by Calculated Risk on 3/28/2023 01:58:00 PM

Note: I like using Las Vegas as a measure of recovery for both leisure (visitors) and business (conventions).

From the Las Vegas Visitor Authority: February 2023 Las Vegas Visitor Statistics

With an easy comparison to the lingering COVID‐affected months of last year, Las Vegas saw visitation approach 3.1M in February 2023, up +17.8% over February 2022.

Overall hotel occupancy exceeded 82% for the month, +12.9 pts YoY and down ‐4.8 pts vs. 2019 while Weekend occupancy reached 89.3%, up 1.8 pts YoY and ‐2.6 pts vs. February 2019. Supported by the strengthening convention/group segment, Midweek occupancy reached 78.8%, + 18.1 pts vs. February 2022 and ‐5.8 pts vs. February 2019.

Robust room rates equated to overall ADR of approx. $177, +18.1% ahead of February 2022 and +35.8% vs. February 2019 while RevPAR exceeded $145, +40.1% YoY and +28.3% over February 2019.

Click on graph for larger image.

The first graph shows visitor traffic for 2019 (Black), 2020 (light blue), 2021 (purple), 2022 (orange), and 2023 (red).

Visitor traffic was down 3.4% compared to the same month in 2019.

Visitor traffic was up 17.8% compared to last February.

The second graph shows convention traffic.

Convention traffic was down 11.4% compared to February 2019, but up 51.1% compared to February 2022.

Note: There was almost no convention traffic from April 2020 through May 2021.

by Calculated Risk on 3/28/2023 01:01:00 PM

Freddie Mac reported that the Single-Family serious delinquency rate in February was 0.65%, down from 0.66% January. Freddie's rate is down year-over-year from 0.99% in February 2022.

Freddie's serious delinquency rate peaked in February 2010 at 4.20% following the housing bubble and peaked at 3.17% in August 2020 during the pandemic.

These are mortgage loans that are "three monthly payments or more past due or in foreclosure".

Click on graph for larger image

Mortgages in forbearance are being counted as delinquent in this monthly report but are not reported to the credit bureaus.

The serious delinquency rate was at 0.60% just prior to the pandemic; this is almost back to that level.

Note that multi-family delinquencies have been increasing and were at 0.13% in February, up from 0.08% in February 2022.

Fannie Mae reported earlier.

by Calculated Risk on 3/28/2023 09:56:00 AM

Today, in the Calculated Risk Real Estate Newsletter: Case-Shiller: National House Price Index "Declining Trend Continued" to 3.8% year-over-year increase in January

Excerpt:

Both the Case-Shiller House Price Index (HPI) and the Federal Housing Finance Agency (FHFA) HPI for January were released today. Here is a graph of the month-over-month (MoM) change in the Case-Shiller National Index Seasonally Adjusted (SA).

The Case-Shiller Home Price Indices for "January" is a 3-month average of November, December and January closing prices. November closing prices include some contracts signed in September, so there is a significant lag to this data.

The MoM decrease in the seasonally adjusted Case-Shiller National Index was at -0.25%. This was the seventh consecutive MoM decrease, and a slightly smaller decrease than in December.

On a seasonally adjusted basis, prices declined in 15 of 20 Case-Shiller cities on a month-to-month basis. The largest monthly declines seasonally adjusted were in Seattle (-1.5%), Las Vegas (-1.1%), and Denver (-1.0%). Seasonally adjusted, San Francisco has fallen 13.2% from the peak in May 2022 and Seattle is down 11.4% from the peak. All 20 cities have seen price declines from the recent peak (SA).

There is much more in the article. You can subscribe at https://calculatedrisk.substack.com/

by Calculated Risk on 3/28/2023 09:11:00 AM

S&P/Case-Shiller released the monthly Home Price Indices for January ("January" is a 3-month average of November, December and January closing prices).

This release includes prices for 20 individual cities, two composite indices (for 10 cities and 20 cities) and the monthly National index.

From S&P: S&P Corelogic Case-Shiller Index Declining Trend Continued in January

The S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index, covering all nine U.S. census divisions, reported a 3.8% annual gain in January, down from 5.6% in the previous month. The 10-City Composite annual increase came in at 2.5%, down from 4.4% in the previous month. The 20-City Composite posted a 2.5% year-over-year gain, down from 4.6% in the previous month.

