patrick.net

Mr.Fantastic says

klarek says

tatupu70 says

Housing did, in fact, go down when the housing credit ended. Like everyone expected. I imagine many people who were considering buying hurried to close before the credit ended, pulling forward a lot of demand.

This is exactly what many of us said would happen. Perma-bulls discounted it as having “little effect”. I wonder how many consecutive months of declining home prices it will take before you guys get it.

tatupu will never get it. He is part of the sheeple crowd who buy homes based on double incomes.

You're right. I'm part of the sheeple crowd that trusts facts. Actual numbers...

klarek--

I don't think you understand my point. The END of the credit is what produced the slight bump and corresponding slight trough. Or at least that's the theory.

I'm not talking about the last 2 years. Just the last 6 months or so.

OK--good. Back to trolling. I was afraid that you actually were going to engage in a useful discussion of housing...

tatupu70 says

The END of the credit is what produced the slight bump and corresponding slight trough.

Are you talking about inventory or prices? If price, then that bump is merely part of the overall swell in demand pushing prices higher, raising the equilibrium if you will.

Prices were heading in a straight-downward trajectory until the credit. All of the losses that should have happened will still occur, on top of those artificial gains, less a certain amount due to income levels rising (a tiny percent).

What I dislike most about Tatupu and Nomograph is that they instantly attack anything that does not mesh with their hoped-for version of reality. Ask them to provide hard objective facts to support their point of view, and they are empty-handed, every time. It is far easier for them to attack other people's facts than to provide their own. They always come out looking like they know something the rest of us don't know. This appears to be fully intentional.

For them, it's about winning at all costs via manipulative word usage, rather than having a respectful debate based in sourced, objective facts.

These guys need to be kicked off these forums, for this reason. Ban their IP addresses here. They have little to contribute but negativity and personal attacks. They are not interested in respectful debate.

robertoaribas says

mortgage loan applications to PURCHASE have dropped some 20% over the last 3 weeks… Historically, this data corresponds to a drop in buying with a 1 month lag, [r -value = .7, but not steady throughout history. there are periods of higher correlation, and lower correlation]
SO:
1. drop in loan apps to buy…
2. Resumption of foreclosures by BofA etc… as the robosigning scandal fades…[already observable in Phoenix, we have had about 1000 more foreclosures in January than the past couple of months…]
More supply, less demand… and that is on top of documented price drops already occurring…
Just like last time, the evidence is clear to all except the blind!

I haven't seen that data. If true, then I would agree. I was going off the sales and pending home sales which have risen in 5 of the last 6 months.

Increasing foreclosure activity will be a drag on prices, no doubt. I'm still a little skeptical about the size of shadow inventory, but there are lots of foreclosures out there.

klarek says

Prices were heading in a straight-downward trajectory until the credit. All of the losses that should have happened will still occur, on top of those artificial gains, less a certain amount due to income levels rising (a tiny percent).

When you say "all of the losses that should have happened"? That's the question. Who knows what those losses should have been? Was it 1%, 10%, 50%?

tatupu70 says

When you say “all of the losses that should have happened”? That’s the question. Who knows what those losses should have been? Was it 1%, 10%, 50%?

Draw your own conclusions based on inflation-adjusted housing price indexes, or just draw a line on the Case Shiller data for wage inflation and see that there was still nationally about 10% more to drop. Then prices rose, what, 8% from the tax credit? Yeah, so falling from there to fundamentally supported levels.

Have you not ever given this any thought? Or do you really think that the sudden and precipitous increase was somehow supported by market fundamentals. If so, what data are you looking at?

You can pin me on not knowing the exact percent the national market was going to fall at that point, but compared to somebody that hasn't given it any thought at all, I'd like to think I have some modicum of clarity.

shrekgrinch says

They are, however, finding it more and more difficult to ‘defend’ their BS though

The only thing they had before as a defense was that prices were rising. We knew why that was happening, and that they'd inevitably correct. Now they're clinging to "this is a short blip".

klarek says

The only thing they had before as a defense was that prices were rising.

That's about as good of a defense as you can get as to why prices aren't falling, isn't it? :)

shrekgrinch says

robertoaribas says

Just like last time, the evidence is clear to all except the blind!

They are, however, finding it more and more difficult to ‘defend’ their BS though, Roberto.

