Its only distressing if you are trying to sell your home otherwise its just a fun graph.
from other post
"Keiretsu"
MS a student of history!? I am glad I am not the only one who sees scary parallels between us and Japan. We're just 15-20 years behind. You don't hear that word thrown about as much anymore. There was a time when GE and motorola called themselves a Keiretsu I think.
"After leaving the tony New York City suburb of Mamaroneck to take his new post in Washington, D.C., Geithner put his five-bedroom Tudor home on the market for $1.635 million.
That was in February. By May, he cut the price $60,000 but still got no takers. A few weeks later, May 21, the home in New York's Westchester County was reportedly rented for $7,500 a month."
That amuses me to no end. I wonder what the purchase price was and at what point he might end up underwater.
Tim Waiting for 2012
Keiretsu...
.......
During the occupation of Japan, under the Supreme Commander of the Allied Powers, General Douglas MacArthur, a partially successful attempt was made to dissolve the zaibatsu in the late 1940s. Sixteen zaibatsu were targeted for complete dissolution, and twenty six more for reorganization after dissolution. However, the companies formed from the dismantling of the zaibatsu were later reintegrated.
....
this is one area he left undone...
I had have an interest in this as a six degrees of separation thing since Dugout Doug was a 2nd cousin to my great grandmother (she was invited to his state funeral but didn't attend...)
It will sit for a long time. He knows this....if he doesn't he's effing stupid. I'm sure he can make up the difference with a few well placed policy initiatives.....someone at GS will end up buying it at an inflated price....watch.
"Although distressed sales will stay elevated for some time, eventually I expect this ratio to decline back to the previous ratio. The small decline in June ratio was because of the increase in new home sales." - CR
I think distressed sales are the new normal for a very long time. We haven't even seen the effects of unemployment on true homeowners yet. We are still seeing normal type employment recession driven defaults based on the 4.5% unemployment of 1-2 years ago (very low). These are the people trying to hang onto their homes through a normal recession not the bubble participants who are the only ones defaulting now. If U-3 is 9.5% now headed for 11% we will see the default consequences 12-18 months from now. All we've seen is a partial market clearing of bubble debris. Now we have to start distress sales due to the recession.
Yay green sh0ots..the economy's recovering..woo hoo. But who will benefit? only he top 99% of earners- the same as it;s been since R3aganomics.
How else would you explain how executive wages have skyr0cketed, while worker wages having been LAGGING inflation for the past 2 decades? Why do we put up with this cra.p? Maybe the economy needs to shrink some more so that real change will take place that EVERYONE can benefit from instead of the wealthy investor creator class.
The Geithner house story is rich. Lowering the price $60K on a $1.6 million listing is asinine, the classic move of the delusional seller. I guess that's all you need to know about him.
I concede you have the logical argument. Mine is a gut feeling, and very emotional to boot. The only thing I hold on to is that history is filled with individuals who have overcome adversity to achieve (both good and evil I should stress) greatness. These individuals have been able to break through the status quo maintained by the wealthy elites throughout history. I believe they are Loki's children if you will, agents of change and chaos and necessary for human advancement (probably a poor choice of words since the more things change the more they stay the same). Your route seems the best for the Republic but I fear it puts us on a course where it will be the norm, and thus another layer of control by the 'soulless minions of orthodoxy'.
"someone at GS will end up buying it at an inflated price...."
I have no doubt he'll get his reach-around. That is how the well connected get to play the game. Or he'll be the next GS CFO, so that he can get a taste along the lines of the 500 mil that Paulson has. Then if he is smart, back to public service, so that he can get a tax free cash-out.
Sadly GS is getting their jollies at the public's expense.
I'd like to see some data that supports the proposition of distressed sales at a 1.5 million annual rate, other than the cryptic pronouncements of the NAR.
I think Dawg makes a strong case and I don't get why CR thinks
we maybe at the end of this cycle with rising UE...
maybe what bothers me is that this cycle is different in many respects
so perhaps the old models might not fit...
Japan had certain laws set up at least in the 1980's that made it prohibitively expensive to own an older car. Basically required one to buy a new car every few years. "Cash for clunkers" is a step in this direction. I agree the US is becoming more Japan-like. Particularly as far as entrenched bureacracies such as DoD and Treasury are pushing Congress around.
"LOL @ Geithner. A treasury secretary that doesn't understand needing to lower the price."
The fact that the property is now being rented leads me to belive that the seller thinks prices will recover in the near term. And THAT shows me Timmy is either not very smart or thinks he is not long for the D.C. scene.
TA, I think DataQuick does a great job for California. They reported for June: "Of the existing homes sold last month, 45.9 percent were properties that had been foreclosed on during the past year." and that doesn't include short sales (also distressed). So I'd guess California is over 55%.
But that is probably higher than most states (Arizona, Nevada and Florida might be worse). So the 31% figure from the NAR might be close.
The distress gap is merely the result of 4 million too many homes built during the Bubble. Since homes are non-perishable and most have some twisted moral dilemma against bulldozing, embrace the gap because it is at least a five year problem.
It will be interesting to see the next months figures. My spouse works for a mid-sized home builder int he DC metro area and they were all excited in April and May over the big increase in sales. June was slower, but not so bad. July new sales have fallen off the cliff again.
Rob Dawg, I agree distressed sales will stay elevated for some time - hopefully I didn't misstate that. My point is this ratio will probably come back in line over time (maybe several years from now), and that means an increase in new home sales, or a decrease in existing home sales - or both - over that period.
I'm not arguing it will happen quickly, but I think people looking for a rebound in existing home sales over the next few years will be wrong.
Funny thing, I am following another forum over on a sun watch site...I can almost copy and paste identical statements about 'cycles' from here and there...bulls and bears everywhere, and a few waiting for more data...
Since homes are non-perishable and most have some twisted moral dilemma against bulldozing
Bulldozing, and empty houses are clear signs that the market is broken. Banks holding these properties on their books at make-believe prices is counter productive. All as a result of choosing the Japan option.
You know, if Timmy really stretched to get that house, then maybe dumped some money into it to repair some minor damage ... There might be no way he can afford to sell.
Dropping that $60k might have been the last drop before admitting to losing money on the deal. Yikes!
No disrespect CR, but why should this 6:1 ratio come back in line? Does it go back a lot further than 1994?
When I look at the mix of residential housing being built since 1994, most of it is in bad locations and is not demographically necessary. So actual need doesn't account for the 6:1 ratio - that's just how much money people had available to spend on new houses.
And it has little to do with replacement - some of the recently built houses may only last six years, but most of the older ones will last a while longer. (edit: this is a joke - existing homes sold doesn't equal existing homes, although it seemed like it a few years ago. I don't know the ratio of new homes to demos, but it isn't anywhere near 1:1)
...but I fear it puts us on a course where it will be the norm, and thus another layer of control by the 'soulless minions of orthodoxy'
Not to jump start a heated discussion, but when has human history not had layers of control by orthodoxy? It is just an instrument of bureaucracy of varing structures, and it is hardwired into almost all parts of any structured system.
Would making people proceed with pregnancies without any option or choice fit into the the same kind of layers of "soulless minions of orthodoxy" you are wanting to avoid?
you know what is so cute? How at each one of the previous little blips up in new home sales, the same stories were trotted out. Lets see how this one turns out once the new buyer credit and other incentives wears off. I know people like homes, and i know prices are lower, but the unemployment trend should tell you something.
Sometimes people just don't want to accept that there is some good news. Higher new home sales is good news (for quite a while now higher starts has been bad news, but even that mght be changing). the absolute level of inventories for New homes is pretty low when you adj for pop growth. Still think prices will be under pressure for a while but activity seems to be picking up and time is curing things slowly. Not exactly happy times are here again, but this appears to be a legit green shoot for the econ. 3 regions of the country were booming for NHS, only the south lagged. Looks like the 1st time buyer credit was pretty successful in helping to clear out inventories.
Existing home sales ... I'm a little confused as to what it consists of exactly.
More specifically, I am wondering whether it includes distressed sales? Homes that were foreclosed?
Does home sales matter anymore, now that default/walkaways are common? Does the number matter if people pays 4 months of mortgage before defaulting and lives in the home for 24 months?
Here's an idea for a novel: Palin is president in 2012. dollar has crashed a few years earlier. EU has disbanded.
Btw, why couldn't have Bush, Greenspan, or Paulson quit their job?
CR replies very clearly above. I was just making sure "eventually" meant years and not a symmetrical mirror image of the run up we've experienced. That said I think we are going to see a lot of adaptive reuse substituting for new construction. Let me explain. So much of anything that could be new construction is in the wrong location, inappropriately designed and appointed and subject to very high carrying costs. I am suggesting that instead of "new" construction we are going to see first and second ring older homes completely renovated/rebuilt to meet "new" home demand. Most likely the traditional methods of measuring "new" construction are going to miss this substitution.
Simple math : 4 million oversupply at annual new demand of 400k is 10 years of oversupply at today's demand rate. Demand is fluid but still...Home building is dead for a long time.
Tim Waiting for
this is what I tried to say ... I didn't understand CR's optimism
but now he has clarified it better and the time horizon is many years, no?
I wish I could find statistics on how many of these low end homes are subsidized by the government? anyone? Are the flippers selling to folks who are getting assistance from the government?
