Low Housing Inventory Lie Still Lives On
2016 Apr 8, 10:12am 28,326 views 164 comments
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Strategist
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2016 Apr 10, 7:26am
I predict existing home price growth of 1-4% for 2016.
Strategist forecasts....
US home prices increase by 5% plus
California home prices increase by 10% plus
_
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2016 Apr 10, 7:31am
So what's your forecast on home prices in the next year and two? National and California.
Thesis with prices is still the same always, inventory over 6 months and a recession is the back drop for price declines nationally.
Nothing new here, in 2012 during that year that's what happened and
where inventory got under 6 months solidly. Inventory is the key if you're only a price metric person
2013
2014
2015
2016
Housing Prediction articles which I only write one a year at the start of the year all had price gains.
I get it that all you guys care about here is price, however, I don't have the luxury of only talking about that.
Housing Starts
Housing Permits
New Home Sales
Construction Jobs
Job openings for constructions jobs
Mortgage Purchase applications
HMI Index
When it's about economics, can't be held down to variable factor.
Like when I warned about the Builders in 2015 and then said in 2016 this is entry point for them because rate of sales are higher in 2016 than 2012/2013 that's based on a sales demand thesis
Plus did anyone take on my KB Homes call? around $10 bucks
Strategist
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2016 Apr 10, 7:36am
I get it that all you guys care about here is price
In the end that's all that matters. Home prices and stocks.
Plus did anyone take on my KB Homes call? around $10 bucks
How about you?
_
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2016 Apr 10, 7:44am
How about you?
No, position here in KB Homes, HP ,TWTR , Z, MASI , WTW Spec play is UNXL The rest are index invested. I always in every month, Never a time a leave the market of course long term portfolio is different than short term trading .
The only reason the builders got whacked last here was that the sales estimates were too high, the year ended out with 15% gains on sales, but people were looking and pricing for 24%-41% sales growth and super strong price gains... that didn't happened, doesn't mean the cycle is dead, it's how much you want to pay up for that sector
The same thing happened in 2014
Sales estimates were at 20%-33% and it ended up at 1.9%
Which made 2014 & 2015 both double digit misses on sales estimates
Where I and you can looked had 8%-12% range sales estimate
2016 looking for 4%-8% growth with up side if median prices stay cool
So far both sales report are negative year over year, so we need to start people the numbers in the next 4 months
_
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2016 Apr 10, 8:01am
The YoY comps are much easier as the rate sales decline last started in March of 2015 with the trend of negative revisions.
So, the key is to beat the YoY marks for the next 4 months, as long as that could happen, you can get some growth in sales this year. If we have negative prints YoY with sales revisions lower in the next 4 months, then even my 4%-8% growth call is in Jeopardy
_
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2016 Apr 10, 8:11am
US home prices increase by 5% plus
Remember, I don't see the lack of price gains in 2015 for the builders as a bad thing because it's part of the make up shift model, in fact it's a reason why I give the sales demand curve higher rates of sales because of the fact the builders were only pushing higher end homes early on
Strategist
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2016 Apr 18, 7:25am
UNXL up again 20% that makes it 50% since we talked ;-)
Not bad. Look into CCGI.
_
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2016 Apr 18, 7:29am
Not bad. Look into CCGI.
That looks like a missed opportunity 10 -15 cents upside, then again spec plays are always spec plays for a reason
_
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2016 Apr 19, 6:29am
Permits
single-family +14.3% YoY
multi-unit: -5.0% YoY
Today's number headline were a big miss.
However, the permits is where the story is at, multifamily boom in terms of YoY growth is slowing
Strategist
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2016 Apr 19, 6:51am
Today's number headline were a big miss.
Homebuilder stocks doing surprisingly well.
_
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2016 Apr 19, 7:00am
Homebuilder stocks doing surprisingly well.
As long as they can get 4%-8% sales growth they should be fine this year. 2016 doesn't have the 2015 profile were estimated sales growth was 24%-41%, they were doomed to fail from the start of the year
So that nasty correction brought everything back in line.