Ah, good. Now MF and Shrek are both trolling. Double the pleasure, double the fun.

tatupu70 says

Who knows what those losses should have been? Was it 1%, 10%, 50%?

I was trying to explore that with this graph.

The 1990s featured a rising economy, but the general climb-down from the 80s bubble and the Bush/Clinton tax rises reduced inflation and so we saw housing decline in both nominal and real terms, even in the face of positive Fed inducement with the lower interest rates.

What stopped the free-fall in 1Q09 was a combination of factors, foremost was the fact that the 1930-style market meltdown was first contained and then reversed. The system was saved.

Secondly, the government stepped in with further intervention with the $1T Fed take-on of MBS and pushing mortgage interest rates into the 3s for 15-year and 4s for 30-year.

Looking at the above graph, I think the trend is still down in real terms. Whether this translates into the nominal depends on GDP growth.

Interest rate policy is the key here. If we're at the lower bound as far as mortgage rates go, then that tool that they've been using since the 1970s if not earlier is no longer available.

If rates drift up without accompanying a rising GDP, there will be a continued fall in home prices. If they rise in tandem with GDP, that is neutral for home prices.

But the OMB says there's going to be fifteen to twenty trillion of new government debt coming this decade. This smells like Japan, where all the debt issues didn't do much for the housing market for some reason, probably because debt is not growth, it's just more of one's future wealth spent today.

tatupu70 says

Now MF and Shrek are both trolling.

It seems you meet the same criteria:

"In Internet slang, a troll is someone who posts inflammatory, extraneous, or off-topic messages in an online community, such as an online discussion forum, chat room, or blog, with the primary intent of provoking other users into a desired emotional response[1] or of otherwise disrupting normal on-topic discussion.[2]"

http://en.wikipedia.org/wiki/Troll_%28Internet%29

joshuatrio says

tatupu70 says

Now MF and Shrek are both trolling.

It seems you meet the same criteria:
“In Internet slang, a troll is someone who posts inflammatory, extraneous, or off-topic messages in an online community, such as an online discussion forum, chat room, or blog, with the primary intent of provoking other users into a desired emotional response[1] or of otherwise disrupting normal on-topic discussion.[2]”
http://en.wikipedia.org/wiki/Troll_%28Internet%29

Despite what the permabears might think, posting a contrarian opinion is not trolling.

SF ace says

Pending home sales is probably more reliable anyway.
June 75.5

Jul 78.9

Aug 82.4

Sep 80.9

Oct 89.1

Nov 91.9

Dec 93.7
So while you see demand that is trending lower, I see clear improving demand (albeit probably not in Jan). I expect jan pending to be around 93.7 and improving thereafter. So I disagree with AZRob that home sales are on the downtrend when it’s clearly not.

Are pending home sales REALLY that reliable? Sure they are a forward indicator, but consider that many of these records are probably short sales (that can easily fall through) and/or offers dependent on bank financing which may not materialize.

Not to mention that NAR has a huge incentive to skew these and other home sale-related stats to their own self-serving needs:

http://www.calculatedriskblog.com/2011/01/lawler-downward-revisions-coming-to.html

klarek says

Have you not ever given this any thought? Or do you really think that the sudden and precipitous increase was somehow supported by market fundamentals. If so, what data are you looking at?

I've looked at Case Shiller unadjusted for inflation--usually it goes back to 1970. It's a fairly noisy graph so I have a hard time believing that the trend line that is drawn in there is a dead certain fact. In my opinion the slope could be just as easily made more positive so that today's prices are actually right in line with the historic norm. There just isn't enough data there and the noise is too large to draw conclusions in stone.

It's one piece of the puzzle. Just like pending home sales are a piece. Or foreclosures. Or wage inflation.

robertoaribas says

tapabootie:
I purchased 3 home in the last 2 months, hardly counts as “permabear” in my book anyway.
Never the less, I see the market trouble spots, I analyze the data.
lets look at your precious pending trend: Notice that it went UP from June to July to August? Did sales do better in the following month or two? Nope they went to hell…
So, given that your pending home sales data has served as a very poor indicator of sales over the past several months, why would you give it so much weight today? merely because it is one of very few remaining pieces of data that fit your preconceived religious belief, that the housing market will not get much worse?

