Gary writes:
I love you, CR.
Gary | 03.24.08 - 1:12 pm | #

vfsv writes:
Here's the comparable Silicon Valley price, listings & sales volume snapshot:

http://www.viewfromsiliconvalley....com/ id401.html

Thanks!
vfsv | Homepage | 03.24.08 - 1:12 pm | #

O-Joe writes:
There are now 4 out of the 40 homes in our little development for sale. That's a new record. Plus one is in a stage of foreclosure. That's in Phoenix.

Otherwise, I'm still very optimistic even though I'll lighten up on some positions here and there for a temp retracement. I'll also probably close my silver shorts at the end of the week or next Monday.

O-Joe
O-Joe | 03.24.08 - 1:15 pm | #

ShortCourage writes:
No surprise that inventory levels would decline. Potential sellers expect that buyers will soon have access to Jumbo GSE loans (and who knows what other government assistance). Why not wait until that automatic boost to home prices comes into play?
ShortCourage | 03.24.08 - 1:16 pm | #

Barley writes:
I'm wonderng if the Spring selling season might be a wash because of price declines and the diminished expectation of reaping rewards. Further, with all the talk of economic recession folks might decide that now is just not the time to make a move.

I'm expecting no reduction in inventory with no substancial increase in elective listings. With this, too, will be a higher % of short sales/REOs.

If on the other hand the Fed makes a few more 100B available, things might change.
Barley | 03.24.08 - 1:18 pm | #

jim a writes:
Both charts have been getting worse on a YoY basis for years.
jim a | 03.24.08 - 1:21 pm | #

Sebastian writes:
Barley said: "If on the other hand the Fed makes a few more 100B available, things might change."

I got my "Economic Stimulus" notice from the IRS in the mail the other day. They start mailing the checks in May.


S.
Sebastian | 03.24.08 - 1:24 pm | #

Jas Jain writes:
--
"The data for March will be much more important since that is the beginning of the Spring selling season."

March data would be mostly sales that took place in Feb. Therefore, April is more likely to tell us about the Spring selling season.

Also, A graph of the SFH price paid by month would be great.

Jas
Jas Jain | 03.24.08 - 1:24 pm | #

Yearning to learn writes:
anybody have actual interest rates for the new Jumbo-conforming loans?

I've heard that "they're out there" but I haven't seen what the rates are...

I love the spin on these February numbers. by all imagination they are horrible, unless you compare them to January... and they're always better than January for seasonal reasons!
Yearning to learn | 03.24.08 - 1:27 pm | #

burnside writes:
If we see a replay of last Spring, NAR will focus on month-to-month sales increases through June, CNBC will break out the party favors, and someone will insult Peter Schiff.

Paul Kasriel will not be a media guest anywhere.
burnside | 03.24.08 - 1:27 pm | #

Yearning to learn writes:
that said:
I'm seeing a LOT of "sold" signs in minneapolis lately.

And I mean a LOT.
Yearning to learn | 03.24.08 - 1:27 pm | #

michael schumacher writes:
Just above 7% is what I have seen today....

For the Jumbo.....but as the news has already stated "it's all over"

What they do not know is that it IS really over....and not in a good "up" inducing way that EVERYONE is trying to accomplish via suggestion....

The FED as an LLC......that takes the proverbial cake (not that there is much left for anyone else to take)

Ciao
MS
michael schumacher | 03.24.08 - 1:30 pm | #

Bob Dobbs writes:
"that said:
I'm seeing a LOT of "sold" signs in minneapolis lately.

And I mean a LOT."

They may be getting conventionally affordable deals -- from realistic buyers, REOs, desperate developers, whatever. But they still stand the risk of catching a falling knife.

If this year's "bargain-hunting" buyers were to go underwater later because of continuing price drops -- well, that would make real estate a bad taste in the consumer's mouth for years to come.

By the way, kudos to CR for clearly stating and illustrating the real story behind this month's sales figures. Something that most of the MSM can't do, apparently.
Bob Dobbs | Homepage | 03.24.08 - 1:32 pm | #

Jas Jain writes:
--
Hey, Seb, financials are bottoming and so did SPX last week on Monday. Time to load up on Scams to make your economy-is –not-in-recession bet look great. You might prove to be a genius after betting against the recession and then winning big.

