Chillin' out till it needs to be funded
Hopes are increasing their stake in the recovery as firm data on Existing and new home sales stayed up above December and January gains , yet well below the 2007 extraordinary peaks, like the existing home sales which have reached the steady state mark with three months data at the Feb 2004 mark and the New Home Sales data revised to 336,000 for December ( upward by 12,000 homes), 318,000 and 313000 in January and February. Anyone counting the monthly declines from December would be taking a very naive point of view with the small 300k numbers prone to more percentage growth volatility than the bigger denominators elsewhere in price and retail consumption indices. Housing inventories are back under 6 months.
Prices being up to the rate since June 2011 is another good number at $233k for the median and $267k for the Average price in February 2011. Existing sales prices might be more comparable than the higher clip of sales from Distressed home sales at $157k as the Existing sales are counted at booking of contract and New home sales are counted at beginning of the sales process.
Nevertheless, the market has enough compunction to support the rage of institutional interest and the most important number for Developers maybe the rising number of rentals as read in the Existing sales report and building of multi family units a good segueway for the retail money to start bulking up behind good developments even as global markets run out of bond investing and commodity /gold / silver investment opportunities. Banks however will take their time to ease credit standards and there is a thick swathe of mortgages (8 mln from BofA alone) that is not open to foreclosure discounts and more as they are under Freddie Mac and Fannie Mae ownership. Banks being yet just clear of stress test requirements and the ramp up to Basel 3 standards in holding Capital straining a weak IPO/ fund raising market for banks has not changed colour despite the recent uptrend in equities.
However, not many realise the kind of color we are getting in the Economy from the returning IPO of Zynga and Facebook’s 1.1% effort though from the yet marginalised Digital Economy as multitudes of retail and institutional investors realise the kind of values that bring back fgaith into a troubled diary of a bloated Fed running in its first showing for well over three years now and nowhere near the climactic end it deserves, planning to stretch for another eventless break over this weekend.