My mother is severely handicapped and about every 6 months I review the HUD site, USDA site etc.. for the newest housing “give-away” program available to low income and disabled folks.. I have been doing this for about 3 years.. The last week I am absolutely shocked how many community action agencies, public housing authorities, township and counties programs are available compared to last year. They must be competing with each other to find low income folks to buy homes.. Every county has a program that can be added to another government program for down payment grants and section 8 subsidies. There are so many more opportunities to mixed your section 8 housing voucher with down payment grants so that a family only needs to pay 30 percent of their income towards a house up to 417,000 in California. If you are bored go spend some time on the HUD and USDA rural websites..
"Higher new home sales is good news (for quite a while now higher starts has been bad news, but even that mght be changing). the absolute level of inventories for New homes is pretty low when you adj for pop growth. Still think prices will be under pressure for a while but activity seems to be picking up and time is curing things slowly."
I agree that higher volumes will lead to a faster price discovery and a bottom. I suspect thought that that price bottom will not be so green, as more and more properties get underwater.
"Based on the latest 10-year earnings average, to reach a P/E (2010 forward earnings) in the high single digits would require an S&P 500 price decline below 600. Of course, a happier alternative would be for corporate earnings to make a strong and prolonged surge."
yagij,
This isn't a heated argument. Friendly all around...I am a philosopher not a zealot, so don't worry about offending me, I take very little personally. I did say, Byz had the logical argument. I never meant to imply that in the past there was less control or layers of society...my soulless minions of orthodoxy was a hat tip to a Star Trek DS9 episode, meant in jest not accuracy...My point is simply that targeting abortion for poor single mothers reduces the chances for individuals to develop who might 'change the game' if you will, even if only for a short time. My stance is not rational...not even ethical. I am suggesting that for the good of all, sometimes individuals have to go through hell and suffer, in order to overcome and be more. Argument against paradise...and the original explanation of satan....remember mankind was lazy...nothing ever happened in paradise...god appointed satan as the official tempter of mankind...only through hard work and toil do we grow...it is just a philosophical point with me that things done out of convenience are seldom convenient in the long run.
triplec
interesting info... I am the owner of some low end rental homes in S. Indiana,
I've been trying to get out of this partnership for some time... a few years back I was
trying to get a few of my tenants to buy the property outright...
I checked out some of the money that might be available...
maybe when I'm back there in the fall I'll pitch 'em again thanks
Take a Name..., do you mean if the company lost money last year they should pay me to take shares as an investment? That sounds like a idea I could get behind.
Vonbek777 (profile) wrote on Mon, 7/27/2009 - 11:58 am
I concede you have the logical argument. Mine is a gut feeling, and very emotional to boot. The only thing I hold on to is that history is filled with individuals who have overcome adversity to achieve (both good and evil I should stress) greatness. These individuals have been able to break through the status quo maintained by the wealthy elites throughout history.
Ultimately my response is that I am not willing to endorse the creation of a suffering underclass just so that it can produce a few dynamic individuals. I think you might have a point if America was a closed system, but it's not. Also I'm not really sure that pure dynamism is a goal. It seems like the American Republic is built around giving each person the best chance they can have of achieving as an individual. I don't know that the parameters of that experiment really go to where you can make that investment for the collective at the expense of all the individuals involved. I think there's plenty of room for redistribution, but large-scale social engineering potentially leads you away from an Enlightenment Republic. Getting everyone all edumacated and togaed-up to discuss big ideas in war and politics down at the agora seems like it's the thesis of the effort and getting too far away from that risks losing the point of the Republic. Just my feeling, but, we need machine helots more than we need real ones.
Your route seems the best for the Republic but I fear it puts us on a course where it will be the norm, and thus another layer of control by the 'soulless minions of orthodoxy'.
That's a problem that will solve itself if stasis turns out to be an affliction. I'm not sure that a very stagnant, happy, general prosperity isn't much more in the ideal of America that the Founders saw rather than the sort of wacky nationalistic imperialism we've been engaging in for the last century. Obviously, I'm a Confucian / Taoist so, this is a answer I am prone to arriving at, but I think that it might be interesting to experience a genuine general prosperity.
What you're describing doesn't seem too different than what we have now, and we haven't had a big outbreak of genius because we shit on blacks and latins, and I don't really see that social-economic decay has strengthened a lot of societies. Typically, you will have much better barriers to entry erected by vested interests than you have human ability to surmount them, or people wouldn't take the time and effort to erect them. You normally get renewal through social collapse or external invasion, not by internal dynamism.
just another lurker (profile) wrote on Mon, 7/27/2009 - 12:31 pm replyIgnore userTake a Name..., do you mean if the company lost money last year they should pay me to take shares as an investment? That sounds like a idea I could get behind.
Not a flipper at all I buy and hold long term as rentals. Cash flow and profit is the goal. I just sold a 2 unit Up and down for a very under valued $23K. Tax value at $28K. The town died as to the years of drought and the local controllers. Once a good cash flow property with good tenants became the dirt magnet. I live in another town and am buying a replacement here. The buyer a young mother on welfare and job training. She received a grant of $5K from the county as a down payment (told is was not to be paid back)and the down stairs tenant of 22years was evicted so her support check would not be altered due to the rental income. I guess Grandpa how helped in the deal is now the unpaid tenant down stairs. You tax dollars at work! No mention of where the father is!
My original scenario was that the alien spaceship lands in front of White House, two creatures debark and start walking toward the doorway, stop, look at one another, then both say, simultaneously: "Nah"...,
...turn, enter the ship again, and take off for orbit.
Vonbek
I prefer this Hindu creation myth:
the Devas and Asuras (demons) fought for 1000 years w/o getting anywhere. Vishnu advises them to work together in a diplomatic manner. Devas formed an alliance with asuras to jointly churn the ocean for the nectar of immortality and to share it among them.
Churning the Milky Ocean
The churning of the Ocean of Milk was an elaborate process. Mount Mandaranchal was used as the dasher (churning tool), and Vasuki, the king of serpents, became the churning rope. The gods held the tail of the snake, while the demons (Asuras) held its head, and they pulled on it alternately causing the mountain to rotate, which in turn churned the ocean. However, once the mountain was placed on the ocean, it began to sink. Vishnu in his second incarnation, in the form of a turtle Kurma, came to their rescue and supported the mountain on his back.
....
Byz,
Dad says the genius of the republic is that nothing can happen too fast, the stagnation is good for stability in the long run, and our whole system is built upon inefficiency in government and efficiency in markets...not sure about the markets right now...but I understand the point. Yes my idea falls apart in this modern world, I don't see a whole lot of genius cropping up here currently either. Seems the genius fairy has moved to S. Korea, India, and other places abroad...but then again thanks to the Church of the Golden Arches, even our poor are fat, dumb, and happy...I digress...the creative part of my personality is an anarchist at heart, much to the dismay of my rational half.
LobbyistBenDover
as an interested landlord I'm not sure I follow your narrative...
you paid 23K for the place or you made 23K? and the tax is assessed at 28K...
I am cash only buyer. Buying houses here is like the little green ones in Monopoly. The locals get piss at my buying power. I had the property for 9 years. Got pissed and wanted it gone now had a contract in a week. I am happy. I rarely loose money.
Vonbek777 (profile) wrote on Mon, 7/27/2009 - 9:46 am
Dad says the genius of the republic is that nothing can happen too fast, the stagnation is good for stability in the long run, and our whole system is built upon inefficiency in government and efficiency in markets..
Which is why every time the government manages to act based upon a claimed necessity for speed we all lose a little of the Republic. Happened with TARP, happening with health care.
I don't see how you can have any real recovery in housing with real interest rates as high as they are and going up every day.
That's because the intent was never to stabilize the housing market. All along the goal was to make whole the mortgage industry (banks) exposed to housing. thus we have what looks like the largest spread twixt mortgage rates and real interest rates in modern history. Good overview on real yields at Marketwatch.
my units are usually single family homes that cost 16K to 24 K and rent for around 400 a month...
....
I see no appreciation in my units either...
it's all about cash flow...
have one Victorian house from 1872 that is divided into 4
apts... problem is that I have to pay the gas heating... I've tried to
get my 2 business partners (brothers) to change out into a new heating system
but they dont; budge....
dirk..yes, it's good news, unless of course prices keep dropping and these sales just turn into more defaults and problems for the banks. Or if rents keep dropping and all these genius landlord types find that they cant cashflow the properties as they thought. Yes, of course there is an eventual bottom for sales. But even if this is one, im not so sure it's an unqualified good thing.
One of my favorite episodes 1 currency...overpopulation is often used as an argument in support of abortion...then there is the other Trek episode where computers pick random casualties from the general population in a never-ending war.
U.S. takes center stage in EU hedge fund row
LONDON (Reuters) - Debate over controversial EU laws on hedge funds shifted to the United States on Monday as a key industry body warned of protectionist aspects of the rules which have prompted Washington to lobby for changes. The Alternative Investment Management Association (AIMA) said the planned laws on alternative investment funds create "potentially major difficulties" and loss of business for funds and investors outside the European Union.
It said the rules would limit European investor choice and damage the competitiveness of the European funds industry.
The vast majority of the $1.4 trillion hedge fund industry is managed either out of the United States or UK.
The draft directive, announced in April, allows managers in non-EU countries to sell their funds to European investors, but only if regulation and supervision is equivalent to that in Europe, and only after a three-year transition period. On Monday the Wall Street Journal reported that the United States is quietly lobbying Europe to change the terms of the directive. Yahoo! 404 - Page Not Found
lol, oh I didn't like that number? How about a different one? I'm sure Dick Bove has even better numbers. And Birinyi Associates has the chosen numbers with the special sauce. Everyone has their own version of the truth.
"I don't see how you can have any real recovery in housing with real interest rates as high as they are and going up every day."
