patrick.net

A look at the FED QE effect on the markets.
You can chart out unemployment claims to equity rise as well

Their response to the financial crisis

A recent look at our bonds and mortgage rates

I think people forget how bad it was back in 2009 and that deflation was everywhere back then. The Fed needed to inject liquidity into the system as even commodity prices were screaming deflation back then

Our economy was frozen so we needed capital to flow back on line.
Anyone can make the argument that the velocity of QE wasn't great. However, the FED isn't God, they can only do so much. Things have gotten better since 2009, which is understanable since 2009 was the bottom in terms of economic weakness here T

Unemployment claims have gotten better since 2009 as well.
Yes participation factor is big reason why the unemployment rate is dropping fast. However, looking back at the last two economic cycle peak employment came at the top both financial bubbles and then we saw jobs go away. We shouldn't try to measure success on 2 previous economic cycles that were juiced up

Social Security is not an entitlement: You pay extra for it, ON TOP OF Taxes.

When you pay today for the chance to have dinner tomorrow, that's not an entitlement.

thunderlips11 says

Social Security is not an entitlement: You pay extra for it, ON TOP OF Taxes.

When you pay today for dinner tomorrow, that's called a contract, not an entitlement.

Whatever you want to call it is fine. However, it doesn't fix the math problem of it. Simply put, Madatory payouts will exceed government revenue in 13-18 years.

Let me give you a bullish look at long term debt. Before the financial crisis even happened so this payout model is as good as it gets. Obviously it looks much different now.

However, this gives you a idea of how unrealistic our long term mandatory payout problem is

Logan, I got you. However, SS can be easily saved by cutting the DoD in half, so the USA only spends 25% of the world's military spending instead of as much as everyone else combined.

Actually, I think the age should be lowered to 60, because we desperately need more spending and more jobs. There is too much money chasing too few opportunities, the only way to create more opportunities is if more money goes into the hands of the many, where it will be mostly spent on new goods and services.

Looking at your chart, it's not S.S. or even MC payouts that's the problem, but the interest on it. This GAO assumes the budget will remain where it is.

It will get worse before it gets better, but when Grandpa Jones has to choose between getting his Soc Sec check or being able to watch more drone strikes on CNN, he'll choose the former.

Nothing makes politicians tremble than large groups of angry, old (and reliable) voters.

Even though I lose heart sometimes, in a boxing match between the AARP and the Mil-Industrial Complex, I say the AARP by TKO in 3 rounds or less.

thunderlips11 says

Actually, I think the age should be lowered to 60

That will never happen! There isn't one democrat that would propose lowering the age on S.S.

However, in terms of a long term concern Medicare has a 5 time larger payout ratio than S.S.

So S.S. can be saved with some adjustments but mind that we don't have the worker to payout ratio advantage this century

Logan Mohtashami says

However, in terms of a long term concern Medicare has a 5 time larger payout ratio than S.S.

We can fix MediCare, and MedicAid by fixing our Health Care system. That's a long debate, but there are solutions to Health Care that we are tinkering with now.

Social Security can also be tinkered with. I just don't see the long term problem if we take a more socialist approach to our safety net.

The problem is the interest payments. The problem we have is the debt.

So we need some returns on our debt to retire it. We can do that with increased production, employment, and tax revenue.

The question is where do we get the jobs that will pay the taxes we need to retire the debt?

thunderlips11 says

Looking at your chart, it's not S.S. or even MC payouts that's the problem,

The reason we will have a net interest payment problem is because S.S. and Medicare cost so much. Medicare cost are insane looking out long term. Also, this has to do with our demographics problem.

We are getting older and more fat. Then add our bloated Defense budget and we have long term problems.

We simply can't grow fast enough to off set the massive cost that are coming years 2022 and on

Not a good long term trend and their is nothing we can do about getting older

What's interesting is that you started this thread with a claim of a an inventory crisis, then it evolved into all of the reasons why perma bears think housing prices will fall.

When people talk about the scarcity of housing they only mean housing units quantified by our Multiple Listing Services. We, here in the United States, have plenty of housing, and the ability to build more.

We are so spoiled that we have this patch of grass idea about housing, but we have alternatives, and substitution.

Then we have this homeless crisis going on. All that means is we have a broken safety net where none should exist.

What you have shown in this thread is a completely manufactured economy. We make bets on what the outside influences will do.

So, for housing there is only an idea of scarcity. No one has to buy into it, people can make other living arrangements for cheaper, they can create more income for themselves, and invest in what gives the highest returns.

There is nothing in all of these charts, and graphs that show housing will give the highest returns on investment.

David Losh says

What's interesting is that you started this thread with a claim of a an inventory crisis, then it evolved into all of the reasons why perma bears think housing prices will fall.

As long as on sale inventory is this low, prices will rise.

