The major averages enter the final hour with large losses on little real news. The Philadelphia Fed regional survey slipped .7 to 22.2 in October, the details were unremarkable.
Since the previous crisis I have pointed out repeatedly that real estate sales have remained a shadow of their pre-bust selves, indicating that the market is much weaker than the lamestream media headlines would suggest. Recent data from RealtyTrac shows that since 2013 the average gain at sale has been 30% with a holding period of about 8-years for homes sold in the 2nd quarter in the 148 major metropolitan areas covered in the report. Annualized this works out to 3.75% per year, a figure that nearly matches the long-term historical annual return seen with real estate that has been measured to be inflation plus about .9% or 4% per year in total. Obviously, the Bay Area has done far better with a 116% gain, or a very respectable 14.5% per year. The next 4 markets covered in the report include Seattle +76%, Los Angeles +56%, Miami up 48%, and Houston up 33%. The bottom 5 include Mobile Alabama -4%, El Paso Texas +2%, Little Rock Arkansas +5%, Cleveland Ohio, and Winston-Salem North Carolina up 10%. Many have blamed a lack of inventory for sale, particularly for starter homes, but a close look at the numbers shows that it’s much more than that.
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