Good luck.

Jas

PS: I am placing GTC orders to buy whole bunch of Jan'09 and Jan'10 puts on FNM, FRE, JPM, GS, AMAT, TOL, etc. I sold 60% of my puts over the past 8 months and am redeploying part of the cash.
Jas Jain | 03.24.08 - 1:33 pm | #

Rob Dawg writes:
I have no doubt that reported inventory will be lower. One need only look to the reliability of "Days On Market" to see how that is possible.
Rob Dawg | Homepage | 03.24.08 - 1:34 pm | #

other Jim writes:
I still wonder how $1200 stimulus checks are supposed to turn around the housing market. It would buy a tent for the homeless and tentless but not help much buying a bubble-priced house. And as I understand, that check counts as income against next years taxes.

Almost time to go see if I have a job, big cloud of smoke reported near my factory workplace...
other Jim | 03.24.08 - 1:35 pm | #

ac writes:

I still wonder how $1200 stimulus checks are supposed to turn around the housing market. It would buy a tent for the homeless and tentless but not help much buying a bubble-priced house. And as I understand, that check counts as income against next years taxes.

The first one probably won't have much impact, but multiply $1200 times 20 or 30 and you start to see a real effect.

ac | 03.24.08 - 1:37 pm | #

black dog writes:
What? No mention that feb 2008 had 3.6% more days that feb 2007.
black dog | 03.24.08 - 1:42 pm | #

Yearning to learn writes:
They may be getting conventionally affordable deals -- from realistic buyers, REOs, desperate developers, whatever. But they still stand the risk of catching a falling knife.

Oh I totally agree... just trying to be objective and noted that there are a lot more sold signs than I ever would have expected this time of year.

especially since this has been the coldest/snowiest/horriblest winter ever in Minneapolis.

We have snow on the ground and it's nearly April. we're 15-20 degrees below the average temp almost every day for months. that's very rare around here.
Yearning to learn | 03.24.08 - 1:43 pm | #

gn writes:
"I'm seeing a LOT of "sold" signs in minneapolis lately."

Three people I know (in Mpls) had "sold" signs on their houses and then the financing fell through for the buyers.

We're nowhere near the bottom.
gn | 03.24.08 - 1:47 pm | #

Jas Jain writes:
--
In the sparsely populated neighborhood I heard of one news of a rental that fell thru today and yesterday I heard of a purchase that fell thru few days ago juts before the close of escrow. The seller had already bought a house to move into.

Lot of people changing minds at the last minutes, it seems.

Jas
Jas Jain | 03.24.08 - 1:57 pm | #

ac writes:

Well, some of the MSM headlines on housing are actually sensible (though I agree with CR that the winter months greatly amplify the noise in housing reports, and the sales rebound is suspect).

To be filed under "markets starting to work properly again":

Home sales rise, but prices keep tumbling
Increase of existing structures is biggest in a year, but cost drop is record

ac | 03.24.08 - 1:57 pm | #

hb writes:
Austin, Texas -- heard it in the media a lot lately? That's no coincidence....it's the last best hope for the housing bulls in the media who don't like to feel very very wrong in all the advice they gave for years.

So, this is interesting:
-----------
"Showing signs of deepening market weakness, pending sales plunged by 49 percent, the greatest decrease on record."

The national housing slowdown has hit Austin in recent months, though real estate experts continue to say that the area’s market is faring much better than in other parts of the country. "
-----------
http://www.statesman.com/blogs/ c...eighth_con.html


hmmmmm......

Austin is following the national curve I figure, but is it possible it will go further than the national average and experience a serious price bust??

I lived there a few years back, and one moderately nice house of about 2100 sf in south central Austin was asking $459,000 a couple of blocks from me. My mouth fell open back then.

Speculators were active in Austin.

One friend started flipping houses, instead of only being a landlord, about 2 years ago. It was a surprise. When I told him it was a bubble a few months ago, he practically exploded at me.

People do not like to admit their activity is coming to an end.

Media or flippers.
hb | 03.24.08 - 1:57 pm | #

ac writes:

PS: I am placing GTC orders to buy whole bunch of Jan'09 and Jan'10 puts on FNM, FRE, JPM, GS, AMAT, TOL, etc. I sold 60% of my puts over the past 8 months and am redeploying part of the cash.

