Fed: Household Real Estate Assets Declined $431 Billion in Q1
Submitted by
CalculatedRisk on Thu, 06/05/2008 - 7:25am (71 comments)
Shopping at Amazon?
Wait! If you click on the Amazon banner link at the top of the page first, HCN will get a percentage of anything you purchase for 24 hours!
Open predictions
Our local book authors
User login
Who's online
There are currently 4 members and 140 guests online.
Currently online
Recent Recommendations
Inflation alone is gutting them like a hog.
--
The Latest Trend In Home Prices -- The Good, the Bad & the Ugly
Annual Rate of Price Change For 2008-To-Date & Since July 2007 (As Per Radar Logic data)\t\t
Phoenix, AZ\t-33.7%\t-26.4%
Washing, DC\t-30.8%\t-14.2%
Detroit, MI\t-30.5%\t-17.7%
Miami, FL\t-28.1%\t-25.0%
Sacramento\t-27.5%\t-33.0%
Las Vegas\t-26.7%\t-30.8%
Tampa, FL\t-26.6%\t-24.2%
San Diego \t-25.6%\t-26.7%
San Fran, CA\t-24.7%\t-24.5%
Los Angeles\t-22.0%\t-26.5%
San Jose, CA\t-18.3%\t-16.8%
25 MSA Comp\t-15.0%\t-19.3%
Boston, MA\t-10.5%\t-21.3%
New York\t-7.6%\t-12.0%
Jacksonv, FL\t-2.5%\t-11.9%
Denver, CO\t1.0%\t-15.6%
Philadelphia\t1.9%\t-9.9%
Seattle, WA\t2.0%\t-9.6%
Minneapolis\t3.0%\t-12.1%
Columbus\t3.0%\t-4.5%
Charlotte\t5.1%\t-4.7%
Milwaukee\t14.3%\t-11.2%
Cleveland 17.3%\t-11.1%
Atlanta, GA\t23.9%\t-10.0%
Chicago, IL\t24.4%\t-16.0%
As one can see, some areas do show recovery in 2008, thus far. 2007Q4 was by far the worst period for all areas, except DC, seeing double-digit Annual Rate decline.
Jas
Can a brother can an exponential trendline in these graphs?
Can't wait to hear everyone's breakdown of FOF; wow, it's like my b-day!
The small
On a lighter note, should I be worried so many people appear to be spending their stimulus checks on new handguns?
Welcome howispentmystimulus.com - BlueHost.com
Got cut off.
The small
If ELOCs are cut off and market prices plunge wouldn't the percent equity increase in those with mortgages? Unless you are using the price they paid in which case the percent equity should go up for performing loans.
The small less then 10% decline is only a problem because they are way leveraged.
We actually lose more from grossly under reported inflation.
Guess the left wing software doesn't like math signs
The ABX.HE.PENAAA tied to bonds from the first half of 2007, which requires the same 0.18 percentage point of annual protection payments as the existing ABX.HE.AAA, opened at a mid- price of 65.5, according to a note to clients today from Lehman. The index closed at 67.78, according to Markit.
The ABX contracts trading for the first time today are tied to subprime bonds that are a class one step higher than those in existing indexes, according to administrator Markit Group Ltd.
The index contracts from banks including Goldman Sachs Group Inc. and Deutsche Bank AG may provide benchmarks for a wider range of debt that has contributed to more than $335 billion in writedowns at financial firms. The contracts also may boost trading in similar bonds by making it easier for investors and traders to hedge what they own, according to Barclays Capital.
Re: Markit Homepage...
Even though prices have risen dramatically in recent years, the percent homeowner equity has fallen significantly (because of mortgage equity extraction 'MEW').
Push-pull. Rising prices forced new entrants to contribute lower down payments as a percentage of price and rapid equity increases induced others to move up the property ladder (trading 50% equity in a $200k for 20% equity in a $500k). Both of these also contributed to declining percentages of homeowner equity. It wasn't just MEW.