And not stopping anytime soon as risk gets priced back in. Kind of hard to peddle, "housing only goes up," these days. And how many more properties are now underwater with that 4% drop?
"Hard to tell if they're going to run out of buyers or houses first, that's the key question."
I suspect there is always a buyer, but not necessarily at a price the seller will like.
Attended a party this weekend, mostly mid range academia and state policy types. Unemployment and salary reductions were the talk of the night. As far as I can tell, everyone is hoping that they can hang on. Even people who purchased based on 1 income are concerned. A good example is a couple where the wife works in healthcare sales and he is a mid line state employee. Problem is they could loose either job and be fine. But she looses her position along with the furloughs, they are effectively done.
Multiply this deflationary effect across the state.
sadly,
in the years (13) I've had rentals I have yet to make a dime even though some
have very good margins.... why? mainly cause I live in NYC for almost all of those years...
and we hired out the older brother to collect rents and some light maintenance and since
most of the tenants pay in cash well money just disappeared... or we had phantom renters...
....
it took me weeks of spreadsheet building and analysis to see how it was done using various
deposit schemes and the like...
....
Volker, had to turn down the ac this morning so I knew something was up. Doesn't last though, back in the 90s soon, but even that is better than this stretch of 100s we had earlier this month.
Despite of various efforts, the government fails to show its magic as there is very little changes can be seen in market situation which is not enough to get rid of such a huge problem. As per the current situation this article is Ideal Unemployment and Foreclosure
I simply love the games that the options market in playing in NFLX today. Put in a limit order (STC) on an August put. Instead of filling it in between the Ask/Bid they have kept the ask capped so that they don't have to fill it. Now what they want me to do is to pull the order, resubmit it as a market so that they can fill it at the bid or lower price. Someone in chicago wants a lobster dinner and they want me to pay for it.
WestSac_grrl (profile) wrote on Mon, 7/27/2009 - 10:02 am
[California] Attended a party this weekend, mostly mid range academia and state policy types. Unemployment and salary reductions were the talk of the night...
Multiply this deflationary effect across the state.
Yet Barry and Timmay are on the road expressing concern and cooperation over the potential problems in China and the US exposure to those problems rather than visiting California. China GDP $4.2T. California GDP $1.8T. Which one deserves Obama's pledge of partnership? Which one got it? which one represents a more systemic risk to US interests?
My point is simply that targeting abortion for poor single mothers reduces the chances for individuals to develop who might 'change the game' if you will, even if only for a short time. My stance is not rational...not even ethical. I am suggesting that for the good of all, sometimes individuals have to go through hell and suffer, in order to overcome and be more.
Could that point then be stretched back into the womb and be included in the "through hell and suffer" period?
If miscarriages and molar pregnancies are often results of pregnancies, I'm not sure why there is a distinction between taking a drug to induce a miscarriage--or are we just assuming the abortion M.O. equates to actions like partial-birth methods--or smoking or drinking or Nature being Nature. You could infer an intent versus the outcome, but the "hell and suffer" and survive part are still there. Also, abortion or post-birth exposure was a normal function of society for millennia, and history still produced figures of politics, religion, and culture from troubled backgrounds. I'm not sure how having the same kind of options for today's women would affect human history more than it already has.
I Try to match the properties to a spread of low income to middle income. Almost all of mine get new HVAC, electrical panels, reasonable insulation. I buy right going in to cover these expenses. Some I buy are what others won't as they need some work and don't have the money to update. I have managers who do the oversee and one is excellent! I am not a slum lord who never fixes anything.
volker the viking (profile) wrote on Mon, 7/27/2009 - 10:18 am
Rob Dawg: which one? Which one has the most importance for the US long term interests....
tough call
Maybe Hopey just wants to kick Terminator's butt.
Leader O is ramping up to keep the House in the mid-terms. California is currently safely in the win column so Rahm hasn't told him yet that California is going to be relevant. Right now it is about maintaining the facade of stabilization for the battleground states.
funny thing is that Arnold is the best Obama can hope for as governor. Whomsoever replaces him next year is sure to be far more problematic.
yagij,
All good points. I am on a slippery slope myself...the miscarriage argument is excellent, where do I draw the line on the other side of the equation with 'natural' aborted births...I honestly don't have an answer other than my personal view is not enforced, mandated, or even looked favorable on by those who determine the norms of society. Absolutely correct about ancient cultures practicing abortion. My concern about now is that technology (in my view, others see it as a salvation) is increasing the reach and grasp of those with 'stars upon thars' (doctor suess reference there). I am seeing a smaller and smaller box humanity is being placed in. This of course increases pressure, so my fears may be for naught, but I don't like the idea of a technological paradise saving us from all the evils of the natural world...human nature requires chaos to survive, and chaos requires diversity...I fear the future from that stance.
The Sneetches is a great teaching tool - my five year old gets googly eyed at something on TV and I tell her that is another McBean - the light bulb goes on...
Skilled Immigrants on Why They're Leaving the U.S.
" "I feel restricted here," says Kumar. "I understand the U.S. has a responsibility to its citizens, and I understand its dilemma. But the country would be better off if it could isolate and identify skilled workers who want to come here and build things and welcome them in."
Freaked me out at age ten. Mass death as a happy ending? On prime time?
I'm a strong nurture over nature type, so I'd rather see policy that treats each child as precious, than that encouraging as many children as possible, hoping one will emerge from the melee to save us.
"the country would be better off if it could isolate and identify skilled workers who want to come here and build things and welcome them in."
As opposed to training our existing unemployed to be skilled instead, so they can build things? How does one justify H1-B in the face of double digit UE?
I don't like the idea of a technological paradise saving us from all the evils of the natural world...human nature requires chaos to survive, and chaos requires diversity...I fear the future from that stance.
Who is the "us" in your concern?
The last time I checked, there was plenty of subsistence living in many parts of the world without basics like access to safe drinking water or basic health care like shots or vaccines. Living in many "poor" parts of the U.S. in rural or urban areas are still a few steps above true poverty in the world. I've read about Haitians eating mud pies to ease their hunger. I've read about people living off of the wildlife in deserted parts of Detroit.
Even in the "bad" parts of the U.S., there are better living standards, and most post-boomer Americans cannot truly fathom a hard life aside from having no A/C in the summer or having to eat fried spam. Chaos may be coming, but it has just as many losers as the Peace if not more.
teabagger (profile) wrote (in reply to...) on Mon, 7/27/2009 - 1:49 pm
googled it myself. number looks accurate. I'm surprised.
People are ignorant and desperate. You can tell because there are so many irrationalist strains in the national psyche. Obama's "Nope Now" and Bushite America / Authority worship are both founded on what exactly?
The more ignorant the populace, the easier they are to lead with simple slogans, and the more effective arguments that people can't be trusted to have a role in government and that the matter needs to be left up to technical experts.
Now I did qualify my statement up above that the change, deviation from the norm if you will, could be for good or evil. I also said that I don't have an ethical foot to stand on in this debate. I view history as a force more than a sum of human effort. I see an unseen hand that navigates the best laid plans of mice and men and total anarchy. Call it god, collective unconscious, or evolution...I don't care...it is there. I don't see this force as benign or gentle...and even though I demand personal ethics for the good of man, I don't think the force of history is especially concerned with human concepts of good and evil...in the end, we might just be that fever the earth must shake off, I don't know, but I as an individual don't like to limit a chance for life. This isn't a religious argument for me, just a diversity argument.
It may take a long time for the ratio to return to normal. Ordinarily, over say a decade, annual existing home sales should be the number of households buying/selling that year less the number buying new homes. If the number of households increase, so should the number of sales. Rising incomes, increasing mobility and changing tastes might lead more people to buy/sell, but the change shouldn't be huge over a short period, and real incomes were more or less flat over the last decade. Similarly, over a decade the number of new home sales should be roughly equal to the number of new households less the number of existing units taken out of service (whether by destruction or conversion to rental or commercial).
Your New and Existing Home Sales graph shows that existing home sales rose about 45% over that period -- that's a whole lot of flipping -- and new home sales rose about 60%. Each of those new homes gets added to the supply of existing housing stock after that initial sale. Existing Home Sales are now a bit below trend -- just about at their 2000 level, although the number of households grew by about 11% through 2008. Given the massive overhang, with about a third of the existing sales being distress sales, there's little reason for households to buy a new home until prices rise above the cost of new construction. It wouldn't surprise me that some of the so-called "new homes" being sold now are in developments that were started just before the bust, stayed as shells for the last year or two, and are now being completed and liquidated as credit unfreezes. There may not be a comparable number of fresh housing starts once they're sold off.
Need a little help trying to show my wife how the wave of defaulting mortgage debt is making it financially stupid for some people to continue to pay down mortgage debt. I am trying my best to explain to her that the system is not taking over the properties, instead just sitting on them hoping that it will all turn out ok. It's very frustrating to me as she was an ex-mortgage broker who has her beliefs rooted in the way things "should" be.
I show her that people who have stopped paying get hassled from the collection agency's but the actual debt holder is doing little by the way of mortgage mods. Meanwhile there are people living in homes that have not paid a single penny for a long period of time and yes they have to live with the "threat" that they may loose the house (I've told her it's lost already) but are still sitting in a property that will most likely never be officially foreclosed on, even at this point, simply because they don't want to own the underlying property. I bring this up because she has a friend that has a rate that will re-adjust in 2016 and they bought a condo a few year's ago (just under the top-against my advice) I am trying to get her to see that whatever the case, interest rates have no where to go but up, but they will continue to service the debt on a property that is even more underwater (by the month) so it becomes a financial decision to stop making the payments. She does not seem to understand this at all. Meanwhile the people who have stopped making payments, grows by the day, and only exacerbates the entire situation.
