patrick.net

tatupu70 says

You think that making a bunch of lines in different colors makes you look smart.

Numbers can't lie

People, poets, politicians these are lies

Numbers are the closest thing we have to the handwriting of God ;-)

tatupu70 says

Logan--enough with this nonsense. I love math. I love data. I love facts.

If you truly did love numbers then you would see why there is an issue with the housing market
You can't deviate from the economic equilibrium of your surrounding group of demand drivers

When condo purchases in the data pool are replaced by apartment building purchases, the average and median transaction prices can increase even without any quality improvement in the housing stock being transacted. Yes, transaction unit volume drops in that product mix change.

tatupu70 says

Again--so how does this chart predict rising prices from 2012-1015?

See, the best thing here is that we both agree home prices are going to rise

But I see net demand issues happening where it's not on your radar really

That is what makes a market place, that is completely fine.

Logan Mohtashami says

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 home ownership 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?

That IMO is on the mark. IMO the overarching reason is simply off-shoring of jobs, secondly it is because of demographics, thirdly it is because of mercantilism, fourthly it is because of automation.

But the insidious reason that may have more to do with than anything is the Fed preventing an organic recovery by TARP and QEs and the Greenspan put which is seen in the velocity of money being at an all time low.

Logan Mohtashami says

Great example right here. You don't care about anything but price, even when sales turn negative in a year where we should have seen 20%-30% growth

Again-why should anyone care about volume if it's not a leading indicator on price? And who says what we "should" have seen?

Logan Mohtashami says

They will show some more growth in 2015 because the bar is too low but if all your care about is price then you can see the trend that pricing power is slowing dwindling down

That's not a big deal in my mind I think that is the most bullish thing that can happen but right here is the best example why someone like yourself doesn't see anything wrong with the housing market

Purity of mathematics creates this divide!

Kudos, on this one, this is the best example you have given me

No problem. I think you'll find 99%+ of the people who follow the housing market are concerned with price. So, yes, that's the variable that I consider the most important. Other variables are tracked and reported because there is a belief that those variables will affect price in the future.

Logan Mohtashami says

They will show some more growth in 2015 because the bar is too low but if all your care about is price then you can see the trend that pricing power is slowing dwindling down

That's not a big deal in my mind I think that is the most bullish thing that can happen but right here is the best example why someone like yourself doesn't see anything wrong with the housing market

Please don't characterize my views on the housing market. I think there are a lot of things wrong right now--and the housing market just reflects the broader issues with the US economy. But the point I'm making is that most of your charts show an overpriced market in 2012. Yet, prices went up for 3 straight years. Obviously those charts are not good predictors of future market behavior.

Facts are neutral--it's the interpretation of those facts that is the important thing. You haven't shown an ability to interpret facts and data to make good predictions on the future. If you can't do that it doesn't matter how many graphs and charts you can make or how many colors you use on them. They're worthless.

Logan Mohtashami says

Numbers can't lie

People, poets, politicians these are lies

Numbers are the closest thing we have to the handwriting of God ;-)

Yep--but you aren't just posting the raw data. You are making graphs that are reaching conclusions. I don't fault your numbers. Just your interpretations.

Logan Mohtashami says

If you truly did love numbers then you would see why there is an issue with the housing market

You can't deviate from the economic equilibrium of your surrounding group of demand drivers

You never answered my question. You say we can't deviate from the equilibrium but we have for 3 years running.

And I ask--at what point do you reevaluate your theories? How many years of them not reflecting reality before you begin to question them?

tatupu70 says

Yep--but you aren't just posting the raw data. You are making graphs that are reaching conclusions. I don't fault your numbers. Just your interpretations.

Like I have said over and over again

You can't help yourself, in your mind there is nothing wrong with the housing market. I get it I have come to realization that there are a certain group of humans that
Math, Facts and Data don't matter. Even Janet Yellen just talked about the Sluggish Housing market but in your mind math, data and facts don't matter

tatupu70 says

You never answered my question. You say we can't deviate from the equilibrium but we have for 3 years running.

Again I have given you the same mathematical model to show you why home prices are rising and you don't even remember it

You don't care about math, facts and data and even with the mathematical model to show you why home prices are rising you have already forgotten it. It was written above.

tatupu70 says

And I ask--at what point do you reevaluate your theories?

Trend data is monthly and always has to be looked at. None of this matters to someone like yourself because

Tatupu70 doesn't believe there is anything wrong with the U.S housing market something that everyone else agrees that there is a demand problem

It's what we called economic narcissism, even when all the data shows a demand issue a single person can create a theory that there is nothing wrong with the housing market.

