by Calculated Risk on 2/10/2015 02:24:00 PM

This is a key distressed market to follow since Las Vegas has seen the largest price decline of any of the Case-Shiller composite 20 cities.

The Greater Las Vegas Association of Realtors reported GLVAR reports local home prices up 8 percent for year

According to GLVAR, the total number of existing local homes, condominiums and townhomes sold in January 2015 was 2,239, down from 2,734 in December 2014 and down from 2,565 one year ago. At the current sales pace, Lynam said Southern Nevada continues to have roughly a four-month supply of available homes. REALTORS® consider a six-month supply to be a balanced market.
...
GLVAR has been tracking a two-year trend of fewer distressed sales and more traditional home sales, where lenders are not controlling the transaction. In January, 9.7 percent of all local sales were short sales – which occur when lenders allow borrowers to sell a home for less than what they owe on the mortgage. That’s down from 10 percent in December and 17 percent a year ago. Another 9.4 percent of January sales were bank-owned, up from 8 percent in December, but down from 11 percent last year.
...
The total number of single-family homes listed for sale on GLVAR’s Multiple Listing Service in January was 12,666, up 2.3 percent from 12,377 in December, but down 6.4 percent from one year ago. GLVAR tracked a total of 3,429 condos, high-rise condos and townhomes listed for sale on its MLS in January, up 4.5 percent from 3,282 in December and up 15.1 percent from January 2014.

By the end of January, GLVAR reported 7,382 single-family homes listed without any sort of offer. That’s down 5.0 percent from 7,774 such homes listed in December, but up 12.9 percent from one year ago. For condos and townhomes, the 2,327 properties listed without offers in January represented a 0.8 percent increase from 2,309 such properties listed in December and a 35.9 percent increase from one year ago.
emphasis added

There are several key trends that we've been following:

1) Overall sales were down 12.7% year-over-year.

2) However conventional (equity, not distressed) sales were only down about 2% year-over-year.  In January 2014, only 72.0% of all sales were conventional equity.  In January 2015, 80.9% were standard equity sales.   Note: In January 2013 (two years ago), only 51.3% were equity!  A significant change.

3) The percent of cash sales has declined year-over-year from 46.8% in January 2014 to 36.0% in January 2015. (investor buying appears to be declining).

4) Non-contingent inventory is up 12.9% year-over-year. The table below shows the year-over-year change for non-contingent inventory in Las Vegas. Inventory declined sharply through early 2013, and then inventory started increasing sharply year-over-year. It appears the inventory build is slowing (an important change in many areas).

Las Vegas: Year-over-year Change in Non-contingent Inventory
Month	YoY
Jan-13	-58.3%
Feb-13	-53.4%
Mar-13	-42.1%
Apr-13	-24.1%
May-13	-13.2%
Jun-13	3.7%
Jul-13	9.0%
Aug-13	41.1%
Sep-13	60.5%
Oct-13	73.4%
Nov-13	77.4%
Dec-13	78.6%
Jan-14	96.2%
Feb-14	107.3%
Mar-14	127.9%
Apr-14	103.1%
May-14	100.6%
Jun-14	86.2%
Jul-14	55.2%
Aug-14	38.8%
Sep-14	29.5%
Oct-14	25.6%
Nov-14	20.0%
Dec-14	18.0%
Jan-15	12.9%

by Calculated Risk on 2/10/2015 11:58:00 AM

From Trulia chief economist Jed Kolko: For Home Prices, The Rebound Effect Is Over. Long Live Job Growth

Nationwide, asking prices on for-sale homes climbed 0.5% month-over-month in January, seasonally adjusted — the smallest monthly gain since August. Year-over-year, asking prices rose 7.5%, down from the 9.3% year-over-year increase in January 2014. Asking prices increased year-over-year in 94 of the 100 largest U.S. metros.

The biggest home price increases are not necessarily in markets that had more severe housing busts. But the metros where home prices are now rising fastest are, almost without exception, the ones with faster job growth. Why? A growing economy fuels housing demand. Among the 10 metros with the biggest year-over-year price increases, nine had at least 2% year-over-year job growth. ...

