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Pending home sales shock 2021 housing crash bears

Pending home sales beat estimates and we can say the 2021 housing crash bears are even worse than the 2020 housing crash bears.
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Today, pending home sales came in as a big beat of estimates — up 7.5% in October — and since we are days away from December, we can officially label the 2021 housing crash bears as even worse than the 2020 housing crash bears. Like I have often said, professional grifters have plagued the housing sector for many years and shouldn’t be looked to as fundamental economic sources of information. This is a big reason why I always have my two staple sayings.

Economics done right should be boring

Trust me, in this day and age of the seven-second attention span, promoting doom and gloom, housing crashes and vast economic conspiracies is the best way to get clicks. I do understand that my economic takes and charts might not be the sexiest thing on the internet. However, I still believe that economics is a story best told by numbers and not ideological takes. Believe in people who believe in economic models, even if they’re not exciting.

“Always be the detective, not the troll

As you can imagine, being a very pro-American economic person, especially during this crisis, I have a target on my head. People like myself understand that it’s part of the business. Who is crazy enough to write an American economic recovery model on April 7, 2020, and try to explain to people why housing isn’t going to crash due to demographics, good credit profiles and low mortgage rates? What person would be so confident in 2020 that forbearance wasn’t going to crash housing in 2021 that they would create the term Forbearance Crash Bros to be ready to mock this group in 2021?

Whatever the future brings for the U.S. economy, know that I won’t lie to you for clicks; it will be based on boring economic models that are back-tested in time and adjusted for new variables 24/7. You can glimpse my mindset in this podcast, which covers the entire COVID-19 crisis and housing. The title I do believe is fitting: Bear Crusher.

From the National Association of Realtors: “The Pending Home Sales Index (PHSI), a forward-looking indicator of home sales based on contract signings, rose 7.5% to 125.2 in October. Year-over-year, signings fell 1.4%. An index of 100 is equal to the level of contract activity in 2001.”

One of the themes that I wanted to give to my readers is that housing data had surged toward the end of 2020, which created a high that couldn’t be sustained. Home sales had a big gap from trending sales to where total sales closed in 2020. So, what was always going to happen was that housing data would moderate. That moderation will be viewed as housing crashing because I have seen people use this line repeatedly during the last eight years. This is why I recently wrote about what real housing or economic weakness would look like so you don’t get suckered by housing and economic crash addicts.

Whatever the future brings for the U.S. economy, know that I won’t lie to you for clicks; it will be based on boring economic models that are back-tested in time and adjusted for new variables 24/7. You can glimpse my mindset in this podcast, which covers the entire COVID-19 crisis and housing. The title I do believe is fitting: Bear Crusher.

From the National Association of Realtors: “The Pending Home Sales Index (PHSI), a forward-looking indicator of home sales based on contract signings, rose 7.5% to 125.2 in October. Year-over-year, signings fell 1.4%. An index of 100 is equal to the level of contract activity in 2001.”

One of the themes that I wanted to give to my readers is that housing data had surged toward the end of 2020, which created a high that couldn’t be sustained. Home sales had a big gap from trending sales to where total sales closed in 2020. So, what was always going to happen was that housing data would moderate. That moderation will be viewed as housing crashing because I have seen people use this line repeatedly during the last eight years. This is why I recently wrote about what real housing or economic weakness would look like so you don’t get suckered by housing and economic crash addicts.

As we can see below, housing moderated, found a base and moved higher toward the second half of 2021. I stress this as many people had sent me examples of YouTube videos with people touting a second-half housing crash. I can tell you that these people don’t have the training to read housing or economic data correctly. If they did, then the notion of a sales collapse in 2021 — when trend demand data was always showing stability — is ludicrous. Remember, be the detective, not the troll.



Last week, I wrote about how the existing home sales markets outperformed my peak sales range in the past two sales reports. As long as the final two reports of the year are above 6.2 million, you should see that as a beat. Of course, total sales are above my critical level of 6.2 million when adding new home sales. So far, 2020 and 2021 have come in as a noticeable beat in my eyes. Mother Demographics and low mortgage rates are two very hard competitors to go against when advocating an epic housing crash.

From NAR: “Motivated by fast-rising rents and the anticipated increase in mortgage rates, consumers that are on strong financial footing are signing contracts to purchase a home sooner rather than later,” said Lawrence Yun, NAR’s chief economist. “This solid buying is a testament to demand still being relatively high, as it is occurring during a time when inventory is still markedly low.”

Has anyone noticed that over the last eight years everyone blames low inventory when we miss estimates, but they keep quiet about it when sales are beating estimates, while inventory is still falling? Over the years, I have never believed in the premise that low inventory is holding sales back, which was expected whenever sales get weaker. 2020 and 2021 are at pre-cycle highs in demand, with total inventory levels at all-time lows for both years.

Remember, a seller is typically also a buyer, so inventory should fall when demand picks up and that seller finds another home to buy. When inventory rises and more supply is on the market, this means demand is fading. Total inventory levels have been falling since 2014, while sales have been rising. Please don’t forget this in the future, as sales will slow at some point when mortgage demand fades.    