I see this as being where the state of california is at and it's just going to get worse. She doesn't want to see that continuing to service debt just for the sake of keeping something that is most likely lost (at least when it re-sets) in a few year's time is worse then stop making payments, keeping the $ for yourself and being able still live in the condo for an extended period of time.
If you are looking at almost three year's in a home (and that's before the thing really gets going) without making a mortgage payment or waiting to see if interest rates will still be low enough to make staying and servicing the debt financially doable what would you do?
I ask this only because this friend of my wife's is one of her closest and I simply do not understand the mentality of waiting to see it "god will provide:. We've had several arguments about this and her thinking is firmly rooted in the way things were. My argument is that it's not that way any longer..the rules have changed. I've told her that them stopping the payments now makes the most financial sense to them. They have a rate of around 6% (i think) and it will adjust to prime +2 in 2016. Unfortunately that is all the information I have.....we've had several arguments about this and I really want to see both sides but I can't because of the reality of what's truly happening.
Can you guys help me understand the mentality here?
Risk, you have a great page and I have used it for at least 2 years for reference of data you have accumulated. I have been around housing in some capacity most of my working life, having been both a Realtor and a mortgage broker. I have also been though a housing bust, the 1980's Texas bust being one of the worst seen in the USA for a long time prior to the current mess. In any case, your data doesn't support what the recent data is showing.
The big deal is that home sales really never exceeded 4 million prior to this bubble on an existing basis. I do know from your data and other data I have mined from the government that new home sales were at a record of 819K until somewhere around 1997 from which we didn't see sales that low again until 2008. I believe your chart on the story above says more than you are mining out of it. I will elaborate after I mention the obvious.
You are using a ratio of existing sales to new sales to I believe net out distressed sales. The last time housing really went bust was the early 1980's interest rate shock. It is also the only time new home sales were at a bottom compared to this recent action, dropping to 401K. Existing home sales in that recession/ bust were well below 3 million. You might note that existing home sales have remained above the prior record, despite the worst economy in a long time. This doesn't support the idea that home prices or building are falling because of a bust, but because of a collapse in market fundementals. There has been speculation all the way down. The population argument doesn't hold water because the real game is how many new households are needing houses and the boom generation was providing as many as ever. Thus the 4 million/800K of 1978 was a peak. There was also a speculative bubble going on in 78 to support such a sales figure. The bust that followed dropped sales to 50% on both accounts. Thus our totals here should be more in the 3.5 million range, not the over 5 million range we have seen as a bottom.
The other matter is the new home sales figures and how they stayed so high for so long during the 1997 to 2007 period. Your chart "comparing peaks and troughs for starts, new home sales and residential investment shows the truth. Though you can say a bottom might be in because new home sales are bouncing, remember that not all markets were glutted. They were building roughy 50K in units here in the DFW area before 2007 and scaled back early. I think DFW could probably consume 25,000 units this year, which would maybe by itself make up the change in construction last month. Other areas aren't coming back.
If you look at that chart, don't only look at the peak, but look at the duration of the climb and the size of the top. A big top means a big bottom and we are going to see something that is totally unexpected. Remember, prior overconstruction was always corrected every few years and only the 1972 era and 1978 era peaks lasted over a very short period of time, 2 and 3 years respectively and followed by plunges. it was the plunge that created the following peak and the 2 peaks played themselves out in the 1980's where we only saw a more moderate peak.
This is evidence that the supply of housing is so large that it will take years to work off the excess. Also, the high existing home sales figures tell me the speculators haven't quit speculating. I don't care to listen to NAR statistics as they have been lying for years and using bubble statistics to hide the fact that the bubble hasn't left. This is the true nature of the problem as I see it.
Thus we are going to see one of two things happen. Either we are going to see a rebound and another speculative bubble (the government has an interest in encouraging and recreating a bubble and would do nothing to stop it, including making FHA a subprime financing outfit) or we are going to see this rebound fizzle to lower prices and lower sales. We spent 5 years above the 5% GDP point in housing, which equated to all the time in the 30 plus years prior. We also spent 11 years in record annual sales territory, peaks that had only lasted 2 years prior. Thus, we are looking at a lot of years of surplus housing construction to wipe out.
Its only distressing if you are trying to sell your home otherwise its just a fun graph.
from other post
"Keiretsu"
MS a student of history!? I am glad I am not the only one who sees scary parallels between us and Japan. We're just 15-20 years behind. You don't hear that word thrown about as much anymore. There was a time when GE and motorola called themselves a Keiretsu I think.
Recent report said Atlanta condo market has 4 years of supply, and more coming on line
Timmy is distressed:
Tim Geithner Can't Sell His House - ABC News
gold up, crude up, bonds down, dollar down (looks to break support soon), stock down
happened last thursday or friday too.....hopefully this keeps up
Always a student no matter the subject......much to learn.
Ciao
MS
The gap will narrow when more "home"builders go out of business. This country is grossly overbuilt.
"After leaving the tony New York City suburb of Mamaroneck to take his new post in Washington, D.C., Geithner put his five-bedroom Tudor home on the market for $1.635 million.
That was in February. By May, he cut the price $60,000 but still got no takers. A few weeks later, May 21, the home in New York's Westchester County was reportedly rented for $7,500 a month."
That amuses me to no end. I wonder what the purchase price was and at what point he might end up underwater.
Tim Waiting for 2012
Keiretsu...
.......
During the occupation of Japan, under the Supreme Commander of the Allied Powers, General Douglas MacArthur, a partially successful attempt was made to dissolve the zaibatsu in the late 1940s. Sixteen zaibatsu were targeted for complete dissolution, and twenty six more for reorganization after dissolution. However, the companies formed from the dismantling of the zaibatsu were later reintegrated.
....
this is one area he left undone...
I had have an interest in this as a six degrees of separation thing since Dugout Doug was a 2nd cousin to my great grandmother (she was invited to his state funeral but didn't attend...)
The question I would pose to BB.
"Can one cure the sins of excess liquidity with more liquidity?"
Replace liquidity with "government spending" or any other problems and try to answer.
Timmay's got skin in the game!!!
It will sit for a long time. He knows this....if he doesn't he's effing stupid. I'm sure he can make up the difference with a few well placed policy initiatives.....someone at GS will end up buying it at an inflated price....watch.
Ciao
MS
LOL @ Geithner. A treasury secretary that doesn't understand needing to lower the price.
Speak of which: Any commentary coming on the 12% YOY drop, CR?
"Although distressed sales will stay elevated for some time, eventually I expect this ratio to decline back to the previous ratio. The small decline in June ratio was because of the increase in new home sales." - CR
I think distressed sales are the new normal for a very long time. We haven't even seen the effects of unemployment on true homeowners yet. We are still seeing normal type employment recession driven defaults based on the 4.5% unemployment of 1-2 years ago (very low). These are the people trying to hang onto their homes through a normal recession not the bubble participants who are the only ones defaulting now. If U-3 is 9.5% now headed for 11% we will see the default consequences 12-18 months from now. All we've seen is a partial market clearing of bubble debris. Now we have to start distress sales due to the recession.
: JP Morgan Chase, Bank of America , Goldman Sachs, Citigroup and Morgan Stanley sitting on $240T of credit derivative risk. Your tax dollars at work.
Yay green sh0ots..the economy's recovering..woo hoo. But who will benefit? only he top 99% of earners- the same as it;s been since R3aganomics.
How else would you explain how executive wages have skyr0cketed, while worker wages having been LAGGING inflation for the past 2 decades? Why do we put up with this cra.p? Maybe the economy needs to shrink some more so that real change will take place that EVERYONE can benefit from instead of the wealthy investor creator class.
hat tip to Interesting Finance & Economic articles
Bernanke, Summers and Geithner are a bunch of pimple faced nerds who are disconnected from what;s happening on mainstreet.
We live though reality every day.
Ken,
Can we get a management ruling on ned spam? TIA.
And I wonder if a white knight from Wall Street will save his skin.
The Geithner house story is rich. Lowering the price $60K on a $1.6 million listing is asinine, the classic move of the delusional seller. I guess that's all you need to know about him.
How do you know a new home sale isn't by a flipper in distress?
"Bernanke, Summers and Geithner are a bunch of pimple faced nerds who are disconnected from what;s happening on mainstreet."
anyone who lives in or owns a house priced at $1.6M could not possibly be connected to reality
Byz,
Response to your last from previous thread,
I concede you have the logical argument. Mine is a gut feeling, and very emotional to boot. The only thing I hold on to is that history is filled with individuals who have overcome adversity to achieve (both good and evil I should stress) greatness. These individuals have been able to break through the status quo maintained by the wealthy elites throughout history. I believe they are Loki's children if you will, agents of change and chaos and necessary for human advancement (probably a poor choice of words since the more things change the more they stay the same). Your route seems the best for the Republic but I fear it puts us on a course where it will be the norm, and thus another layer of control by the 'soulless minions of orthodoxy'.
"someone at GS will end up buying it at an inflated price...."
I have no doubt he'll get his reach-around. That is how the well connected get to play the game. Or he'll be the next GS CFO, so that he can get a taste along the lines of the 500 mil that Paulson has. Then if he is smart, back to public service, so that he can get a tax free cash-out.
Sadly GS is getting their jollies at the public's expense.