Hey Jas, you ever have liquidity problems with the puts?

Sometimes I find myself holding on to stuff I want to dump because of huge bid/ask spreads.

Maybe I need a better broker.

ac | 03.24.08 - 1:59 pm | #

Rob Dawg writes:
black dog writes:
What? No mention that feb 2008 had 3.6% more days that feb 2007.

Damn your "black dog" eyes, you stole my punch line. Okay, kudos. Here is the breakdown:

Feb 2007 had 20 business days and 4 Fridays.

Feb 2008 had 21 business days and 5 Fridays.

+7% to +9% would have been a comparable sales rate.

For those looking ahead:

Mar 2007, 22 business days. 5 Fridays. Easter was April 8, 2007.

Mar 2008, 21 business days. 4 Fridays with Good Friday and Easter messing everything up.

I predict the Mar numbers will be waaay down y-o-y but the holiday will receive prominent attention despite the fact that Feb Fridays and business days got glossed over.
Rob Dawg | Homepage | 03.24.08 - 2:00 pm | #

O-Joe writes:
PS: I am placing GTC orders to buy whole bunch of Jan'09 and Jan'10 puts on FNM, FRE, JPM, GS, AMAT, TOL, etc. I sold 60% of my puts over the past 8 months and am redeploying part of the cash.
Jas Jain

If you're serious about this, good luck. I hope you have good money management.
O-Joe
O-Joe | 03.24.08 - 2:01 pm | #

solo writes:
The average guy does not know that with an attorney to protect him he has a free house!
http://www.jsmineset.com/ARhome....905& T_ARID=5960
solo | 03.24.08 - 2:02 pm | #

Taos writes:
I think the point is that the NAR actually stands for:

Not Adjusted for Reality
Taos | 03.24.08 - 2:04 pm | #

sdtfs writes:
other Jim writes:
I still wonder how $1200 stimulus checks are supposed to turn around the housing market.

You want to go in with me and buy one of those "special" homes in Ohio? They're going for a few thousand. Or we could wait until I find one in California for that price.
sdtfs | 03.24.08 - 2:05 pm | #

Bill Melater writes:
sdtfs
Go to Detroit. You can buy a dozen.


Bill Melater | 03.24.08 - 2:07 pm | #

Yearning to learn writes:
"Three people I know (in Mpls) had "sold" signs on their houses and then the financing fell through for the buyers"

good point.

I personally feel that this year will be a huge RE bust in Mpls with lots of pain.

but I also must honestly report what I'm seeing anecdotally, and that is tons of "sold" signs.

FWIW: I live in Southwest Mpls, aka the "Lakes" area or Uptown, and it is considered one of the more/most desireable places in our metro... so that could be a factor too. (more desireable still selling, less desireable sitting)
Yearning to learn | 03.24.08 - 2:07 pm | #

idoc writes:
here we go; reversal
idoc | 03.24.08 - 2:08 pm | #

Windowdog writes:
I plan on using my stimulus check to pay off most of my deferred income tax.

Gotta love our system.
Windowdog | 03.24.08 - 2:08 pm | #

poszi writes:
I'm a bit skeptic about NAR data especially about their seasonal adjustment but they are not so stupid to forget about the leap year in the seasonal adjustment. And based on the data, it looks they took it into account. Seasonally adjusted sales are 23.8% down while the non-seasonally adjusted are -19.4%. The difference looks mostly due to the extra day.
poszi | 03.24.08 - 2:09 pm | #

sdtfs writes:
"I'm seeing a LOT of "sold" signs in minneapolis lately."

I've noticed a reluctance to take down "sold" signs. The same sign has been down the street from me for over six months. And we notice a similar lack of change elsewhere in and around San Diego.
sdtfs | 03.24.08 - 2:10 pm | #

Sebastian writes:
Windowdog said: "I plan on using my stimulus check to pay off most of my deferred income tax."