From the NAR: “The notable gain in October assures that total existing-home sales in 2021 will exceed 6 million, which will shape up to be the best performance in 15 years.”

One aspect of housing that doesn’t get enough attention is that mortgage purchase application data has had a nice run for 12 weeks. Earlier in the year, I wrote an article saying that purchase application data was going to be negative year over year in the second half of 2021, and we shouldn’t overreact to this, because the housing crash people will.

It’s the nature of the beast, as I have seen this behavior a lot. The lack of training and not making COVID-19 adjustments to data creates a false sense of reality for housing crash people, and some were pushing the negative year-over-year data as a legit premise for sales to collapse.

Well, as we can see, sales didn’t collapse, but something else happened. The purchase application data was getting better because the year-over-year declines were improving so much that we have a shot to report even a flat or positive print, which will explode my head. Not even I thought that could be possible with such high comps, as we can see below with mortgage demand getting firm.



From July 14 to Sept. 8, purchase application data year over year was trending at roughly negative 18%-19%. The higher comps in 2020 were always going to result in negative year-over-year data this year. However, just taking the last eight weeks, still using high comps, the average decline is roughly 8%-9%. The last three weeks combined is down only 4.6% on average, and this data line looks out 30-90 days.

Yes, seasonality kicked in a while ago, but the firming of this data line is a big deal. Consider this in the context of the focus on iBuyers, which might not even account for 1% of total home sales. The focus has also been on investors because the premise was that without investors, housing would crash. This idea misses out on the real data trends that matter because the biggest homebuyers in America are always mortgage buyers, not investors. We don’t have a Wall Street moat around housing: when mortgage demand fades, so will housing.

Hopefully my work this year can make you understand that sexy ideological headlines might get the press time, but good old boring economic work gets the job done with satisfaction. Today’s pending home sales is just another affirmation of what we’ve seen over the last two years: it’s the Revenge of the Nerds. 

The post Pending home sales shock 2021 housing crash bears appeared first on HousingWire.

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Economics

Global Industry Statement on the WTO Moratorium on Customs Duties on Electronic Transmissions

Global Industry Statement on the WTO Moratorium on Customs Duties on Electronic Transmissions
PR Newswire
NEW YORK, May 17, 2022

NEW YORK, May 17, 2022 /PRNewswire/ — The United States Council for International Business (USCIB) joined today nearly…

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Global Industry Statement on the WTO Moratorium on Customs Duties on Electronic Transmissions

PR Newswire

NEW YORK, May 17, 2022 /PRNewswire/ -- The United States Council for International Business (USCIB) joined today nearly 100 other global trade and industry associations to urge WTO members to renew the Moratorium on Customs Duties on Electronic Transmissions at the 12th WTO Ministerial Conference in June.

According to the statement, allowing the Moratorium to expire would be a historic setback for the WTO, representing an unprecedented termination of a multilateral agreement in place nearly since the WTO's inception – an agreement that has allowed the digital economy to take root and grow. All WTO members have a stake in the organization's continued institutional credibility and resilience, as well as its relevance at a time of unprecedented digital transformation.

Continuation of the Moratorium is critical to the COVID-19 recovery. As detailed by the United Nations, the World Bank, the OECD, and many other organizations, the cross-border exchange of knowledge, technical know-how, and scientific and commercial information across transnational IT networks, as well as access to digital tools and global market opportunities have helped sustain economies, expand education, and raise global living standards.

Continuation of the Moratorium is also important to supply chain resilience for manufacturing and services industries in the COVID-19 era. Manufacturers – both large and small, and across a range of industrial sectors – rely on the constant flow of research, design, and process data and software to enable their production flows and supply chains for critical products.

The Moratorium is particularly beneficial to Micro, Small and Medium-Sized Enterprises (MSMEs), whose ability to access and leverage digital tools has allowed them to stay in business amidst physical restrictions and lockdowns.

Failure to renew the Moratorium will jeopardize these benefits, as customs restrictions that interrupt cross-border access to knowledge and digital tools will harm MSMEs, the global supply chain, and COVID-19 recovery – increasing digital fragmentation. As UNCTAD has explained, such fragmentation "reduces market opportunities for domestic MSMEs to reach worldwide markets, [and] ... reduces opportunities for digital innovation, including various missed opportunities for inclusive development that can be facilitated by engaging in data-sharing through strong international cooperation.... [M]ost small, developing economies will lose opportunities for raising their digital competitiveness." 

The rest of the statement can be found here.

Media Contact: Kira Yevtukhova, kyevtukhova@uscib.org

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SOURCE United States Council for International Business

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Government

“The Real President Is Whoever Controls The Teleprompter”: Musk Delivers Scathing Criticism Of Biden

"The Real President Is Whoever Controls The Teleprompter": Musk Delivers Scathing Criticism Of Biden

Authored by Jack Phillips via The Epoch…

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"The Real President Is Whoever Controls The Teleprompter": Musk Delivers Scathing Criticism Of Biden

Authored by Jack Phillips via The Epoch Times,

Tech billionaire Elon Musk this week warned that the United States must take steps to address inflation or it will end up like socialist Venezuela.

