by _ ➕follow (8) 💰tip ignore
« First « Previous Comments 99 - 138 of 360 Next » Last » Search these comments
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
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.
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?
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.
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?
No. That quote doesn't contradict anything I've said.
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.
The flaw in that thesis is that net inventory is still higher than 2013 where we had more demand for housing.
So there was more demand for housing in a year that saw double digit price gains with less homes in the market but now that TOTAL sales are volume that net demand trend is creating a slow down in price gains which is very normal when you don't have growing sales
Now if you understand what I am saying right there, then you should get it why demand matters ;-)
The flaw in that thesis is that net inventory is still higher than 2013 where we had more demand for housing.
So there was more demand for housing in a year that saw double digit price gains with less homes in the market but now that TOTAL sales are volume that net demand trend is creating a slow down in price gains which is very normal when you don't have growing sales
Now if you understand what I am saying right there, then you should get it why demand matters ;-)
OK--so the point of the demand analysis was to predict future prices. Correct?
OK--so the point of the demand analysis was to predict future prices. Correct?
That isn't the main factor for the health of a housing market.
Because in all my predictions I am showing YoY price again but I have to believe in a economic discipline that looks at variable factors model
This is the problem when all you care about is price.
Honestly you probably didn't think anything was wrong from 2003-2006 when prices where well beyond the MI2MP model
Be honest here, if I follow your singular housing economic thesis then you were a housing bull all the way through the housing bubble years
Correct?
Be honest here, if I follow your singular housing economic thesis then you were a housing bull all the way through the housing bubble years
Correct?
Until right before the bubble popped. Which is really the point, isn't it.. Inventory predicted MUCH more accurately when prices would continue to rise and when they were set to fall.
If you wanted something to measure when we're in a bubble or away from fundamentals--look at price/rent ratios.
Until right before the bubble popped. Which is really the point, isn't it.. Inventory predicted MUCH more accurately when prices would continue to rise and when they were set to fall.
EXACTLY!!!!!!! My point :-)
Thank you for your honestly, most people wouldn't admit that
You see in my world the MI2MP model deviated in Mid 2003 and you were a bull all the way to 2006 right before the bubble crashed.
We are in 2 different worlds, I can never advocate the strength of economic sector which doesn't have it's natural demand buyer at or on par with historical trends.
So we are never going to agree on housing economics
However, thank you for your honesty, I total understand now where you're coming from.
EXACTLY!!!!!!! My point :-)
Thank you for your honestly, most people wouldn't admit that
You see in my world the MI2MP model deviated in Mid 2003 and you were a bull all the way to 2006 right before the bubble crashed.
We are in 2 different worlds, I can never advocate the strength of economic sector which doesn't have it's natural demand buyer at or on par with historical trends.
So we are never going to agree on housing economics
However, thank you for your honesty, I total understand now where you're coming from.
No problem. In my world, I would be able to predict prices from 2003 - 2006 and from 2012 - 2015 while you wouldn't. And I would also be able to predict the housing collapse much more accurately than you.
I'm not sure what you think is better about your world?
I'm not sure what you think is better about your world?
Clap Clap Clap
My first thesis about you was right I just needed confirmation
See
You're that guy that told me in 2003-2006 that all that matters is price, that is the true health of the housing market
You're that guy that didn't care about sub prime loans, option arm loans 80/20 loans because all that matters is price
You're that guy that even today admits that internal net demand doesn't matter all that matters is price
We are in different worlds brother, there is nothing we have in common in how we look at the housing markets
That is what I have been trying to say, you're that guy back then from 2003-2006
Plus if you really did believe in price to rent ratio's you should have been raising red flag in Mid 2003
But you didn't because you're that guy
Math is Math... the rest is story telling
You're that guy that told me in 2003-2006 that all that matters is price, that is the true health of the housing market
You're that guy that didn't care about sub prime loans, option arm loans 80/20 loans because all that matters is price
You're that guy that even today admits that internal net demand doesn't matter all that matters is priceWe are in different worlds brother, there is nothing we have in common in how we look at the housing markets
That is what I have been trying to say, you're that guy back then from 2003-2006
Plus if you really did believe in price to rent ratio's you should have been raising red flag in Mid 2003
But you didn't because you're that guy
lol--you're way more concerned with "which guy I am" than actually understanding what I'm saying. It's too bad. If you had a slightly better attitude and more open mind, you might just learn something.
Of course I raised the flag in 2003. I lived in CA. and I rented because it was obvious housing prices were drastically overpriced. You are really clueless to what I am saying. Here's a tip for you--no matter how big you think you are--never stop questioning yourself and listening to others.
To say that the housing sector is "unhealthy" because the "demand is weak" doesn't accurately characterize the situation.
Instead you should say:
"Old people are bent on restricting new construction so they can extort insane sums of money from the richest young people in exchange for their shacks. The inventory is deliberately kept low by building much less than population growth would require. Politicians desperately want housing prices to be high, and want young people to pay through the nose, so banks balance sheets look ok. They cannot afford to build more houses and let prices align with wages and building costs, because it would reveal the financial system is rotten to the core."