Even though new home sales are negative so far this year,
The comps get a lot easier until December
This is what I have told everyone media and economist
You can afford only one more miss Year over Year from now until December, after that we need to start beating the YoY marks because of the rate sales fell after Feb
As long as that happens then we can get YoY growth.
I am looking for 4%-8% growth with some upside if median home sales price cools like it did last year, = just meaning some lower priced homes get into the mix
_
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2016 Apr 19, 7:02am
Really need to see positive YoY growth in the next report March should be a YoY beat!
_
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2016 Apr 19, 7:20am
Vice Versa with Starts, low bar on the YoY numbers to beat... but that will soon change
What about Starts?:
US Housing Starts tumbled -8.8% in March (missing -1.1% expectations by the most since Feb 2015) as both single-family (-9.2%) and multi-family units (-7.9%) tumbled. The biggest drop was in The West (-16% overall with a 26.9% MoM plunge in single-family units). Worst still, Permits (forward-looking), plunged 7.7% (against expectations of 2% rise) - this is the 2nd biggest MoM crash since Jan 2011. As the Spring-selling season starts, the housing 'recovery' appears to be stalling.
Regionally, it was very mixed:
Permits in Northeast declined 17.9%, Midwest down 3.1%, South down 3.2%, West down 15.4%
Starts in Northeast rose 61.3%, Midwest down 25.4%, South down 8.4%, West down 15.7%
Prices went down in San Francisco for the first time. For the bay area it all depends now on how tech will be doing.
_
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2016 Apr 19, 8:50am
What about Starts?:
Starts are showing YoY growth, but as you can see it's a low bar to beat on that YoY print
Like everything else in housing slow and steady
_
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2016 Apr 19, 8:52am
The question on starts going forward.... this is the point I have tried to make, at some point the Multi family boom can't continue and how much can single family starts carry the load at that point
That to me is the real question going down the line :-)
_
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2016 Apr 19, 9:08am
2 Charts I am showing people today
Can't break out of here
Inventory for new homes is higher 1999-2005
In short the low inventory holding demand thesis is getting massively gutted up this year and their is no where to hide anymore :-)
I will be at the UCLA Anderson Housing Conference, this is main thesis I am throwing up there and have a meeting with the economist of the CAR as well on this
In short the low inventory holding demand thesis is getting massively gutted up this year and their is no where to hide anymore :-)
I will be at the UCLA Anderson Housing Conference, this is main thesis I am throwing up there and have a meeting with the economist of the CAR as well on this
dude, you are a retarded jackass in a suit. if mommy and daddy didn't keep you on the payroll in the family mortgage business, you'd be working retail.
in my own zip, there is exactly 1.25 months inventory, which is extremely low. Ditto a great many cities US wide, and hence, why home prices have been going up for the past 5 years, all the while you keep posting that it isn't happening. Get psychological help!
you aren't going to debate the FED chair.
you aren't an invitee to an economics summit, because you have little understanding of economics.
you aren't throwing "a thesis up there"
_
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2016 Apr 19, 12:52pm
dude, you are a retarded jackass in a suit. if mommy and daddy
Roberto, Roberto, Roberto
I do love seeing your post, it brings nothing but a smile on my face :-)
Fallacy of Logic is always deep with the extremes, the rage, the anger, I get it, I understand your hate and it still brings a smile to my face
Allow me to retort
#1 Inventory nationally is higher 2012-2016 than 1999-2005
#2 Inventory nationally is higher 2012-2016 than 1999-2005 
#3 Inventory nationally is higher in 2012-2016 than any period from 1999-2005
I understand why you hate me Roberto, I do, and I am so sorry that I have created that for you!
Hopefully, one day you can forgive me :-)
tatupu70
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2016 Apr 19, 1:03pm
Logan--
As I've posted here multiple times, your problem is that you assume sales = demand. Either you purposely ignore or don't understand the implicit assumption underlying that belief. Further, 4 months of supply at lower sales means many fewer actual homes for sale than 4 months for sale at high sales volumes.