This almost borderlines of economic moral insanity

Which is 100% normal because I have seen this type of human behavior before where math, facts and data don't matter to this certain group

Remember if cash buyers went back to their normal historic %
Both 2012, 2013, 2014 and most likely 2015 would be the lowest level of total sales in the Great Recession

This is a mathematical fact, your demand drivers are the Rich, they have given a great cushion even though total sales have been soft.

There is no way around it, to deny this is to deny numbers itself. Much like the demand during the housing bubble was fake in this cycle, it's been the Rich buying with cash

None quarter asked none taken, this is the reality of this housing cycle

Once mortgage demand grows then you have a more normal housing market and even these low level of total sales wouldn't matter as much

Here is a stat

Back in 20000

EHS was 5.2 million
We had 5.5 million less people working back then
Interest rates were at 8%

2014

EHS sales closed a 4.93 million
We have 5.5 million more working than the year 2000
Interest rates range was from 4% - 4.5%
And we had a 20% above historical norm of cash buyers in 2014

Even with all that sales came in negative in year 6 of the economic cycle which had the biggest job growth monthly avg since the year 1999 and biggest private monthly
job creation since 1997

Math is Math... the rest is storytellig

Logan Mohtashami says

You can't help yourself, in your mind there is nothing wrong with the housing market. I get it I have come to realization that there are a certain group of humans that

Math, Facts and Data don't matter. Even Janet Yellen just talked about the Sluggish Housing market but in your mind math, data and facts don't matter

Logan-- Why do you keep saying this?? Can you not read my posts? Do you not comprehend them?

Logan Mohtashami says

Again I have given you the same mathematical model to show you why home prices are rising and you don't even remember it

My apologies--please repost it then and explain how it works. What model result indicates rising prices and what result indicates falling prices.

Logan Mohtashami says

Trend data is monthly and always has to be looked at. None of this matters to someone like yourself because

Tatupu70 doesn't believe there is anything wrong with the U.S housing market something that everyone else agrees that there is a demand problem

It's what we called economic narcissism, even when all the data shows a demand issue a single person can create a theory that there is nothing wrong with the housing market.

This almost borderlines of economic moral insanity

Which is 100% normal because I have seen this type of human behavior before where math, facts and data don't matter to this certain group

Logan--

You really need to stop and read my posts and stop pretending that you understand what I'm saying--because you clearly don't. It's not that complicated--I wouldn't think that the nuance is over your head, but perhaps it is.

First off--using sales numbers as a surrogate for demand is only correct with infinite supply. Any other time, it's an approximation that may or may not reflect reality. The fact that you don't understand this simple point is a good indication that your other theories are probably equally suspect.

When have I EVER said that there's nothing wrong with the housing market?? In fact, on this very thread I have posted that there IS something wrong and it is a symptom of the problem with the US economy. So, let's start there. From now on try to read more carefully and understand my position. OK?

tatupu70 says

What model result indicates rising prices and what result indicates falling prices.

6 month inventory levels with trend growth

As long as cash buyers still buy homes you will have at least trend growth, it might not be great but there is no double digit decline in home sales we only say a negative 3% print

I don't believe this will happen in 2015 but lets just say cash buyers go back to their historical norms

That would imply a -13% to -17% Year over Year decline in home sales and even with inventory less than 6 months you would see a decline in home prices
nothing big because it's not a distress market

6 months is the key line for inventory in terms of pricing power, if we started the year at like 8 months with the slowing demand trend then I would say you would see home prices decline year over year

However, we aren't there, so pricing power with on par year over year mortgage demand still gives you enough firepower to keep prices from going up.

This has to be tracked monthly too because of different variable factors that could impact the market place

But for 2015 I am looking for 1%-4% growth in price for existing homes. New home market might see negative trend but for different reasons that would actually be bullish for them that is a entirely different avenue than existing homes because they aren't selling entry levels home

In short
6 month or below inventory with long term trending growth in place gives you pricing power. There is no net new delinquencies being created so the distress market is becoming less and less a factor

That is the short version of it

tatupu70 says

symptom of the problem with the US economy

The U.S. economy is doing better than in previous years, the housing issue is a bigger problem and that has more to do with

#Globalization
#Technology
#Debt
#Demographics

That goes into another topic all together

Logan Mohtashami says

tatupu70 says

What model result indicates rising prices and what result indicates falling prices.