Miami, Tampa, and Atlanta again reported the highest year-over-year gains among the 20 cities in January. Miami led the way with a 13.8% year-over-year price increase, followed by Tampa in second with a 10.5% increase, and Atlanta in third with an 8.4% increase. All 20 cities reported lower prices in the year ending January 2023 versus the year ending December 2022.
...
Before seasonal adjustment, the U.S. National Index posted a -0.5% month-over-month decrease in January, while the 10-City and 20-City Composites posted decreases of -0.5% and -0.6%, respectively.

After seasonal adjustment, the U.S. National Index posted a month-over-month decrease of -0.2%, while both the 10-City and 20-City Composites posted decreases of -0.4%.

In January, before seasonal adjustment, 19 cities reported declines with only Miami reporting an increase at 0.1%. After seasonal adjustment, 15 cities reported declines while Miami, Boston, Charlotte, and Cleveland had slight increases.

“2023 began as 2022 had ended, with U.S. home prices falling for the seventh consecutive month,” says Craig J. Lazzara, Managing Director at S&P DJI. “The National Composite declined by 0.5% in January, and now stands 5.1% below its peak in June 2022. On a trailing 12-month basis, the National Composite is only 3.8% ahead of its level in January 2022, a result also reflected in our 10- and 20-City Composites (both +2.5% year-over-year).

“January’s market weakness was broadly based. Before seasonal adjustment, 19 cities registered a decline; the seasonally adjusted picture is a bit brighter, with only 15 cities declining. With or without seasonal adjustment, most cities’ January declines were less severe than their December counterparts.
emphasis added

Click on graph for larger image.

The first graph shows the nominal seasonally adjusted Composite 10, Composite 20 and National indices (the Composite 20 was started in January 2000).

The Composite 10 index is down 0.4% in January (SA) and down 4.5% from the recent peak in June 2022.

The Composite 20 index is down 0.4% (SA) in January and down 4.7% from the recent peak in June 2022.

The National index is down 0.2% (SA) in January and is down 3.0% from the peak in June 2022.

The second graph shows the year-over-year change in all three indices.

The Composite 10 SA is up 2.5% year-over-year.  The Composite 20 SA is up 2.5% year-over-year.

The National index SA is up 3.8% year-over-year.

Annual price increases were at expectations.  I'll have more later.

by Calculated Risk on 3/27/2023 08:26:00 PM

From Matthew Graham at Mortgage News Daily: Mortgage Rates Moving Back Up From 6 Week Lows

Mortgage rates hit their lowest levels in just over 6 weeks on Friday as investors braced for bad news in the banking sector. Such fears tend pull money out of the stock market and into bonds. Excess bond demand means lower rates, all other things being equal.

After a weekend without any new bank drama, investors were able to move back in the other direction. News regarding the sale of most of Silicon Valley Bank's deposits and loans only added to the momentum.
...
The average lender was down below 6.5% for a flawless 30yr fixed scenario on Friday, but is now back above. [30 year fixed 6.54%]
emphasis added

Tuesday:
• At 9:00 AM ET, S&P/Case-Shiller House Price Index for January. The consensus is for a 2.5% year-over-year increase in the Comp 20 index for January, down from 4.6% YoY in December.

• Also at 9:00 AM, FHFA House Price Index for January 2021. This was originally a GSE only repeat sales, however there is also an expanded index.

• At 10:00 AM, Richmond Fed Survey of Manufacturing Activity for March. This is the last of the regional surveys for March.

by Calculated Risk on 3/27/2023 04:23:00 PM

Fannie Mae reported that the Single-Family Serious Delinquency decreased to 0.62% in February from 0.64% in January. The serious delinquency rate is down from 1.11% in February 2022.  This is below the pre-pandemic levels.

These are mortgage loans that are "three monthly payments or more past due or in foreclosure".

The Fannie Mae serious delinquency rate peaked in February 2010 at 5.59% following the housing bubble and peaked at 3.32% in August 2020 during the pandemic.

Click on graph for larger image

By vintage, for loans made in 2004 or earlier (1% of portfolio), 2.04% are seriously delinquent (down from 2.11% in January). 

For loans made in 2005 through 2008 (1% of portfolio), 3.31% are seriously delinquent (down from 3.40%), 

 For recent loans, originated in 2009 through 2021 (98% of portfolio), 0.51% are seriously delinquent (down from 0.52%). So, Fannie is still working through a few poor performing loans from the bubble years.