Car insurance for a teenage driver for me. Ouch.:)


S.
Sebastian | 03.24.08 - 2:10 pm | #

Ministry of Truth writes:
Banks allowed to lift MBS holdings

http://www.reuters.com/article/ o...T00917420080324

The move announced on Monday by the Federal Housing Finance Board enables the banks in the Federal Home Loan Bank system to expand their holdings of securities issued by Fannie Mae and Freddie Mac, the congressionally chartered companies that are the two biggest U.S. home financing providers.
Ministry of Truth | 03.24.08 - 2:11 pm | #

Rob Dawg writes:
...Federal Housing Finance Board enables the banks in the Federal Home Loan Bank system to expand their holdings of securities issued by Fannie Mae and Freddie Mac...

We are all our own counterparties now.
Rob Dawg | Homepage | 03.24.08 - 2:14 pm | #

ac writes:

The move announced on Monday by the Federal Housing Finance Board enables the banks in the Federal Home Loan Bank system to expand their holdings of securities issued by Fannie Mae and Freddie Mac, the congressionally chartered companies that are the two biggest U.S. home financing providers.

Sounds like more "stealth nationalization".

I don't so much have problems with nationalization as I do with nationalization without voter approval.

Just like inflation is basically taxation with out voter approval.

Voters are being systematically disenfranchised when it comes to economic and monetary issues. IMO this is partly a side effect/consequence of the political parties converging.

ac | 03.24.08 - 2:17 pm | #

Ralph Cramdown writes:
Rob Dawg or others... Could you elaborate on business days and Fridays? Are contracts for land unenforceable if executed on Sunday in some places? I know new listings generally hit MLS on Fridays, but am unclear as to business days per month, and how weekends/month are calculated If Sunday is the 1st, does each weekend get 1/2 month? Maybe I'll google and see if NAR can shed any light. TIA
Ralph Cramdown | 03.24.08 - 2:19 pm | #

ac writes:

"I'm seeing a LOT of "sold" signs in minneapolis lately."

The new Realtor tactic is to put "SOLD" signs on foreclosed and abandon houses. Nobody bothers to check to take them down, and it makes it look like there's a flurry of sales going on at any one time so as to stir up another buying panic.

ac | 03.24.08 - 2:20 pm | #

wally writes:
Those 'Sold' signs stay up for a LONG time in some areas - even in SW Minneapolis.
There is no 'finesse' to be worked on reality however. People get incomes, people pay to buy homes... the two must balance just as in any market.
wally | 03.24.08 - 2:21 pm | #

Bill Melater writes:
Report to the Funding Committee: We are alive and spending the money.


Am I misremembering something? A couple of years ago the Fed Gov ran out of money to pay the employees, so in an emergency measure just raised the debt ceiling. ???
Bill Melater | 03.24.08 - 2:22 pm | #

halbhh writes:
"We are all our own counterparties now.
Rob Dawg "


yeah, it's like we are trying to decide just how much artificial price support we mutually want to....print.
halbhh | 03.24.08 - 2:22 pm | #

Jim writes:
Tucson may not be as bad as Phoenix, but it is not good. In my little neck of the woods, there are four places out of maybe 35 for sale, and one for sale property has been taken off the market. Nearby another more expensive one has been taken off the market. The owner was asking a million and a half for a house Zillow evaluated for about 700 thousand. But all of them are asking way more than the Zillow valuation. I am not surprised nothing is moving.
Jim | 03.24.08 - 2:22 pm | #

will writes:
There's a good chart here that shows, over the past few years, a little bump right around Feb/March before the plunge continues. This Time It's Different (?)

http://online.wsj.com/article/ SB...p_us_whats_news
will | 03.24.08 - 2:23 pm | #

halbhh writes:
Jim writes:
Tucson may not be as bad as Phoenix, but it is not good. In my little neck of the woods, there are four places out of maybe 35 for sale, and one for sale property has been taken off the market. Nearby another more expensive one has been taken off the market. The owner was asking a million and a half for a house Zillow evaluated for about 700 thousand. But all of them are asking way more than the Zillow valuation. I am not surprised nothing is moving.


I've tried to guess about how long it takes for the median mental adjustment on the part of a potential seller to conceed fully that 2006 is gone. After the news, which they may block out, but still get on some level, my guess is about 1 year (median).

