Monday, July 27, 2009

California Foreclosures > National New Home Sales

The Big Picture's quote of the day:

“National New Home Sales, on a monthly basis, don’t even add up to half of the total foreclosure activity in California alone in a single month.”

-Mark M Hanson
Let's go to the chart...

While the Census reported new home sales came at 36,000 for the month on an unadjusted basis, Foreclosure Radar reported:
Notices of Default, the initial step in the foreclosure process, rose by 11.8 percent to the second highest level on record at 45,691 filings. Year-overyear filings increased by 10.0 percent from June of 2008.
Mark is close (and things are horrendous), but they aren't quite that bad. So, please use the following quote going forward:
“National New Home Sales, on a monthly basis, don’t even add up to 80% of the total foreclosure activity in California alone in a single month.”
-Jake (EconomPic Data)


  1. Another excellent visual, Jake~!

  2. Jake -

    The issue is bigger than one group crying foul and forcing retributive justice onto another group. This is classic 'group' oriented Marxism. So, TYRANNY is the issue, not health care.

    When one group can muster enough fuel to plunder another group through the law, then the law becomes an injustice is designed to protect against. Then we end up with a system where everyone vies for power in order to impose their will and get their share of plunder from another man's property (and violating his liberty).

    The law (constituion) is supposed to be designed to protect our liberty from others, even if via the government, rather than being the tool which some use to inflict injustice.

  3. How about a little history for context? New home sales are always lower than existing sales, but how were foreclosures vs. new homes for the past 5 years or so?

    There's no context to compare...

  4. Also...keep in mind that corporations typically sell 'new homes'. And incentives are common in a down market....incentives that are not represented in the sale price. So, the actual sale price is likely several percentage points below the indicated sale price - ouch!

  5. As Bender(Futurama) would say

    "Well, we're boned."

    Maybe we should throw out both the repukelicans and demacraps?

  6. You are taking Mark's comment out of context. He stated ALL foreclosure activity in CA, not just the NODs. I love the chart (and I love many of your past charts), but I would like to see what it would look like when you add in the notice of trustee sales and trustee/foreclosure sales to truly include ALL the foreclosure activity in CA like Mark's comment was originally intended to mean.

  7. graphix- wouldn't that be double counting (i.e. weren't trustee sales previously notice of defaults, but a later stage in the process)?

  8. Sorry it took me so long to get back to you, but no, that wouldn't be double counting the foreclosure activity. While yes, they were once an NOD, they now moved to an NTS, and then onto a foreclosure/REO. Once they move to the next stage of the foreclosure process, they are no longer considered NOD or counted for as an NOD. Plus, the foreclosure activity cited from Foreclosure Radar are what has been filed for that month, and not compiling all of the currently active NODs from the previous months.

    Let me give an example: Lets say you Jake got an NOD in March, it counts for March but not the following months. Then in June you get the NTS, and I get an NOD. Yes, you were accounted for in March, but you have moved on the second stage of the process and I'm in the first stage, so you would count both as the activity for June. One reason you do this is because Bob got his NOD same as you in March, but Bob sold his two SeaDoos and paid his account current, and is no longer in NOD status. However, if Bob can't sell anything else and doesn't make his payments, he could get another NOD in June.

    So you take the 45,691 NODs, 29,853 NTSs, the 22,291 that went for sale at the auction and add them to get 97,835.

    Now... if you want to see a really scary number, you should see how many total cumulative currently active NODs and NTSs there are in CA. This might lead to double counting, if you don't scrub the data of who has moved from NOD to NTS. One way you might want to look at as, how many properties are currently and actively in NOD status in CA.... 156,467 according to Foreclosure Radar as of today.

    So I hope that clears things up. If you want some more Foreclosure Radar numbers, just let me know.

  9. Not to be difficult, but this is double (actually triple) counting.

    If you count NOD, NTS, and REO in month 1 and then the NOD moves to NTS the next month (and count it) you have counted it for two months in a row. What I am trying to show is the # of new foreclosures per month. This would be more of a rolling figure.

  10. Don't forget that some notices of trustee sales are a bluff. I'd want to know which sales were actually consummated.

    About a year ago, I did go to one of those auctions by a huge outfit that advertises on TV and the staff wears black tie formal. It wasn't the bloodbath I'd expected, as everyone had done their homework and bids were much higher than I'd expected.

    My sense is that prices have a long, long way to fall yet and those buying presently are much more optimistic than I am.