This is basic math, in fact it's one of reason why I said home prices will rise this year because on sale inventory has collapsed.

In fact I am very sure you can't provide one data source that shows the non MLS listing that would even make a minor dent into the amount on sale inventory that is on the market place.

If you can provide any evidence of your claim please do so. Here is the latest numbers to show the trend % YOY since 2010

and this is our market place. It shows sales out pacing inventory.

David Losh says

and this is our market place. It shows sales out pacing inventory.

??? Ok.... Let me ask this question this way because right now you're the only person I know in America that is saying America doesn't have an inventory crisis.

Give me a number of homes that are non MLS listed and then ratio that out to the homes that are listed

Apples to Apples debate. What you're saying is that your grape is as important than a giant boulder

Pure numbers and you can see why that Across America Inventories have collapsed for on sale homes.

Here is a good metric to go by. If you're thesis is correct then there should be at least 50% more sales for non MLS listing now across America. That would prove that there is no inventory crisis and everyone has this wrong

Right now ann sales are trending at 5 million.. So there should be 2-2.5 million ann sales that are non MLS listed homes

Actually, this a good case point here

Give me a number of homes that are non-MLS listed across America and then we can compare that to MLS listed homes. ( On sale Inventory)

Then we can do a Apples to Apple debate to see if your thesis stands that there isn't a inventory problem here in the US.

Logan Mohtashami says

Right now ann sales are trending at 5 million.. So there should be 2-2.5 million ann sales that are non MLS listed homes

You're ignoring the 25% of sales at auction, or investor transactions.

This is really simple. Let's say that there are 10 houses on my street, and one of them is listed for sale. How many of the other people on my street would sell with acceptable price, terms, and conditions?

No one needs to buy Real Estate right now. You can't quatify demand any more than you can quantify supply.

Like I said, you've listed here in your thread all of the reasons to avoid signing up for a mortgage debt, but nothing here shows that we are in a short supply of housing units.

Oh yeah, we do have the NAR thing because they need to make some commission dollars.

I think you may have said, or some one did, that foriegners could live four to a home to get it paid off. Consumers have choices.

I can't have a debate without numbers.

I am chart guy so if you can provide me numbers to do a apple to apple then I can chart it out.

On sale inventory are homes that are on market. That number has gone down drastically since 2010.

If you believe the gap is filled by cash auction buyers and investors ( On sale homes that aren't counted) then provide an actual number and source and then let the do the math do the talking.

If your thesis is true, then it should be really easy to prove with some data because the on sale inventory numbers are out there

Remember one item

Right now there are 5.1 million homes that are either in delinquency or in foreclosure process. That's the latest numbers from LPS.

Now roughly 1.6- 1.7 Million are in the shadow inventory and the rest are still in delinquency stage. So, ratio is 2-1 on delinquency than shadow.

The distressed market just takes too long to get to market to sell. That's one of the problems with inventory. Judicial and non judicial states have a big gap on timing

http://www.census.gov/compendia/statab/2012/tables/12s0982.pdf

https://www.google.com/publicdata/explore?ds=kf7tgg1uo9ude_&met_y=population&idim=country:US&dl=en&hl=en&q=population%20of%20the%20united%20states

We have enough housing units for half the population.

How is that a crisis of supply?

I just provided you with data for my market area, and you'll find that what you rely on is the Multiple.

I would have to go to each market place to pull the number of sales, I'd be going to each assessor's office web site to pull numbers.

Do you know another way to do that?

The system of the Multiple Listing Service, and Brokerages is rigged.

David Losh says

The system of the Multiple Listing Service, and Brokerages is rigged.

Let's say I agree with this statement.

That means you believe there are more homes on sale ( Non MLS) than actual homes being reported in shadow inventory.

If not, then do you a metric of homes that would prove your argument valid

For me we would need at least 2- 2.5 million homes that are non MLS listed.

Would you agree then that your thesis means there needs to 2-2.5 million homes across the US that are listed but non-MLS listed.

We also have this which shows 19% of sales through the foreclosure process:

http://www.realtytrac.com/content/foreclosure-market-report/q3-2012-foreclosure-sales-and-short-sales-market-report-7499

Apples to Apples debate

If ann. Sales are running at 5 million for the NAR ( 2013) then you should easily find at least 2 -2.5 million homes that are on sale inventory but not being listed by MLS.

If you can find me 2- 2.5 million homes, then I can think about this being a debate

Remember the keys phrase is Apples to Apples

Number of on sale inventory, rolling ANN sales for 2013 and then the Number ( Key actual number of homes) that are non-MLS listed homes for inventory at this current pace

Logan Mohtashami says

Remember the keys phrase is Apples to Apples

I am remembering and you are talking about 2% of the national market place, if that.

Here's the problem with Real Estate today, the same with many investment vehicles.

You are quoting a closed loop of data. When you broaden the picture, like you did with this thread, you can see how ridiculous the data becomes.

