My corner of the world was the hottest spot in the county for res real estate in 2003 - 06. Home prices blew through the roof. Now, the only property that I've seen move in the past several months has been a stone farmhouse - now in a residential neighborhood - that is now set up as a duplex. Lots of places are just sitting...
Out of curiousity, how do you measure inventory for a specific area?
Total houses for sale divded by # of houses sold in the last month.
Example: 1000 homes for sale in specific area. One hundred sales within specific area during last month= 10 months inventory.
While I respect CRs data collection, and website I dont agree with his analysis of the timing of the bust. I dont believe 2005 was a transition year and that 2006 was a bust year. What exactly was the bubble? My sense is that the bubble was a pricing phenomenon. Prices kept going up and then they stopped. When did this bubble end? While every individual market is different the broadest measure of pricing is OFHEOs national data which peaked in the first half of 2007. CR do you have a different definition of bubble?
http://www.papereconomy.com/HPI.aspx?id=USA|USA_SA|Boston-Quincy,MA|Boston-Quincy,MA_SA|Boston-Quincy,MA|Boston-Quincy,MA_SA&showcomplete=True&showpo=False&showna=False&showsa=True&normalize=True
Let me render my authoritative opinion (hey I am serving on a jury right now for god sake): this is perfectly fine chart, in terms of both quantitative clarity and visual appeal, case closed.
Daughter was chatting a few weeks ago with an acquaintance who owns a real estate agency of quite significant size in a fairly upscale are of the Chicago suburbs -- an agency that has two-page spreads in the newspaper. He said they hadn't sold a single house yet this year.
Not sure I understand why people are confused about this chart. I find it quite informative.
CR has posted this data in other forms many times in the past (obviously not including the just released data) This is simply one other way of looking at the data. no single picture is perfect, sometimes it's good to see from multiple angles.
What I find somewhat interesting:
-as I would have expected, the biggest delta in inventory really occurs in the spring/fall months, nad really flattens in winter months until a droppoff in the late winter.
Thus all the data for boom/bust years is relatively clustered early on with no discernible pattern.
-as expected, boom years show lower inventory rise in summer (compared to January) than bust years
-as I would have expected 2004 (seasonally adjusted) had the lowest change in inventory throughout the year, and IMO that was the peak year
(and 2003 and 2002 came in 2nd and 3rd, respectively, also agrees with my "worldview" at the time)
-similarly, I am unsurprised that 2005, 2006, 2007 have higher amounts of change overall
-but I am suprised that 2006's change surpassed 2007's... I would have thought that it was the opposite especially given the subprime fiasco that happened last fall... (and now 2008 on track to surpass both, in seasonal adjusted terms)
CR: is there statistical significane to the difference between 2006 and 2007???
I expect a huge rush of inventory early this spring.
I know of several people who "have" to move (you know, only have a 3 BR 2 Ba house and are now pregnant, and can't POSSIBLY fit into such a small house... sigh)
they are all listing NOW (February in MN=FREEZING and nobody's looking) because they want to beat the other houses on the market. Also, they all know it's hard to sell a house, so their plan is sell first, then they know they'll have enough time to buy a house after they sell their primary...
the word is out that it's a difficult selling season... these people are not financially aware...
The symphony is climaxing! Where is Conjure's Clock? Are we about to be dashed upon the rocks?! If only Tanta could write opera would my soul be relieved! Count yourselves blessed to have found your way to this blog.
"LOS ANGELES - The number of homes facing foreclosure jumped 57 percent in January compared with a year ago, with lenders increasingly forced to take possession of homes they couldn't unload at auctions, a mortgage-research firm said Monday.
Nationwide, about 233,001 homes received at least one notice from lenders last month related to overdue payments, compared with 148,425 a year earlier, according to Irvine, Calif.-based RealtyTrac Inc. Nearly half of the total involved first-time default notices."
Each year is normalized to 100 at the ending level of the prior year.
I think the chart is clear and informative. Rather than normalizing to 100 for end of Dec it might make your point even clearer if you normalized to end of Mar which is the start of the selling season and likely less variable due to exogenous factors.