I still fail to see how a demand problem could lead to a strong 6 year bull market on prices.
_
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2016 Apr 19, 1:03pm
why home prices have been going up for the past 5 years, all the while you keep posting that it isn't happening. Get psychological help!
On another note, back to the fallacy of Logic thesis
2013
2014
2015
2016
Housing Predictions all have price gains in it.
You're creating a false narrative thesis with me because you don't like me personally, which is 100% fine
However, what you're saying is that you don't like my inventory under 6 months thesis leading to price gains because I said it, not you....
That's when you know it's rage, anger,
By all means copy and paste all the yearly predictions articles from 2013, 2014, 2015 and 2016 and you will see what I am saying is right.
Inventory broke under 6 months in 2012, down 20% year over and after that every single yearly housing prediction article had price gains
Again, a false narrative thesis for the sake of ranting out of personal disapproval.
_
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2016 Apr 19, 1:05pm
I still fail to see how a demand problem could lead to a strong 6 year bull market on prices.
A false narrative thesis again
Every Housing Prediction article while inventory was under 6 months had price gains in it
Nothing has changed from that
tatupu70
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2016 Apr 19, 1:05pm
A false narrative thesis again
Ever Housing Prediction article while inventory was under 6 months had price gains in it
Nothing has changed from that
Nope-- how do you reconcile a demand problem not causing rising inventories?
_
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2016 Apr 19, 1:10pm
In economics we have talk more that just price, price is a investors game, I get that, but I can't hide behind a fake on a website and make false economic theories and just use price.
New Home Sales have missed sales expectations for 3 years in a row... the question is why?
“Weak home sales are ‘much more of an income problem than a credit problem,’ said David Blitzer of S&P Dow Jones Indices.
‘I don’t think there is a housing shortage…It’s strictly a matter of low demand, said’ “NAHB Chief Economist Crowe: #housing #NAR @NAHBhome
Sales estimates in this cycle were way to high, that is what we have to deal with, that's difference between price is all that matters and economics
_
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2016 Apr 19, 1:11pm
Nope-- how do you reconcile a demand problem not causing rising inventories?
You hide behind a fake name while others can't
“Weak home sales are ‘much more of an income problem than a credit problem,’ said David Blitzer of S&P Dow Jones Indices.
‘I don’t think there is a housing shortage…It’s strictly a matter of low demand, said’ “NAHB Chief Economist Crowe: #housing #NAR @NAHBhome
What you're saying is that you disagree with the weak demand thesis that many have talked about, even Warren Buffet
This works on website where you can't show your name... but it doesn't work on there
tatupu70
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2016 Apr 19, 1:11pm
In economics we have talk more that just price, price is a investors game, I get that, but I can't hide behind a fake on a website and make false economic theories and just use price.
New Home Sales have missed sales expectations for 3 years in a row... the question is why?
“Weak home sales are ‘much more of an income problem than a credit problem,’ said David Blitzer of S&P Dow Jones Indices.
‘I don’t think there is a housing shortage…It’s strictly a matter of low demand, said’ “NAHB Chief Economist Crowe: #housing #NAR @NAHBhome
Sales estimates in this cycle were way to high, that is what we have to deal with, that's difference between price is all that matters and economics
Thanks. How about you actually address the question, however. How does lack of demand cause prices to rise? Or cause inventory to shrink? In Economics, how do you talk about that?
tatupu70
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2016 Apr 19, 1:12pm
You hide behind a fake name while others can't
You're welcome to use whatever username you'd like at pat.net. You appear to be quite vain, however, and like to pretend that you're an authority here.
_
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2016 Apr 19, 1:13pm
Personally
I think this site is full of people who are friends, bears and bulls, because you guys say certain things at certain points where it correlates more to an investment group
That makes sense to me....
Out in the real world, we don't have that luxury
Hence why all of you except Gary and Roberto ( to a degree) never show your real names
tatupu70
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2016 Apr 19, 1:15pm
Personally
I think this site is full of people who are friends, bears and bulls, because you guys say certain things at certain points where it correlates more to an investment group
That makes sense to me....
