patrick.net

anonymous says

Do you two know each other?

I am bad with names better with faces. The economic conferences I attended last year was the UCLA Anderson Forecast conference and the University of Chicago Booth Housing Conference in Los Angeles. I don't believe he was attending those. The other conferences I went to were more on the Commercial outlook for housing.

There has been many people that use what I call the 4 Horsemen of the American Economic Cycle ... G.T.D.D. in short for Globalization, Technology, Debt and Demographics. I post daily economic charts on my facebook page and over 10,000 charts that will lead to the conclusion that after 1968 a lot things of changed for American Economics and I am big demographic guy.. Malthus was right, but he needed an global economic environment for his thesis to have more merit

If anyone of you are interested, here is my facebook page it's all about economic charts all day and historical photos at night

https://www.facebook.com/Logan.Mohtashami

dodgerfanjohn says

Let the damn thing collapse.

What can I do to help?

Homebuilders haven't built many homes recently (chart)

http://smaulgld.com/why-the-housing-recovery-is-a-farce-illustrated-by-two-charts/

and maybe they are building too many:

http://smaulgld.com/increase-in-new-home-starts-and-new-home-permits-a-false-signal/

Time is running out... reflation of debt needs income growth... we aren't seeing it and median incomes are about 40K away where they should be. I don't believe we can make up the gap

Logan Mohtashami says

Time is running out... reflation of debt needs income growth... we aren't seeing it and median incomes are about 40K away where they should be. I don't believe we can make up the gap

It's a sign of recovery!

smaulgld says

It's a sign of recovery!

I did express our concerns about this so called recovery in housing to her last year

She listens to Kolko who believed in the recovery and millennial household formation. I am glad you set her straight!

smaulgld says

She listens to Kolko who believed in the recovery and millennial household formation. I am glad you set her straight!

I believe Mark Hanson gives her a lot information to balance out Jed's view. In time I will have my T.V. shot on CNBC and hopefully I will have a housing bull to debate so we can outline the point by point cast that this recovery doesn't look like a recovery at this stage of the cycle

Inman News stopped publishing my stuff when I sent this in:

http://smaulgld.com/the-false-housing-recovery-of-2013-and-how-it-unraveled/

of course they didn't like this either

http://smaulgld.com/why-the-housing-recovery-is-a-farce-illustrated-by-two-charts/

smaulgld says

Inman News

SMH

SMH?

Inman new

S =Shaking
M= My
H= head

I don't believe I have read anything from that site

lol

APOCALYPSEFUCKisShostikovitch says

even brain damaged

Consequences of an unstable market.

2011 Housing Predictions

The longer term consequences of an unstable residential real estate market may be more serious than just the destruction of individual wealth. The ideal of middle class home ownership may be at stake. The census bureau reported a 7% decline in national rental vacancy rates in 2010, along with an overall decline 0.7% in home ownership rates compared to a year ago. There were fewer “organic” buyers, more renters and more investment buyers in the market in 2010 and I expect this trend to continue into 2011. Are we at the beginning of a sociological movement away from middle class homeownership and towards a cultural split between the investment property landlords and their renters both of whom may have less personal investment in neighborhood security, local schools and shared public facilities compared to primary homeowners?

Read more: http://www.businessinsider.com/the-future-aint-what-it-used-to-be-predictions-for-the-2011-real-estate-market-2010-12#ixzz2tjEQrJXA

anonymous says

Logan - I asked about the four factors you cited in an earlier reply to another reader, due to the uncanny similarity between what you said and what Professor Gordon said.

I found his paper, yes, we do sound a like in many ways. I took a look at his economic charts as well

We are all paying the price for the expansion of human population that started in 1920's.

-Too many people around the world and not enough jobs for them

-Technology advances while make us more productive has destroyed a portion of manual labor and will do so in the future

- Demographics, by 2024-2027 all government revenue will not be able to cover mandatory payouts and that trend will get worse

- Globalization has been damming for wage growth among other things.

I gave an interview just on this economic thesis a few weeks ago

http://loganmohtashami.com/2014/02/03/my-interview-with-david-lykken-on-american-economics

APOCALYPSEFUCKisShostikovitch says

guy pulling out his citations

I have something that might be up your alley

This was my interview on Bloomberg Financial last year when they asked me to counter the thesis that Ben Bernanke made that his QE velocity was poor because of tight lending standards.... and my thesis was that.. there is no tight lending in America, we simply don't make enough money as
DTI is too high
LTI is too high
& liquid assets are too light

http://loganmohtashami.com/2013/03/27/will-be-on-bloomberg-financial-talking-about-bernankes-myth-on-tight-lending-standards-the-real-housing-story/

"Home builder confidence" Are you referring to that which makes someone build a neighborhood of houses RIGHT NEXT TO EACH OTHER on a square quarter mile, in the middle of the desert with miles of nothing but tumbleweeds around and 90 miles commute to Los Angeles? Yeah, that kind of confidence needed to be lost.

