Money and Investing Thoughts

April sales and price report.

Linked above the the April sales report from the California Association of Realtors. The big news is that the state has now had two months of increases in the median sales price.

The median price for April was 36.5% lower than for April 2008. This is the 1st time in 9 months that the YoY price decline was less than 40%. Kind of like less bad bad news. The number of sales was 49% higher than a year ago and the available inventory was at 4.6 months.

With good-credit homeowners tempted to “buy and bail”. (Buy a low priced home with a smaller, low interest mortgage, then walk away from their current high balance/high payment mortgage) now is the time for bankers to make some serious attempts to modify their troubled mortgages. Making concessions to lower rates, payments and have most of the mortgage payments go to principal seems to make more sense than spending ten of thousands of dollars to foreclose then lose 30% to 50% on the sale of the home. Bankers should offer the same concessions to all of their mortgage holder, so those who are trying to save their credit get some benefit also. It seems to me that these steps would work to restart the whole real estate system and all parties would benefit in the long run. But when was the last time a banker did something smart for the long run?

newressales.pdf (application/pdf Object).

The link above is the April new residential sales report from the U.S. Department of Housing and Urban Development. Sales were basically level with March.

The numbers I find interesting are the year over year comparisons. April 2009 sales were 34% below the April 2008 rate. However, the April 2009 available inventory was 35.4%. Funny how that works.

Available inventory fell by 4.2% in April as homebuildes continue to not build much.

rel0904ehs.pdf (application/pdf Object).

Linked above is the data from the National Association of Realtors on existing home sales for May 2009. If you get tired of sensationalized headlines and spin in the articles, take a look at the data for yourself.

The non-seasonally adjusted numbers show some nice gains from April and I wonder in this new economic age if seasonality is still in play as much for real estate.

On the sale price numbers, the median is the midpoint price in the listing of sales prices. Mean price is the average, or total sales dollars divided by number of sales.

I was taking a look at one of the stocks I follow on this site and a couple of the news headlines caught my eye. Troubled Atlas Pipeline Partners (APL: 37.07 -0.31 -0.83%) released their first quarter results a couple of weeks ago and here a a couple of lingering headlines:

From TradingMarkets.com: Atlas Pipeline Holdings Q1 net loss widens

From WSJ.com: Atlas Pipeline Partners’ 1Q Loss Narrows; Volume Up

It seems that investing on the headlines can be confusing. This is why you need to understand the underlying financial fundamentals of stocks you are interested in. Right now I think APL’s stock value is much less than the value of the assets it holds and the stock can move significantly higher from this point. This is tough to swallow on a stock which has lost 80% of its value in the last year.

My point is that if you want to invest in individual stocks do your own research. Another point is that if the “experts” can disagree so much, a smart individual should be able to find ways to profit against the herd.

Las Vegas home prices continue to slide – Business – ReviewJournal.com.

The article linked above is full of speculation on both sides of the argument on whether home prices in Las Vegas are reaching a bottom. Not a lot of hard information included.

I find it interesting that homebuilders are starting and selling only about 300 homes per month. I remember living in Las Vegas in the early years of this decade and 6,000 new people were moving into town every month. It will be interesting to see if the city can regain its growth prospects.

It sounds like the median price is falling in some measure due to the dregs of foreclosed properties being picked up at prices near the value of the lots. With no sales at the luxury end of the market there are now high priced property sales to help pull up the median price.

The markets in Southern California seem to be finding a bottom, price wise, it will be interesting to see if Las Vegas does the same in the next few months.