First California, then Florida, now Nevada. The 3 biggest foreclosure states are all seeing a rebound. Does the writing on the wall get any clearer than that? Those 3 markets represent 50% of the foreclosures nationwide. Yes foreclosures are high, but buyers are grabbing deals as fast as they can. Are you?
It seems like Cramer and I are the only one noticing… As much as you can find this in local press, it is definitely not making the main stream media. I'm glad you found my blog… read on… and join me on Tuesday, June 30th, for the rest of the details for FREE.
Local existing-home sales surge during May
Month's total up 42.5 percent from year earlier
Sales of existing homes increased for the fourth straight month in May and signs of a price bottom are starting to appear, Las Vegas housing analyst Dennis Smith said Wednesday.
"It could be. Let's get through the summer before we say anything," the president of Home Builders Research said. "It's hard to predict or analyze how to get through the new inventory you hear about of 20,000 foreclosures that haven't hit the market yet."
Home Builders Research reported 3,714 resales in May, a 42.5 percent increase from the same month a year ago and up from 3,652 in April. For the first time in more than a year, the median price was unchanged from the previous month at $130,000. It's still down 43.5 percent, or about $100,000, from a year ago. Total resales for the year are up 61 percent to 15,728, an amazing statistic considering all the negative reports bombarding the public almost daily, Smith said.
"Even if the majority of the sales are to investors, we are still selling a lot of inventory," he said. "Dring this difficult economic climate, it certainly appears there will be a consistent supply of folks looking for homes to rent."
New-home sales also rose in May, to 378 recorded closings, compared with 343 in April. They fell 59 percent from 921 in May 2008. Smith said he doesn't expect to see the number of traditional, single-family new-home sales increase much this year. The median price of a new home fell to $212,990 in May, down 23.5 percent, or $65,255, from a year ago. The price has fallen from its peak of $350,615 in early 2006. Smith counted 308 new home permits in May, bringing the total for the year to 897, a 51 percent decrease from a year ago.
The number of homes for sale on the Multiple Listing Service dipped to 21,181 in May, but it's going up again when bank-owned properties that haven't been listed yet come on the market, Smith said. "They're going to release them a little at a time, we hope," he said. "You may see the number of new listings start to increase. Once we get through the summer, we'll know where we're at in inventory."
Las Vegas-based SalesTraq reported 383 new-home sales in May, a 56 percent decrease from a year ago. Existing-home closings increased 66 percent to 4,476, though 64 percent of those sales were bank-owned homes, the research firm reported. Those homes had a median closing price of $106,000, while homes that were not bank-owned had a median closing price of $140,000. The overall median was $122,000, down 45.8 percent from a year ago.
While President Barack Obama and Congress debate financial regulatory reform, foreclosures continue to mount as embattled housing markets bump along the bottom, said Alexis McGee, president of Sacramento, Calif.-based Foreclosures.com.
Still, some parts of the country are rebounding. Foreclosures are declining, while home sales and average sale prices are increasing, she said. "We're in a slow, but definite recovery mode," McGee said. "While foreclosures persist and unemployment still worsens, there are positives in the market that give a strong indication that housing markets have bottomed."
In Southern California, home sales rose for the 11th consecutive month in May. A shift toward sales of mid- to high-end homes drove the median price to $249,000, the first increase since July 2007, San Diego-based MDA DataQuick reported. The company reported that 20,775 new and resale houses and condos closed escrow in San Diego, Orange, Los Angeles, Ventura, Riverside and San Bernardino counties last month. That was the most since May 2006.
I'm Sticking to My Guns on Housing
By Jim Cramer
RealMoney Columnist
It's not easy being the only guy on earth who believes that house price stabilization is upon us and that house price depreciation is in the past. Not easy at all. In fact, the belligerent press I get on it is only exceeded by everything else I say!
But let's go over the data. The classic signal of a bottom requires two components: gigantic increases in sales and stabilization of price. Those are always the bottom and have been in every single housing cycle. Would it kill the opponents of my thesis to look into that fact?
Now, the worst four housing markets in the country — California, Florida, Arizona and Nevada — have all seen that exact combination, with Nevada being the latest in stats that came out yesterday. These four states represent 50% of the housing market. So, we have the definition of the cycle bottom — not appreciation but stabilization — in half the market, but more important, in the part of the market that caused the housing crisis.
When I made my prediction a year ago that we would bottom and house prices would stabilize at the end of this month, I made it clear that I was calling for the classic cycle bottom: drying-up of inventory because of a sales explosion coupled with price stabilization, and we are having that happen in the most problematic half of the market.
We keep getting more confirmatory data why. This morning Lennar (LEN) reported a really good quarter and commented that cancellations were down 15%. We have seen numbers in the $40s during the free fall. What does this mean? Buyers are finding ways to get credit rather than show remorse. They are using the $8,000 credit and taking advantage of rates that are a full point below last year's rates.
I do not like the stock of Lennar. For all of the good news, they will not make anything on the houses they are selling because the foreclosed inventory, often in the exact same areas they are building, will keep their prices low.
That will only end when the foreclosed inventory runs out. But what I wonder is why do people think that these stats don't matter? Are they all waiting for Shiller to call a bottom? What do they need to see happen?
As for me, I am a buyer of JPMorgan, Wells Fargo (WFC) and Bank of America (BAC) off this. They will be the big performers. They are the beneficiaries because they profit from the huge increase in sales. It is a double bonus: A huge increase in sales means end of sitting on foreclosed property and an end to the charges.
This trend is the most important trend in the economy today. Of course, if unemployment keeps ticking up and if rates shoot up, then the housing bottom will be nothing to write home about.
But right now I am the only one writing and it seems wrong. But I will keep doing it because the facts are the story.
No Jim, you are not alone! I've been writing about the housing recovery for quite some time. You can catch up here:
Florida Home Sales Up 9th Month in Row
Existing Home Sales Up Two Months in a Row
So Cal Home Prices Up 1st Time Since 2007
Housing Hits Bottom
California Home Price Bottom?
More on Housing Bottom and Our Plan
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