Of course, bank failures and such can accelerate the recognition some.
halbhh | 03.24.08 - 2:26 pm | #

halbhh writes:
Of course, 1 year might be overesitmating the reality-checking that happens!
halbhh | 03.24.08 - 2:27 pm | #

blackhat writes:
halbhh,

Bank failures don't mean anything to most Americans. Job failures, yes.
blackhat | Homepage | 03.24.08 - 2:27 pm | #

Rob Dawg writes:
Rob Dawg or others... Could you elaborate on business days and Fridays? Are contracts for land unenforceable if executed on Sunday in some places?

don't read too much into this. The County records the sale and they aren't open on weekends or holidays. The nature of the workweek is such that Fridays are heavier than other days. Because of that month to month changes are very noisy. To their credit even the NAR cautions against month to month comparisons and recommends y-o-y as the better comparison. Well, that is unless it id like this month when their advice would have resulted in a negative headline. ;-)
Rob Dawg | Homepage | 03.24.08 - 2:32 pm | #

Turbo writes:
I wonder if two consecutive years of a bad housing market will finally force sellers to realistically adjust price expectations? If so, it's quite possible that sales will bounce back a little (up nar annualized, but down in year-on-year comparisons), prices continue to plunge. A mixed bag for the economy in the short-run, but a clear out that needs to happen.
Turbo | 03.24.08 - 2:36 pm | #

picosec writes:
When I access Zillow, "zero" homes for sale/sold are shown. Anybody else had this problem or a solution?
picosec | 03.24.08 - 2:40 pm | #

ipodius writes:
I'm seeing a LOT of "sold" signs in minneapolis lately.

According to the figures, last month's sales in the Northeast were up over 11%. That seems reasonable if we're somewhere around 5% or so from the trough, as I think. Watch the Northeast first for indications of what is going on. We've been on the downside a lot longer than other sections of the country, so we're likely to hit some sort of statis first.
ipodius | 03.24.08 - 2:41 pm | #

ac writes:

"Showing signs of deepening market weakness, pending sales plunged by 49 percent, the greatest decrease on record."

The nightmare of the 80s real estate crash is still alive and well within the memory of many Texans.

A huge decline in pending sales in central Texas doesn't surprise me one bit.

ac | 03.24.08 - 2:41 pm | #

Turbo writes:
If you look to the last stock market bust to get a feel for J6P's euphoria to revulsion time-frame, two years seems reasonable, though housing is much stickier.
Turbo | 03.24.08 - 2:42 pm | #

giacutter writes:
Beautiful graphs, CR.

Maybe the bounce of sales is real. People like me who have put the home purchase on ice and have rented for two years waiting for prices to come down. Now that everyone has declared "buyer's market", the "pent-up demand" may be starting to flow over the top of the dam (how's that for a MM entry?).

Anyway, I don't know if I can convince the wife to not buy a house again this year. That nesting instinct is.......so.......strong...
giacutter | 03.24.08 - 2:43 pm | #

blackhat writes:
ac,

I remember the huge decline of RE in 80s CA post-aerospace implosion...we're talking about RE declines right now absent mass layoffs. Let's see how things correct with mass layoffs...
blackhat | Homepage | 03.24.08 - 2:44 pm | #

bofiz writes:
I got my "Economic Stimulus" notice from the IRS in the mail the other day. They start mailing the checks in May.


Great Seb! Now you'll be able to put it down as a downpayment to buy that investment property you've been eyeing. $600 outta do it, right? (or $1200 if you're married)
bofiz | 03.24.08 - 2:46 pm | #

ipodius writes:
giacutter, just pay close attention to the local market. you don't have to buy AT the bottom, just close enough to it based on your timeframe. Some places have a long way to go, some not so much. And if you don't plan on moving for 20 years, it doesn't make much of a difference.
ipodius | 03.24.08 - 2:46 pm | #

ac writes:

Anyway, I don't know if I can convince the wife to not buy a house again this year. That nesting instinct is.......so.......strong...

Maybe try aiming for a forclosure sale and a deep haircut if you can manage it.

I would probably buy a house locally at a 40% haircut, even though I think that still leaves the house overvalued, it would be worth it to me partly for psychological reasons and partly to hedge some financial assets.

ac | 03.24.08 - 2:46 pm | #

Jas Jain writes:
--
"Hey Jas, you ever have liquidity problems with the puts?"

ac,

NO. I always have and place GTC orders to sell (the same for buys). I have had no problem in selling because the puts almost always get sold on big dowb day. My biggest selling was on Monday, a week ago.

