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Western builder confidence at 4-month low

October 24th, 2009, 4:00 pm · 8 Comments · posted by Jon Lansner

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Click to enlarge

The freshest National Association of Home Builders/Wells Fargo Housing Market Index — a measure of homebuilder confidence fell in the West in October to its lowest level since July. The NAHB confidence report (HERE) says of the index where 50 means bullish …

  • West recorded a four-point decline to 14, back to July’s mark after rising 5 of past 6 months.
  • On a regional basis, the Northeast was the only part of the country will an increase (+1 to 25.) Midwest and South each recorded one-point declines to 18.
  • National index fell 1 to 18. Its components fell, too: current sales conditions, -1 to to 17; sales expectations, -2 to 27; traffic of prospective buyers, -3 to 14.
  • Quote: NAHB Chief Economist David Crowe: “Clearly, builders are experiencing the effects of the expiring tax credit on their sales activity, since it would be virtually impossible at this point to complete a new home sale in time to take advantage of that buyer incentive before Nov. 30.”
  • How? Index gauges builder perceptions with scores where any number over 50 indicates that more builders view sales conditions as good than poor.

Real estate trends:

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 8 Comments

  • bloodinthestreets says:
    October 24, 2009 at 5 pm

    Regarding the statement above: “the index where 50 means bullish …” Is that true? (Oh – no, it’s not)

    It looks to me that ‘50′ means neutral, above 50 is good and less than 50 is poor.

    Jon is apparently watching baseball while typing, so we will forgive . … While he’s busy, I’ll provide a more accurate interpretation:

    An index of falling from a ‘high’ of 18 which is reasonably expected to slump to 5 . .. . is best characterized as ‘going from bad to worse’. (But honestly . . . when would you tap builder sentiment as being worth ANYTHING as predictive value?)

  • Scott says:
    October 24, 2009 at 11 pm

    Gosh if you had run that chart back more than a year, you would show the naive reader just how low 14 is by historical measures. We are at lows never seen prior to the current implosion.

  • Brain says:
    October 25, 2009 at 12 am

    The bulls should be on here soon using this data as reasoning why housing prices will rise. Misguided as that logic might be…

  • BOGEY says:
    October 25, 2009 at 6 am

    No jobs
    falling income
    rising taxes
    rising rates
    No move-up buyers

    Those who have done their homework and ‘get-it’ that housing is toast don’t need any more data. Housing is done.

  • Mike Wizowski says:
    October 25, 2009 at 9 am

    It’s funny that I’ve been right on almost everything I called in the last 5 years. I called the housng bubble, gold skyrocketing, and DOW 14,000 peak. I did not buy a bubble home, bought a lot of gold @ $480, and lost less than most pulling my investments @ DOW 14k.

    I admit I did not see .gov intervention coming and propping up the housing market. I thought we would be falling until 2011. However, being as I associate with people and websites much more reputable than an OC housing blog, once again I know what is going to happen.

    Mathematically the current scenario playing out in 2009 in unsustainable. As I said, .gov is propping up housing. We are $14 Trillion in debt, with no recovery in jobs in sight. Within the next 2 years, .gov will be forced to raise interest rates to satisfy foreign bond holders, and fight hyperinflation from all the funny printed money injected into the system. It’s all “kick the can” and “extend and pretend”.

    IMHO, there has never been a WORSE time to buy a home than now. We are facing an entire systematic collapse strainght into Great Depression II, and the smart money knows it. The S&P 500 is pricing in 5% GDP growth for the next 4 quarters! HA! This is why insiders are selling 40:1, they have no confidence in their company, and they know Q4 retail sales are going to be dismal.

    Sales and property tax revenues are down. Look for more tax increases in the near future.

    Gerald Celente, Karl Denniger, Mike Sitka, John Husing…are all correct. Do your research and find the inevitable.

    Folks, consider yourself very lucky if OC housing bottoms at median $350k

  • Bill says:
    October 25, 2009 at 11 am

    People can learn more from one of Mike Wizowski’s blog posts than they can from a whole week of Register articles.

    I think mike would agree with Shiller’s “Current Market Boom ‘Can’t Be Trusted,’ Robert Shiller Says,”

    And this just out:

    “Now that the moratorium has been lifted, there should be a tsunami of them [foreclosures] coming shortly,” says Chuck Cochran, a real estate assessor based in the San Fernando Valley. “A lot of properties are due to hit the market, which could push prices down another notch.”

    The pretend times are now ending!

    http://features.csmonitor.com/economyrebuild/2009/10/23/foreclosure-activity-slows-in-california-as-banks-hold-back/

  • CoolView4375 says:
    October 25, 2009 at 2 pm

    Between 1996 and 2005, the builders built 3 million more houses than were needed. It will take time to work off the excesses. As for the economy as a whole, the USA is paying the price for the deflationary policies pursued by the US Government and the FED for the last thirty years. As a result, the USA has become a Nation of obsequious, groveling, medicants. Just ask the Secretary of State who HAD to go China and beg that they continue to buy government bonds. And I do mean beg.