And no matter what they sell, it's going back to the bank in the end, so it's all moot.
"U.S. Home Foreclosures Jump 90% as Mortgages Reset...Repossessions rose 90 percent to 45,327 last month from the same period a year ago, RealtyTrac Inc. said today in a statement. Total foreclosure filings, which include default and auction notices as well as bank seizures, increased 57 percent."
Atlanta's inventory is already above 100K, according to Metro Brokers. For some perspective, last year we didn't hit that number until the peak of the spring selling season (May/June.)
This data suggest that no headway has been made in reducing last year's inventory. Any one crazy enough to try and sell in this market needs to have their head examined.
Any one crazy enough to try and sell in this market needs to have their head examined.
Right on schedule. Well proceding in a logical and predetermined manner, it is a bit slower. The next waves of inventory will come from two classes, the must moves and the wanna get outs. The must moves are the normal basal turnover from job changes and divorce and estate settlement, etc. In the boom years often things like a divorce meant one house sells and two got bought. No longer applies on the demand side, just the supply side. The "wanna get outs" are a combination of demographics and the changed nature of the most bubblicious areas. LA, LV, Phoenix, et al are not the places they were even ten years ago. Totally unrecognizable from 20 years past. There are a lot of 50-65 year old boomers who after the last 18 months have suddenly realized 2006 prices were chimeric and it could be a decade before they even get 2008 prices again. They don't want to be 70 and living where they are now paying property taxes and ever spiraling utility bills while stuck in congestion. They have a cost basis that makes them competitive with current REO pricing so they will be the only private parties actually closing deals. That is until the banks get serious and start second wave of price reductions.
WARNING: Topic a few abstraction layers above present thread.
Inflation alarm bells at the International Herald Tribune.
Thanks for posting this link. If you look at it closely, you will see why the decline in the U.S. manufacturing base is so harmful.
The article observes that companies are regaining pricing power. They then cite these examples:
Michelin, the French tire maker, raised prices on car and light-truck tires by 3.5 percent while ArcelorMittal increased the price of flat carbon steel products.
Nestlé said last week that a 3 percent price rise for its products had helped it to post a 15.8 percent rise in 2007 net profit.
These are manufacturers with strong ties to commodities and necessities.
The U.S. economy has become service-dominated and the majority of services are not necessities. They can be easily replaced of avoided. Think realtors, retail, restaurants and stock brokers.
We have vast overcapacity in most of these service sectors relative to recessionary demand. Too many useless, unwanted bodies floating through the U.S. economy at the wrong time.
This chart is valuable because it supports CR's call for a 12+ month inventory later this year.
From the onset of 12+ month inventory, you would have to think it would take at least another 12-18 months for home prices to bottom (as inventory clears). So, this chart supports a view that housing prices will not bottom until late 2009 or 2010 at earliest. Since inventory is already higher in CA and probably will hit 20+ months, prices might not bottom in CA until 2011 at earliest.
Every MSM newscaster who talks about housing hitting a near-term bottom should understand this chart.
I think this is an excellent graph. It clearly shows that in recent years, inventory, as a pct of inventory at the beginning of the year, grows much higher than during the boom years.
It also shows that inventory tends to peak during the summer and drops off during the winter.
The graph indeed is informative. One potential issue is normalizing by the ending level of previous year; it is subject to idiosyncrasies. Another way to normalize might be through the average of the preceding n months (n=12 or n=6 for example)
Zillow shows a 14.6% drop in values for Newport Beach in the last 30 days. Until now, prices in this area has held up very well -- though sales volume has been quite low.
This reminds me of the 1989 - 1995 period in SoCal. Newport prices held better than most other areas for the first few years and then started falling faster than other areas for years.
SIV's are so last months' financial disaster. Now VIE's (variable interest entities) are soon to be the rage. Get ready for the Super-duper VIE bailout!
--
Congratulations, CR! When your thinking is not clouded you come to right conclusions. Your hard work is definitely appreciated.
Big data day ahead. BTW, be prepared for an ugly Case-Shiller number today. However, the worst will come during April and later reports due to built-in delays in the data.
