by Calculated Risk on 3/20/2015 09:06:00 AM

From DataQuick: Bay Area February Home Sales Decline; Smaller Gain for Median Sale Price

The number of homes sold was slightly lower than in January and was the lowest for the month of February in seven years. ... A total of 4,376 new and existing houses and condos sold in the nine-county Bay Area in February 2015. That was down 1.1 percent month over month from 4,423 sales in January 2015 and down 10.9 percent year over year from 4,911 sales in February 2014, according to CoreLogic DataQuick data.
...
“February is always a bit odd from a numbers standpoint. March should provide a better view of emerging trends this year,” said Andrew LePage, CoreLogic DataQuick data analyst. “That said, it is easy to see that supply is still constrained."
...
Foreclosure resales accounted for 4.5 percent of all resales in February, up from a revised 4.4 percent in January 2015 and down from 5.0 percent in February 2014. Foreclosure resales in the Bay Area peaked at 52.0 percent in February 2009, while the monthly average over the past 17 years is about 10 percent. Foreclosure resales are purchased homes that have been previously foreclosed upon in the prior 12 months.

Short sales accounted for an estimated 4.8 percent of Bay Area resales in February, down from a revised 5.2 percent in January 2015 and down from 6.3 percent in February 2014. Short sales are transactions in which the sale price fell short of what was owed on the property.
emphasis added

by Calculated Risk on 3/19/2015 07:01:00 PM

From Freddie Mac today: Mortgage Rates Move Down as We Head Into Spring

Freddie Mac today released the results of its Primary Mortgage Market Survey® (PMMS®), showing average fixed mortgage rates moving down across the board. The average 30-year fixed mortgage rate continues its run below 4 percent -- a good sign for the spring homebuying season. ...

30-year fixed-rate mortgage (FRM) averaged 3.78 percent with an average 0.6 point for the week ending March 19, 2015, down from last week when it averaged 3.86 percent. A year ago at this time, the 30-year FRM averaged 4.32 percent.

15-year FRM this week averaged 3.06 percent with an average 0.6 point, down from last week when it averaged 3.10 percent. A year ago at this time, the 15-year FRM averaged 3.32 percent.

Click on graph for larger image.

This graph shows the 30 year and 15 year fixed rate mortgage interest rates from the Freddie Mac Primary Mortgage Market Survey®.  

30 year mortgage rates are up a little (43 bps) from the all time low of 3.35% in late 2012, but down from 4.32% a year ago. 

The Freddie Mac survey started in 1971. Mortgage rates were below 5% back in the 1950s.

by Calculated Risk on 3/19/2015 03:18:00 PM

From housing economist Tom Lawler:

Lennar Corporation, the nation’s second largest homebuilder, reported that net home orders in the quarter ended February 28, 2015 totaled 5,287, up 18.4% from the comparable quarter of 2014. The average net order price was $346,000, up 5.8% from a year ago. Home deliveries totaled 4,302, up 19.2% from the comparable quarter of 2015, at an average sales price of $326,000, up 2.5% from a year earlier. The company’s order backlog at the end of February was 6,817, up 20.4% from last February, at an average order price of $352,000, up 2.9% from a year ago.

In Lennar’s press release the company’s CEO was quoted as saying that “(d)espite severe weather conditions which contraction production and sales in parts of the country, the housing market continued its strong and steady recover. Early signals from this year’s spring selling season indicate that the housing market is improving, and disappointing single-family starts and permits numbers should rebound shortly.”

The company said that its homebuilding gross margin last quarter was down slightly from a year earlier but was consistent with the company’s guidance from earlier this year, with the decline coming from a combination of rising labor and material costs and a moderation in pricing power.

A few conference call questions focused on Houston, and company officials seemed moderately “upbeat” but created a bit of confusion. Noting a 7.1% YOY decline in net home orders in Houston in the latest quarter, one analyst asked about what was behind this decline, and how the Houston market was holding up. A company official responded that the Houston market was still seeing “good traffic,” but that some buyers were being a “bit more caution” about “pulling the trigger.” The official also noted that the company, in balancing “price versus pace,” was focused more on margin in Houston, and did not “chase prices down.” Near the end of the call another analyst, noting this statement, asked for some clarification, and a company official said that some “smaller and less-capitalized” builders, some selling in “outlying” areas, had cut prices in response to “headlines,” but that Lennar had not. Lennar’s average order price in Houston last quarter was unchanged from a year ago.