I started to sell ML 60 puts (VMEML) several months ago. The first sale was at $10, then $15, $17.5, $20, and the last at $23. I still have some left. I was loaded with puts on Fraudentials in July 2007 as you can guess from my views on Bankrupters and Fraudsters of NYC. I misses BSC altogether. Well, you can’t get’m all.

Jas
Jas Jain | 03.24.08 - 2:47 pm | #

Jas Jain writes:
--
"If you're serious about this, good luck."

O-Joe, is there a more serious person on this blog?

Jas
Jas Jain | 03.24.08 - 2:49 pm | #

blueridge writes:
So, how accurate are inventory data, anyway? I think they're probably important, but what happens to all the properties that banks are foreclosing on? Do they show up as part of the inventory data? If not, then there's a steady stream of housing units disappearing from the "inventory" column and showing up on the bank ledgers - where none of us can see them.

So, when and how do houses leave the secret bank ledgers and return to inventory? Has that even started happening yet in a big way? If not, there's going to be a tidal wave of inventory in the near future...
blueridge | 03.24.08 - 2:49 pm | #

ipodius writes:
$600 outta do it, right? (or $1200 if you're married)

I find it sort of ironic that the checks are going to the people that can least afford to spend it, except on basic needs or to pay off debt...instead of to someone deserving like me what would spend all of it on stuff I don't really need to help get the retail numbers back up.

Seb, you can't be getting a check! The earnings of your trades alone (from what you post) would be enough to disqualify you!
ipodius | 03.24.08 - 2:49 pm | #

John Stark writes:
I still wonder how $1200 stimulus checks are supposed to turn around the housing market. It would buy a tent for the homeless and tentless

That's one great idea. I have a home and a tent, but I'm always looking to upgrade on the tent side. $1200 could buy an awesome tent.
John Stark | 03.24.08 - 2:49 pm | #

ac writes:

ac,

I remember the huge decline of RE in 80s CA post-aerospace implosion...we're talking about RE declines right now absent mass layoffs. Let's see how things correct with mass layoffs...

I was still in school at the time of the Texas bust, and my family was basically unaffected by the oil bust, but it still had a real psychological effect on me because of the effect I saw it having on other people.

People who bought houses simply disappeared never to be seen or heard from again.

It was a Lovecraftian sort of horror, my first impression of the homeownership experience.

ac | 03.24.08 - 2:50 pm | #

bofiz writes:
--
In the sparsely populated neighborhood I heard of one news of a rental that fell thru today and yesterday I heard of a purchase that fell thru few days ago juts before the close of escrow. The seller had already bought a house to move into.

Lot of people changing minds at the last minutes, it seems.



Or is it lots of lenders changing their minds at the last minute?
bofiz | 03.24.08 - 2:51 pm | #

Broker writes:
In my neck of the woods ( in Central Florida) 67.3% of the properties sold in the last 30 days were financed with FHA loans. It might have had something to do with the new FHA program.($100 down payment). However, IMO this is just going to make things worse. Also I see quite a few bank repos listed for 55-60% less than what they sold for in `04 -`06. It is getting harder and harder for our brave realtors to keep these properties out of sight of their potential buyers, while trying to sell them more or less the same thing for 30-40% more. 6% and a lot of pressure from the seller result in a screwed buyer.
Broker | 03.24.08 - 2:53 pm | #

Rob Dawg writes:
Since it hasn't been mentioned and there are a lot of new screen names it should be noted that lots of sold signs isn't a viable indicator as so many transactions are taking twice as long among other factors.
Rob Dawg | Homepage | 03.24.08 - 2:54 pm | #

ac writes:

ac,

NO. I always have and place GTC orders to sell (the same for buys). I have had no problem in selling because the puts almost always get sold on big dowb day. My biggest selling was on Monday, a week ago.

I started to sell ML 60 puts (VMEML) several months ago. The first sale was at $10, then $15, $17.5, $20, and the last at $23. I still have some left. I was loaded with puts on Fraudentials in July 2007 as you can guess from my views on Bankrupters and Fraudsters of NYC. I misses BSC altogether. Well, you can’t get’m all.

