Looking back at September’s results (released throughout October) it’s now unequivocally obvious that the nation’s housing markets, having fully transcended the mania that existed primarily in the first half of the decade and now, in its aftermath, after being dramatically and irreparably impaired by the unwinding of the resultant mortgage-credit debacle, are now hurtling headlong into a dramatic new leg down.

Suprime is a far too convenient concept for those who would like to depict the housing downturn as contained.

Although it has been correctly associated with the first wave of housing boom borrowers who, having poor credit quality at the outset, are now undergoing tremendous stress as housing values decline, rates reset and lending standards tighten, it is just the bleeding edge.

Looking back at October’s results (released throughout November) it’s now unequivocally obvious that the nation’s housing markets, having fully transcended the mania that existed primarily in the first half of the decade and now, in its aftermath, after being dramatically and irreparably impaired by the unwinding of the resultant mortgage-credit debacle, are now hurtling headlong into a dramatic new leg down.

This post combines the latest results of the Rueters/University of Michigan Survey of Consumers, the Conference Board’s Index of CEO Confidence and the State Street Global Markets Index of Investor Confidence indicators into a combined presentation that will run twice monthly as preliminary data is firmed.

These three indicators should disclose a clear picture of the overall sense of confidence (or lack thereof) on the part of consumers, businesses and investors as the current recessionary period develops.

Today’s early release of the Reuters/University of Michigan Survey of Consumers for March confirmed the recent plunge in consumer sentiment falling further still to a reading of 70.5, a decline of 20.25% compared to March 2007.

At the start of 2007, it was pretty clear that something had seriously gone wrong with residential housing markets in the United States.

After nearly a full year of declining home sales, widespread homebuilder and home “investor” trauma and some precursors of the mortgage-credit implosion, the backdrop was clearly set for a larger and more pervasive unveiling of one of history’s greatest economic debacles.

This post combines the latest results of the Rueters/University of Michigan Survey of Consumers, the Conference Board’s Index of CEO Confidence and the State Street Global Markets Index of Investor Confidence indicators into a combined presentation that will run twice monthly as preliminary data is firmed.

These three indicators should disclose a clear picture of the overall sense of confidence (or lack thereof) on the part of consumers, businesses and investors as the current recessionary period develops.

Our favorite reporter over at North County Times Mr. Chris Bagley has an article out this weekend on consumer spending as related to the housing slow down.

Chris figured out one way to track this is to visit the local BMW dealership. He reports that sales of BMWs are off by 5-10% at Brecht BMW in Escondido. This is especially significant since total U.S. BMW sales actually increased by 7.1%.

Chris also interviewed Marney Cox, chief economist for the San Diego Association of Governments. According to her, per every $100,000 increase in home value, there's an average increase of $6,000 in consumer spending.

This post combines the latest results of the Rueters/University of Michigan Survey of Consumers, the Conference Board’s Index of CEO Confidence and the State Street Global Markets Index of Investor Confidence indicators into a combined presentation that will run twice monthly as preliminary data is firmed.

These three indicators should disclose a clear picture of the overall sense of confidence (or lack thereof) on the part of consumers, businesses and investors as the current recessionary period develops.

Today’s early release of the Reuters/University of Michigan Survey of Consumers for April showed another startling plunge in consumer sentiment to a reading of 63.2, a decline of 27.44% compared to April 2007.

I’ve decided to convert the “Constructing Capitulation” monthly wrapup post of all the economic bits and pieces I track into a recurring document with embedded images, data and narration.

I’ll continue to develop this document in coming months adding additional narration and data as well as perfecting the format and content.

Overview

Looking back at January’s results (released throughout February and into March) it now seems very possible that the nation’s housing markets, having just entered its third year of unprecedented nationwide contraction, are now poised to take another even more severe leg down with precipitously falling home prices, palpable recession, and significant inflation of food and fuel all working to depress sentiment and, in turn, stifle both general consumption and housing demand.

Today, the Massachusetts Association of Realtors (MAR) released their Existing Home Sales Report for April again showing the truly dismal and deteriorating circumstances that have befallen the Bay State’s housing market.

Whether it was a slow depression brought on by a local economy that has been eroding for over eight years, well over two years of steadily declining home sales and prices, the credit crunch, a looming recession, a palpable increase in inflation of necessities like food and fuel or just simply a change in attitudes toward the notion of a house as a vehicle for untold wealth, the regions housing market has now crossed a dangerous tipping point.

In anticipation of Friday’s release of the latest read on the employment situation, this post, along with the next several daily posts, will attempt to present a progression of analysis seeking to shed more light on issues surrounding the present state and future prospects of the job market.

Today, the National Association of Realtors (NAR) released their Existing Home Sales Report for April again confirming, perfectly clearly, the tremendous weakness in the demand of existing residential real estate with both single family homes and condos declining uniformly across the nation’s housing markets while inventory swelled dramatically yielding a stunning 11.2 months of supply for all residential properties, 10.7 months for single family properties and a truly whopping 14.2 months for condos.

I'm sorry to interrupt the ongoing commentary. I just wanted to point out that CMHC has released their 4th quarter housing market outlook for Victoria. You can read it here.

Highlights according to CMHC are:
- Victoria's housing industry robust, growth spurred by strong economy.
- Resale market sales to edge down, prices to rise slowly.
- New homebuilding will level off in 2008.
- New home prices to rise.
- Rental vacancies will remain low.

I think I've heard that all before.

I’ve decided to roll the Rueters/University of Michigan Survey of Consumers, The Conference Board’s Index of CEO Confidence and The Conference Board’s Index of Leading Economic indicators into a combined post that will run twice monthly as preliminary data is firmed.