Out in the real world, we don't have that luxury
Hence why all of you except Gary and Roberto ( to a degree) never show your real names
Why does it matter what my real name is, anyway? Do you respond differently if you knew my name?
_
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2016 Apr 19, 1:18pm
You appear to be quite vain, however, and like to pretend that you're an authority here.
All I show is data and charts that's it... and yes I am very vain and then some...
But 4 rules
1. discipline
2. discipline
3. Narcissism is your enemy not your friend
4. Always stay a gentlemen
Why do you think Bloomberg Financial asks me to do the podcast for the yearly economic housing predictions for 2015 and 2015
Because what I have said in this cycle not just housing but in economics, it hasn't deviated from the trend....
That's the market place talking... I have no connections to any firm or to any media group.... it's all John
Now, it's very fair to agree or disagree with me
However,
A. I always bring data to my discussions
B. I have always conducted myself fair to others
C. I can only work from numbers, nothing less and nothing more.... that's the discipline :-)
But you're very right, I am very vain with my numbers :-)
You're creating a false narrative thesis
I don't "create a false narrative thesis"
I call out the truth, about a pseudo-intellectual dumbass, you.
You make a lot of chart. beautiful charts. the best charts. Great words too.
Fakocery. We aren't bouncing off the bottom yet. Low inventory thesis is being gutted. This is not true organic demand. Take out the cash buyer and housing is still in freefall. etc. etc. etc.
ALL as in 100% of your negative articles about housing, have been wrong. Anyone listening to you, and not buying on that basis, has been butt f**ked.
if YOU had ignored yourself, and bought a home in southern california, where you live, 5 years ago, you'd be sitting on really large value gains. If you'd bought several homes, you'd be rich enough to quit working. But, even with the complete obviousness of how wrong you've been, you are simply too stupid to even learn from your own mistakes.
Then, you do a HUGE amount of bragging about yourself as if you were some kind of expert:
YOU: "the thesis I'm putting out at my meeting with CAR economists..."
REALITY: you bought a ticket to a housing meeting, nobody is asking for your thesis, nobody cares.
YOU: "my article on Bloomberg"
REALITY: you posted on an unmoderated blog linked from them an article that nobody reads, and nobody cares about.
#1 Inventory nationally is higher 2012-2016 than 1999-2005
Nobody who isn't a blowhard moron trying to appear smarter than they are would write that.
Inventory is NOW. not some long term average. Your own chart shows utterly shockingly low inventory, right now. Lower than the past several years. The past several years, we've had price gains. Despite your "inventory is lower over that period... blah blah blah"
So, let someone who didn't fail econ 101 help you out. Low supply = higher equilibrium price. PERIOD. No "thesis of blah blah" needed.
Everybody who has even been in real estate has always used a 6 months inventory rule of thumb to get an idea about the market. (though its seasonal, 6 months in late fall winter wouldn't be bad, the market slows then so you are dividing by a low sales number. low inventory to sales in April/May means the market is really tight, prices will go up)
You are just an empty suit.
_
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2016 Apr 19, 1:21pm
Why does it matter what my real name is, anyway? Do you respond differently if you knew my name?
I just think you guys and gals like yourself are all friends here, this is why you don't show your names. It makes sense, you see this game plan on many sites and apps where people who either work or push a website have activities participants
Obviously I am not in this group, but I notice certain people with certain statements here that don't usually talk say the same thing when this issue comes up.
That is my take on it, hence why it's a price pushing area,
Investment club .... or something to that nature
tatupu70
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2016 Apr 19, 1:21pm
So, you haven't answer my question Logan. How does low demand cause both prices to rise and inventory to shrink?
Can you explain this?
_
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2016 Apr 19, 1:24pm
I call out the truth, about a pseudo-intellectual dumbass, you
beautiful charts
Great words too.
