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Inventory always bottoms, seasonally, in the first week of January, or end of December if we look at the monthly data. Months of supply is not a good indicator at the end of December. September/October are the best guide for months of supply. Seasonality is very pronounced in home sales and listings and should always ne kept in mind.
Jas
didnt we just go over geometric smoothing just a few weeks ago, with this very same topic and the bogus nature of this data?
Can you help me on this in the meantime: http://www.sec.gov/Archives/edgar/data/1400725/000105117008000009/cwheq07e_jan08pds.txt
EXHIBIT 99.1
COUNTRYWIDE REVOLVING HOME EQUITY LOAN TRUST NOTES
Series 2007-E
Distribution Date: 1/15/2008
Where does one obtain inventory numbers from ?
Cheers,
v
Ok,
Can we go over these topics?
vercollateralization Details
Step Down Reached on December 2009 NO
Step Down Trigger Tests
Excess Spread Percentage 2.743%
Loss Percentage 9.820%
Spread Rate -7.077%
Spread Rate Test Trigger Threshold 1.250%
Spread Rate Step Down Event in Effect? YES
Current Delinquency Rate Percentage 4.701%
Rolling 3 Month Delinquency Percentage 4.102%
Trigger Threshold 2.500%
Rolling 3 Month Delinquency Step Up Event in Effect? YES
What is CDR?
Realized Lossses
Investor Loss Amounts 0.00
Investor Loss Amounts Paid 0.00
Investor Loss Amounts Unpaid 0.00
Current Realized Principal Losses 6,610,190.87
Cumulative Realized Principal Losses 11,470,037.92
Current CDR 9.319%
It looks like a good Friday for a bank closing to me. I guess FDIC will wait it out until after the election and close them all at the same time.
Sorry, CDR is:
Calculation Methodology:
Monthly Default Rate (MDR): sum(Beg Scheduled Balance of Liquidated Loans)/ sum(Beg Scheduled Balance).
Conditional Default Rate (CDR): 1-((1-MDR)^12)
SDA Standard Default Assumption: If WAS is less than or equal to 30 then CDR / (WAS * 0.02) else if WAS is greater than 30
and less than or equal to 60 then CDR / 0.6 else if WAS is greater than 60 and less than or equal to 120 then CDR / (0.6 -
((WAS - 60) * 0.0095)) else if WAS is greater than 120 then CDR / 0.03
Cumulative Loss Severity: Sum (Realized Losses) / Sum (Ending Actual Balance for loans that have experienced a loss).
Writedowns Surpass $100 Billion - MarketBeat - WSJ
How can Countrywide writedowns be so low?
FFDIC I guess FDIC will wait it out until after the election and close them all at the same time.
I laughed, but unfortunately....
I was told in 2006 that NetBank was going down. (But not by a regulator!)
There's dead banks walking on both sides of the Atlantic right now.
Just to check, this is inventory for just the District proper, not the MSA.
DC itself still seems to have a much more stable market than the surrounding suburbs, and the NOVA exurbs are in considerably worse shape.
After reading the comments regarding the proposed "stimulus" package, I just want to point out to everone that China has been SELLING US treasuries since March of 2007.
According to http://www.treas.gov/tic/mfh.txt
, they have sold 33.2 billion, or 7.9%.
Mike2, dc1000 might correct me, but he wrote that this data is D.C. metro - so I think it's just D.C. proper.
Vikram, I'll ask for the source.
Best Wishes.
How is it that the UK can afford to purchase 240 billion of US treasuries in one year? Aren't they in worse fiscal shape than the US. Can you say....covert monetization...
AAAAAAND the ABX roundup:
Looks like 12 new lows today for the ABX, the CMBX hit new highs in all but one category and the LCDX spreads blew out past the November high...
Just two quick notes on real estate,
1) My friends are fixing up their house for sell in the spring. If the inventory comes back on the market as I expect, they will have more competition than they expected.
2) I also have a client who has been trying to see his house for five months and has dropped the price by over 100K. It bothers him that he had an over for 720K but turned it down by his wife becuase it was not enough. Now, he is looking at selling the house at below 600K since his wife now wants him to get rid of the house. His realtor is telling him that his house is price correctly but if his house does not sell be March (max ARM resets), that it probably will not sell.
Vikram, CR
I've compiled a very similar looking graph from MRIS:
MRIS Statistics
I don't know if that the same source used here.
I use the "Washington DC" location rather than one of the other areas. You can also look specifically at zip codes in the area. This site gives a lot of pretty nice data.
Forgive my ignorance (I'm no expert on real estate), but if the inventory ratio is roughly as high as it's been since 1997, don't house prices have to fall to 1997 levels, adjusted for inflation, for the market to fully correct?
The real estate bubble started in 1992 or so. Go back to 1992 and plot in a 4% annual increase, and you'll see where real estate should be.
At the risk of trotting out the "it's different here" meme, D.C. should not be seen as typical, as businesses here continue to expand (and, needless to say, the government continues to expand, sigh.) One concrete measurement of that is Metro ridership and road traffic, both of which continue to climb.
That said, the District is more stable than NoVa and Maryland (as noted above), and the home supply is more stable than the condo supply (where they continue to be built at a breakneck pace.) But there is real demand, and real salaries to provide the money for that real demand.