Logan Mohtashami says

I post daily economic charts on my facebook page

Logan,

I follow you on twitter and facebook. I see your charts all the time but to be honest, I do not understand many of them. If you wouldnt mind explaining some of your more complicated charts, I would really appreciate it. Eventually over time I figure I will learn enough where I will not need an explanation. I know for you and many others here, these charts are obvious... but for someone like me with limited knowledge in this subject, it would help a lot..

THanks again and id love to see you contribute more to this website as well as oc housing...

Logan,

In another housing blog, someone wrote about the increasing service costs and the costs of deferred maintenance being a reason lenders may begin to foreclose on more homes. What are your thoughts on this?

Miike says

Logan,

In another housing blog, someone wrote about the increasing service costs and the costs of deferred maintenance being a reason lenders may begin to foreclose on more homes. What are your thoughts on this?

In regard to foreclosures and timeline. There is a big difference between judicial states and non judicial states. Some states take up to 3 years to foreclosure a home and some non judicial states just take a few months. A lot things changed after the robo signing settlement and the California Homeowners acts in regard to timing of foreclosures. In terms of increasing cost, everything cost more to make sure the T's are crossed and i's are dotted.

I definitely think this thread has the most reasonable and useful information on the subject.

On another note mortgage purchase applications ( today's number awful) have 5 more weeks to get their seasonal rise or else 2014 home sales have to be revised lower.

Now, today's numbers were so bad I am writing another article about apps, but the one I wrote last year still holds merit

Mortgage Applications Falling Slope

http://loganmohtashami.com/2013/10/24/mortgage-purchase-applications-falling-slope/

Call it Crazy says

Yep, today's numbers have "recovery" written all over them.... (and it's NOT because of the weather)..

I am surprised the housing bulls haven't been concerned about this. I always point out that if majority of the jobs recovered in this cycle have been low wage paying jobs going to people 50 and over and there is the massive student loan debt cycle we are in... that there should have been more emphasis on the weak % of mortgage buyers. I believe they run their models on old economic scales and actually believe job growth would mean more mortgage buyers but its been 3 years now and the % of mortgage buyers have been soft and about to have a negative year over year

What explains the significant chunk of jobs (construction,I think it was 45 or 46%)in January and may have been more but this abnormally harsh winter season put a damper on it, even in the south.

Yesterday and today are the first times since before thanksgiving that the daily temps are above freezing, and this is in an area that is within one day's drive of 70% of the population of the US. Nat gas prices are up by 35% this winter, and most houses that weren't finished by Jan 1st, have sat because of sub-zero temps and the added cost to finish.

hrhjuliet says

I definitely think this thread has the most reasonable and useful information on the subject.

agree. All of logans threads are reasonable and useful imo.

logan

can you explain these graphs you posted... im sure its obvious for you and many others, but im sure there are few people including myself who need some explanation...

Logan Mohtashami says

The prediction of the Confidence collapse for the homebuilders, I had this
discussion with CNBC's Diana Olick and it came true today with the worst
collapse in home building confidence ever in it's history .

So which ttime were you wrong with your 'prediction', then, or now?

2. Housing Starts will continue to rise. We have never seen such a dramatic drop in housing starts as we did in 2008-2011. So the rise in 2012 should come as no surprise. Starts should continue to grow and benefit the economy. However, a strong primary resident rebound in starts most likely won't happen. The big players in housing aren't sold on the concept that Americans can buy homes and multi family expansion will still stay with us in 2013. We have a long way to go to get housing starts back to historical normal levels. However, housing should be a bigger contributor to GDP in 2013.

2013 Housing Predictions
Logan Mohtashami, Yahoo Contributor Network
Jan 10, 2013 "Share your voice on Yahoo websites.

http://voices.yahoo.com/2013-housing-predictions-11960855.html

upisdown says

2. Housing Starts will continue to rise. We have never seen such a dramatic drop in housing starts as we did in 2008-2011.

The growth in sales, starts and permits still has legs for new homes

New home sales had an 80% correction from peak to bottom unlike existing home sales.

So, there is still room to go higher in 2014 for new home sales like it was in 2013.