I'd like to see some data that supports the proposition of distressed sales at a 1.5 million annual rate, other than the cryptic pronouncements of the NAR.
Can we get a management ruling on ned spam? TIA.
Can we at least get some old CRC functionality where we can ban keywords or phrases?
I think it's written $240,000,000,000,000. Either way incomprehensible, which is why they get away with it.
I think Dawg makes a strong case and I don't get why CR thinks
we maybe at the end of this cycle with rising UE...
maybe what bothers me is that this cycle is different in many respects
so perhaps the old models might not fit...
Japan had certain laws set up at least in the 1980's that made it prohibitively expensive to own an older car. Basically required one to buy a new car every few years. "Cash for clunkers" is a step in this direction. I agree the US is becoming more Japan-like. Particularly as far as entrenched bureacracies such as DoD and Treasury are pushing Congress around.
other than his time at the NY Fed, has Timmy ever been in the private sector?
"LOL @ Geithner. A treasury secretary that doesn't understand needing to lower the price."
The fact that the property is now being rented leads me to belive that the seller thinks prices will recover in the near term. And THAT shows me Timmy is either not very smart or thinks he is not long for the D.C. scene.
TA, I think DataQuick does a great job for California. They reported for June: "Of the existing homes sold last month, 45.9 percent were properties that had been foreclosed on during the past year." and that doesn't include short sales (also distressed). So I'd guess California is over 55%.
But that is probably higher than most states (Arizona, Nevada and Florida might be worse). So the 31% figure from the NAR might be close.
best wishes
dryfly, thank you for your comments toward the end of the last thread.
"that this cycle is different"
Until it's not?
Kung.Fu.Panda
they have that law in Singapore... I think a car can only be owned for 12 or 10 years and then the gov. junks it....
The distress gap is merely the result of 4 million too many homes built during the Bubble. Since homes are non-perishable and most have some twisted moral dilemma against bulldozing, embrace the gap because it is at least a five year problem.
It will be interesting to see the next months figures. My spouse works for a mid-sized home builder int he DC metro area and they were all excited in April and May over the big increase in sales. June was slower, but not so bad. July new sales have fallen off the cliff again.
"...Timmy is either not very smart or thinks he is not long for the D.C. scene. "
Both for 60 thousand, Alex.
Rob Dawg, I agree distressed sales will stay elevated for some time - hopefully I didn't misstate that. My point is this ratio will probably come back in line over time (maybe several years from now), and that means an increase in new home sales, or a decrease in existing home sales - or both - over that period.
I'm not arguing it will happen quickly, but I think people looking for a rebound in existing home sales over the next few years will be wrong.
best wishes
Funny thing, I am following another forum over on a sun watch site...I can almost copy and paste identical statements about 'cycles' from here and there...bulls and bears everywhere, and a few waiting for more data...
"U.S. Home Vacancies Hit 18.7 Million on Bank Seizures"
U.S. Home Vacancies Hit 18.7 Million on Bank Seizures (Update2) - Bloomberg.com
Since homes are non-perishable and most have some twisted moral dilemma against bulldozing
Bulldozing, and empty houses are clear signs that the market is broken. Banks holding these properties on their books at make-believe prices is counter productive. All as a result of choosing the Japan option.
You know, if Timmy really stretched to get that house, then maybe dumped some money into it to repair some minor damage ... There might be no way he can afford to sell.
Dropping that $60k might have been the last drop before admitting to losing money on the deal. Yikes!
No disrespect CR, but why should this 6:1 ratio come back in line? Does it go back a lot further than 1994?
When I look at the mix of residential housing being built since 1994, most of it is in bad locations and is not demographically necessary. So actual need doesn't account for the 6:1 ratio - that's just how much money people had available to spend on new houses.
And it has little to do with replacement - some of the recently built houses may only last six years, but most of the older ones will last a while longer. (edit: this is a joke - existing homes sold doesn't equal existing homes, although it seemed like it a few years ago. I don't know the ratio of new homes to demos, but it isn't anywhere near 1:1)
...but I fear it puts us on a course where it will be the norm, and thus another layer of control by the 'soulless minions of orthodoxy'
Not to jump start a heated discussion, but when has human history not had layers of control by orthodoxy? It is just an instrument of bureaucracy of varing structures, and it is hardwired into almost all parts of any structured system.
Would making people proceed with pregnancies without any option or choice fit into the the same kind of layers of "soulless minions of orthodoxy" you are wanting to avoid?
you know what is so cute? How at each one of the previous little blips up in new home sales, the same stories were trotted out. Lets see how this one turns out once the new buyer credit and other incentives wears off. I know people like homes, and i know prices are lower, but the unemployment trend should tell you something.
GDD
WE have never had national home declines of 20-30% before this alone should cause you to toss out the rulebook.
Sometimes people just don't want to accept that there is some good news. Higher new home sales is good news (for quite a while now higher starts has been bad news, but even that mght be changing). the absolute level of inventories for New homes is pretty low when you adj for pop growth. Still think prices will be under pressure for a while but activity seems to be picking up and time is curing things slowly. Not exactly happy times are here again, but this appears to be a legit green shoot for the econ. 3 regions of the country were booming for NHS, only the south lagged. Looks like the 1st time buyer credit was pretty successful in helping to clear out inventories.
Student here ...
Existing home sales ... I'm a little confused as to what it consists of exactly.
More specifically, I am wondering whether it includes distressed sales? Homes that were foreclosed?
Thanks!!!
Does home sales matter anymore, now that default/walkaways are common? Does the number matter if people pays 4 months of mortgage before defaulting and lives in the home for 24 months?
Here's an idea for a novel: Palin is president in 2012. dollar has crashed a few years earlier. EU has disbanded.
Btw, why couldn't have Bush, Greenspan, or Paulson quit their job?
Palin is president in 2012. dollar has crashed a few years earlier. EU has disbanded.
The 3/4 horsemen?
CR replies very clearly above. I was just making sure "eventually" meant years and not a symmetrical mirror image of the run up we've experienced. That said I think we are going to see a lot of adaptive reuse substituting for new construction. Let me explain. So much of anything that could be new construction is in the wrong location, inappropriately designed and appointed and subject to very high carrying costs. I am suggesting that instead of "new" construction we are going to see first and second ring older homes completely renovated/rebuilt to meet "new" home demand. Most likely the traditional methods of measuring "new" construction are going to miss this substitution.
so why arent they making loans?
cause they are horrified of what they know is down the road.
It would be nice to be able to ban the URL, but I suspect he might change it like the user name.
The 3/4 horsemen?
Canada having to combat a bad "illegal immigration" problem as "refugees" from the USA flock north might be a 4th horseman.
Can you imagine the smuggling of Americans into Calgary and other places just in hopes of avoiding a world that would give us that scenario?
Simple math : 4 million oversupply at annual new demand of 400k is 10 years of oversupply at today's demand rate. Demand is fluid but still...Home building is dead for a long time.
Tim Waiting for
this is what I tried to say ... I didn't understand CR's optimism
but now he has clarified it better and the time horizon is many years, no?
Interesting, a lot of people look to be taking $300k haircuts in Larchmont... I bet Timmy needs to drop 300-400k before his house will move.
Larchmont, NY Real Estate & Larchmont Homes for Sale - Zillow
I wish I could find statistics on how many of these low end homes are subsidized by the government? anyone? Are the flippers selling to folks who are getting assistance from the government?
My mother is severely handicapped and about every 6 months I review the HUD site, USDA site etc.. for the newest housing “give-away” program available to low income and disabled folks.. I have been doing this for about 3 years.. The last week I am absolutely shocked how many community action agencies, public housing authorities, township and counties programs are available compared to last year. They must be competing with each other to find low income folks to buy homes.. Every county has a program that can be added to another government program for down payment grants and section 8 subsidies. There are so many more opportunities to mixed your section 8 housing voucher with down payment grants so that a family only needs to pay 30 percent of their income towards a house up to 417,000 in California. If you are bored go spend some time on the HUD and USDA rural websites..
TTM P/E ratio = 768.7
dshort.com: Is the Stock Market Cheap?
"Higher new home sales is good news (for quite a while now higher starts has been bad news, but even that mght be changing). the absolute level of inventories for New homes is pretty low when you adj for pop growth. Still think prices will be under pressure for a while but activity seems to be picking up and time is curing things slowly."
I agree that higher volumes will lead to a faster price discovery and a bottom. I suspect thought that that price bottom will not be so green, as more and more properties get underwater.
"Based on the latest 10-year earnings average, to reach a P/E (2010 forward earnings) in the high single digits would require an S&P 500 price decline below 600. Of course, a happier alternative would be for corporate earnings to make a strong and prolonged surge."
yagij,
This isn't a heated argument. Friendly all around...I am a philosopher not a zealot, so don't worry about offending me, I take very little personally. I did say, Byz had the logical argument. I never meant to imply that in the past there was less control or layers of society...my soulless minions of orthodoxy was a hat tip to a Star Trek DS9 episode, meant in jest not accuracy...My point is simply that targeting abortion for poor single mothers reduces the chances for individuals to develop who might 'change the game' if you will, even if only for a short time. My stance is not rational...not even ethical. I am suggesting that for the good of all, sometimes individuals have to go through hell and suffer, in order to overcome and be more. Argument against paradise...and the original explanation of satan....remember mankind was lazy...nothing ever happened in paradise...god appointed satan as the official tempter of mankind...only through hard work and toil do we grow...it is just a philosophical point with me that things done out of convenience are seldom convenient in the long run.