Jas
PS: The P Train, the so-called stock market was turned into the Scam Market, a sham, beginning in 1995, by Corporate Crooks of America and Bankrupters and Fraudsters of New York City, jointly constituting the Network of Crooks. A Scam Lover (aka stock "investor") is an easily identifiable dope for feeding the Crooks. My advice since 1998: Avoid Scams!
--
"Every MSM newscaster who talks about housing hitting a near-term bottom should understand this chart."
Rich, a "MSM newscaster" is in propaganda business and not in truth-telling business. Most of them want people to buy homes because it is such a good time to buy a home now.
Only a dope expects honesty from BFNYC and CCA, our economic rulers, and their agents. Also, only a dope expects the Fed and USG to intervene on behalf of the honest and hardworking Americans (they do exactly the opposite). USG and Fed are there to help the criminal enterprises run by BFNYC and CCA.
It is very important to understand the atmosphere in which one is operating.
Read the attached Bloomberg report about all the foreclosures being denied by judges because the supposed noteholder can't prove he owns the home. If one of you could help us understand -- doesn't it follow that it is not safe to buy a home if sellers today can't prove they satisfied the right noteholder prior to passing the home to a new buyer? Might it be that buyers are not paying the right party for the home?
CR - grand chart. As a general question, is there any possibility of getting a few (more than a few?) rows of similar data from an entirely different decade because neither these boom or bust (or boom/bust) years are exactly "normal". It would also be fun to have more data because it almost looks as there there is more variance in the "boom" years than the bust years but with only 6 years worth of data (and possibly atypical data), I'd hesitate to call it a real observation yet.
I think I'm infected with a Grammasite of random quote marks, but there it is.
Can I suggest on the data in this chart as it is (re-normelized each year) try doing this :
plot the avg of 2002/30/04 in one line
plot the avg of 2005/06/7 on a 2nd line.
let 08 stand alone.
btw, I am not sure Jan 1st as the normelizing point is the best. maybe an avg of Jan/1st and Feb 1st (as the normelizing value) will give more coherent results.
The P Train, the so-called stock market was turned into the Scam Market, a sham, beginning in 1995, by Corporate Crooks of America and Bankrupters and Fraudsters of New York City, jointly constituting the Network of Crooks.
Ok, at the risk of asking for and getting too much information, why was 1995 the beginning of the scam?
What this chart shows well is the real difference between seasonality between bubble and bust years. I do however have to agree that Sep might be a better start point. Inventory is relatively flat before and after Sep in both bubble and bust years. This means that a shifting of sales forward or back one month won't affect the scaling for the entire year. There seems to be a BIG difference in January inventory in the charts. Shifting of sales from Dec to Jan could be making the differences seem bigger than they are.
Dems want to write down mortgages to fair market values -- your debt disappears. Just when I was going to finally vote Dem they again convinced me not to. Aid on home loans sought - Los Angeles Times
Banks can't foreclose because no one knows who holds the note. If that is true then might it be true that when you buy a house today the real noteholder may not be the one who gets paid for it. If that happens then did you really buy it???
WASHINGTON (AP) -- Inflation at the wholesale level soared in January by the fastest pace in 16 years, pushed higher by rising costs for food, energy and medicine.
The Labor Department said Tuesday that wholesale prices rose 1 percent last month, more than double the 0.4 percent increase that economists had been expecting.
--
"Ok, at the risk of asking for and getting too much information, why was 1995 the beginning of the scam?"
Short answer: The SEC Chairman and the Congress threatened and forced the FASB (accounting body) to allow companies not to have to expense stock options (Scam Options) compensation expenses. This led to the tech bubble (Cisco mkt cap at $600B!) and trillions of dollars of money went from pension funds and the public to the VCs and others who are part of the Network of Crooks.
Long answer: Read "BULL!" by Maggie Mahar.
Let me repeat: Scam Lovers are a bunch of dopes and morally bankrupt to feed the Crooks.
--
"Dems want to write down mortgages to fair market values -- your debt disappears. Just when I was going to finally vote Dem they again convinced me not to."