Actually, Jas, I believe you are picking up some seasonal effects from Radarlogic. PPSF normally climbs during the first 6 months of a calendar year, then falls.
I'm confused, what is the average mortgage debt per household and how do we break down GDP in terms of mortgage debt per household?
Household Equity down 10% under Bush, and it wasn't all at once.
Ken, don't vote for Bush.
--
safe_as_apartments writes: "Actually, Jas, I believe you are picking up some seasonal effects from Radarlogic. PPSF normally climbs during the first 6 months of a calendar year, then falls."
Some of it is seasonal, but not most of it.
Jas
The shrub isn't entirely responsible. MFN trade treaty with China really set the ball in motion.
@ Turbo
I just spent my rebate check on a handgun. I've never owned a gun before, nor have I ever wanted to. In fact it makes me uncomfortable having one in the house. But if I'm correct about what's coming, it might be the best investment I've ever made.
MEW will slaughter the banks.
GH,
Caution is good, paranoia is bad. I think bad might be a good way to describe your actions.
Gav-
Same EXACT situation here......could not agree more with your statement.
Ciao
MS
why is it paranoid to be prepared for ANY eventuality????
and I hope I NEVER have to get it out either....however I'd be a sorry sack if I needed it and I had no option.
Ciao
MS
MS, think it's a good time to long Smith & Wesson (SWHC)? Their stock has been in the crapper over the past 6 months. Traded at $22 in October, now at $5.60. They could see a big pop if this trend is real.
Also I have the exact same viewpoint. I have no intention of even touching the damn thing, but the risk of not having one when you need it (plus the risk of not being able to buy one then) is scary indeed.
A gun will only help if you can use it if and when you need to. I am also preparing for what might be bad times, and don't consider myself paranoid. I took a 5 day handgun class at a shooting school and consider it money well spent.
The Democratic-controlled Congress on Thursday adopted a $3 trillion U.S. budget for next year
House approves $3 trillion budget
| Reuters
If it wasn't for government spending the whole economy would collapse.
"But if I'm correct about what's coming, it might be the best investment I've ever made."
For hard times, better to invest in friends than in handguns. Unfortunately, friends are hard to buy.
Quality firearms are a good inflation hedge as well.
what is the average mortgage debt per household and how do we break down GDP in terms of mortgage debt per household??????
O Bob Dobbs, that was fab.
Guns don't kill people.
Bad economic and foreign policies do.
Take those gun safety lessons to heart, don't let your kids kill other kids.
Bob Dobbs and Interesting Times at 1:34, well said.
You'll shoot yer eye out, Mike.
Besides, you could always just use your bedpost to subdue any would-be robbers. That's how we roll.
CR
By subtracting the two curves in your second graph you should obtain household equity as a percent of GDP. It looks to be relatively constant over the time series and might indicate a historical mean that today's conditions could be compared to.
I just spent my rebate check on a handgun. I've never owned a gun before, nor have I ever wanted to. In fact it makes me uncomfortable having one in the house. But if I'm correct about what's coming, it might be the best investment I've ever made.
Hey you new gunners. Welcome to one of America's great freedoms. Now that you have exercised your rights, it's time to learn to exercise them responsibly.
Think about a Mossberg Model 500 18" home defense shotgun rather than a pistol. Pistols really suck except for the concealability thing. If you are defending your house, get the mighty mighty 12 ga pump. It's a smaller-ticket item than that handgun and they are much more legal.
If you're gonna stick with a handgun, do yourself a favor, get comfortable with it. Shoot at least 1,000 rounds through your new weapon. New handguns esp. need about that much break-in just to get the action running smoothly, and you certainly need the practice.
Learn how to shoot if you don't know how. Take classes if you really don't know how. The NRA will gladly teach you! Shoot it enough that it doesn't scare you. Handle it enough that it doesn't scare you. It scared the crap out of me when I got my first piece, but that goes away with familiarity.
