by Calculated Risk on 3/16/2015 09:01:00 PM

During the recession, I started following the Sacramento market to look for changes in the mix of houses sold (equity, REOs, and short sales). For some 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 February, 14.8% of all resales were distressed sales. This was down from 16.6% last month, and down from 19.1% in February 2014. Since distressed sales happen year round, but conventional sales decline in December and January, the percent of distressed sales bumps up in the winter (seasonal).

The percentage of REOs was at 8.3%, and the percentage of short sales was 6.5%.

Here are the statistics for February.

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 (equity) sales that started in 2012 (blue) as the percentage of distressed sales declined sharply.

Active Listing Inventory for single family homes increased 13.9% year-over-year (YoY) in February.  In general the YoY increases have been trending down after peaking at close to 100%.  This is the smallest YoY increase in inventory since May 2013.

Cash buyers accounted for 16.8% of all sales (frequently investors).

Total sales were up 11.6% from February 2014, and conventional equity sales were up 17.6% compared to the same month last year.

Summary: This data suggests a healing market with fewer distressed sales, more equity sales, and less investor buying.

by Calculated Risk on 3/16/2015 05:47:00 PM

From Reuters: U.S. fuel consumption is soaring amid cheaper prices (ht Shane)

Fuel demand in Texas is growing strongly as lower oil prices encourage motorists to use their vehicles more and buy larger replacements.

Receipts of motor fuel taxes in February 2015 were 6 percent higher than in the same month in 2014, according to the Texas Comptroller of Public Accounts.

Tuesday:
• 8:30 AM ET, Housing Starts for February. Total housing starts were at 1.065 million (SAAR) in January. Single family starts were at 678 thousand SAAR in January. The consensus is for total housing starts to decrease to 1.040 million (SAAR) in February.

• At 10:00 AM, Regional and State Employment and Unemployment (Monthly) for January

by Calculated Risk on 3/16/2015 01:54:00 PM

From the WSJ: Oil Prices Fall to Six-Year Intraday Low

Crude prices extended losses in early New York trading on a report, issued by a private data provider, that showed rising oil stockpiles at a key U.S. storage hub. Earlier, oil dropped as traders weighed the prospect of more Iranian crude hitting the global market, as negotiators came closer to a tentative political agreement on Tehran’s nuclear program.
...
Recently, light, sweet crude for April delivery recently fell $1.65, or 3.7%, at $43.19 a barrel on the Nymex. It dipped as low as $42.85 a barrel, the lowest intraday price since March 12, 2009. Oil is now on pace for a five-session losing streak and is down nearly 14% in that span.

Click on graph for larger image

This graph shows WTI and Brent spot oil prices from the EIA. (Prices today added).

According to Bloomberg, WTI has fallen 2.8% today to $43.52 per barrel, and Brent to $53.23.

WTI oil prices are off  almost 60% from the peak last year, and there should be further declines in gasoline prices over the next couple of weeks.  Nationally gasoline prices are around $2,42 per gallon, and gasoline futures are down about 4 cents per gallon today.

by Calculated Risk on 3/16/2015 10:05:00 AM

The National Association of Home Builders (NAHB) reported the housing market index (HMI) was at 53 in March, down from 55 in February. Any number above 50 indicates that more builders view sales conditions as good than poor.

From Reuters: Builder Confidence Drops Two Points in March

Builder confidence in the market for newly built, single-family homes in March fell two points to a level of 53 on the National Association of Home Builders/Wells Fargo Housing Market Index (HMI) released today.

“Even with this slight slip, the HMI remains in positive territory and we expect the market to improve as we enter the spring buying season,” said NAHB Chairman Tom Woods, a home builder from Blue Springs, Mo.

“The drop in builder confidence is largely attributable to supply chain issues, such as lot and labor shortages as well as tight underwriting standards,” said NAHB Chief Economist David Crowe. “These obstacles notwithstanding, we are expecting solid gains in the housing market this year, buoyed by sustained job growth, low mortgage interest rates and pent-up demand.”

Two of the three HMI components posted losses in March. The component gauging current sales conditions fell three points to 58 while the component measuring buyer traffic dropped two points to 37. The gauge charting sales expectations in the next six months held steady at 59.
emphasis added

Click on graph for larger image.

This graph show the NAHB index since Jan 1985.

This was below the consensus forecast of 56.

by Calculated Risk on 3/16/2015 09:26:00 AM

From the Fed: Industrial production and Capacity Utilization

Industrial production increased 0.1 percent in February after decreasing 0.3 percent in January. In February, manufacturing output moved down 0.2 percent, its third consecutive monthly decline. The rates of change for the total index in January and for manufacturing in both December and January are lower than previously reported. The index for mining fell 2.5 percent in February; drops in the indexes for coal mining and for oil and gas well drilling and servicing primarily accounted for the decrease. The output of utilities jumped 7.3 percent, as especially cold temperatures drove up demand for heating. At 105.8 percent of its 2007 average, total industrial production in February was 3.5 percent above its level of a year earlier. Capacity utilization for the industrial sector decreased to 78.9 percent in February, a rate that is 1.2 percentage points below its long-run (1972–2014) average.
emphasis added

Click on graph for larger image.

This graph shows Capacity Utilization. This series is up 12.0 percentage points from the record low set in June 2009 (the series starts in 1967).

Capacity utilization at 78.9% is 1.2% below the average from 1972 to 2012 and below the pre-recession level of 80.8% in December 2007.

Note: y-axis doesn't start at zero to better show the change.

The second graph shows industrial production since 1967.

Industrial production increased 0.1% in January to 102.8. This is 26.4% above the recession low, and 2.6% above the pre-recession peak.

This was below expectations, and there were downward revisions to prior months.