Only a born-and-bred American dope votes and partisan Democrats and Republicans are easily identifiable born-and-bred dopes. No, your vote doesn't really count (it is counted but it doesn't matter)! It is a case of blind faith in the system, pure and simple.
BTW, I was a dope once! (I was a registered Republican and voted for and contributed to W in 2000). It requires lot of effort to un-dope (or detox!) oneself in America.
America: a nation of born-and-bred dopes ruled over by Crooks. The econo-political system was turned into a criminal financial enterprise. What you read on this blog are details of the Crooks deeds and dopes who got tricked.
Jas jain,
1995 was the start of the scam because that was when The Private Security Litigation Reform act went into effect. Expectations drive markets and this act undid post Great Depression acts by making it very hard to sue a firm for not delivering on promises -- prior, if firms told you they expected 25% returns and only got 2% you could sue them and win based on the fact that they were wrong -- now you can only sue if you can prove they intentionally defrauded you and you can't dipose them for the proof you obtain the proof without deposition. That is what drove the thing and if it was a scam that was only because not everyone was privy to the change in the law. If they news media had gotten it out there anyone who invests would have realized that it would drive the markets up.
Back in the '80s and '90s I became familiar with real estate patterns in a couple of communities dominated by retirees. Home prices stayed low compared to surrounding communities, because when the retirees died, their heirs -- who usually lived hundreds of miles away -- almost always sold the home at low-ball prices. They simply wanted to settle the estate and go home.
Career relocations, divorces, deaths, retirement moves: all these will continue to happen. Aside from those who are under water, the gazillions of people who still have substantial equity in their homes, and have to move, may be more and more willing to sell now and get what profit they can rather than hold out. It could be a real depressive factor in home prices.
Yes, right now you can still find a lot of people who believe that real estate always goes up. But that kind societal wisdom can flip in an instant when there's sufficient panic in the air. And suddenly, only a boob would hold unrealized gains in real estate.
(Of course, that's the time to buy, if the numbers make sense.)
agreed with Rob Dawg: "Rather than normalizing to 100 for end of Dec it might make your point even clearer if you normalized to end of Mar"
as previously shown in a recent CR post, jan/feb data are a bit unreliable...i'd be interested to see the chart per Rob's comment...suspect it may calm some of the noise...
There are many owners who would like to sell but are not putting there house on the market.
As I said yesterday. I really believe that the actual inventory is well over 5 million now.
sad as it is, i'd really like a home at this stage in my life, the best financial decision has me putting home buying off until next spring ;[...i'll keep looking for that special deal from an actual motivated seller in a neighborhood i'd actually care to live in...but haven't seen one yet though...
the only tempering agent here is how much harder they're going to make it to get credit...
My corner of the world was the hottest spot in the county for res real estate in 2003 - 06. Home prices blew through the roof. Now, the only property that I've seen move in the past several months has been a stone farmhouse - now in a residential neighborhood - that is now set up as a duplex. Lots of places are just sitting...
Out of curiousity, how do you measure inventory for a specific area?
CR
Very confusing chart, renormalizing every year. Why not just plot the data, un-normalized, from 2002 to the present?
Total houses for sale divded by # of houses sold in the last month.
Example: 1000 homes for sale in specific area. One hundred sales within specific area during last month= 10 months inventory.
Very thought-provoking analysis, CR. Thanks for that.
Fireinthehole:
Thanks and good night.
arun, you can see that in my earlier post. I'm trying to show the seasonal pattern.
The NAR doesn't seasonally adjust inventory, so we have to do it.
Best Wishes.
While I respect CRs data collection, and website I dont agree with his analysis of the timing of the bust. I dont believe 2005 was a transition year and that 2006 was a bust year. What exactly was the bubble? My sense is that the bubble was a pricing phenomenon. Prices kept going up and then they stopped. When did this bubble end? While every individual market is different the broadest measure of pricing is OFHEOs national data which peaked in the first half of 2007. CR do you have a different definition of bubble?
http://www.papereconomy.com/HPI.aspx?id=USA|USA_SA|Boston-Quincy,MA|Boston-Quincy,MA_SA|Boston-Quincy,MA|Boston-Quincy,MA_SA&showcomplete=True&showpo=False&showna=False&showsa=True&normalize=True
Usually, I find your stuff illuminating, but for this I only have one thing to say:
Amazon.com: The Visual Display of Quantitative Information, 2nd edition (9780961392147): Edward R. Tufte: Books
Seriously. That graph is a crime against clarity.