Likewise, learn what is legal and what is not. Shooting people is a heck of a sticky thing, it's murder, which you get off from. It's still murder. Do it right! Learn what is a righteous shoot in your area and what places are off-limits for CCW.
Get what's called a "wheel of shame" and learn what your basic handgun handling problems are -- these are things you can hold up to a target and see what your handgunning defects. These are amazingly awesome things.
Get a CCW permit and a holster! A handgun without the ability to carry and without a way to carry it is worth much less than one you can legally cart around and that won't drop out of your waistband when you run.
Get extra mags and carry an extra mag with you when you're holding. A very high percentage of firearm failures in action are feed-failures. Like 70% at bent mag lips or bad mag springs, and a gun if only good at long as there's ammo.
Get a grip trainer, just a little spring compression thing like you can get at Wal-Mart. Hand-guns require a heck of a grip to fire accurately. This is also fun because douchebags who like to try to crush your hand to prove their manliness are always funnier when they are on the receiving end.
Vise-like grip! Be surprised when the weapon fires! Front sight!
The Democratic-controlled Congress on Thursday adopted a $3 trillion U.S. budget for next year
More debt for the populous and more bubble fuel for the fractional reserve banking system and Wall Street.
Shnaps,
Police think the house was targeted randomly. Under the circumstances, I think so to. Captain Bedpost has "big and agressive" right at the top of his resume.
Nicely said byzantine_ruins, I agree wholeheartedly. Familiarity and practice, go shoot your new gun. not touching the damn thing until you have to is not a good idea.
very funny....
Don't bother me when you get assaulted at the gas pumps when your SUV needs a $500 fill-up and people soon realize that you have the cash to do it with.
As a "little sprog" my parents refused to allow me to play with toy guns....understanding that they should not be treated as such. I do not want one AT ALL. I am prepared....nothing more or less.....make fun of that to your heart's delight.
Bob Dobbs-
Wall Street has decided long ago that friends CAN be bought at any price.
Schnaps-
You assume I'd let them into the house. If you do that won't help you at all. Nice try though...
I.T.
You left out what those policies do to people who benefited the most from them..they tend to react in an irrational way (Tim- see I spelled it like you wanted!!)
You won't be laughing if half of what's coming becomes reality.
Ciao
MS
Re: By subtracting the two curves in your second graph you should obtain household equity as a percent of GDP. It looks to be relatively constant over the time series and might indicate a historical mean that today's conditions could be compared to.
So, what is the average equity per household and how you come up with these values?
It would be nice to see your method!
so do we have any statistics or charts on how many people actually successfully defend themselves and their homes in incidents involving guns?
Um, so you're gonna just start shooting people you think are planning to rob you?
Maybe you should have spent your stimulus funds on a shrink.
Unfortunately, < Vlad >, you ran afoul of the reserved chars in HTML. These will be acted upon when you preview in Hell-o-scan, so you can see the result that way. Unfortunately, it will also wipe your words of wisdom if you make a mistake, so copy the preview window before hitting that button. & strings not terminated with whitespace seems to be one of its foibles, hence the spaces around your name.
UM...no schnaps but you are implying much more into this than need be....
Good luck with your shrink.
Ciao
MS
So the Bush Admin. plans for the "ownership" society have become the "rootless, wandering, don't own anything" society?
Odd how that happened.
Average household equity is completely meaningless. The number of seniors living in million dollar houses with million dollar bank accounts is astounding. Their effect upon the average is extreme. Conversely a recent grad with $100k in student loans and one tie drags down the average which disregards their economic potential.
Then there's the retirement funding issue. Saving in a 401k for instance is not counted the same as some other long term investments.
As a person who has owned guns her entire adult life, I am a little disturbed by these posts. First of all, what is it you new owners are planning to do with these guns?
(1) Inflation hedge - yes lock it in a safe and never touch it.