For some localized flavor here is existing home sales broken down by REO, Short Sale and normal sales for Ventura County and the San Fernando Valley:
Effective Demand: Short Sale & Foreclosure for San Fernando Valley & Ventura County - June 2009
triplec
interesting info... I am the owner of some low end rental homes in S. Indiana,
I've been trying to get out of this partnership for some time... a few years back I was
trying to get a few of my tenants to buy the property outright...
I checked out some of the money that might be available...
maybe when I'm back there in the fall I'll pitch 'em again
thanks
I wonder what the ratio of morons to non-morons is for people buying new houses instead of fo
reclosures? My guess is that ratio is distressing.
Take a Name..., do you mean if the company lost money last year they should pay me to take shares as an investment? That sounds like a idea I could get behind.
"Here's an idea for a novel: Palin is president in 2012. dollar has crashed a few years earlier. EU has disbanded."
President of NY Stock Exchange is a recently arrived alien from orbiting space ship.
Pavel,
All but the alien part has been covered.
"Palin is president in 2012..."
Resigns in 2015
Vonbek777 (profile) wrote on Mon, 7/27/2009 - 11:58 am
I concede you have the logical argument. Mine is a gut feeling, and very emotional to boot. The only thing I hold on to is that history is filled with individuals who have overcome adversity to achieve (both good and evil I should stress) greatness. These individuals have been able to break through the status quo maintained by the wealthy elites throughout history.
Ultimately my response is that I am not willing to endorse the creation of a suffering underclass just so that it can produce a few dynamic individuals. I think you might have a point if America was a closed system, but it's not. Also I'm not really sure that pure dynamism is a goal. It seems like the American Republic is built around giving each person the best chance they can have of achieving as an individual. I don't know that the parameters of that experiment really go to where you can make that investment for the collective at the expense of all the individuals involved. I think there's plenty of room for redistribution, but large-scale social engineering potentially leads you away from an Enlightenment Republic. Getting everyone all edumacated and togaed-up to discuss big ideas in war and politics down at the agora seems like it's the thesis of the effort and getting too far away from that risks losing the point of the Republic. Just my feeling, but, we need machine helots more than we need real ones.
Your route seems the best for the Republic but I fear it puts us on a course where it will be the norm, and thus another layer of control by the 'soulless minions of orthodoxy'.
That's a problem that will solve itself if stasis turns out to be an affliction. I'm not sure that a very stagnant, happy, general prosperity isn't much more in the ideal of America that the Founders saw rather than the sort of wacky nationalistic imperialism we've been engaging in for the last century. Obviously, I'm a Confucian / Taoist so, this is a answer I am prone to arriving at, but I think that it might be interesting to experience a genuine general prosperity.
What you're describing doesn't seem too different than what we have now, and we haven't had a big outbreak of genius because we shit on blacks and latins, and I don't really see that social-economic decay has strengthened a lot of societies. Typically, you will have much better barriers to entry erected by vested interests than you have human ability to surmount them, or people wouldn't take the time and effort to erect them. You normally get renewal through social collapse or external invasion, not by internal dynamism.
just another lurker (profile) wrote on Mon, 7/27/2009 - 12:31 pm replyIgnore userTake a Name..., do you mean if the company lost money last year they should pay me to take shares as an investment? That sounds like a idea I could get behind.
No. I mean the TTM P/E ratio = 768.7
triplec,
Not a flipper at all I buy and hold long term as rentals. Cash flow and profit is the goal. I just sold a 2 unit Up and down for a very under valued $23K. Tax value at $28K. The town died as to the years of drought and the local controllers. Once a good cash flow property with good tenants became the dirt magnet. I live in another town and am buying a replacement here. The buyer a young mother on welfare and job training. She received a grant of $5K from the county as a down payment (told is was not to be paid back)and the down stairs tenant of 22years was evicted so her support check would not be altered due to the rental income. I guess Grandpa how helped in the deal is now the unpaid tenant down stairs. You tax dollars at work! No mention of where the father is!
Forgot, My two highest rents now come from Government supported charities!
"Pavel,
All but the alien part has been covered."
nova, you mean disguised? That means that.....
My original scenario was that the alien spaceship lands in front of White House, two creatures debark and start walking toward the doorway, stop, look at one another, then both say, simultaneously: "Nah"...,
...turn, enter the ship again, and take off for orbit.
Ben: what was the monthly rent on both units?
I understand the TTM. Just a joke about negative earnings messing up the price to earnings relationship -since I've never seen a negative share price.
Vonbek
I prefer this Hindu creation myth:
the Devas and Asuras (demons) fought for 1000 years w/o getting anywhere. Vishnu advises them to work together in a diplomatic manner. Devas formed an alliance with asuras to jointly churn the ocean for the nectar of immortality and to share it among them.
Churning the Milky Ocean
The churning of the Ocean of Milk was an elaborate process. Mount Mandaranchal was used as the dasher (churning tool), and Vasuki, the king of serpents, became the churning rope. The gods held the tail of the snake, while the demons (Asuras) held its head, and they pulled on it alternately causing the mountain to rotate, which in turn churned the ocean. However, once the mountain was placed on the ocean, it began to sink. Vishnu in his second incarnation, in the form of a turtle Kurma, came to their rescue and supported the mountain on his back.
....
"Resigns in 2015 "
A REAL Maverick?
Volker,
I got $225 down and $400 up. Property taxes here run about 2.2% high in relation to values.
Volker I may have missed it the two Charity rentals or the one I just sold?
625 X 12 = 7,500 ASR
and you sold for 23k?
were you underwater?
I wouldn't sell a performing asset that returned 33% per annum
But, then, we all have our reasons. Deferred maintenance, deteriorating market, roll into something less complicated...
Byz,
Dad says the genius of the republic is that nothing can happen too fast, the stagnation is good for stability in the long run, and our whole system is built upon inefficiency in government and efficiency in markets...not sure about the markets right now...but I understand the point. Yes my idea falls apart in this modern world, I don't see a whole lot of genius cropping up here currently either. Seems the genius fairy has moved to S. Korea, India, and other places abroad...but then again thanks to the Church of the Golden Arches, even our poor are fat, dumb, and happy...I digress...the creative part of my personality is an anarchist at heart, much to the dismay of my rational half.
Von there was also that Star Trek where there was so much overpopulation they were grateful when the Enterprise brought death.
Elvis back in form
LobbyistBenDover
as an interested landlord I'm not sure I follow your narrative...
you paid 23K for the place or you made 23K? and the tax is assessed at 28K...
Volker,
I am cash only buyer. Buying houses here is like the little green ones in Monopoly. The locals get piss at my buying power. I had the property for 9 years. Got pissed and wanted it gone now had a contract in a week. I am happy. I rarely loose money.
Take a name,
I was going along in the dshort article fine until this,
"So a P/E ratio of 768.7 with the index down about 37% from its October 2007 all-time high can't be taken seriously."
Why can't it be taken seriously? His whole article is about P/E ratios but throws in that it can't be taken seriously? Seriously?
Vonbek777 (profile) wrote on Mon, 7/27/2009 - 9:46 am
Dad says the genius of the republic is that nothing can happen too fast, the stagnation is good for stability in the long run, and our whole system is built upon inefficiency in government and efficiency in markets..
Which is why every time the government manages to act based upon a claimed necessity for speed we all lose a little of the Republic. Happened with TARP, happening with health care.
I don't see how you can have any real recovery in housing with real interest rates as high as they are and going up every day.
Duke of Con Dao,
Sold for 23K I see no value in appreciation as most live for. Cash flow and profit is the goal. I got my money back and made some over the years.
"Bipartisan usually means that a larger-than-usual deception is being carried out."
-- George Carlin
Good morning, California.
.RATM (profile) wrote on Mon, 7/27/2009 - 12:49 pm replyIgnore userTake a name,
I was going along in the dshort article fine until this,
"So a P/E ratio of 768.7 with the index down about 37% from its October 2007 all-time high can't be taken seriously."
Why can't it be taken seriously? His whole article is about P/E ratios but throws in that it can't be taken seriously? Seriously?
Alright. How about this?
A P/E RATIO OF 122?
THE PRAGMATIC CAPITALIST » » CHART OF THE DAY: A P/E RATIO OF 122?
ac (profile) wrote on Mon, 7/27/2009 - 9:49 am
I don't see how you can have any real recovery in housing with real interest rates as high as they are and going up every day.
That's because the intent was never to stabilize the housing market. All along the goal was to make whole the mortgage industry (banks) exposed to housing. thus we have what looks like the largest spread twixt mortgage rates and real interest rates in modern history. Good overview on real yields at Marketwatch.
now I see your numbers...
Lobbyist Ben ....
my units are usually single family homes that cost 16K to 24 K and rent for around 400 a month...
....
I see no appreciation in my units either...
it's all about cash flow...
have one Victorian house from 1872 that is divided into 4
apts... problem is that I have to pay the gas heating... I've tried to
get my 2 business partners (brothers) to change out into a new heating system
but they dont; budge....
dirk..yes, it's good news, unless of course prices keep dropping and these sales just turn into more defaults and problems for the banks. Or if rents keep dropping and all these genius landlord types find that they cant cashflow the properties as they thought. Yes, of course there is an eventual bottom for sales. But even if this is one, im not so sure it's an unqualified good thing.
One of my favorite episodes 1 currency...overpopulation is often used as an argument in support of abortion...then there is the other Trek episode where computers pick random casualties from the general population in a never-ending war.