In the next couple of months we'll have a good statistical sample for future inventory with this kind of chart.. nice one
GIHJ,
Your questions have been answered a thousand times since CR started his blog. Please don't make us repeat'em again.
Let me render my authoritative opinion (hey I am serving on a jury right now for god sake): this is perfectly fine chart, in terms of both quantitative clarity and visual appeal, case closed.
Daughter was chatting a few weeks ago with an acquaintance who owns a real estate agency of quite significant size in a fairly upscale are of the Chicago suburbs -- an agency that has two-page spreads in the newspaper. He said they hadn't sold a single house yet this year.
Not sure I understand why people are confused about this chart. I find it quite informative.
CR has posted this data in other forms many times in the past (obviously not including the just released data) This is simply one other way of looking at the data. no single picture is perfect, sometimes it's good to see from multiple angles.
What I find somewhat interesting:
-as I would have expected, the biggest delta in inventory really occurs in the spring/fall months, nad really flattens in winter months until a droppoff in the late winter.
Thus all the data for boom/bust years is relatively clustered early on with no discernible pattern.
-as expected, boom years show lower inventory rise in summer (compared to January) than bust years
-as I would have expected 2004 (seasonally adjusted) had the lowest change in inventory throughout the year, and IMO that was the peak year
(and 2003 and 2002 came in 2nd and 3rd, respectively, also agrees with my "worldview" at the time)
-similarly, I am unsurprised that 2005, 2006, 2007 have higher amounts of change overall
-but I am suprised that 2006's change surpassed 2007's... I would have thought that it was the opposite especially given the subprime fiasco that happened last fall... (and now 2008 on track to surpass both, in seasonal adjusted terms)
CR: is there statistical significane to the difference between 2006 and 2007???
I expect a huge rush of inventory early this spring.
I know of several people who "have" to move (you know, only have a 3 BR 2 Ba house and are now pregnant, and can't POSSIBLY fit into such a small house... sigh)
they are all listing NOW (February in MN=FREEZING and nobody's looking) because they want to beat the other houses on the market. Also, they all know it's hard to sell a house, so their plan is sell first, then they know they'll have enough time to buy a house after they sell their primary...
the word is out that it's a difficult selling season... these people are not financially aware...
WARNING: Topic a few abstraction layers above present thread.
Inflation alarm bells at the International Herald Tribune.
Alarm bells as inflation pressures mount - The New York Times
The symphony is climaxing! Where is Conjure's Clock? Are we about to be dashed upon the rocks?! If only Tanta could write opera would my soul be relieved! Count yourselves blessed to have found your way to this blog.
Oh, the humanity!
Now, back to Existing Home Inventory.
The Realtytrac numbers are out, the press release should hit the realtytrac website in the morning with more detail:
Foreclosure rate up 57% in January
"LOS ANGELES - The number of homes facing foreclosure jumped 57 percent in January compared with a year ago, with lenders increasingly forced to take possession of homes they couldn't unload at auctions, a mortgage-research firm said Monday.
Nationwide, about 233,001 homes received at least one notice from lenders last month related to overdue payments, compared with 148,425 a year earlier, according to Irvine, Calif.-based RealtyTrac Inc. Nearly half of the total involved first-time default notices."
Each year is normalized to 100 at the ending level of the prior year.
I think the chart is clear and informative. Rather than normalizing to 100 for end of Dec it might make your point even clearer if you normalized to end of Mar which is the start of the selling season and likely less variable due to exogenous factors.
And no matter what they sell, it's going back to the bank in the end, so it's all moot.
"U.S. Home Foreclosures Jump 90% as Mortgages Reset...Repossessions rose 90 percent to 45,327 last month from the same period a year ago, RealtyTrac Inc. said today in a statement. Total foreclosure filings, which include default and auction notices as well as bank seizures, increased 57 percent."