Mortgages in forbearance were counted as delinquent in this monthly report, but they were not reported to the credit bureaus.

by Calculated Risk on 3/27/2023 02:42:00 PM

This is something I check occasionally.

The Department of Transportation (DOT) reported:

Travel on all roads and streets changed by +5.6% (+13.2 billion vehicle miles) for January 2023 as compared with January 2022. Travel for the month is estimated to be 247.3 billion vehicle miles.

The seasonally adjusted vehicle miles traveled for January 2023 is 272.5 billion miles, a 4.5% (11.6 billion vehicle miles) change over January 2022. It also represents a 3.1% change (8.1 billion vehicle miles) compared with December 2022.
emphasis added

Click on graph for larger image.

This graph shows the monthly total vehicle miles driven, seasonally adjusted.

Miles driven declined sharply in March 2020, and really collapsed in April 2020.  After recovering, miles driven were softer early in 2022 due to higher gasoline prices but have increased since gasoline prices are now down sharply year-over-year.

by Calculated Risk on 3/27/2023 08:34:00 AM

Altos reports that active single-family inventory was down 0.3% week-over-week. Inventory might have bottomed seasonally two weeks ago.

Click on graph for larger image.

This inventory graph is courtesy of Altos Research.

As of March 24th, inventory was at 413 thousand (7-day average), compared to 414 thousand the prior week.   

Year-to-date, inventory is down 15.8%, and up 0.2% from the possible seasonal bottom two weeks ago.

The second graph shows the seasonal pattern for active single-family inventory since 2015.

The red line is for 2023.  The black line is for 2019.  Note that inventory is up from the previous two years (the record low was in 2022), but still well below normal levels.

Inventory was up 64.3% compared to the same week in 2022 (last week it was up 68.6%), and down 50.2% compared to the same week in 2019 (last week down 49.7%). 

A key will be when inventory starts increasing in 2023 - and this might be the start of the usual summer increase in inventory.

Mike Simonsen discusses this data regularly on Youtube.

by Calculated Risk on 3/26/2023 08:42:00 PM

Weekend:
• Schedule for Week of March 26, 2023

Monday:
• At 10:30 AM ET, Dallas Fed Survey of Manufacturing Activity for March.

From CNBC: Pre-Market Data and Bloomberg futures S&P 500 futures are up 13 and DOW futures are up 100 (fair value).

Oil prices were up over the last week with WTI futures at $69.26 per barrel and Brent at $74.99 per barrel. A year ago, WTI was at $116, and Brent was at $123 - so WTI oil prices are DOWN 40% year-over-year.

Here is a graph from Gasbuddy.com for nationwide gasoline prices. Nationally prices are at $3.42 per gallon. A year ago, prices were at $4.23 per gallon, so gasoline prices are down $0.81 per gallon year-over-year.

by Calculated Risk on 3/26/2023 05:12:00 PM

A friend’s brother was brutally murdered and his killer sentenced to death. Here is a piece from my friend Eric in Newsweek and a few comments about the family’s ongoing fight for justice: 'My Brother's Horrific Murder Shocked Police. His Killer Is Up for Parole'

Like Charles Manson and Sirhan Sirhan, the murderer’s sentence was changed to life imprisonment WITH the possibility of parole after the death penalty was abolished in California. This was the 2nd harshest penalty in the ‘70s. Now the harshest penalty is life in prison without parole.

This has made the victim’s family relive this horrific event over and over. On April 25, 2023, the killer will be up for parole again. This will be the 18th time my friend’s family will provide a victim’s statement at a parole hearing.

Here is a Facebook page: Justice for Frank. If you can help, please write a letter to the parole board.

Legendary San Francisco police officer Frank Falzon caught the case and describes it in his book:

“Barbaric. Atrocious. Savage. Horrendous.

These are the words used when people talk about what happened at Frank and Annette Carlson's Potrero Hills home on the night of April 18, 1974.

None is adequate. Not even using them all together. Truly, there are no words to describe it. I know I've said it before, as a homicide inspector you never know what you're walking into at a crime scene. But this was beyond the worst ... still rank it among the worst crimes in San Francisco history.”

If parole is granted, there will be a full court press on the Governor to deny parole (like for Sirhan).

It’s horrible that my friend has to relive this every few years. Letters to the parole board will help.