U.S. takes center stage in EU hedge fund row
LONDON (Reuters) - Debate over controversial EU laws on hedge funds shifted to the United States on Monday as a key industry body warned of protectionist aspects of the rules which have prompted Washington to lobby for changes. The Alternative Investment Management Association (AIMA) said the planned laws on alternative investment funds create "potentially major difficulties" and loss of business for funds and investors outside the European Union.
It said the rules would limit European investor choice and damage the competitiveness of the European funds industry.
The vast majority of the $1.4 trillion hedge fund industry is managed either out of the United States or UK.
The draft directive, announced in April, allows managers in non-EU countries to sell their funds to European investors, but only if regulation and supervision is equivalent to that in Europe, and only after a three-year transition period. On Monday the Wall Street Journal reported that the United States is quietly lobbying Europe to change the terms of the directive.
Yahoo! 404 - Page Not Found
Ben--got it, no stranger to outliving my welcome either, no surprise to some I'm sure
Take a name,
lol, oh I didn't like that number? How about a different one? I'm sure Dick Bove has even better numbers. And Birinyi Associates has the chosen numbers with the special sauce. Everyone has their own version of the truth.
SAAR new home sales volume was up 10% in June over May, but the median sales price was down 6%. So the gross income was up only 4%.
Prices are being dropped dramatically, no wonder inventory is clearing quickly.
Hard to tell if they're going to run out of buyers or houses first, that's the key question.
"I don't see how you can have any real recovery in housing with real interest rates as high as they are and going up every day."
And not stopping anytime soon as risk gets priced back in. Kind of hard to peddle, "housing only goes up," these days. And how many more properties are now underwater with that 4% drop?
"Hard to tell if they're going to run out of buyers or houses first, that's the key question."
I suspect there is always a buyer, but not necessarily at a price the seller will like.
Rob does have a point.
Attended a party this weekend, mostly mid range academia and state policy types. Unemployment and salary reductions were the talk of the night. As far as I can tell, everyone is hoping that they can hang on. Even people who purchased based on 1 income are concerned. A good example is a couple where the wife works in healthcare sales and he is a mid line state employee. Problem is they could loose either job and be fine. But she looses her position along with the furloughs, they are effectively done.
Multiply this deflationary effect across the state.
sadly,
in the years (13) I've had rentals I have yet to make a dime even though some
have very good margins.... why? mainly cause I live in NYC for almost all of those years...
and we hired out the older brother to collect rents and some light maintenance and since
most of the tenants pay in cash well money just disappeared... or we had phantom renters...
....
it took me weeks of spreadsheet building and analysis to see how it was done using various
deposit schemes and the like...
....
must go that story for another day....
A perspective: Pretend that the median price is close to the average price for this period. (I couldn't find the avg. quickly.)
Total NSA new home sales = 36K,
median = avg price = $206K
= $7.4B in total sales.
Wow, just checked the weather for Fort Worth....my high for July 27th 2009 is 83...this cold front is great. Getting rain too.
Vonbek 777--you guys will need to put on a sweater!
Volker, had to turn down the ac this morning so I knew something was up. Doesn't last though, back in the 90s soon, but even that is better than this stretch of 100s we had earlier this month.
Despite of various efforts, the government fails to show its magic as there is very little changes can be seen in market situation which is not enough to get rid of such a huge problem. As per the current situation this article is Ideal Unemployment and Foreclosure
I simply love the games that the options market in playing in NFLX today. Put in a limit order (STC) on an August put. Instead of filling it in between the Ask/Bid they have kept the ask capped so that they don't have to fill it. Now what they want me to do is to pull the order, resubmit it as a market so that they can fill it at the bid or lower price. Someone in chicago wants a lobster dinner and they want me to pay for it.
I simply saying effe you.....
Ciao
MS
WestSac_grrl (profile) wrote on Mon, 7/27/2009 - 10:02 am
[California] Attended a party this weekend, mostly mid range academia and state policy types. Unemployment and salary reductions were the talk of the night...
Multiply this deflationary effect across the state.
Yet Barry and Timmay are on the road expressing concern and cooperation over the potential problems in China and the US exposure to those problems rather than visiting California. China GDP $4.2T. California GDP $1.8T. Which one deserves Obama's pledge of partnership? Which one got it? which one represents a more systemic risk to US interests?
My point is simply that targeting abortion for poor single mothers reduces the chances for individuals to develop who might 'change the game' if you will, even if only for a short time. My stance is not rational...not even ethical. I am suggesting that for the good of all, sometimes individuals have to go through hell and suffer, in order to overcome and be more.
Could that point then be stretched back into the womb and be included in the "through hell and suffer" period?
If miscarriages and molar pregnancies are often results of pregnancies, I'm not sure why there is a distinction between taking a drug to induce a miscarriage--or are we just assuming the abortion M.O. equates to actions like partial-birth methods--or smoking or drinking or Nature being Nature. You could infer an intent versus the outcome, but the "hell and suffer" and survive part are still there. Also, abortion or post-birth exposure was a normal function of society for millennia, and history still produced figures of politics, religion, and culture from troubled backgrounds. I'm not sure how having the same kind of options for today's women would affect human history more than it already has.
MS: Pull it and send it back at a higher ask. It causes all sorts of what-ifs to play out on the other side.
I Try to match the properties to a spread of low income to middle income. Almost all of mine get new HVAC, electrical panels, reasonable insulation. I buy right going in to cover these expenses. Some I buy are what others won't as they need some work and don't have the money to update. I have managers who do the oversee and one is excellent! I am not a slum lord who never fixes anything.
Rob Dawg: which one? Which one has the most importance for the US long term interests....
tough call
Maybe Hopey just wants to kick Terminator's butt.
jp-
pulled it.....have not put it back yet.....but I'm on that train on thought already.
Ciao
MS
Make China happy, make Cali more dependent....
you tell me
volker the viking (profile) wrote on Mon, 7/27/2009 - 10:18 am
Rob Dawg: which one? Which one has the most importance for the US long term interests....
tough call
Maybe Hopey just wants to kick Terminator's butt.
Leader O is ramping up to keep the House in the mid-terms. California is currently safely in the win column so Rahm hasn't told him yet that California is going to be relevant. Right now it is about maintaining the facade of stabilization for the battleground states.
funny thing is that Arnold is the best Obama can hope for as governor. Whomsoever replaces him next year is sure to be far more problematic.
To view certain issues
In stark black and white
Is to suffer a form
Of intellectual blight.
Far more than the usual
'Many shades of gray",
We live in a world
Of color today,
Where solutions to questions
Of welfare, or race,
Immigration, abortion,
The many problems we face
Can usually be reduced
To matters of class:
Who works, and who pays,
And who gets a "pass".
The "hot-button" issues
Are used as the tools
To keep us all fighting
While they play us for fools.
being financially responsible, I am sure we can safely assume Timmy paid at least 20% down, so $300k off should still keep him nose-above-water
right?
So there's an article on bloomberg (with no body) stating that real yields are the HIGHEST they've been since 1994.
This ain't no recipe for recovery if this is true.
you guys still on this?
belated thread music...
YouTube - The Specials - Too Much Too Young
yagij,
All good points. I am on a slippery slope myself...the miscarriage argument is excellent, where do I draw the line on the other side of the equation with 'natural' aborted births...I honestly don't have an answer other than my personal view is not enforced, mandated, or even looked favorable on by those who determine the norms of society. Absolutely correct about ancient cultures practicing abortion. My concern about now is that technology (in my view, others see it as a salvation) is increasing the reach and grasp of those with 'stars upon thars' (doctor suess reference there). I am seeing a smaller and smaller box humanity is being placed in. This of course increases pressure, so my fears may be for naught, but I don't like the idea of a technological paradise saving us from all the evils of the natural world...human nature requires chaos to survive, and chaos requires diversity...I fear the future from that stance.
The Sneetches is a great teaching tool - my five year old gets googly eyed at something on TV and I tell her that is another McBean - the light bulb goes on...
Skilled Immigrants on Why They're Leaving the U.S.
" "I feel restricted here," says Kumar. "I understand the U.S. has a responsibility to its citizens, and I understand its dilemma. But the country would be better off if it could isolate and identify skilled workers who want to come here and build things and welcome them in."
Skilled Immigrants on Why They're Leaving the U.S. - BusinessWeek
We have enough skilled immigrants already.....look at the houses they build!
"One of my favorite episodes..."
Freaked me out at age ten. Mass death as a happy ending? On prime time?
I'm a strong nurture over nature type, so I'd rather see policy that treats each child as precious, than that encouraging as many children as possible, hoping one will emerge from the melee to save us.
"the country would be better off if it could isolate and identify skilled workers who want to come here and build things and welcome them in."
As opposed to training our existing unemployed to be skilled instead, so they can build things? How does one justify H1-B in the face of double digit UE?
"How does one justify H1-B in the face of double digit UE? "
A very badly educated native population. 45% of the country thinks humanity was made by God in the past 15,000 years.
As opposed to training our existing unemployed to be skilled instead
The reason that we're in this mess is because lack of math skills, which should tell you all you need to know.
Another green shoot - Barclays came out with a report today that Option ARM recasts will be less than forecast.
Because many borrowers will default BEFORE recast.
Just as I have been saying. These borrowers can't even handle the 7.5% jump in annual payments, let along a recast.
And talk about ruthless defaults - these borrowers will be practicing that in spades.
"45% of the country thinks the earth was made by God in the past 15,000 years. "
number seems way way too high. supporting evidence please ...
The one in a million genius emerging from chaos might be the one who convinces people that extermination of a select 10% is a fine solution.
number seems way way too high. supporting evidence please ...
yeah, i thought it was like 6300 years ago
Texas in 80's. Portland in high 90's.