U.S. Home Foreclosures Jump 90% as Mortgages Reset (Update5) - Bloomberg.com
Is there data on the number of REOs that are on listed on MLS?
Atlanta's inventory is already above 100K, according to Metro Brokers. For some perspective, last year we didn't hit that number until the peak of the spring selling season (May/June.)
This data suggest that no headway has been made in reducing last year's inventory. Any one crazy enough to try and sell in this market needs to have their head examined.
Any one crazy enough to try and sell in this market needs to have their head examined.
Right on schedule. Well proceding in a logical and predetermined manner, it is a bit slower. The next waves of inventory will come from two classes, the must moves and the wanna get outs. The must moves are the normal basal turnover from job changes and divorce and estate settlement, etc. In the boom years often things like a divorce meant one house sells and two got bought. No longer applies on the demand side, just the supply side. The "wanna get outs" are a combination of demographics and the changed nature of the most bubblicious areas. LA, LV, Phoenix, et al are not the places they were even ten years ago. Totally unrecognizable from 20 years past. There are a lot of 50-65 year old boomers who after the last 18 months have suddenly realized 2006 prices were chimeric and it could be a decade before they even get 2008 prices again. They don't want to be 70 and living where they are now paying property taxes and ever spiraling utility bills while stuck in congestion. They have a cost basis that makes them competitive with current REO pricing so they will be the only private parties actually closing deals. That is until the banks get serious and start second wave of price reductions.
Dear CR
Excellent. This chart is a keeper.
Thanks so much for the information. You and your co-blogger really provide some light on this.
Best regards,
Inflation alarm bells at the International Herald Tribune.
Thanks for posting this link. If you look at it closely, you will see why the decline in the U.S. manufacturing base is so harmful.
The article observes that companies are regaining pricing power. They then cite these examples:
Michelin, the French tire maker, raised prices on car and light-truck tires by 3.5 percent while ArcelorMittal increased the price of flat carbon steel products.
Nestlé said last week that a 3 percent price rise for its products had helped it to post a 15.8 percent rise in 2007 net profit.
These are manufacturers with strong ties to commodities and necessities.
The U.S. economy has become service-dominated and the majority of services are not necessities. They can be easily replaced of avoided. Think realtors, retail, restaurants and stock brokers.
We have vast overcapacity in most of these service sectors relative to recessionary demand. Too many useless, unwanted bodies floating through the U.S. economy at the wrong time.
This chart is valuable because it supports CR's call for a 12+ month inventory later this year.
From the onset of 12+ month inventory, you would have to think it would take at least another 12-18 months for home prices to bottom (as inventory clears). So, this chart supports a view that housing prices will not bottom until late 2009 or 2010 at earliest. Since inventory is already higher in CA and probably will hit 20+ months, prices might not bottom in CA until 2011 at earliest.
Every MSM newscaster who talks about housing hitting a near-term bottom should understand this chart.
I think this is an excellent graph. It clearly shows that in recent years, inventory, as a pct of inventory at the beginning of the year, grows much higher than during the boom years.
It also shows that inventory tends to peak during the summer and drops off during the winter.
The graph indeed is informative. One potential issue is normalizing by the ending level of previous year; it is subject to idiosyncrasies. Another way to normalize might be through the average of the preceding n months (n=12 or n=6 for example)
Zillow shows a 14.6% drop in values for Newport Beach in the last 30 days. Until now, prices in this area has held up very well -- though sales volume has been quite low.
This reminds me of the 1989 - 1995 period in SoCal. Newport prices held better than most other areas for the first few years and then started falling faster than other areas for years.
SIV's are so last months' financial disaster. Now VIE's (variable interest entities) are soon to be the rage. Get ready for the Super-duper VIE bailout!
Goldman, Lehman May Not Have Dodged Credit Crisis (Update4) - Bloomberg.com
--
Congratulations, CR! When your thinking is not clouded you come to right conclusions. Your hard work is definitely appreciated.