Actually, you are wrong again.

Here is the existing home sales data from realtor.org:

July 3.8MM
Aug 4.1MM
Sept 4.5MM
Oct 4.4MM
Nov 4.7MM
Dec 5.3MM

Here's a little primer for you on the value of pending home sales:

http://trendingrealestate.typepad.com/trendingrealestate/2008/09/a-historical-review-of-nar-pending-home-sales.html

So, you've been wrong twice now. Care to go for three?

Lovely, how some lost nearly a million ! Wont see this on HGTV

Zappos.com founder Nick Swinmurn sold a five-bedroom, 3.5-bath home in Hillsborough for $2.3 million to equity analyst Paritosh Somani and Nisha Somani on Dec. 3.

Swinmurn is the founder of Zappos.com, an online shoe store that was formed in 1999 and is now a part of Amazon.com. In 2009, the company grossed more than $1 billion. Swinmurn served as CEO of Zappos until 2001, and left in 2006 to pursue other ventures.

tatupu70 says

Here is the existing home sales data from realtor.org:
July 3.8MM

Aug 4.1MM

Sept 4.5MM

Oct 4.4MM

Nov 4.7MM

Dec 5.3MM
Here’s a little primer for you on the value of pending home sales:
http://trendingrealestate.typepad.com/trendingrealestate/2008/09/a-historical-review-of-nar-pending-home-sales.html
So, you’ve been wrong twice now. Care to go for three?

hmm... maybe a good short-term, indicator for NEGATIVE home sale trends 1-2 months in the future according to your cited study. However as a POSITIVE home sale indicator it is probably not so good as it is indeed possible to have LESS future contractual sales than currently pending contracts indicate, for the exact reasons that robertoaribas listed. That is, the only reason it works well for negative trends is that you can't have MORE future contractual sales then currently pending contracts indicate.

robertoaribas says

You sir, as usual pick on the minutae to try to win something. Prices are dropping, anyone reading YOUR old posts on here can judge how smart you have been..

Isn't this the basic strategy for all the bulls on this website? Poo-poo good reasoning, selectively misuse data to support faith-based arguments, bully, dither, dodge and cry when confronted with better evidence/arguments, then go and hide when their crap is demonstrated to be just that.

And I shouldn't just pick on the bulls here... this seems to be a common strategy/life philosophy for most if not all of them.

terriDeaner says

Isn’t this the basic strategy for all the bulls on this website? Poo-poo good reasoning, selectively misuse data to support faith-based arguments, bully, dither, dodge and cry when confronted with better evidence/arguments, then go and hide when their crap is demonstrated to be just that.

Really? Roberto posts completely erroneous statements that he is called on twice. SF Ace posts the actual numbers on pending and I post the actual numbers on existing home sales but yet you think we are misusing data?

How do you figure?

tatupu70 says

terriDeaner says

Isn’t this the basic strategy for all the bulls on this website? Poo-poo good reasoning, selectively misuse data to support faith-based arguments, bully, dither, dodge and cry when confronted with better evidence/arguments, then go and hide when their crap is demonstrated to be just that.

Really? Roberto posts completely erroneous statements that he is called on twice. SF Ace posts the actual numbers on pending and I post the actual numbers on existing home sales but yet you think we are misusing data?
How do you figure?

yawn...

You posted a 'study' on pending home sales that ran from '05 to mid '08 upon which you base your faith/extrapolation/speculation that the same relationship (pending as predictor) will hold for current trends. You also incorrectly assume this data is correct, which it is not:

http://www.calculatedriskblog.com/2011/01/lawler-downward-revisions-coming-to.html

My reasoning for calling your reasoning crap was simple - you do not account for the effects of cancelled contracts on actual sales when using pending sales as a predictor. This holds whether the NAR data is accurate or not.

Further, you and SF are posting garbage from the NAR for current pending/sale data SINCE JULY 2010. Again, NAR is not a reliable data source.

And I don't see how your collective, selective use of these timecourse datasets refutes Roberto's assertion - pending sales are simply not always good predictor of final sales - take another look at the chart he posted over the much longer time period.