I'll get the 2.5 million homes for you, but it is kind of a small point.

David Losh says

I'll get the 2.5 million homes for you, but it is kind of a small point.

You can't get 2.5 million because there are only 1.7 million at most in the shadow inventory. Those aren't rolling out at the same time

I am no fan of the NAR at all, as you might have seen I have taken a lot shots at them and at L. Yun.

However, if I look at all the numbers and I made a presentation to the country and said. There is no inventory crisis in America, I would get a F grade because the biggest source of viable data shows this not to be true.

On sale inventory by the biggest collection of data source has to be respected if you believe in Math.

I can't discount that on sale inventory has fallen dramatically since 2010.

I almost have your 2.5 million units, but in my Google search I found this NAR site amusing: this is the research page:

http://www.realtor.org/research-and-statistics

Did you say shadow inventory? What the heck is that?

Just kidding, because that is another contrived set of data.

NAR is worthless,

Also, you can't find 2.5 million homes that are on sale inventory that isn't part of the MLS.

That would mean there are more homes not listed on MLS than they are listed on MLS

I was just trying to make a point. Here take a look at the numbers for the start of the year and the trend right now is only 8.5% rise from the start of the year

Ready?

1/18/13 Bloomberg) Housing starts in the U.S. climbed 12.1 percent last month to a 954,000 annual rate, exceeding all forecasts in a Bloomberg survey of economists

10/21/12 U.S. home construction rose 15% in September to an annual rate of 872,000

3/23/12 U.S. Existing home sales fell 0.9% from February.
2/9/12 A $25 billion settlement with the U.S. mortgage lenders was hailed by government officials as long-overdue relief for victims of foreclosure abuses. Of the five major lenders, Bank of America will pay the most to borrowers: nearly $8.6 billion. Wells Fargo will pay about $4.3 billion, JPMorgan Chase roughly $4.2 billion, Citigroup about $1.8 billion and Ally Financial $200 million. The banks will also pay state and federal governments about $5.5 billion.

-- About 11 million households are underwater.

I gave you the foreclosure sales, I also found REIT, and investors sales, but seriously what is the point?

Every one of those underwater loans may want to sell, I for sure want to sell, and get a nice apartment some place warm.

Stick a fork in it, residential housing is simply a matter of who can get what for the cheapest price.

Residential housing is like buying, or renting a car, except we can build something better on your lot when you're done using up the old place.

Brother I tried to explain it as simply as I could, obviously it didn't work.

Math is math, the rest is story telling.

There is no housing inventory problem. This is the same game they tried for about two years, from about 2007 when the market collapsed, until the end of the "First time home buyers tax credit" Around late 2009 to early 2010.

The inventory is being manipulated, either by keeping houses off the market, or releasing them as a house sales. The other thing they do to manipulate "average listing price" is they will include Commercial buildings, and MFUs in the average list price. That will make a neighborhood of 900sqft houses that are selling for 69K and listing for 90K, seem like the average list price is 225K. By time they include the 800K and 1.2 million dollar apartment buildings.

Trulia and Zillow, pulled that in my neighborhood, for most of last year. Where my neighborhood, was dark red or orange, while more typical expensive neighborhoods, that surround my neighborhood, were yellow in comparison.
Those suspect buildings commingled into the listing finally sold earlier this year, and now my neighborhood is in the light green.

It's all just a numbers game, stick to your guns, and don't believe the hype.

CaptainShuddup says

The inventory is being manipulated, either by keeping houses off the market, or releasing them as a house sales

You can make a great case that FASB 157 and the nationalizing of the GSE has prevented homes from coming back to market in a timely fashion.

That I would agree as the number show we have 5.1 Million loans that are either in foreclosure process or delinquency. However, on sale inventory on a national level is low.

Do, I think this is a good thing, not at all. However, I can't say with a straight face that on sale inventory isn't low with this

In fact I made a case that last year that we should let the zombie homes die or make the process faster. The judicial process is taking way too long for homes to come to market

http://loganmohtashami.com/2012/03/09/housing-zombies-last-stand/

Logan Mohtashami says

That would mean there are more homes not listed on MLS than they are listed on MLS

You mean this chart:

http://www.economagic.com/em-cgi/data.exe/cenc25/fsalmon01

As compared to new home sales:

http://www.economagic.com/cenc25.htm#US

Sales are the market place, and sales have been steady.

We have an unlimited capacity to add inventory. Builders are still building, and giving us alternative choices.

In the mean time all of those 100 year old crap shacks are obsolete.

I found your 2.5 million homes in the construction pipeline, so where is the shortage?

There is also all of that investor activity that is coming to a close. To me it looks like we are heading for another glut in housing.

robertoaribas says

this is a hilarious quote!

My kids are in high school, and we moved here to be within walking distance.

Give it up professor, this is the last time.