-owners can’t sell; their home is worth less than they owe the bank. Many others more don’t want to sell, because they can rent their house for more each month than their bank payment, and because they believe prices may improve. With vacancies are on the decline and rents rising, for many sellers it just makes more sense to rent out the home rather than sell.

There is limited historical data for this index. In 2011, sales were fairly weak in the April through July period, and a 4.3% increase in year-over-year sales for June would be less than the approximately 10% year-over-year increase in sales NAR reported for April and May of this year.

The reported 25.3% decrease in inventory is similar to other sources and is a key driver for the small year-over-year price increase.

by Calculated Risk on 7/12/2012 11:15:00 AM

From CNBC: Warren Buffett: US Economic Growth Slowing, Europe Slipping 'Pretty Fast'

In a live CNBC interview from Sun Valley with Becky Quick of "Squawk Box," Buffett says the general economy's growth has "tempered down" so that it is now "more or less flat."

He does, however, see a "noticeable" pickup for residential housing from a "very low base" that "doesn't amount to a whole lot yet, but it's getting better."

For months, Buffett had been seeing general U.S. economic growth held back by a weak residential housing market.

Buffett also says things are beginning to "slip pretty fast" in Europe, especially over the past six weeks.

Warren Buffett (my transcript):

"I have a different story this time. For a couple of years, I've been telling you that everything except residential housing was improving at a moderate rate, not crawling, but not galloping either. But that residential housing was flat lining.

The last two months have been sort of the opposite. The general economy in the US has been more or less flat; the growth has tempered down. But residential housing - we're seeing a pickup - it is noticeable, it is from a very low base, and it doesn't amount to a whole lot yet - but it is getting better. You have a flip-flop on that."
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The rest of the economy is slowing down - it is not heading downward - but it is not growing at the rate that it was earlier."

His comments on Europe were very negative.

by Calculated Risk on 7/12/2012 08:40:00 AM

The DOL reports:

In the week ending July 7, the advance figure for seasonally adjusted initial claims was 350,000, a decrease of 26,000 from the previous week's revised figure of 376,000. The 4-week moving average was 376,500, a decrease of 9,750 from the previous week's revised average of 386,250.

The previous week was revised up from 374,000 to 376,000.

From MarketWatch: "onetime factors such as fewer auto-sector layoffs than normal likely caused the sharp decline, the Labor Department said Thursday".

The following graph shows the 4-week moving average of weekly claims since January 2000.

Click on graph for larger image.

The dashed line on the graph is the current 4-week average. The four-week average of weekly unemployment claims declined to 376,500.

The sharp decline was probably due to onetime factors, plus this included the holiday week.

And here is a long term graph of weekly claims:

This was well below the consensus forecast of 375,000. With the holiday week and onetime factors, it is difficult to tell if there is any improvement - but this is the lowest level for the four week average since May.


All current Employment Graphs

by Calculated Risk on 7/11/2012 08:48:00 PM

Thursday will be another light day for economic data, but there will be plenty of discussion about the possibility of QE3. A few key dates for the Fed:

On Friday, Atlanta Fed President Dennis Lockhart, a voting member of the FOMC and someone in the "middle", will speak on the economic outlook. Next week, on July 17th, Fed Chairman Ben Bernanke will testify before the Senate Banking Committee, and on July 18th he will testify House Financial Services Committee.

The next FOMC meeting is on July 31st and August 1st, and the key piece of economic data to be released before the meeting is the Q2 advance GDP report on Friday, July 27th. Also there will be more data on inflation (especially CPI on July 17th, and Q2 / June PCE price index).

On the FOMC minutes from Tim Duy: FOMC Minutes Not a Smoking Gun

The minutes of the June FOMC meeting are out, and they did not deliver the much-anticipated smoking gun that would indicate QE3 was on its way. In fact, I think the minutes raise questions about another round of QE3 at all. The minutes hold many hints that policymakers are struggling to find a new direction for policy, one not necessarily dependent on balance sheet expansion.
...
Bottom Line: The minutes leaves me with the sense that it isn't so much the outlook that is holding back the Fed from further stimulus, but a lack of faith in the beneficial effects of further quantitative easing. That lack of faith may be why the bar to QE3 seems so high. So high that Fed officials are searching for other tools as the next step. Until I see more specific suggestions of other tools, I would continue to expect QE as the tool of choice. Given concerns about the functioning of the Treasuries market, MBS would seem a suitable alternative. But a building desire to explore new tools could mean a delay in any additional action. Hopefully Fed officials will give us more guidance on specific alternatives in the weeks ahead.

And from Binyamin Appelbaum at the NY Times: Fed Is Torn on Tipping Point for Action

Paul Ashworth, chief United States economist at Capital Economics, was among the analysts who chose a position in the middle, writing to clients that “officials are edging closer to launching a third round of large-scale asset purchases, but it won’t become a reality unless the recovery loses even more momentum.”

• At 8:30 AM, the initial weekly unemployment claims report will be released. The consensus is for claims to increase slightly to 375 thousand.

• Also at 8:30 AM, Import and Export Prices for May will be released. The consensus is a for a 1.9% decrease in import prices.

by Calculated Risk on 7/11/2012 03:32:00 PM

CR Note: Yesterday I posted some distressed sales data for Sacramento. I'm following the Sacramento market to see the change in mix over time (short sales, foreclosure, conventional). There has been a clear shift to fewer distressed sales in Sacramento.

Economist Tom Lawler has been digging up similar data, and he sent me the following table yesterday for several more distressed areas (I added Sacramento). For all of these areas the share of distressed sales is down from June 2011 - and for the areas that break out short sales, the share of short sales has increased (Mid-Atlantic only increased slightly) and the share of foreclosure sales are down - and down significantly.

Previous comments from Lawler:

Note that the distressed sales shares in the below table are based on MLS data, and often based on certain “fields” or comments in the MLS files, and some have questioned the accuracy of the data. Some MLS/associations only report on overall “distressed” sales.

The most striking shift from a year ago, of course, is the sharp drop in the foreclosure share of home sales ...

CR Note: So far there is no evidence of an increase in distressed sales this summer following the mortgage settlement.

	Short Sales Share		Foreclosure Sales Share		Total "Distressed" Share
	12-June	11-June	12-June	11-June	12-June	11-June
Las Vegas	34.2%	21.6%	27.8%	47.2%	62.0%	68.8%
Reno	37.0%	25.0%	21.0%	41.0%	58.0%	66.0%
Phoenix	32.8%	27.0%	14.1%	40.8%	46.8%	67.8%
Sacramento	31.0%	22.2%	23.2%	43.0%	54.2%	65.2%
Mid-Atlantic (MRIS)	10.2%	10.0%	8.7%	14.9%	18.9%	24.9%
Charlotte					14.2%	30.6%