So this is how I figure you are misusing data. Don't feel bad, it is easy to make mistakes like this.

terriDeaner says

My reasoning for calling your reasoning crap was simple - you do not account for the effects of cancelled contracts on actual sales when using pending sales as a predictor. This holds whether the NAR data is accurate or not

My lord. I've answered this at least 5 times already. Do you have ANY reason to think cancelled contracts are significantly higher now than 3 months ago? Or 6 months ago? Otherwise it's meaningless. We are looking at the trend.

Further, I posted the actual closed sales numbers and they show the EXACT same trend as the pending sales did. Did you not see that??

tat, my guess is the upper/middle and upper markets start getting hammered next.
Also, all of the crashing commercial stuff has to have an effect on those rich bastards at some point too.

terriDeaner says

Further, you and SF are posting garbage from the NAR for current pending/sale data SINCE JULY 2010. Again, NAR is not a reliable data source.

OK--do you have another data set that shows pending home sales aren't a good prediction then? I'd be happy to see it.

terriDeaner says

And I don’t see how your collective, selective use of these timecourse datasets refutes Roberto’s assertion - pending sales are simply not always good predictor of final sales - take another look at the chart he posted over the much longer time period

I did. Was there a specific time period that you don't think conforms?

tatupu70 says

terriDeaner says

My reasoning for calling your reasoning crap was simple - you do not account for the effects of cancelled contracts on actual sales when using pending sales as a predictor. This holds whether the NAR data is accurate or not

My lord. I’ve answered this at least 5 times already. Do you have ANY reason to think cancelled contracts are significantly higher now than 3 months ago? Or 6 months ago? Otherwise it’s meaningless. We are looking at the trend.

yawn...

It doesn't matter whether I think canceled contracts are trending higher or lower right now. Either way, their relationship to final sales generates a level of uncertainty in pending sales as a predictor, given that canceled contracts can have a strong effect on final sale numbers.

Further, I posted the actual closed sales numbers and they show the EXACT same trend as the pending sales did. Did you not see that??

Again, NAR numbers are not reliable. Even so, please look at the trend after every peak (that is, post July 2009) in Roberto's figure, not just the short time period you selected to support your argument. Doesn't look like 1-2 months of strong growth that the earlier months should have predicted.

And I am aware that his dataset probably was drawn from the same NAR source. That said, your cited numbers should be a subset (perhaps seasonally adjusted) of this data. So even if it is all crap, YOUR crappy prediction is still not supported by the larger crap dataset you drew your data from.

terriDeaner says

yawn…
It doesn’t matter whether I think canceled contracts are trending higher or lower right now. Either way, their relationship to final sales generates a level of uncertainty in pending sales as a predictor, given that canceled contracts can have a strong effect on final sale numbers.

Wake up! I get that, but the point is that this uncertainty is in the number in every month. There is a clear trend over the last 6 months that is supported by the closed contract numbers. To claim otherwise is just being stubborn. Or disingenious.

terriDeaner says

Even so, please look at the trend after every peak (that is, post July 2009) in Roberto’s figure, not just the short time period you selected to support your argument. Doesn’t look like 1-2 months of strong growth that the earlier months should have predicted

Wow. That's your argument? We don't even know where the data came from because he didn't post a link. Is the PHSI forward adjusted?

tatupu70 says

terriDeaner says

Further, you and SF are posting garbage from the NAR for current pending/sale data SINCE JULY 2010. Again, NAR is not a reliable data source.

OK–do you have another data set that shows pending home sales aren’t a good prediction then? I’d be happy to see it.

For the record, your tack here is essentially a common trick or fallacy know as an "argument from ignorance". You seem to be trying to make it out so that my assertion is false because I do not provide proof via a different dataset, and therefore your assertion must be true.

But then I don't have to have to provide a different dataset. I have simply demonstrated that your assertion (pending home sales is a good predictor for final home sales), based on your evidence, is not true. Hope this helps.

this is getting tedious so I'm just going to call them as I see them...

tatupu70 says

Wake up! I get that, but the point is that this uncertainty is in the number in every month. There is a clear trend over the last 6 months that is supported by the closed contract numbers. To claim otherwise is just being stubborn. Or disingenious.

continue to misuse data, and bully

terriDeaner says

Even so, please look at the trend after every peak (that is, post July 2009) in Roberto’s figure, not just the short time period you selected to support your argument. Doesn’t look like 1-2 months of strong growth that the earlier months should have predicted