Musk, who is currently in the process of acquiring Twitter, told a virtual conference that he believes the government has printed too much money in recent years.

“I mean, the obvious reason for inflation is that the government printed a zillion amount of more money than it had, obviously,” Musk said, likely referring to COVID-19 relief stimulus packages worth trillions of dollars that were passed in recent years.

U.S. inflation rose by 8.3 percent in April, compared with the previous year. That’s slightly lower than the 8.5 percent spike in March, but it’s still near the 40-year high.

“So it’s like the government can’t … issue checks far in excess of revenue without there being inflation, you know, velocity of money held constant,” the Tesla CEO said.

“If the federal government writes checks, they never bounce. So that is effectively creation of more dollars. And if there are more dollars created, then the increase in the goods and services across the economy, then you have inflation, again, velocity of money held constant.”

If governments could merely “issue massive amounts of money and deficits didn’t matter, then, well, why don’t we just make the deficit 100 times bigger,” Musk asked. “The answer is, you can’t because it will basically turn the dollar into something that is worthless.”

“Various countries have tried this experiment multiple times,” Musk said.

“Have you seen Venezuela? Like the poor, poor people of Venezuela are, you know, have been just run roughshod by their government.”

In 2018, Venezuela, a country with significant reserves of oil and gas, saw its inflation rise more than 65,000 percent amid an economic crash that included plummeting oil prices and government price controls. The regime of Nicolas Maduro then started printing money, thereby devaluing its currency, which caused prices to rapidly increase.

During the conference, Musk also said the Biden administration “doesn’t seem to get a lot done” and questioned who is actually in charge. 

“The real president is whoever controls the teleprompter,” he said.

“The path to power is the path to the teleprompter.”

“The Trump administration, leaving Trump aside, there were a lot of people in the administration who were effective at getting things done,” he remarked.

Musk’s comment about the White House comes as Jeff Bezos, also one of the richest people in the world, has increasingly started to target the administration’s economic policies. Bezos, in a series of Twitter posts, said the rapid increase in federal spending is the reason why inflation is as high as it is.

“Remember the Administration tried their best to add another $3.5 TRILLION to federal spending,” Bezos wrote on Monday, drawing rebuke from several White House officials. “They failed, but if they had succeeded, inflation would be even higher than it is today, and inflation today is at a 40-year high.”

Tyler Durden Tue, 05/17/2022 - 15:05

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Economics

Summit Healthcare REIT, Inc. COO/CFO Elizabeth Pagliarini participates in the 9th Annual IMN Real Estate CFO & COO Forum

Summit Healthcare REIT, Inc. COO/CFO Elizabeth Pagliarini participates in the 9th Annual IMN Real Estate CFO & COO Forum
PR Newswire
LAGUNA HILLS, Calif., May 17, 2022

LAGUNA HILLS, Calif., May 17, 2022 /PRNewswire/ — Elizabeth Pagliarini, COO…

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Summit Healthcare REIT, Inc. COO/CFO Elizabeth Pagliarini participates in the 9th Annual IMN Real Estate CFO & COO Forum

PR Newswire

LAGUNA HILLS, Calif., May 17, 2022 /PRNewswire/ -- Elizabeth Pagliarini, COO/CFO of Summit Healthcare REIT, Inc. ("Summit") joined five other industry leaders on the Executive Roundtable at the 9th Annual IMN Real Estate CFO & COO Forum at the Monarch Beach Resort in Dana Point, California. The panelists shared their thoughts and experiences regarding the post pandemic environment, namely the recovery progress and how businesses are changing, trends in tenant lease terms, and the transition back to working in the office and its implications for new hires. They also provided insights into the availability of financing and how terms have changed over the past six months, how they are managing supply chain crises, rising costs of sourcing and materials, and staffing shortages, the changes made to core processes over the past 18 months and whether these changes would be permanent, and how investor communications have changed in recent months.

About Summit Healthcare REIT, Inc. 
Summit is a publicly registered non-traded REIT that is currently focused on investing in seniors housing and care real estate located throughout the United States. The current portfolio includes interests in 53 facilities in 14 states. Please visit our website at: http://www.summithealthcarereit.com

This material does not constitute an offer to sell or a solicitation of an offer to buy Summit Healthcare REIT, Inc. 

This release may contain forward-looking statements relating to the business and financial outlook of Summit Healthcare REIT, Inc. that are based on our current expectations, estimates, forecasts and projections and are not guarantees of future performance. Actual results may differ materially from those expressed in these forward-looking statements, and you should not place undue reliance on any such statements. A number of important factors could cause actual results to differ materially from any forward-looking statements contained in this release. Such factors include those described in the Risk Factors sections of the Company's annual report on Form 10-K for the year ended December 31, 2021, and the quarterly report for the period ended March 31, 2022. Forward-looking statements in this document speak only as of the date on which such statements were made, and we undertake no obligation to update any such statements that may become untrue because of subsequent events. We claim the safe harbor protection for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995.

CONTACT
Chris Kavanagh
(800) 978-8136
ckavanagh@summithealthcarereit.com

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SOURCE Summit Healthcare REIT, Inc.

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