(2) Home defense against burglars - there is no way you are going to be able to use a handgun in self defense unless you are extremely familiar with it. The average miss rate for shooting a moving human 10 feet away is amazing high, even for people who know what they are doing. A handgun isn't the best weapon for defense of a home anyway - a sawed off shotgun is. You can't miss with those. Furthermore, if there are any children in your house ever, you'd better have your weapons locked up securely (meaning it will be hard to get at them when a burglar makes an appearance).
3- becoming a militia member in case of civil unrest. You'll want a rifle, not a handgun, and again you need to practice with it often. And lock it up.
I have no problem with gun ownership. I don't want one, but I don't begrudge anyone else who wants one. It's one of the few B/W rights enumerated in the Constitution regardless of how some people want to interpret what needs no interpretation.
That said, if you want home security, get a big dog (Labrador, German Shepard, etc). They'll hear an intruder long before you realize something is up, and they won't accidentally kill a family member. Intruders won't go near a house when they hear a big dog even if your dog is all bark and no bite.
As a "little sprog" my parents refused to allow me to play with toy guns....understanding that they should not be treated as such. I do not want one AT ALL. I am prepared....nothing more or less.....make fun of that to your heart's delight.
IMO -- get past the emotional reaction. Don't be uncomfortable with the gun, become comfortable with the fact you are preparing to be a killer. The killing is what you bring to the equation, not the gun. The gun is just a lump of metal without MS the killer behind it. Don't blame the gun for the situation that makes you use it, blame the people who convinced you the world would never be like this.
And you're right about what's coming along. If you want some advice, which I would extend to anyone here reading this -- get a book called "Three Kingdoms" by Luo Guanzhong. It's kind of expensive, but there's a mediocre free translation here if you're hard up:
Romance of Three Kingdoms - by Luo Guanzhong - Table of Contents
Piss off with guns and stay on topic retards!
As already mentioned, most estimates of the wealth effect in the United States fallwithin a range of about 2 cents to 7 cents of extra spending per extra dollar of housing wealth (see Table 1). 7 That is, all else being equal, a $1,000 increase in the price of a home this year will generate $20 to $70 of extra spending this year and in each subse-quent year. Some studies assume that the size of the wealth effect changes over time; two of those studies find that the effect is larger in the first year than in subsequentyears, while a third study finds the reverse.Given those findings, one can estimate the impact of the increase in home prices since 1997 on consumer spending and saving. In making such estimates, changes in homeprices should be compared with changes in the cost of living; if home prices rise onlyby the same percentage as consumer prices, the amount of goods and services that a home can be sold for remains unchanged, and so there is no wealth effect.The rise in real home prices between mid-1997 and mid-2006 added $6.5 trillion to consumer wealth. 8 Combining that estimate with households propensity to spend from housing wealth indicates that the rise in real home prices since mid-1997 has added between $130 billion and $460 billion per year to consumer spending. 9 That estimate implies that consumer spending would be 1.4 percent to 5.0 percent lowerthan it is if real home prices had risen only at their trend rate since mid-1997, all else being equal. (The qualifier all else being equal is important because other drivers ofconsumer spending, such as household income, could be different if home prices werelower today than they are.)
I am going to assume that a thread dominated by gun talk is bearish!
If you are going to have a gun learn to use it properly. People with guns who are uncomfortable with them, often have their own gun used against them.
Not "hard up" byz.....
but you're attitude towards others is
Good luck with it.
Ciao
MS
would you go near a house with a 110 lb Doberman???
Come on over.....I'll give you the address.
Ciao
MS
but your attitude towards others is
I am a terrible person, it's true!
I also just gave some people a bunch of fairly detailed advice that may save their life and / or a lot of legal expenses.
It's great to encompass contradictions. I would not wish to live otherwise.
CR, regarding the household percent equity graph, you state that this is biased by all the households w/o a mortgage (i.e., 100% equity). Does the percentage account for households with negative equity or does it figure those households in as zero equity? The latter would lead to additional further upwards bias, right? Thanks.
would you like a gold star to go with that?? I hear they are passing them out to anyone nowadays.....
You assume that people here are unaware of any information you put forth. Try a little humility with your information.