6 month inventory levels with trend growth

LOL You're kidding me. After all this nonsense you are agreeing that supply is the best "model"? What the f$*& are you arguing with me for then?? That's what I've been saying all along.

Logan Mohtashami says

The U.S. economy is doing better than in previous years, the housing issue is a bigger problem and that has more to do with

#Globalization

#Technology

#Debt

#Demographics

That goes into another topic all together

I disagree with the health of the US economy. It does have to do with some of the above, but the poor health is most easily seen by looking at wealth disparity.

tatupu70 says

I disagree with the health of the US economy.

Almost every economic indicator in the U.S. economy is trending better except for housing. I have 10,000 charts to show this.

Now it's a not a Utopia and never will be and the velocity of $ is very poor when so much of it is held by so little but 2014 was clearly a better year than 2013

Logan Mohtashami says

Almost every economic indicator in the U.S. economy is trending better except for housing. I have 10,000 charts to show this.

Less sick doesn't equal healthy in my book.

Even with tight supply we can see that the peak % gains are limited YoY
Still not enough to create a negative trend but there are limits to low inventory gains and why buyer profile matters in terms of total net demand

tatupu70 says

LOL You're kidding me. After all this nonsense you are agreeing that supply is the best "model"? What the f$*& are you arguing with me for then?? That's what I've been saying all along.

Do you see my point exactly, you don't follow data. To be honest it's not your fault, your probably don 't have a financial background so a lot this stuff doesn't make sense to you.

I understand why it's confusing.

This is why you don't provide charts, again what you're saying is exactly what I believe people like yourself think always

Math, data and facts don't matter to you all you care about is price
Just like in 2003-2006 when people told me the same thing, all that matters is price

Logan Mohtashami says

Do you see my point exactly, you don't follow data. To be honest it's not your fault, your probably don 't have financial background so a lot this stuff doesn't make sense to you.

I understand why it's confusing.

This is why you don't provide charts, again what you're saying is exactly what I believe people like yourself think always

Math, data and facts don't matter to you all you care about is price

Just like in 2003-2006 when people told me the same thing, all that matters is price

lol--I can almost guarantee that I have a stronger financial background than you do, but it's irrelevant. You seem to be incapable of discussing the issues without trying to tie it back to me. As I have said repeatedly, your data and facts are useless unless they can be used to explain reality and generate a model for predicting future behavior.

In all seriousness--do you understand that all the data and facts in the world are useless if you can't use them to improve your understanding of the world and allow you to better predict the future?

I did provide facts and data. On inventory. As you have agreed--it's the best indicator of future price. Which is what 99% of the people care about.

You've never answered my question--why should I care about sales volume?

tatupu70 says

lol--I can almost guarantee that I have a stronger financial background than you do, but it's irrelevant.

If that is the case why do you hide behind a fake name?

You know exactly who I am, and economist, professor come to me about housing but you???

Fake name, no data, no economic game.

I have seen this for 15 years and I don't blame you for hiding behind your computer

tatupu70 says

You've never answered my question--why should I care about sales volume?

Because without trend growth even in tight inventory shows the decline in YoY % gains this is why the YoY price gains are decling

At this point you're just embarrassing yourself

tatupu70 says

Which is what 99% of the people care about.

Again why I say people like you don't care about Math, Facts and Data

Everybody, housing pundits, the Fed, Builders, NAR is talking about a net demand problem but only you... care about price

Let me guess during 2003-2006 the housing bubble you didn't care about net demand trends either.

It's the nature of the beast for you to not care about net demand and to this I understand why

Logan Mohtashami says

If that is the case why do you hide behind a fake name?

You know exactly who I am, and economist, professor come to me about housing but you???

Fake name, no data, no economic game.

I have seen this for 15 years and I don't blame you for hiding behind your computer

Would you like to meet in real life? I'm not sure that would accomplish anything, but I'm game.

tatupu70 says

Would you like to meet in real life? I'm not sure that would accomplish anything, but I'm game.

Just say your name, then we can see if you have an economic background like you said

Logan Mohtashami says

Would you like to meet in real life? I'm not sure that would accomplish anything, but I'm game.

