by Calculated Risk on 6/13/2014 08:22:00 PM

Just an update ... during the recession, I wrote about the troubles in Las Vegas and included a chart of visitor and convention attendance: Lost Vegas.

Since then Las Vegas visitor traffic recovered to a new record high in 2012, although visitor traffic was down slightly in 2013.

Convention attendance in 2013 was still about 18% below the peak level in 2006.  Here is the data from the Las Vegas Convention and Visitors Authority.  

Click on graph for larger image.

The blue bars are annual visitor traffic (left scale), and the red line is convention attendance (right scale). 

Through April, visitor traffic in 2014 is running 4.8% above 2013 - and on a record pace.

Convention traffic is barely up from last year, and is still way below the pre-recession peak.

In general, the gamblers are back ... but the conventions are still lagging behind.

by Calculated Risk on 6/13/2014 02:29:00 PM

Economist Tom Lawler sent me the preliminary table below of short sales, foreclosures and cash buyers for several selected cities in May.

On distressed: Total "distressed" share is down in all of these markets, mostly because of a sharp decline in short sales.

Short sales are down in all of these areas.

Foreclosures are down in most of these areas too, although foreclosures are up a little in a couple of areas.

The All Cash Share (last two columns) is mostly declining year-over-year. 

As investors pull back, the share of all cash buyers will probably continue to decline.

	Short Sales Share		Foreclosure Sales Share		Total "Distressed" Share		All Cash Share
	May-14	May-13	May-14	May-13	May-14	May-13	May-14	May-13
Las Vegas	7.9%	31.8%	9.1%	10.3%	17.0%	42.1%	40.2%	57.9%
Reno**	11.0%	27.0%	6.0%	7.0%	17.0%	34.0%
Phoenix	3.9%	12.3%	6.7%	9.7%	10.7%	22.0%	29.5%	38.9%
Sacramento	7.0%	22.5%	8.3%	7.5%	15.3%	30.0%	20.5%	33.6%
Minneapolis	3.9%	6.8%	12.1%	19.9%	16.0%	26.7%
Mid-Atlantic	5.2%	8.2%	8.1%	7.2%	13.3%	15.5%	17.2%	16.7%
California *	6.0%	11.3%	6.9%	15.0%	12.9%	26.3%
Bay Area CA*	4.7%	10.4%	3.1%	6.5%	7.8%	16.9%	22.9%	27.6%
So. California*	6.6%	15.7%	5.8%	10.9%	12.4%	26.6%	25.8%	32.6%
Hampton Roads					21.3%	26.3%
Northeast Florida					36.5%	37.8%
Toledo							36.6%	33.8%
Des Moines							17.5%	17.3%
Tucson							31.3%	32.8%
Omaha							19.4%	14.1%
Georgia***							26.0%	NA
Houston			4.5%	9.4%
Memphis*			15.9%	21.5%
*share of existing home sales, based on property records **Single Family Only ***GAMLS

by Calculated Risk on 6/13/2014 10:31:00 AM

Here are some analyst comments on the upcoming FOMC meeting. From Nomura:

At the conclusion of the 17-18 June Federal Open Market Committee (FOMC) meeting, we expect the FOMC to announce another $10bn reduction in its asset purchase program. We will look to see if there is any mention of discussions around the exit strategy in the statement or in Chair Yellen’s press conference. We will also look out for any mention of the pace of adjustment when the Committee begins to raise rates. The Summary of Economic Projections (SEP) will also be released. Notably, based on the weak Q1 GDP numbers, we expect to see a downward revision to the FOMC’s GDP forecast for 2014.

And from Merrill Lynch:

The Fed is unlikely to make any meaningful policy changes in June: tapering should continue (bringing the asset purchase pace down to $35 bn per month) and the forward guidance should remain unchanged. The interesting discussions should revolve around various aspects of the exit strategy. There is some chance that Fed Chair Janet Yellen addresses aspects at her press conference, but more likely, we will have to wait until the minutes to get any details. ...

At this point, it would take a significant shift in the outlook to change the pace of tapering. In all likelihood, the Fed will taper $10 bn each in June, July, and September, leaving a $15 bn purchase pace at the October meeting. If the economy is deemed strong enough, they could taper the full amount then. Alternatively, should they want to hammer home a message of gradual exit, they could again taper $10 bn in October and then do the final $5 bn in December.

CR note: I've seen a suggestion that the FOMC might increase the pace of tapering at this meeting - they won't - and other suggestions that QE3 will never end - it will. I'll post some thoughts on the upcoming meeting this weekend.

by Calculated Risk on 6/13/2014 09:55:00 AM

Click on graph for larger image.

The preliminary Reuters / University of Michigan consumer sentiment index for June was at 81.2, down from 81.9 in May.

This was below the consensus forecast of 83.0. Sentiment has generally been improving following the recession - with plenty of ups and downs - and a big spike down when Congress threatened to "not pay the bills" in 2011, and another smaller spike down last October and November due to the government shutdown.

by Calculated Risk on 6/12/2014 07:16:00 PM

Several years ago I started following the Sacramento market to look for changes in the mix of houses sold (equity, REOs, and short sales).  For a long time, not much changed. But over the last 2+ years we've seen some significant changes with a dramatic shift from foreclosures (REO: lender Real Estate Owned) to short sales, and the percentage of total distressed sales declining sharply.

This data suggests healing in the Sacramento market and other distressed markets are showing similar improvement.  Note: The Sacramento Association of REALTORS® started breaking out REOs in May 2008, and short sales in June 2009.

In May 2014, 14.7% of all resales (single family homes) were distressed sales. This was down from last month, and down from 29.1% in May 2013. This is the post-bubble low.

The percentage of REOs was at 7.7%, and the percentage of short sales was 7.0%.

Here are the statistics.

Click on graph for larger image.

This graph shows the percent of REO sales, short sales and conventional sales.

There has been a sharp increase in conventional sales over the last 2 years (blue). 

Active Listing Inventory for single family homes increased 83.7% year-over-year in May. 

Cash buyers accounted for 20.5% of all sales, down from 33.6% in May 2013, and down from 21.9% last month (frequently investors).  This has been trending down, and it appears investors are becoming less of a factor in Sacramento.

Total sales were down 10.6% from May 2013, but conventional equity sales were up 7.5% compared to the same month last year. This is exactly what we expect to see in an improving distressed market - flat or even declining overall sales as distressed sales decline, and conventional sales increasing.

As I've noted before, we are seeing a similar pattern in other distressed areas.