Ciao
MS
Sorry no time to review other comments.
It seems to me that the decline in actual ownership of assets known as homes translates directly to -- pauper country.
The free market revolution has arrived, and wonder of wonders, it's just like your great grandfathers free market.
The spells the end of the US as we have known it.
Does the percentage account for households with negative equity
In theory, yes. The way they measure aggregate equity here is simply to aggregate the current value of all residential real estate at "market value" and subtract the total of all resi mortgages (incl. jr. liens).
It's not clear how they arrive at the current market values, at least not to me. I'm guessing they apply some index, but it would make a pretty big difference (as far as neg. equity is concerned) whether they used Case-Shiller or OFHEO, for example. Then again, maybe they use tax assessments, which would be even more misleading.
would you like a gold star to go with that?? I hear they are passing them out to anyone nowadays.
You can make cash gifts via my user page on livejournal.com.
You assume that people here are unaware of any information you put forth. Try a little humility with your information.
I make no such assumptions. Rest assured I'll take your comments under advisement and give them the attention they deserve going forward.
"The Democratic-controlled Congress on Thursday adopted a $3 trillion U.S. budget for next year
Page Not Found | Reuters.com
b...529765620080605"
M'kay... so Republicans controlled ALL branches of government for 6 of the last 7.5 years. So, this means Democrats are solely responsible for record-breaking deficits, pork-barrel spending, and corruption for the entire time. Not a very "fair and balanced" POV.
Disclaimer: registered independent.
Isn't that almost equal to what the Fed has loaned out thru the TAF window?
byz - just be glad he's at least toned down his language today.
I sometimes wonder if MS is a longshoreman who suffers from Tourette's syndrome.
Single party politics is immiscible with a functional democracy. Witness California.
and I spend my day's wondering what you two do to each other......not a pretty picture however insulting someone under the guise of "advice" pretty much sums up what you two are about.
Ciao
MS
As a former Jarhead I'm going to keep it simple.
Learn the rules of weapon safety.
Practice.
Practice.
When you think you can handle it practice some more.
You don't need to spend a fortune or tons of time.
Also learn the law of your state on what you can and can't do for self/family defense. Florida has some of the best,your state will vary...
Chris
P.S.- Practice some more.
Handgun Target Analysis
This is the "wheel of shame" I was talking about. Some of the new handgunners may find this useful.
Schnapster:
I play a rough game, he's welcome to say what he thinks. In the end, it's not what he says or what I say, it's what the third party reading the exchange thinks.
and the stock market?
straight to the moon!!
and I spend my days wondering what you two do to each other......not a pretty picture
My grandma and your grandma
Were sittin' by the fire
My grandma told your grandma
I'm gonna set your flag on fire
Talkin' 'bout hey now, hey now! Hey now, hey now!
Iko, iko unday
Jockamo feeno ai nané
Jockamo fee nané
however insulting someone under the guise of "advice" pretty much sums up what you two are about.
I'll insult you to your face, man, straight up -- you won't have to wonder.
I did'nt "wonder" it was easily taken from the response "If you are hard up".
Now go back to trying to be better than everyone else is the world.
Ciao
MS
In case anyone is still on this thread-- and sorry if it was brought up before, but--won't a growing population drive down percent equity by itself? As a population ages (Europe, Japan) more of the population has been in their home longer and percent equity goes up. If more young people are around, either through birth or immigation, percent equity would go down? Wrong?
I didn't "wonder" it was easily taken from the response "If you are hard up".
Three Kingdoms starts at 40 bucks for the paperback printed on onion skin, and you really don't want to get it abridged. Get ready to drop 150 for the 3,000 page English & Chinese edition.
All kinds of people read Calculated Risk. Some are rich, many pretend to be rich, others will admit they work for a living. None of them are necessarily going to be motivated to spend 40 bucks on a book the size of the Lord of the Rings and the Silmarillion combined.
I'm certainly not one of the people here pretending to be Thurston Howell. Empty pockets don't make you bad, they just make you poor.