Call me 949-291-8293 and I can explain to exactly why the housing pundits, housing economist and other people in the business are coming to me and asking
about the net demand problem, because I have said the same thesis for 6 years now and after 6 years of data the thesis has been vindicated

There is no where for me to hide, because I don't hide behind a fake name, everyone knows who I am

Logan Mohtashami says

Because without trend growth even in tight inventory shows the decline in YoY % gains this is why the YoY price gains are decling

At this point you're just embarrassing yourself

OK--now we're getting somewhere. I'll try to give you a little lesson here, professor. Free of charge. So, the reason you look at sales volume is because you believe that it's a forward looking indicator of future price changes?

Logan Mohtashami says

Again why I say people like you don't care about Math, Facts and Data

Everybody, housing pundits, the Fed, Builders, NAR is talking about a net demand problem but only you... care about price

Let me guess during 2003-2006 the housing bubble you didn't care about net demand trends either.

It's the nature of the beast for you to not care about net demand and to this I understand why

lol--so are prices not data?

Demand is but one part of the equation and history has proven it is less predictive than supply. That is why. Further, as I explained earlier--using sales volume as a surrogate for demand assumes infinite supply. Do you think there is infinite supply right now?

tatupu70 says

OK--now we're getting somewhere. I'll try to give you a little lesson here, professor. Free of charge. So, the reason you look at sales volume is because you believe that it's a forward looking indicator of future price changes?

Why would I listen to someone who doesn't believe in Math, Data and Facts and is only talking about Price

What is your name SIR? if you truly have a financial background we can verify it in less than 1 minute?

Logan Mohtashami says

Call me 949-291-8293 and I can explain to exactly why the housing pundits, housing economist and other people in the business are coming to me and asking

about the net demand problem, because I have said the same thesis for 6 years now and after 6 years of data the thesis has been vindicated

There is no where for me to hide, because I don't hide behind a fake name, everyone knows who I am

You're awfully defensive for someone who is so certain of their background and knowledge. Typically, I would expect one such as yourself to welcome such questioning of their ideas as it serves to further strengthen their understanding and ensure that they are not off base.

Let me help you out

My name is Logan Mohtashami, google it and you can see what it is out there

If you do have a financial background then spell your name out

So we can google it?

Fair question since you claim you have a financial background

Then exactly I know who I am dealing with so it will help me understand why you're just a price person and why net demand doesn't matter to you

Logan Mohtashami says

Why would I listen to someone who doesn't believe in Math, Data and Facts and is only talking about Price

What is your name SIR? if you truly have a financial background we can verify it in less than 1 minute?

No thanks--I choose not to supply my name. Like I said--there is no need to use the appeal to authority logical fallacy here. Let's let the arguments stand on their own regardless of who is making them.

Price IS data. And it is the ultimate piece of data--all other data is captured to try to understand future price movements.

tatupu70 says

You're awfully defensive for someone who is so certain of their background and knowledge. Typically, I would expect one such as yourself to welcome such questioning of their ideas as it serves to further strengthen their understanding and ensure that they are not off base.

I just want to know who I am dealing with so it can help me understand why you don't care about net total volume sales.
This is a very new economic thesis, I must know who with a financial background is breaking this new thesis

Logan Mohtashami says

I just want to know who I am dealing with so it can help me understand why you don't care about net total volume sales.

This is a very new economic thesis, I must know who with a financial background is breaking this new thesis

I've already told you why I don't find net total volume sales as very compelling. Have you not been paying attention?

I think you may be so ensconced in the details of the housing market that you cannot see the forest for the trees at this point.

tatupu70 says

Price IS data. And it is the ultimate piece of data--all other data is captured to try to understand future price movements.

Let me take this economic thesis.

If this is true then you must believe the market is getting weaker because even in a low inventory cycle we are losing pricing power as inventory has risen from 2012

Correct?

Even from the Master Spin Man himself from the NAR:

Higher prices, coupled with weak supply, caused an unexpectedly large drop in January home sales, down nearly 5 percent from January of 2014, according to the National Association of Realtors.

"This is a notable speed bump," said NAR's chief economist, Lawrence Yun, who deemed the phenomenon, "puzzling," given a stronger economy and rising rents.

I am not puzzled and you're aren't too correct under your own economic thesis about the U.S. housing market?

Right?

Logan Mohtashami says

Let me take this economic thesis.

If this is true then you must believe the market is getting weaker because even in a low inventory cycle we are losing pricing power as inventory has risen from 2012

Correct?

The last article I saw said inventory has decreased in January for the last 2 years. So it appears that while inventory was up for most of 2014, it has now reversed itself and is down YOY, and down even more vs. 2012.

But, yes, history shows that if inventory rises, price changes will decrease.