These three indicators should disclose a clear picture of both the overall sense of confidence (or lack thereof) on the part of consumers and businesses as well the overall trend of economic circumstances.

Today’s preliminary release of the Reuters/University of Michigan Survey of Consumers for February showed a shocking plunge in consumer sentiment to 69.6 from 78.4 in January.

It’s important to note that this is the lowest sentiment reading seen since the recessionary period of February 1992.

Today, the Massachusetts Association of Realtors (MAR) released their Existing Home Sales Report for January 2008 and simultaneously Standard & Poor’s released their Case-Shiller Home Price Index for December 2007 both showing, perfectly clearly, the truly dire circumstances that have now befallen the Bay State’s housing market.

Today, the National Association of Realtors (NAR) released their Existing Home Sales Report for October again confirming, perfectly clearly, that demand for residential real estate, for both single family and condos, has now taken a new and substantial leg down uniformly across the nation’s housing markets likely as a direct result of the momentous and ongoing structural changes in the credit-mortgage markets.

Today, the National Association of Realtors (NAR) released their Existing Home Sales Report for January again confirming, perfectly clearly, the tremendous weakness in the demand of existing residential real estate with both single family homes and condos declining uniformly across the nation’s housing markets.

Although this continued and even worsening falloff in demand is mostly as a result of the momentous and ongoing structural changes that are taking place in the credit-mortgage markets, consumer sentiment surveys are now indicating that consumers are materially feeling the current recessionary trend which will likely result in even further significant sales declines to come.

Today’s release of the Reuters/University of Michigan Survey of Consumers for December confirmed again that the U.S. consumer is feeling the burn from declining home values, increased fuel costs and a general uncertainty about the future of the economy.

In fact, short of a brief plunge in the wake of Hurricane Katrina, the current levels for the Index of Consumer Sentiment and the Index of Consumer Expectations are at lows not seen since the early 1990’s.

Today, the Commerce Department released their monthly Retail Sales Report for October which continued to show an interesting and, with some pretty significant revisions to past results, even more significant correlation between declining consumer spending, particularly on discretionary items, and the decline in home values.

This post combines the results of the Rueters/University of Michigan Survey of Consumers, The Conference Board’s Index of CEO Confidence and The Conference Board’s Index of Leading Economic indicators into a post that will run twice monthly as preliminary data is firmed.

These three indicators should disclose a clear picture of both the overall sense of confidence (or lack thereof) on the part of consumers and businesses as well the overall trend of economic circumstances.

Today’s final release of the Reuters/University of Michigan Survey of Consumers for February confirmed a shocking plunge in consumer sentiment to a final reading of 70.8, a decline of 22.45% compared to February 2007.

The latest turmoil concerning Freddie Mac and Fannie Mae likely represents one of the most significant blows to have hit the housing markets and the overall economy since the start of this historic downturn.

Given the eroding results of Freddie Mac's third quarter operations and other tumultuous events, there has been a clear loss in confidence in these two government sponsored enterprises (GSE) both closing the door to many of the proposed opportunities for market relief and further revealing the true extent of the housing decline.

Witnessing the S&P 500 index slide into “bear market” territory has really increased the overall sense of gloom I get when considering the plight of the economy.

At first I wasn’t sure why I was so surprised… I had been anticipating the housing decline wreaking havoc on the economy for a long while but yet, there was something more ominous in the “twin peaks” chart that just seemed to cut right through all the latest news and developments to the heart of the matter.

To me, it appears that we are dangerously close to having the latest economic downturn being linked so directly to the prior that the two periods inevitably become one.

I’ve decided to roll the Reuters/University of Michigan Survey of Consumers, The Conference Board’s Index of CEO Confidence and The Conference Board’s Index of Leading Economic indicators into a combined post that will run twice monthly as preliminary data is firmed.

These three indicators should disclose a clear picture of both the overall sense of confidence (or lack thereof) on the part of consumers and businesses as well the overall trend of economic circumstances.

Today, the National Association of Realtors (NAR) released their Pending Home Sales Report for February showing a weakening to existing home sales activity and a clear continuation of the historic decline to residential housing on a year-over-year basis, both nationally and across every region.

As the decline in demand for residential housing slumps through its third year, it’s important to consider the significance of both the extent of the decline and the severity of the oncoming declines to existing home sales activity clearly indicated by the current 21.4% year-over-year drop-off in pending home sales.

In light of recent increases to consumer prices and declining retail sales, I’ve reworked my analysis of the possible correlation between falling home values and declining consumption of the most “discretionary” retail items.

On a “nominal” basis, there appeared to be “rough correlation” between strong home value appreciation and strong retail spending preceding the housing bust and an even stronger correlation when home values started to decline.

This week the National Association of Realtors (NAR) released their existing home sales report for the third quarter of 2007 showing, in truly stark terms, the tremendously broad nature of the housing downturn.

Today, the U.S. Census Bureau released its latest nominal read on retail sales showing a decline of 0.6% from January 2008 and a 2.6% increase since February 2007 on an aggregate of all items including food, fuel and healthcare services.

Discretionary retail sales including home furnishings, home garden and building materials, consumer electronics and department store sales, on the other hand, experienced a significant decline falling 0.38% since January 2008 and 1.88% compared to February 2007.

Further, adjusted for inflation, discretionary retail sales declined 5.74% since February 2007.

In light of yesterday’s results for Producer Prices, and Retail Sales and Today’s results for Consumer Prices, I’m reworking my analysis of the possible correlation between falling home values and declining consumption of the most “discretionary” retail items.

On a “nominal” basis, there appeared to be “rough correlation” between strong home value appreciation and strong retail spending preceding the housing bust and an even stronger correlation when home values started to decline.