Big data day ahead. BTW, be prepared for an ugly Case-Shiller number today. However, the worst will come during April and later reports due to built-in delays in the data.
Jas
PS: The P Train, the so-called stock market was turned into the Scam Market, a sham, beginning in 1995, by Corporate Crooks of America and Bankrupters and Fraudsters of New York City, jointly constituting the Network of Crooks. A Scam Lover (aka stock "investor") is an easily identifiable dope for feeding the Crooks. My advice since 1998: Avoid Scams!
From Jack's link
Citigroup, which has incurred $22.1 billion in losses from the subprime crisis, has $320 billion in ``significant unconsolidated VIEs,''
--
"Every MSM newscaster who talks about housing hitting a near-term bottom should understand this chart."
Rich, a "MSM newscaster" is in propaganda business and not in truth-telling business. Most of them want people to buy homes because it is such a good time to buy a home now.
Only a dope expects honesty from BFNYC and CCA, our economic rulers, and their agents. Also, only a dope expects the Fed and USG to intervene on behalf of the honest and hardworking Americans (they do exactly the opposite). USG and Fed are there to help the criminal enterprises run by BFNYC and CCA.
It is very important to understand the atmosphere in which one is operating.
Jas
http://www.marketwatch.com/tvradio/player.asp?guid=%7B0AF98CA2-4C17-40B2-893C-D8B0E82552E4%7D
"Banks will add a million homes to the market this year"
Citigroup's troubles remind me of Homer Simpson tumbling down the Springfield Gorge.
Does anybody truly believe that Citi will be a shadow of itself by this time next year barring government intervention?
CR or Tanta,
Read the attached Bloomberg report about all the foreclosures being denied by judges because the supposed noteholder can't prove he owns the home. If one of you could help us understand -- doesn't it follow that it is not safe to buy a home if sellers today can't prove they satisfied the right noteholder prior to passing the home to a new buyer? Might it be that buyers are not paying the right party for the home?
Citi Global Wealth to buy Legg Mason's Private Portfolio Grp
CR - grand chart. As a general question, is there any possibility of getting a few (more than a few?) rows of similar data from an entirely different decade because neither these boom or bust (or boom/bust) years are exactly "normal". It would also be fun to have more data because it almost looks as there there is more variance in the "boom" years than the bust years but with only 6 years worth of data (and possibly atypical data), I'd hesitate to call it a real observation yet.
I think I'm infected with a Grammasite of random quote marks, but there it is.
CR,
chart takes time to understand.
Can I suggest on the data in this chart as it is (re-normelized each year) try doing this :
plot the avg of 2002/30/04 in one line
plot the avg of 2005/06/7 on a 2nd line.
let 08 stand alone.
btw, I am not sure Jan 1st as the normelizing point is the best. maybe an avg of Jan/1st and Feb 1st (as the normelizing value) will give more coherent results.
Ok, at the risk of asking for and getting too much information, why was 1995 the beginning of the scam?
What this chart shows well is the real difference between seasonality between bubble and bust years. I do however have to agree that Sep might be a better start point. Inventory is relatively flat before and after Sep in both bubble and bust years. This means that a shifting of sales forward or back one month won't affect the scaling for the entire year. There seems to be a BIG difference in January inventory in the charts. Shifting of sales from Dec to Jan could be making the differences seem bigger than they are.
Dems want to write down mortgages to fair market values -- your debt disappears. Just when I was going to finally vote Dem they again convinced me not to.
Aid on home loans sought - Los Angeles Times
Wholesale inflation up by 1%!
wholesale cpi out and not good ... Stagflation!
Banks can't foreclose because no one knows who holds the note. If that is true then might it be true that when you buy a house today the real noteholder may not be the one who gets paid for it. If that happens then did you really buy it???
Banks Lose to Deadbeat Homeowners as Loans Sold in Bonds Vanish - Bloomberg.com
Wholesale Inflation Rate Soars
Higher Costs for Food, Energy and Medicine Push Wholesale Prices Up Sharply
WASHINGTON (AP) -- Inflation at the wholesale level soared in January by the fastest pace in 16 years, pushed higher by rising costs for food, energy and medicine.