Wow. That’s your argument? We don’t even know where the data came from because he didn’t post a link. Is the PHSI forward adjusted?

misquote (please read the last paragraph of my post you quoted), dodge

terriDeaner says

But then I don’t have to have to provide a different dataset. I have simply demonstrated that your assertion (pending home sales is a good predictor for final home sales), based on your evidence, is not true

No offense, but you have done nothing of the sort. You have stated an opinion without any evidence to back it up. I have shown that you were incorect with actual data. The existing home sales were very much in line with the prediction from the pending home sales.

terriDeaner says

misquote (please read the last paragraph of my post you quoted), dodge

Miquote? You said you THINK it came from NAR. Do you know for a fact where it came from? If so, please post the link.

tatupu70 says

terriDeaner says

But then I don’t have to have to provide a different dataset. I have simply demonstrated that your assertion (pending home sales is a good predictor for final home sales), based on your evidence, is not true

No offense, but you have done nothing of the sort. You have stated an opinion without any evidence to back it up. I have shown that you were incorect with actual data. The existing home sales were very much in line with the prediction from the pending home sales.

yawn... straw man, incorrect assertion, then fallacy of composition. It seems that you are trying to prove a larger point based on a very selective set of data. Problem is, your larger point doesn't hold up over the (available) larger datasets.

tatupu70 says

terriDeaner says

misquote (please read the last paragraph of my post you quoted), dodge

Miquote? You said you THINK it came from NAR. Do you know for a fact where it came from? If so, please post the link.

Yep. It appeared that you selectively left of my last paragraph so that it would look like I hadn't addressed the source of the data.

But you do raise a valid point here, we do not know the source of Roberto's data. You may think it came from a less reputable source than yours, but for all we know it may be from a MORE accurate source than yours. I had simply assumed that it was as unreliable as yours (but from the same source).

Roberto - can you clear this up by posting your data source?

terriDeaner says

yawn… straw man, incorrect assertion, then fallacy of composition. It seems that you are trying to prove a larger point based on a very selective set of data. Problem is, your larger point doesn’t hold up over the (available) larger datasets.

Your strategy seems to be if you keep saying that pending home sales don't predict future closed sales then it won't be so. I hate to break it to you, but it doesn't work that way. The data is the data. And it is pretty clear.

Go ahead and keep your head in the sand--doesn't really make any difference to me.

robertoaribas says

tapabootie quotes a short term trend up (though in data that is still down drastically year over year) and moves to claim victory.

I'm not claiming victory--this isn't a contest. I just want to have a rational discussion, but you keep posting lies. It's all anyone can do to correct you...

robertoaribas says

So what is up? is an increase for a few months from the worst month in living memory really UP? If we are still down drastically from last year, and the year before that is it still up?

Agreed--sales numbers still aren't very good. If you guys wouldn't argue every stat and at least acknowledge that things are improving from 6 months ago, you'd have a little more credibility.

joshuatrio says

I agree. But if you are using NAR information to support your point - that puts you in that category - especially on a housing crash site.

I understand your concern.. I don't know where else to find the pending home sales data and existing home sales data. If there are other places, I would be happy to see their data. Further, we're comparing NAR data from one month to NAR data from another month. I'd expect any biases to be cancelled out, as it were.

St. Louis. If you ever get a chance to taste some serious BBQ ribs and briskets...
thats the place to go... freaking excellent!

Does all this include Los Angeles County?

I've been shocked lately-- prices have jumped about three percent in a month in some areas. I can't seem to find any rational reason for it given the current state of the economy, etc. It's left me scratching my head.

Mr.Fantastic says

St. Louis, Missouri. Are there any communities there with a median 108k income? I doubt it.

lol-I thought I lived in the sticks? Because I couldn't afford CA. Here are a few communities in the St. Louis metro area:

Ladue, MO--median income $159,473
Town and Country, MO--median income $157,500
Frontenac, MO--median income $134,478
Warson Woods, MO--median income $98,270
Huntleigh, MO--median income >$225,000
Westwood, MO--median income $134,602
Country Life Acres--median income $217,482

It took me about 2 minutes to come up with those. Every city has nice areas--like I said. I know you think CA is the end all be all. I'm glad you enjoy living there. But there is a whole wide world out there--you should really broaden your horizons...