patrick.net

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...

Brett Heathcott says

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.

I created the "Ignore" link so that people could ignore anyone they want. I ban people only if they're way out of bounds, not merely rude. Though I'd be much happier if everyone were polite.

Spammers get nuked immediately and permanently. If someone's insulting you, at least they care about you enough to insult you. Spammers are not even that little bit human.

tatupu70 says

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.

yawn... another straw man. You may not like that I am making a consistent argument, but it helps derail your attempts to fixate on trivial details or confuse with tangents and or selective data use.

No, all data is not equal. Some data is reliable (to a degree) and some is not. Furthermore, selective use of data to support a model can easily be employed to support INCORRECT models.

thomas.wong1986 says

The source was at main street, your typical consumer created the bubble.

Dude wtf is with people who blame the victim? The housing bubble is the least part of the credit bubble which was generated by Wall St. and the banks who sold that paper back and forth to keep skimming profits. And the housing bubble never could've taken off without the banks/Wall St. in the first place either. But you're gonna place most if not all the blame on Main St who knew little to nothing about loans and relied on the expertise of others to advice and direct them through the home buying process?

When a mechanic fucks up someones car do you also blame the car owner instead of the mechanic?

thomas.wong1986 says

Sounds like a Ponzi scheme to me, found in many typical main street towns!

You do know that Ponzi and not his victims was held responsible for the mess he made right?

QUIT BLAMING THE VICTIMS!!

tts, with all due respect, the whole mess needed more buyers.
Where did more buyers come from?
illegal immigant mexicans.

How did they get access to money?
Neighborhood Reinevestment Act mandated a certian percentage of loans were wrote to unqualified buyers with hispanic sounding names. Most hispanic subprimes in Central Cal were done by non-Americans, were 80/20, and were with 'stated income". Lenders should be in jail over this.

What happened to "20% down"?
I have no idea. But, if 20% down had remained the standard there never would have been any bubble .... no matter who the buyer was. So far, the only reason the 20% standard was lowered was to increase the buyer pool. Sound right?

So, WallStreet may have found a way to play with the new money flowing between banks, but that liquid was created by non-buyers that had no business buying a house. In my opinion.

The only victims are the tax-payers.

tts says

QUIT BLAMING THE VICTIMS!!

1999 to 2001 long before low interest rates.. prices doubled!
Herd mentality like the dot.com era, the gold rush and all the rest!

Bap33 says

Neighborhood Reinevestment Act

well, you can't even correctly repeat the right-wing talking points any more, bap.

Poor people didn't cause the bubble. Lending money to poor people had some part, but that was an action executed by rich people that made them a lot of money.

Nobody in the mortgage business -- loan brokers, banking employees, appraisers, Wall Street investment houses, ratings agencies, private mortgage insurance houses, credit default swap writers, MBS buyers -- was losing money lending money to EVERYONE -- poor, middle class, and rich -- 2002-2006.

CRA had NOTHING to do with this run up. Absolutely nothing.

How could it when total mortgage debt:

http://research.stlouisfed.org/fred2/series/HHMSDODNS

nearly DOUBLED from $5.5T in early 2002 to $10.5T in late 2007.

Poor people IN POOR AREAS covered by the CRA weren't borrowing trillions of dollars. Poor people in total only got 10-20% of it -- the rest went to the RICH areas with SKY-HIGH home prices, like Salinas, San Diego, SF, and to middle-class people being allowed to borrow as much as they wanted via their high FICO scores and abuse of automatic underwriting.

Man, There are some perma bulls here to be sure, I thank you Robert for the data about Cash buyers, and I am sure by now you have been proven correct and those two D. Shirts are tail between their legs and long gone, as I think you were posting that back in june, and now Jan 2011 flippers needed to be cleared out as that is another part of the long term correction, the 2nd wave of people who helped ease the pain of the banks, now take their share of the losses and the banks are glad they SOLD them to those PRO's as one poster thinks, (gee wonder what he thinks you do, if your not a pro why would they consider a flipper a pro? I would rank you WAY WAY above a flipper as you are SELLING to them at times, and then for them, all along the way, Gee I call that FRONT ROW SEATS, and a great place to get the REAL pulse.... maybe in numbnuts analogy you would be Goldman... lol anyway I see a long way down to go, from here, and we might be in real discomfort, not sure why some think the GOV can do anything but slow it down, and in fact make things worse. We are in for some rough waters at best in the good ole USA I am sorry to say, as I am living it, FOOD PRICES, FUEL PRICES, TAXES, and HEALTH care are going up up up and Jobs are ... how shall I say being done for less in countries that are FAR MORE willing to work for their money! Fellow Citizens wake up, time to "See the wolf" he is huffing and a puffing, and then they will eat... you know what I mean?

tts says

But you’re gonna place most if not all the blame on Main St who knew little to nothing about loans and relied on the expertise of others to advice and direct them through the home buying process?

Prices from $200K - $400K skyrocketing to $750K to $1MILLION+ ...
and had no idea what a mortages were ? Irrational Exhuberance!

thomas.wong1986 says

1999 to 2001 long before low interest rates.. prices doubled!

apartment vacancy was VERY TIGHT in mid-2000. I know, I was FOB here in May 2000, apartment rents were going up $100 a month. I went to Cupertino City Center and they told me the rent on the website was out of date by $200, LOL.

It was only natural for prices to move up so much. Starting tech salary in the bay area was low 30s in the early 90s, but doubled in the dotcom rush and was about triple by 2000.