Existing home sales is roughly going to be flat in 2014 but if the 30% cash buyer doesn't still around then we can be looking at a negative year over year number for existing home sales. In 2013 I was looking for 5.10-5.30 and total sales came in a 5.09 so slightly too bullish for 2013 on EHS

There is a big difference between the new home sale market place and existing home sales

New home sales are roughly 1/10th -1/12th of the entire market place so growth in that area with their downturn still has room to go.

Here is my 2014 Housing Prediction Interview with Bloomberg Financial and article to go with it

http://loganmohtashami.com/2014/01/01/my-interview-with-bloomberg-financial-on-my-2014-housing-predictions/

For 2013 new home sales were up 16.4% year over year but at a total 428K that is a very low number historically. I believe it was the 5th or 6th worst year going back to 1963. So even thought the % rise year over year is strong it's due to a very low bar to start off with.

Logan Mohtashami says

The growth in sales, starts and permits still has legs for new homes

New home sales had an 80% correction from peak to bottom unlike existing home
sales.

So you agree that the temporary lull from the last quarter and part of this one will rebound?

It's the October pop and January drop, as usual, but due to certain circumstances, it's exagerated the last and this quarter. Maybe not in sunny Cali, but for the majority of the rest of the nation(yes, there are other parts of the USA, we actually exist).

Curious question in reference to homebuilder/s:

Why haven't you ever referenced the NAHB?

Logan Mohtashami says

There is a big difference between the new home sale market place and existing
home sales

New home sales are roughly 1/10th -1/12th of the entire market place so
growth in that area with their downturn still has room to go.

I agree with the above, mainly because the new homes are in the upper end of the market-semi-custom to custom niche, where mortages OR cash isn't an issue at all. Which ever form of payment they use is determined by the greater advantage/return.

Logan Mohtashami says

For 2013 new home sales were up 16.4% year over year but at a total 428K that
is a very low number historically. I believe it was the 5th or 6th worst year
going back to 1963. So even thought the % rise year over year is strong it's due
to a very low bar to start off with.

Very true. It's too bad that the clean-sweep or downturn didn't take out the mega-builders too, but they were bloated with money from the boom. Now, unforunately people will be stuck buying and selling those junk shacks for years to come.

upisdown says

Curious question in reference to homebuilder/s:

Why haven't you ever referenced the NAHB?

Actually the original article I wrote about and used for this thread was talking about the NAHB

http://loganmohtashami.com/2013/09/17/economic-denial-from-home-builders/

If I look at the 50 year average of total starts it's roughly 1.5 million and sales 700K roughly

I'm not even going to think about a top in new homes until we start to get to the 650-700K level and then I have to see where the economy is and how much housing inflation we see in the market place

I had a problem with IVY Zelman theory on housing was in Nirvana last year because her thesis didn't match the cycle, so even though her and I agree on the trend I didn't see the new home sales market as invincible as she did even though it's tilted to the more wealth buyers

http://loganmohtashami.com/2013/08/26/housing-nirvana-gets-slapped-by-higher-rates/

Logan Mohtashami says

If I look at the 50 year average of total starts it's roughly 1.5 million and
sales 700K roughly

I'm not even going to think about a top in new homes until we start to get to
the 650-700K level and then I have to see where the economy is and how much
housing inflation we see in the market place

I had a problem with IVY Zelman theory on housing was in Nirvana last year
because her thesis didn't match the cycle, so even though her and I agree on the
trend I didn't see the new home sales market as invincible as she did even
though it's tilted to the more wealth buyers

Let me throw this out there, in general, or throughout the USA, do you think that possibly going forward in the new home market, it will be a new market that's uncharted territory? The old standards/norms won't come close to matching the new and ever changing markets or patterns?

Other than the wealth portion of that market that it seems we agree on, will the 'new normal' even be that normal at all?

upisdown says

Let me throw this out there, in general, or throughout the USA, do you think that possibly going forward in the new home market, it will be a new market that's uncharted territory? The old standards/norms won't come close to matching the new and ever changing markets or patterns?

I believe it will change in the sense that more rentals will be built going forward. We still have 3 million loans in delinquency and once rate inflation rises
IE 10 year at 4.5% and Fed funds rate 3% plus higher that a rental equation will always be thought of and that the home ownership society won't regain it's previous bubble luster.

Student loan debt issue is really impacted the younger generation and not sure if there is a valid answer to that equation in an economy that is not having median incomes rise in a strong fashion.

Unless we are Japan 2.0 10 year can't stay this low forever