Forgive my ignorance (I'm no expert on real estate), but if the inventory ratio is roughly as high as it's been since 1997, don't house prices have to fall to 1997 levels, adjusted for inflation, for the market to fully correct?
Not necessarily -- RE inventory can rise and fall without sales. Listings expire, sellers get discouraged and decide to stay put, etc.
However, right now there are a high percentage of REO (lender owned) and pre-foreclosure short sales on the market -- these are properties that will be sold regardless of price, and they are putting a tremendous downward pressure on values in many areas.
There is no direct correlation between inventory and price -- high inventory is an indicator of a buyers market, and high inventory of REOs is bad news in general. But values will stabilize when the market finds it's bottom.
=======
One specific insight to add, the condo market in D.C. has seen a significant number of reverse conversions as units, typically new units, have been converted to rentals. That has kept rents flat (and myself and my fellow bitter renters™ are grateful for that), while keeping inventories from exploding further. That's as opposed to Florida and California, where there isn't enough rental demand, with more units staying as (empty) condos rather than getting converted.
That factor will vary from location to location, but generally speaking, higher numbers of jobs will create more demand for rentals, which will tend to reduce inventory. Regions without (non-real estate-related) jobs will see inventories continue to climb as it doesn't make sense to convert.
It looks like a good Friday for a bank closing to me. I guess FDIC will wait it out until after the election and close them all at the same time.
FFDIC | 01.18.08 - 4:08 pm | #
Didn't that happen during S&L too? I forget which election but neither party wanted to discuss it during the campaign since both had left evidence at the crime scene... then one day after the results were in... Ummm. there's sumptin' we forgot to mention.
Alan, it doesn't quite work that way. A high inventory ratio means prices are probably too high, but you can't compare inventory ratios across time. Actually the D.C. ratios are lower than most areas.
The general rule of thumb is prices will go down with the SA months of supply above 8 months, and prices will rise below about 6 months (3 to 4 months was very low).
Best to all.
OK. So what happened between mid-2005 and mid-2006? Sales didn't change much from the previous year(s), but inventory took a massive leap.
You can read the graph up to that point as starting with fairly high inventory, each year's sales being higher than each year's addition to inventory, so inventory declines. But then, out of nowhere, comes this massive increase. Why?
OK, NOw that the Generals and Admirals properties are starting to decline, maybe we can get a few of them who are PO's to stage a coup.
There ought to be a law:
I heard an NAR radio commercial today that stated there has never been a better time to buy a home and the average home doubles in price every ten years. There was a little disclaimer at the end: "Not all markets are the same". No shit.
"There ought to be a law:
I heard an NAR radio commercial today that stated there has never been a better time to buy a home and the average home doubles in price every ten years."
Enough to make you want to believe in a god...
Of vengeance.
Regarding the NAR advertising, we could all complain to the FTC and document why we believe the ad is misleading, deceptive and unfair, likely to deceive the average consumer, and an unfair business practice.
Bob, I'm afraid that's as close as we can get to a god of vengeance.
Can someone name the only US bank that did not
shut down during Roosevelt's bank holiday ?
How is it that the UK can afford to purchase 240 billion of US treasuries in one year? Aren't they in worse fiscal shape than the US. Can you say....covert monetization...
SweetHomeKilla | 01.18.08 - 4:24 pm | #
The treasuries are bought by the Arab accounts based in U.K. "Petro dollar recycling" process.
manu06, I don't play a guessing game unless there is free liquor or bongwater involved. Why is this historical banking fact of no importance important to you?
dang, sorry i missed this thread.
dc proper stats only for RESALE
most new build properties dont go onto MRIS in a detailed fashion.
these stats are nothing more a collection of the stats MRIS releases monthly.
they speak for themselves.
i haven't tracked zip code or price range specific stats, but i think i should have. i can compile it pretty easily tho.
whats funny is that if you look at mid 2007 it looks like a head and shoulders top was put in. i ALMOST released a 'newsletter' to my network about that but decided not to for many many reasons including my absolute lack of expertise in technical analysis (if one even believes in that anyhow).
the chart is incredible in showing how there is often a late year decline and early year pop in inventory.
the chart also clearly show when the bubble burst, mid 2005.
then higher highs and higher lows which make a bull market in real estate misery here in washington.
(for sales that is)(multifamily rental is smoking hot however with cap rates of 5.5% for stabilized residential)(no kidding)
thanks for posting the data
dc1000
and PS thanks to CR for inspiring me to track this data in a meaningful way. it has given me great insight.
While there is a clear tendency for national inventories to fall seasonally in December, I cannot find any data to support your statement that the "normal" seasonal pattern (nationally) is for inventories to decline about 15% in December. Using NAR data for SF and condos combined (which go back to 1999), the average decline from November to December is 8.4%, with the largest decline being 13.2% (2001). Using just SF data going back to 1990, the average Nov/Dec drop is 9.2%, with the largest also being 13.2% (1998). Using seasonal adjustment programs, one would find that a "normal" seasonal drop is around 8 3/4% -- not too different from the likely actual drop we'll see in the upcoming NAR report!
ffdic
just a little trivia somewhat related to the conversation. no one said you couldn't
provide your own incentive
there is real demand, and real salaries to provide the money for that real demand.
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