It doesn't help to say the market is not healthy, when it's deliberately kept this way to produce the desired high prices.
You are really clueless
If I am clueless and you just told me you use the price to rent model then why are you debating your own self saying you were a housing bull from 2003-2006
This is what we call economic slippage the story gets in a crossfire you forget what your original thesis.
Honestly do you think this works on someone like me? Do I give that impression that I am real estate agent
If you wanted something to measure when we're in a bubble or away from fundamentals--look at price/rent ratios.
So we are in a bubble now?
Logan, I have a question, if you are so smart why do you argue with idiots?
If you wanted something to measure when we're in a bubble or away from fundamentals--look at price/rent ratios.
So we are in a bubble now?
I don't think price/rent ratios are that out of whack from most of the US. Maybe prices are too high in a few places.
Want to tell me again H.S, who's the whiner??
[shrug] This was just stating facts.
Logan, I have a question, if you are so smart why do you argue with idiots?
You have to know what the other side thinks, it preps you always for any economic discussion
Causation
Correlation
Representation
Math, Facts, Data... the final number is what matters but there is a story behind those numbers ( Why) factor is really what separates economic analysis
Dealing with professors, economist, housing pundits and others. I have learned one thing that they all have in common. None of them have a financial lending background
so their model of affordability is outdated in relationship to this economic cycle. This has been the case for 12 years now and their frustration on why demand has been soft comes from this area of not understanding why Americans aren't buying homes like their model would have shown
Breakdown
MI2MP then add PITI inflation tagged to a DTI factor model, with a representation of LTI metrics against real median income. Once I have shown them this then it makes sense to them why demand is soft even with rates this low
That was the main confusion with the housing community and why they didn't account for the weakness in demand
If I am clueless and you just told me you use the price to rent model then why are you debating your own self saying you were a housing bull from 2003-2006
This is what we call economic slippage the story gets in a crossfire you forget what your original thesis.
Honestly do you think this works on someone like me? Do I give that impression that I am real estate agent
Listen--this isn't that hard to understand. I said that inventory is the best predictor of future housing prices. And I think you agree with that statement.
As to a housing bull--my statement was that using inventory as a guide, one would have been a bull until inventory started rising then they would have turned bearish before the bubble popped. As someone who wanted to buy more long term--I wouldn't have been able nor wanted to time the market, so I sat it out. No slippage or difference from my original thesis.
See--this is my problem with you. You can't just state your point without trying to puff yourself up. If you would have simply said that you use other measures to try to gauge demand because supply can change quickly and you wanted a longer term gauge of the direction of housing prices, then you might have had a point. But, for some reason, you cannot do that. After all this, you have yet to give a simple explanation for why you look at sales volume. It's as if you are incapable of understanding and explaining your thought process.
See--this is my problem with you. You can't just state your point without trying to puff yourself up
2. Housing internals are weak
Second, those housing pundits tend not to consider the “internals†of the housing market. The internals tell the story for those who care to look.
In a normal cycle we would see the following:
90% mortgage buyers
40% of that first time home buyers
10% cash buyers
In this cycle, however we see the following:
67-70% mortgage buyers
27-30% first time home buyer
30% plus cash buyers for the past several years
The internals show weakness in demand, not strength. What if the number of cash buyers returned to a normal 10% level of the market place? 2014 has a high percentage of cash buyers but the volume of sales are going down. With a lower percentage of cash buyers expected in the future, the number of mortgage buyers will need to increase just to maintain the current level of sales.
"A key emphasis this year."
If cash buyers went back to their normal historic %, then both 2013 & 2014 existing home sales would be at the lowest level of this economic cycle.
We are talking about year 5 & 6 in this economic cycle not the first few years coming out of the recession. This troubling trend is why mortgage demand needs to grow to keep sales from falling more as total cash volumes continue to dwindle slowly.
It was written pretty clear in the article too, I could have added 2012 but it was year 2013 and 2014 that people started to raise their sales estimates and they missed badly
I mean ouch some as high as 30% sales miss in 2014
Dealing with professors, economist, housing pundits and others. I have learned one thing that they all have in common. None of them have a financial lending background
so their model of affordability is outdated in relationship to this economic cycle. This has been the case for 12 years now and their frustration on why demand has been soft comes from this area of not understanding why Americans aren't buying homes like their model would have shown
Weak demand meets weak building. Things balance out. Where's the problem?
Overwhelmingly people care about prices more than anything else.
Politicians, banksters, retirees... they don't care if volume is drowned into the bathtub as long as prices are up.
Weak demand meets weak building. Things balance out. Where's the problem?
Overwhelmingly people care about prices more than anything else.