You think my charts are pretty 
You know why I don't believe you hate me, a long time ago we had a chat about economics and it was when inflation will return and what the Fed would do then. That's the real Roberto I know.
See, you're versed in economics, simple words like tight labor market, and stuff to that nature.
I think it's all show what you do here and on other websites and the mommy and daddy thing.. I find it amusing :-)
yes, I like you.
I just like arguing my point in a certain style...
but come on, man, your anti-housing articles over this past half decade have missed the point: 2008-2014 was not a time to be noticing things wrong with housing, it was the best time in the history of the world to buy. THAT was the only thing worth writing.
Your young. There will be other crashes, and other recoveries. LEARN from this one, buy and sell at the right times going forward, make a few million dollars, and we'll joke about all this over drinks at a ski chalet in france.
_
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2016 Apr 19, 1:35pm
How does low demand cause both prices to rise and inventory to shrink?
Can you explain this?
Let me explain it this way, why are housing economist saying their is weak demand growth, doesn't really matter what you and I think, it's what the market place thinks
I know you won't acknowledged what housing experts think because that goes against this web site thesis
Let me give you a real time example
#1 2015 New Home Sales estimates were 24%-41% Wall Street Firms, Housing Shops, Economist etc etc
2015, I said sales estimates will be 8%-12% with up some upside if median home sales price cools down... So the head people, this is the world I live in were wrong
What happened?
Sales estimates were to high Not only that... I called them out for it at the start of the year
2015 Housing Predictions: The Bar Is So Low We Might Trip On It
"You get my drift: The bar for housing is so low that some housing bulls might try the predictable tactic of bellowing about exponential growth portending a miraculous recovery when all that is occurring is a bump up from a pitifully low base. I take a more measured (or perhaps jaundiced) view of what the future holds."
With that thesis the builder trade was always over hyped... then in June of 2015 ... on CNBC I just said, there was no value in the builders because the rate of sales was decline meaning at double digit sales miss once again
Nobody warned about the correction because nobody thought we would miss sales expectations after a 20% sales miss in 2014
This year when builder stocks were back in 2012/2013 pricing, I said this is the time you want to get in because sales aren't collapsing
This is the demand world I have to deal with sales estimates, I just can't do the price thing, it's not a sophisticated theists when sales estimates are being missed in years, 5,6, and 7 of the economic cycle
Or as Warren Buffet said, I am surprise that Housing hasn't done well but car sales have
a reason for that, DTI & LTI metrics for a car loan is much different than a home payment
2014.. adjusting to population worst purchase demand year ever, 2015 was the 2nd worst on record.
Millions of homes will be bought a year, not an issue, in fact all my sales estimates show growth outside 2014 ( which needed more cash buyers) and 2016 only if cash buyer fall faster than I think
In fact I have a higher sales estimate than the NAR
So, you see, this is my world I deal with and we can't hide behind fake names while we do interviews with media sites.
So, I am just in a different world that you guys, I think deep down inside you know that
_
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2016 Apr 19, 1:40pm
your anti-housing articles
It's only anti Housing from a perspective view, If I really was Anti Housing I would have had much negative sales estimates and the yearly predictions would have price declines
I look at housing economic output through new home sales, starts and permits, I know we had this discussion once that existing home sales provides better economic output but to me new home sales, starts, and permits are where the economic growth comes from on housing.
Still believe 100% this cycle has legs, she might be old, but the U.S. economy has now what I think is the best economic advantage over the world
This will give the housing demand curve much more velocity.
Also, I fight against easing of lending standards, I have been consistent on that as well
We are doing this economic cycle the right way, I wish we had a bit more government spending to help the velocity more... but this I am 100% pro USA and fight the Anti American Gold Bugs and MMT people daily
_
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2016 Apr 19, 1:44pm
Plus since this cycle was legit
This means No Bubble Crash in home prices, we have taken away that aspect of housing off the grid, the Harry Dents of the world their followers are the ones calling for a housing price crash like he had done with the American cycle for years now 4 Great Recession II thesis in 7 years..
He makes demographic economic people look awful
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