The Labor Department said Tuesday that wholesale prices rose 1 percent last month, more than double the 0.4 percent increase that economists had been expecting.
[snip]
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"Ok, at the risk of asking for and getting too much information, why was 1995 the beginning of the scam?"
Short answer: The SEC Chairman and the Congress threatened and forced the FASB (accounting body) to allow companies not to have to expense stock options (Scam Options) compensation expenses. This led to the tech bubble (Cisco mkt cap at $600B!) and trillions of dollars of money went from pension funds and the public to the VCs and others who are part of the Network of Crooks.
Long answer: Read "BULL!" by Maggie Mahar.
Let me repeat: Scam Lovers are a bunch of dopes and morally bankrupt to feed the Crooks.
Jas
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"Dems want to write down mortgages to fair market values -- your debt disappears. Just when I was going to finally vote Dem they again convinced me not to."
Only a born-and-bred American dope votes and partisan Democrats and Republicans are easily identifiable born-and-bred dopes. No, your vote doesn't really count (it is counted but it doesn't matter)! It is a case of blind faith in the system, pure and simple.
BTW, I was a dope once! (I was a registered Republican and voted for and contributed to W in 2000). It requires lot of effort to un-dope (or detox!) oneself in America.
America: a nation of born-and-bred dopes ruled over by Crooks. The econo-political system was turned into a criminal financial enterprise. What you read on this blog are details of the Crooks deeds and dopes who got tricked.
Jas
Jas jain,
1995 was the start of the scam because that was when The Private Security Litigation Reform act went into effect. Expectations drive markets and this act undid post Great Depression acts by making it very hard to sue a firm for not delivering on promises -- prior, if firms told you they expected 25% returns and only got 2% you could sue them and win based on the fact that they were wrong -- now you can only sue if you can prove they intentionally defrauded you and you can't dipose them for the proof you obtain the proof without deposition. That is what drove the thing and if it was a scam that was only because not everyone was privy to the change in the law. If they news media had gotten it out there anyone who invests would have realized that it would drive the markets up.
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Headline...
Case-Shiller down 8.9%, YoY, and down 5.4% for the 2007Q4.
Jas
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Thanks, Something fishy.
Jas
Don't New Home Sales come out today? I hope so, because I love this day.
Re: people who have to sell into this market:
Back in the '80s and '90s I became familiar with real estate patterns in a couple of communities dominated by retirees. Home prices stayed low compared to surrounding communities, because when the retirees died, their heirs -- who usually lived hundreds of miles away -- almost always sold the home at low-ball prices. They simply wanted to settle the estate and go home.
Career relocations, divorces, deaths, retirement moves: all these will continue to happen. Aside from those who are under water, the gazillions of people who still have substantial equity in their homes, and have to move, may be more and more willing to sell now and get what profit they can rather than hold out. It could be a real depressive factor in home prices.
Yes, right now you can still find a lot of people who believe that real estate always goes up. But that kind societal wisdom can flip in an instant when there's sufficient panic in the air. And suddenly, only a boob would hold unrealized gains in real estate.
(Of course, that's the time to buy, if the numbers make sense.)
Elvis,
I have that on the calendar for tomorrow...
Based on recent market performance, the increase in wholesale inflation in January should make the market go up.
At least, if it does go up today, it will make about as much sense as anything this market has done lately...
Thanks, energyecon. Gotta hold off on the party for another day.
agreed with Rob Dawg: "Rather than normalizing to 100 for end of Dec it might make your point even clearer if you normalized to end of Mar"
as previously shown in a recent CR post, jan/feb data are a bit unreliable...i'd be interested to see the chart per Rob's comment...suspect it may calm some of the noise...
There are many owners who would like to sell but are not putting there house on the market.
As I said yesterday. I really believe that the actual inventory is well over 5 million now.
sad as it is, i'd really like a home at this stage in my life, the best financial decision has me putting home buying off until next spring ;[...i'll keep looking for that special deal from an actual motivated seller in a neighborhood i'd actually care to live in...but haven't seen one yet though...
the only tempering agent here is how much harder they're going to make it to get credit...