Dollar Value Inventory of Unsold Homes
Since we have New Home Sales at 10:00am this morning, let's take a look at U.S. House Inventory, Priced in Dollars:
>
Total Inventory Value, New + Existing Homes (in $ billions)
Chart courtesy of Macromavens via The Gartman Letter
>
Note the series of higher highs and higher lows.
That's a pretty astonishing increase in total inventory value. I'm not sure if its based on the listed price or comparables, but either way, t implies that prices will be coming further down in U.S. Real Estate.
Friday, December 28, 2007 | 08:21 AM | Permalink
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Comments
Coming down quickly, dramatically or range bound for twenty years.
Posted by: Tom C | Dec 28, 2007 8:38:08 AM
Barry, in para 2, where it says, "Not the series of higher highs and higher lows." did you mean, "Note the series of higher highs and higher lows." ?
~~~
BR: Too much eggnog! I'll fix above...
Posted by: David Merkel | Dec 28, 2007 8:49:24 AM
It is going to take a lot to burn through all of that inventory. Hey, maybe Realtors should become the biggest pro-immigration lobby. It will take a lot more time to absorb all of that real estate without immigration, because household formation and growth in capital formation are slow processes, though in some heavily vacant areas, I would expect condemnation to do part of the job.
Posted by: David Merkel | Dec 28, 2007 8:53:56 AM
Looks like too many granite counter tops, cast stone surrounds, media rooms, Jenn Aire stainless packages, slate floors and Pavestone driveways have inflated the values.
We know these will be discounted so let's use units instead.
Go to comics.com and look at "The Wizard of Id' Screaming funny!
Posted by: Ross | Dec 28, 2007 9:13:08 AM
How much of the rise is developers not willing to factor the reduced prices for their current inflated real estate prices in the first place.
Posted by: Mukund Mohan | Dec 28, 2007 9:40:26 AM
Immigration would only worsen the problem, as many existing, financially secure homeowners lose their jobs. Sounds like there is a position with Hank Paulsen open for you, David.
Posted by: larry | Dec 28, 2007 9:59:26 AM
Weren't the homies dumping all the houses they could in October, Tons of specials... and that was the up in October number, take that relative to a normal month... I just don't get why down 9 is a surprise... seems like any excuse to sell :)
I bet we bounce...
Posted by: Eric Davis | Dec 28, 2007 10:07:29 AM
How about the Warren Buffet move today into the bond reinsurance biz? MBI & ABK are loaded up with funky stuff, and Warren's going to step in and take their bread and butter new business in munis. Going to be awfully difficult for MBI & ABK to turn things around if they can't get new business. And they'd raised their fees in an effort to shore up their balance sheets. Seems elementary where the new business will go. No wonder Buffet's stock is up $2,200 today...
Posted by: Chief Tomahawk | Dec 28, 2007 10:11:08 AM
One must wonder whether the one of the largest benefactors of the easy money, sub prime debacle wasn't the drug cartels.
Now they've laundered a big sum of money into respectable neighborhoods, installed the faithful immigrant "renters" to watch over the "distributed" stash and now have discreet ditribution networks in places that you wouldn't have thought to look before.
Methinks immigration will become the root cause of yet another drug war like the 80's.
Posted by: Cockroach Killer | Dec 28, 2007 10:11:50 AM
Nice gap and fade...
Gap it up in anticipation of the (still) bad home sales numbers and then absorb the selling.
Is'nt that slightly illegal???......LOL
Ciao
MS
Posted by: michael schumacher | Dec 28, 2007 10:16:27 AM
If that doesn't scream look out below....I don't know what does.
Posted by: KP | Dec 28, 2007 10:26:33 AM
Log scale it and she don't look so bad.
Posted by: C. Maoxian | Dec 28, 2007 10:38:15 AM
It could very well be good old-fashioned ignorance but I never understood the purpose of log-scaling something as linear as time.
Posted by: KP | Dec 28, 2007 10:52:47 AM
It appears a reversion to the mean would require quite a fall, but I'm no mathematician...what the hell is log-scaling?
Posted by: Don | Dec 28, 2007 10:56:27 AM
Log-scaling is used to display items with logarithmic behaviors.
My comment was to the point of taking the log of the dependent variable and plotting it against an independent variable that is as linear as time.
Seems like home value vs. population both displayed in log-scale would be more useful.
Posted by: KP | Dec 28, 2007 11:08:56 AM
Renault: I'm shocked, shocked to find that gamb*ling is going on in here!
This market is like Atlas struggling to the finish line... Flat on the year.
Posted by: Eric Davis | Dec 28, 2007 11:19:14 AM
It will take a lot more time to absorb all of that real estate without immigration ...
How much house can the average Mexican afford?
Posted by: David Davenport | Dec 28, 2007 12:18:24 PM
KP,
Thanks for the info...I think I get where you are coming from--the range is too extreme for this graph to give much clarity.
home value vs. population would certainly be useful. Demographics, no matter how many dollars or yen you print, is destiny.
Posted by: Don | Dec 28, 2007 12:24:50 PM
There’s also a huge shadow inventory, people who feel the current market is hopeless and who are waiting for a better market before they list or just waiting for foreclosure.
Posted by: touche | Dec 28, 2007 12:30:58 PM
Interesting comment about asking the title guys about closings. Isn't it done somewhere?
Posted by: Innocent Bystander | Dec 28, 2007 3:27:04 PM
BriefRant: Correct Useage of "Weak" (contrast to incorrect useage here re retail sales):
"Sales of new homes fell an unexpectedly sharp 9% in November, while small gains reported for the previous two months were largely erased by downward revisions.
"The magnitude of the decline, reported by the Commerce Department, surprised economists. Based on earlier sales data, some had hoped that the housing market might be beginning to stabilize. Joshua Shapiro, chief U.S. economist at research firm MFR Inc. in New York, called yesterday's report "stunningly weak."
.....
Note here "weak" means a *decline*.
Comprende???
Not so hard.
"Weak" means *less* sales, not more!
I hope posting the correct useage about 5 more times will be enough for me, lest I become stuck on this too long. :-)
...
Posted by: halbhh | Dec 29, 2007 12:51:42 PM
Quote just above is from:
http://online.wsj.com/article/SB119884885661555567.html?mod=economy_lead_story_lsc
(here's the quote):
"Sales of new homes fell an unexpectedly sharp 9% in November, while small gains reported for the previous two months were largely erased by downward revisions.
"The magnitude of the decline, reported by the Commerce Department, surprised economists. Based on earlier sales data, some had hoped that the housing market might be beginning to stabilize. Joshua Shapiro, chief U.S. economist at research firm MFR Inc. in New York, called yesterday's report "stunningly weak."
Posted by: halbhh | Dec 29, 2007 12:53:06 PM
btw, this is a great, beautiful graph. Thanks, BR.
Posted by: halbhh | Dec 30, 2007 10:45:06 PM