Yesterday 100
Today 98
Tues 98
Wed 101
Portland is same latitude as Minneapolis, but with an ocean just west LOL
teabagger (profile) wrote (in reply to...) on Mon, 7/27/2009 - 1:43 pm
number seems way way too high. supporting evidence please ...
Beliefs of the U.S. public about evolution and creation
America is a sea of deliberately engineered ignorance.
pew research poll.
that number actually rose in the 80s and 90s.
google it yourself, busy morning.
googled it myself. number looks accurate. i'm surprised.
45% of the country thinks humanity was made by God in the past 15,000 years.
Coincidentally, the same percentage is waiting for the market to come back so they can sell their houses for a profit.
I don't like the idea of a technological paradise saving us from all the evils of the natural world...human nature requires chaos to survive, and chaos requires diversity...I fear the future from that stance.
Who is the "us" in your concern?
The last time I checked, there was plenty of subsistence living in many parts of the world without basics like access to safe drinking water or basic health care like shots or vaccines. Living in many "poor" parts of the U.S. in rural or urban areas are still a few steps above true poverty in the world. I've read about Haitians eating mud pies to ease their hunger. I've read about people living off of the wildlife in deserted parts of Detroit.
Even in the "bad" parts of the U.S., there are better living standards, and most post-boomer Americans cannot truly fathom a hard life aside from having no A/C in the summer or having to eat fried spam. Chaos may be coming, but it has just as many losers as the Peace if not more.
teabagger (profile) wrote (in reply to...) on Mon, 7/27/2009 - 1:49 pm
googled it myself. number looks accurate. I'm surprised.
People are ignorant and desperate. You can tell because there are so many irrationalist strains in the national psyche. Obama's "Nope Now" and Bushite America / Authority worship are both founded on what exactly?
The more ignorant the populace, the easier they are to lead with simple slogans, and the more effective arguments that people can't be trusted to have a role in government and that the matter needs to be left up to technical experts.
New Earnings Trends report:
The Dog That Didn't Bark?
Now I did qualify my statement up above that the change, deviation from the norm if you will, could be for good or evil. I also said that I don't have an ethical foot to stand on in this debate. I view history as a force more than a sum of human effort. I see an unseen hand that navigates the best laid plans of mice and men and total anarchy. Call it god, collective unconscious, or evolution...I don't care...it is there. I don't see this force as benign or gentle...and even though I demand personal ethics for the good of man, I don't think the force of history is especially concerned with human concepts of good and evil...in the end, we might just be that fever the earth must shake off, I don't know, but I as an individual don't like to limit a chance for life. This isn't a religious argument for me, just a diversity argument.
Did O win 55 to 45?
It may take a long time for the ratio to return to normal. Ordinarily, over say a decade, annual existing home sales should be the number of households buying/selling that year less the number buying new homes. If the number of households increase, so should the number of sales. Rising incomes, increasing mobility and changing tastes might lead more people to buy/sell, but the change shouldn't be huge over a short period, and real incomes were more or less flat over the last decade. Similarly, over a decade the number of new home sales should be roughly equal to the number of new households less the number of existing units taken out of service (whether by destruction or conversion to rental or commercial).
According to the Census, Families and Living Arrangements, formerly Households and
Families (Table HH-1), the number of households rose by about 5% from 2001 (just before the bubble) to 2006 (about the peak).
Your New and Existing Home Sales graph shows that existing home sales rose about 45% over that period -- that's a whole lot of flipping -- and new home sales rose about 60%. Each of those new homes gets added to the supply of existing housing stock after that initial sale. Existing Home Sales are now a bit below trend -- just about at their 2000 level, although the number of households grew by about 11% through 2008. Given the massive overhang, with about a third of the existing sales being distress sales, there's little reason for households to buy a new home until prices rise above the cost of new construction. It wouldn't surprise me that some of the so-called "new homes" being sold now are in developments that were started just before the bust, stayed as shells for the last year or two, and are now being completed and liquidated as credit unfreezes. There may not be a comparable number of fresh housing starts once they're sold off.
I see an unseen hand that navigates the best laid plans of mice and men and total anarchy. Call it god, collective unconscious, or evolution...
Dirk van Dijk,
Thanks for the Nebraska comment yesterday. Keep it up we don't need the coasters here!
Need a little help trying to show my wife how the wave of defaulting mortgage debt is making it financially stupid for some people to continue to pay down mortgage debt. I am trying my best to explain to her that the system is not taking over the properties, instead just sitting on them hoping that it will all turn out ok. It's very frustrating to me as she was an ex-mortgage broker who has her beliefs rooted in the way things "should" be.
I show her that people who have stopped paying get hassled from the collection agency's but the actual debt holder is doing little by the way of mortgage mods. Meanwhile there are people living in homes that have not paid a single penny for a long period of time and yes they have to live with the "threat" that they may loose the house (I've told her it's lost already) but are still sitting in a property that will most likely never be officially foreclosed on, even at this point, simply because they don't want to own the underlying property. I bring this up because she has a friend that has a rate that will re-adjust in 2016 and they bought a condo a few year's ago (just under the top-against my advice) I am trying to get her to see that whatever the case, interest rates have no where to go but up, but they will continue to service the debt on a property that is even more underwater (by the month) so it becomes a financial decision to stop making the payments. She does not seem to understand this at all. Meanwhile the people who have stopped making payments, grows by the day, and only exacerbates the entire situation.
I see this as being where the state of california is at and it's just going to get worse. She doesn't want to see that continuing to service debt just for the sake of keeping something that is most likely lost (at least when it re-sets) in a few year's time is worse then stop making payments, keeping the $ for yourself and being able still live in the condo for an extended period of time.
If you are looking at almost three year's in a home (and that's before the thing really gets going) without making a mortgage payment or waiting to see if interest rates will still be low enough to make staying and servicing the debt financially doable what would you do?
I ask this only because this friend of my wife's is one of her closest and I simply do not understand the mentality of waiting to see it "god will provide:. We've had several arguments about this and her thinking is firmly rooted in the way things were. My argument is that it's not that way any longer..the rules have changed. I've told her that them stopping the payments now makes the most financial sense to them. They have a rate of around 6% (i think) and it will adjust to prime +2 in 2016. Unfortunately that is all the information I have.....we've had several arguments about this and I really want to see both sides but I can't because of the reality of what's truly happening.
Can you guys help me understand the mentality here?
Ciao
MS
Risk, you have a great page and I have used it for at least 2 years for reference of data you have accumulated. I have been around housing in some capacity most of my working life, having been both a Realtor and a mortgage broker. I have also been though a housing bust, the 1980's Texas bust being one of the worst seen in the USA for a long time prior to the current mess. In any case, your data doesn't support what the recent data is showing.
The big deal is that home sales really never exceeded 4 million prior to this bubble on an existing basis. I do know from your data and other data I have mined from the government that new home sales were at a record of 819K until somewhere around 1997 from which we didn't see sales that low again until 2008. I believe your chart on the story above says more than you are mining out of it. I will elaborate after I mention the obvious.
You are using a ratio of existing sales to new sales to I believe net out distressed sales. The last time housing really went bust was the early 1980's interest rate shock. It is also the only time new home sales were at a bottom compared to this recent action, dropping to 401K. Existing home sales in that recession/ bust were well below 3 million. You might note that existing home sales have remained above the prior record, despite the worst economy in a long time. This doesn't support the idea that home prices or building are falling because of a bust, but because of a collapse in market fundementals. There has been speculation all the way down. The population argument doesn't hold water because the real game is how many new households are needing houses and the boom generation was providing as many as ever. Thus the 4 million/800K of 1978 was a peak. There was also a speculative bubble going on in 78 to support such a sales figure. The bust that followed dropped sales to 50% on both accounts. Thus our totals here should be more in the 3.5 million range, not the over 5 million range we have seen as a bottom.
The other matter is the new home sales figures and how they stayed so high for so long during the 1997 to 2007 period. Your chart "comparing peaks and troughs for starts, new home sales and residential investment shows the truth. Though you can say a bottom might be in because new home sales are bouncing, remember that not all markets were glutted. They were building roughy 50K in units here in the DFW area before 2007 and scaled back early. I think DFW could probably consume 25,000 units this year, which would maybe by itself make up the change in construction last month. Other areas aren't coming back.
If you look at that chart, don't only look at the peak, but look at the duration of the climb and the size of the top. A big top means a big bottom and we are going to see something that is totally unexpected. Remember, prior overconstruction was always corrected every few years and only the 1972 era and 1978 era peaks lasted over a very short period of time, 2 and 3 years respectively and followed by plunges. it was the plunge that created the following peak and the 2 peaks played themselves out in the 1980's where we only saw a more moderate peak.
This is evidence that the supply of housing is so large that it will take years to work off the excess. Also, the high existing home sales figures tell me the speculators haven't quit speculating. I don't care to listen to NAR statistics as they have been lying for years and using bubble statistics to hide the fact that the bubble hasn't left. This is the true nature of the problem as I see it.
Thus we are going to see one of two things happen. Either we are going to see a rebound and another speculative bubble (the government has an interest in encouraging and recreating a bubble and would do nothing to stop it, including making FHA a subprime financing outfit) or we are going to see this rebound fizzle to lower prices and lower sales. We spent 5 years above the 5% GDP point in housing, which equated to all the time in the 30 plus years prior. We also spent 11 years in record annual sales territory, peaks that had only lasted 2 years prior. Thus, we are looking at a lot of years of surplus housing construction to wipe out.