If that was the case then why did sales drop in a year where pricing where increasing
Not to mention we did it 21st century.... Hold... let me repeat this again.... 21st century lows in 2014 for
Mortgage purchase applications
&
First time home buyers
So in 2013 where we saw massive price gains sales barely grew
In 2014 where we saw another year of price gains sales went negative
Not sure if that is a valid economic thesis with the last 2 years if all that matters is price
If that was the case then why did sales drop in a year where pricing where increasing
What is your point? I said they don't care if sales drop as long as prices are up.
Housing internals are weak
Second, those housing pundits tend not to consider the “internals†of the housing market. The internals tell the story for those who care to look.In a normal cycle we would see the following:
90% mortgage buyers
40% of that first time home buyers
10% cash buyersIn this cycle, however we see the following:
67-70% mortgage buyers
27-30% first time home buyer
30% plus cash buyers for the past several yearsThe internals show weakness in demand, not strength. What if the number of cash buyers returned to a normal 10% level of the market place? 2014 has a high percentage of cash buyers but the volume of sales are going down. With a lower percentage of cash buyers expected in the future, the number of mortgage buyers will need to increase just to maintain the current level of sales.
I fail to see how a different spread of buyer types = weakness. Different doesn't equal weak. Maybe cash buyers are drowning out mortgage buyers. I just have a hard time with someone saying the housing market is weak after 3 years of very good gains, price/rent ratios in normal ranges, and low supply. By definition it's not weak.
If you want to say it's unsustainable, then you might have a point.
What is your point? I said they don't care if sales drop as long as prices are up.
Seriously it's amazing that we have hit 21st century lows in demand metrics from main street America but the richest 1% have been buying more homes as a % of the market than anytime in recent history and some people find nothing wrong with that at all
You don't get charts like this if there isn't a demand problem
Have you not been paying attention with all the charts and graphs he put up with all the different metrics he uses besides prices??
And the question I asked was why does he use those.
Anyone reading this thread can see that's YOUR problem, since the ONLY thing you focus on is prices, and every other data point, fact or math goes completely over your head!
Well, obviously I focus on prices as do 99% of people in the world. But I can assure that nothing goes over my head.
Seriously it's amazing that we have hit 21st century lows in demand metrics from main street America but the richest 1% have been buying more homes as a % of the market than anytime in recent history and some people find nothing wrong with that at all
If we've hit 21st century lows in demand--why are prices rising???? Doesn't that strike you as a contradictory statement??
If you want to say it's unsustainable, then you might have a point.
2013 & 2014 were supposed to be the best year homes net overall demand
2013 barely grew
2014 went negative
Even with higher inventory and lower rates plus 30% cash buyers in the system
Like I said, there is no way to cut around it, the price inflation we have seen since 2012 has brought the U.S housing to demand metrics that are at
21st century lows in terms of % buyers
You don't get charts like this if there isn't a demand problem
Ok, there is a demand problem. Ah, but there is also a supply problem. As a result the entire housing market is restricted to its upscale part.
So it is a market in balance, more than it looks like.
I guess we shouldn't care so much about the market [taken purely as a market] and more about what it means socially when this happens.
If we've hit 21st century lows in demand--why are prices rising???? Doesn't that strike you as a contradictory statement??
I tried my best to make the point but like I said you're that guy that didn't care about the prices rising during the housing bubble and your own metrics that you quoted
even showed you that there was an issue in mid 2003
Not sure what else I can say. People like yourself only care about price and nothing else. That is not how I would look at it because the last time that metric was used
2003-2006 and it failed miserably and we are already seeing net negative demand trend.
Ok, there is a demand problem. Ah, but there is also a supply problem
Supply was up in 2014, we had more demand in 2013 with less homes on the market and on par and higher rates
If we've hit 21st century lows in demand--why are prices rising???? Doesn't that strike you as a contradictory statement??
I tried my best to make the point but like I said you're that guy that didn't care about the prices rising during the housing bubble and your own metrics that you quoted
even showed you that there was an issue in mid 2003Not sure what else I can say. People like yourself only care about price and nothing else. That is not how I would look at it because the last time that metric was used
2003-2006 and it failed miserably and we are already seeing net negative demand trend.
So you have no answer then?
So you have no answer then?
for the 3th time
As long as inventory stays below 6 months and you trend sales growth ( this is possible still) because cash buyers have never been this high as a % of market place
They key is having both 6 months and lower inventory and trend sales growth, this is only possible if cash buyers are still 17%-22% above their historical norms because if it wasn't we would be below the lowest level of total home sales in this cycle
Which means actually 2012-2015 would have the lowest level of total sales in the Great Recession
2013 & 2014 were supposed to be the best year homes net overall demand
See this what you're missing. Supply and demand in housing are related. A buyer is usually also a seller. So the net effect is zero.
What you really care about is net demand (intuitively think of demand - supply). Or new buyers - sellers that aren't buying.
If prices are rising, then net demand > 0. If prices are falling then net demand is less than zero
« First « Previous Comments 99 - 138 of 360 Next » Last » Search these comments
http://loganmohtashami.com/2015/02/23/bloomberg-financial-interview-housing-2015-the-truth-about-demand/
#housing