Nationwide, rents rose 6.5% year-over-year in January. The three large rental markets with the steepest rent increases – Denver, Oakland, and San Francisco – all have had job growth of 2% or more. In general, metros with faster job growth have larger rent increases, though some Sunbelt markets like Riverside-San Bernardino, Houston, and San Diego have had impressive job growth with more limited rent increases.
emphasis added

Note: These asking prices are SA (Seasonally Adjusted) - and adjusted for the mix of homes - and although year-over-year price increases had been slowing, the year-over-year change increased in January compared to December.

The month-to-month increase suggests further house price increases over the next few months on a seasonally adjusted basis.

There is much more in the article.

by Calculated Risk on 2/10/2015 10:00:00 AM

From the BLS: Job Openings and Labor Turnover Summary

There were 5.0 million job openings on the last business day of December, little changed from 4.8 million in November, the U.S. Bureau of Labor Statistics reported today. ...
...
Quits are generally voluntary separations initiated by the employee. Therefore, the quits rate can serve as a measure of workers’ willingness or ability to leave jobs. ... There were 2.7 million quits in December, little changed from November.

The following graph shows job openings (yellow line), hires (dark blue), Layoff, Discharges and other (red column), and Quits (light blue column) from the JOLTS.

This series started in December 2000.

Note: The difference between JOLTS hires and separations is similar to the CES (payroll survey) net jobs headline numbers. This report is for December, the most recent employment report was for January.

Click on graph for larger image.


Note that hires (dark blue) and total separations (red and light blue columns stacked) are pretty close each month. This is a measure of labor market turnover.  When the blue line is above the two stacked columns, the economy is adding net jobs - when it is below the columns, the economy is losing jobs.

Jobs openings increased in December to 5.028 million from 4.847 million in November.

The number of job openings (yellow) are up 28% year-over-year compared to December 2013.

Quits are up 12% year-over-year. These are voluntary separations. (see light blue columns at bottom of graph for trend for "quits").

This is another very positive report.  It is a good sign that job openings are over 5 million, and that quits are increasing year-over-year.

by Calculated Risk on 2/10/2015 09:01:00 AM

From the National Federation of Independent Business (NFIB): SMALL BUSINESS OPTIMISM FALLS, BUT STILL IN NORMAL ZONE

The Small Business Optimism Index fell 2.5 points to 97.9, giving back the December gain that took the Index over 100. Still, the Index indicates that the small business sector is operating in a somewhat “normal” zone.

The percent of owners reporting job creation fell 4 percentage points to a net 5 percent of owners, still a solid number. ... Twenty-six percent of all owners reported job openings they could not fill in the current period, up 1 point and a very solid reading. ...
...
Labor costs continue to put pressure on the bottom line but energy prices are down a lot. Two percent reported reduced worker compensation and 25 percent reported raising compensation, yielding a seasonally adjusted net 25 percent reporting higher compensation, unchanged from December.
emphasis added

Click on graph for larger image.

This graph shows the small business optimism index since 1986.

The index decreased to 97.9 in January from 100.4 in December.

by Calculated Risk on 2/09/2015 07:21:00 PM

From the NY Times: Greece to Propose a Debt Compromise Plan to Creditors

Hoping to defuse a standoff that has set Europe and financial markets on edge, Greek officials intend to propose a detailed compromise plan at an emergency meeting with creditors on Wednesday in Brussels, a finance ministry official here said on Monday.
...
Greece still plans to reject some of the harshest austerity conditions attached to Greece’s bailout loans, but will propose retaining about 70 percent of the terms, according to the official.

Athens will propose replacing the remaining 30 percent of the austerity conditions with new reforms that the Greek government will devise together with the Organization for Economic Cooperation and Development.

Tuesday:
• At 7:30 AM ET, NFIB Small Business Optimism Index for January.

• Early: Trulia Price Rent Monitors for January. This is the index from Trulia that uses asking house prices adjusted both for the mix of homes listed for sale and for seasonal factors.

• At 10:00 AM, Job Openings and Labor Turnover Survey for December from the BLS. Jobs openings increased in November to 4.972 million from 4.830 million in October. The number of job openings were up 21% year-over-year compared to November 2013, and Quits were up 7% year-over-year.