And some other data from Houston:

Flipping to “macro” numbers, single-family permits in the Houston MSA through January showed no signs of slowing. January SF permits were up 11% from the previous January, and permits over the three-month period ending in January were 14.4% from the comparable three-month period of a year earlier.

On the MLS front, the Houston Association of Realtors reported that single-family home sales by realtors in the Houston area totaled 4,521 in February, down 5.8% from last February’s pace. The HAR also reported that total property listings were up 0.7% from a year earlier, the first YOY increase in several years, and that listings in February were up 8.4% in December. While inventory levels remained at historically low levels relative to sales last month, the unusually high jump over the last two months is worth noting.

Right now it appears as if home sales are starting to soften in the Houston market, while based on building permits construction was still increasing through the beginning of this year. Given the likely negative impact of the plunge in oil prices on Houston’s economy (it won’t be as bad as in the 1980’s, but it will be negative), and it would appear that (1) there may be some “excess” building going on; and (2) that suggests coming downward pressure on home prices.

by Calculated Risk on 3/19/2015 12:37:00 PM

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

Thanks to Tom for sharing this with all of us!

On distressed: Total "distressed" share is down in most of these markets mostly due to a decline in short sales (Mid-Atlantic is up year-over-year because of an increase foreclosure as lenders work through the backlog).

Short sales are down in these areas.

The All Cash Share (last two columns) is 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
	Feb-15	Feb-14	Feb-15	Feb-14	Feb-15	Feb-14	Feb-15	Feb-14
Las Vegas	9.3%	14.0%	9.7%	12.0%	19.0%	26.0%	37.4%	46.8%
Reno**	7.0%	13.0%	7.0%	7.0%	14.0%	20.0%
Phoenix	4.4%	5.3%	5.8%	8.3%	10.1%	13.7%	29.9%	35.4%
Sacramento	6.3%	12.4%	8.6%	7.0%	14.9%	19.4%	19.8%	26.5%
Minneapolis	2.7%	5.0%	15.3%	25.3%	18.1%	30.3%
Mid-Atlantic	5.3%	7.7%	15.1%	10.9%	20.4%	18.6%	21.2%	21.4%
Orlando	5.3%	9.4%	27.0%	23.8%	32.3%	33.2%	42.2%	42.2%
Bay Area CA*	4.8%	6.3%	4.5%	5.0%	9.3%	11.3%	26.7%	28.4%
So. California*	6.1%	9.0%	6.1%	6.7%	12.2%	15.7%	28.0%	31.0%
Chicago (city)					29.9%	40.0%
Hampton Roads					22.6%	30.7%
Northeast Florida					37.6%	44.5%
Tucson							33.7%	37.0%
Des Moines							21.3%	23.3%
Georgia***							27.1%	35.3%
Omaha							19.6%	25.6%
Pensacola							36.7%	41.8%
Knoxville							23.9%	27.4%
Richmond VA			13.9%	22.2%			21.5%	22.2%
Springfield IL**			15.3%	18.3%			21.4%	N/A
*share of existing home sales, based on property records **Single Family Only ***GAMLS

by Calculated Risk on 3/19/2015 10:08:00 AM

From the Philly Fed: March Manufacturing Survey

Manufacturing activity in the region increased at a modest pace in March, according to firms responding to this month’s Manufacturing Business Outlook Survey. The survey’s current indicators for general activity and new orders were positive and remained near their low readings in February.
...
The survey’s broadest measure of manufacturing conditions, the diffusion index of current activity, at 5.0, was virtually unchanged from its reading of 5.2 in February ...

Although the current employment index, at just 3.5, was virtually unchanged from last month, the index remains well below its average reading of about 14 over the second half of last year. ...
emphasis added

This was below the consensus forecast of a reading of 7.0 for March.

Click on graph for larger image.

Here is a graph comparing the regional Fed surveys and the ISM manufacturing index. The light blue line is an average of the NY Fed (Empire State) and Philly Fed surveys through March. The ISM and total Fed surveys are through February.  Note: Areas with oil production (Texas and some in Kansas City region), have been especially weak.

The average of the Empire State and Philly Fed surveys declined in March, and this suggests a slightly weaker ISM report for March.