Existing home sales increase year-over-year

From Calculated Risk:

Sales in September 2008 (5.18 million SAAR) were higher than in September 2007 (5.11 million SAAR). This is the first time sales have increased for any month year-over-year since November 2005.

By no means does this mean that the housing bust is over, or that we are near the bottom. It does mean that the housing bust may be (slightly) closer to the bottom than the top.

The housing market reaching a new equilibrium is crucial to the ultimate resolution of and rebuilding from the Slow Motion Bust.

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I'm not so sure

I wouldn't call a bottom and that's because of the prime ARM reset rate.

2nd image in link.

Bottom line is houses are still plain too expensive for most wages and while our lovely Congress seems to think that importing workers will help, that will only depress wages, displace US workers further...causing more defaults and foreclosures.

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Months of housing supply also down

See this neat graph by Tim Iacono of The Mess that Greenspan Made.

Again, this doesn't mean we are anywhere near the end. But it does mean maybe we can at least begin to see the beginning of the end.

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the race to the bottom

The median price for all existing homes sold last month fell 9.0 percent from year ago levels, from $210,500 to $191,600, and further price reductions are expected in the year ahead. As the economy weakens further and credit continues to tighten, home price declines could accelerate.

The market is doing what markets are supposed to do - price discovery.

The supply is still at historical highs and the foreclosure rate just increased 71% in 1 year and we're not even at the peak of prime ARM resets.

I don't see how one can expect to have housing prices stabilize without increasing wages, job security for the US working/middle class.

And frankly, Democrats (and Republicans) are pursuing their corporate conceived/neoliberal globalization agenda that just isn't going to stop that....so unless the Japanese rush in (and China too) and buy up the supply....

I don't see the actual prices stabilizing anytime soon.

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Housing prices will stabilize

once they reach their historical, lower multiple of median household income (and they'll probably overshoot first).

Either wages and salaries go up in real terms, or housing prices continue to go down until the ratio is restored.

There is no bailout that can avoid that ground truth. Today's figures tell us that we have reached the first station along the way.

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What is that historical multiple?

I'm not sure, but wasn't it about 3x?

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Maximum jobs, not maximum profits.

Yes I believe so.

n/t

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Not a bottom

I'm not calling a bottom at all. Just suggesting that we may be more than 50% of the way there. This is the first inflection point -- YoY sales increase -- along the way there.

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CNBC, ok, more ranting

Ah, ok...To me what is missing in this entire big picture is the bottom line that the middle class cannot prosper, commit and pay for 30 yr. mortgages without good, stable jobs...

I mean the entire idiocy of thinking they can import home buyers is astounding...if the economy is contracting and there are less jobs....where do they think those jobs will go to if they import people on employer based immigration vehicles with a contracting job market?

It's like more fictional economy math where 1-3 = 6.

Then green jobs! Drives me nuts, of course those jobs can be offshore outsourced and they already are....that claim is just an absurdity without major policy changes in corporate tax code, trade agreements, worker protections in the US....

It's like filling up a sieve and pretending water isn't running out the bottom.

I mean have you even heard on CNBC they mention manufacturing? It's like the entire financial mindset is all about credit, financial instruments, debt, fictional money...

and if someone is talking about a production economy, it's like it's out of vogue...

I saw more concern yesterday on poor ole China going from 10% yearly GDP growth to 9% GDP growth than the reality of the US GDP contracting or the middle class shrinking.

What are these people thinking because that switch...when China overtakes the U.S. as the world leading economy...
that just ain't gonna be pretty across the board for everyone.

I mean talk about behavioral economics, it's like they have blinders on to some of these fundamentals.

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Once the election is out of the way

I will try to blog some more on what the economic agenda ought to be in 2009 -- what are the highest priorities, or easiest good fixes to pass.

The US desparately needs its infrastructure repaired, the middle/working classes deparately need jobs, and banks need to be recapitalized with loans that they can be confident will be paid back on a fiscally prudent basis.

I see the makings of an economic program here.

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hell do it now

I mean the election was over a long time ago. Hillary lost and it was a bummer for promoting more Progressive/Populist policies was assuredly lost in the fray.

I've blown it off assuming we will have complete 1 party rule (as if the 2 party system gives up that much of a choice).

But, we have the lame duck and I hate to tell everyone this but it is Democratic leadership that has first up....not dealing with US middle class jobs, the financial crisis, setting up a HOLC or any such thing...
nope, they are promising to pass more corporate lobbyists demands, heavy focus on guest worker Visas/immigration.

So, expect a disaster...charming, let's do a sudden spike up in the domestic labor supply...ignoring our manufacturing hemorrhage while even more manufacturing/production jobs are on life support.... and frankly this is by Democrats, in the lame duck.

They might wait until the new session but it depends on how much they can guarantee a US worker sell out by the new Democratic sweep into Congress.

I'm not kidding, these are the internal agenda reports.

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Indeed....

...the most dangerous people on the planet are the assholes Hoyer, Pelosi and Reid. These people are so ignorant of what must be done, so stupidly perverse that as long as they are in office we are going to have a tough time.

Fortunately their are other voices. Barney Frank is one, Paul Krugman is another and from the hinterlands you can hear a woman named Cindy Sheehan who will be heard. I only hope she's got her economics talking points correct.

The idiot Pelosi has a 32% approval rating in her district.

Yeah....

The citizenry is not amused by the Congress's prancing as it's current approval rate of 9% demonstrates.

Subtle signs point to Obama actually understanding that he needs to make a radical course change, in line with what Robert has been advocating, to avert disaster and he might just be tough enough to carry it off. He certainly has the high ground now with the vile sack of shit Greenspan publicly admitting he has no idea about what is going on. Check that, senile old fool has been the biggest voice on conomics, the 'go to guy', in the nation for decades and all the while advocating action on the basis of a fatally flawed model of how things work.

They ought to shoot the bastard. And every politician who ever took his advice needs to rethink what they think they know.

The field of play is now much bigger and wide open for progressive change. We can only hope Obama is smart enough to go for it. Because I don't want to wait for Clinton in 2012.

It might very well be too late by then.

Check out Krugman's interview on Charlie Rose's show. Very interesting and informative. Too bad the MSM can't seem to find time to allow our newest Nobel Prize winner to speak to the nation.

But then many heads would explode.

I'd like to ask all those Republicans who voted for Reagan and the Bush's...

How's yer 401k pal?

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'When you see a rattlesnake poised to strike, you do not wait until he has struck to crush him.'

she's get 79% of the vote I bet

even with a 32% approval rating. People don't get it that they have to get these folks out of office and don't work to do it.

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