Jas

Hmmmm... maybe because I've been buying options on some relatively obscure ETFs in place of messing around with futures, currency bets etc.

It sucks to have a put that's up 200% that you have to take a 50% haircut on to sell.

ac | 03.24.08 - 2:55 pm | #

Ralph Cramdown writes:
So I grabbed the NAR's spreadsheet of the data here. They round everything to the nearest thousand, which doesn't have much of an effect for SFR, but when the non-adjusted condo/co-op sales for February are "35,000" it sure does turn the second and third significant digits on the Y-O-Y and M-O-M percentages into fantasy numbers.
Ralph Cramdown | 03.24.08 - 2:56 pm | #

michael schumacher writes:
ac-

you're taking bid price??...

NEVER take BID price.......EVER.

of course I can help you with that......LOL!!

Ciao
MS
michael schumacher | 03.24.08 - 2:59 pm | #

Shnaps writes:
OT - This over at Minyanville made my day.

But how the hell did "Negative Equity" wind up with only a 10 seed?
Shnaps | Homepage | 03.24.08 - 3:02 pm | #

hiker90 writes:
ac,

That texas experience scarred me to the point it negatively impacted my judgement. I should have bought in 90-91 after graduating from college and when homes were incredibly cheap. Instead, I rented a room from a buddy. Oh well, it was a win-win situation. He had help with his house note, I had a cheap room with the amenities of a house, and we all had a good time.

Best,
hiker90 | 03.24.08 - 3:06 pm | #

from bubble 2 bubble we go writes:
The key issue will be finding a mechanism to bring massive waves of buyers into a selling spree, like much lower 30 year mortgages, much lower home values and massive amounts of qualified buyers who are making much more money in money markets and 401ks.

Aint gonna happen anytime soon, so this panic is retarded!
from bubble 2 bubble we go | 03.24.08 - 3:11 pm | #

from bubble 2 bubble we go writes:
Re: The first one probably won't have much impact, but multiply $1200 times 20 or 30 and you start to see a real effect.

Are you referring to multiple families in a single residence, e., 20 people in one condo or what?
from bubble 2 bubble we go | 03.24.08 - 3:14 pm | #

hiker90 writes:
btw, latest Austin sales plotted here:
http://recenter.tamu.edu/data/hs...a/hs/ hs140b.htm
hiker90 | 03.24.08 - 3:15 pm | #

from bubble 2 bubble we go writes:
what is the reason behind either NAR or ratings agencies still being in the business of forecasting? The only people using either org, are people that want to manipulate political data.
from bubble 2 bubble we go | 03.24.08 - 3:18 pm | #

Ralph Cramdown writes:
So, how accurate are inventory data, anyway? I think they're probably important, but what happens to all the properties that banks are foreclosing on?

blueridge,

I think inventory data, defined as the number of houses listed on all the MLSs nationally, is probably pretty accurate. It is doubtless underestimating the number of houses whose owners wish to sell right now, because some of them can't yet face the music.

The way the REOs work is, first the ARM goes its initial teaser period, often two years, then it resets to LIBOR+6, after a month or two a payment gets missed, then it shows up as nonperforming in the stats for the MBS pool it is bundled in, then FC starts on the property, and 3-6 months later a "for sale" sign shows up in the front yard. If you read previous posts on this site (and the übernerd posts) its all laid out. According to our calculations, the tsunami hits late summer/early fall, but rising tides are reported already in coastal areas because the last batch of loans written were so crappy that the borrowers didn't even wait until reset to start defaulting. Ben is pushing on the string that connects the Fed to LIBOR, but, given the geography between Washington and London, the string is very long and very damp.
Ralph Cramdown | 03.24.08 - 3:20 pm | #

from bubble 2 bubble we go writes:
Substitution bias occurs because a fixed NAR market basket fails to reflect the fact that consumers substitute relatively less for more expensive goods when relative prices change.

>Geometric substitution is my favorite statistical trick, where you substitute steak for chicken and tweak the model to conform to your bias
from bubble 2 bubble we go | 03.24.08 - 3:22 pm | #

sbarrkum writes:
OT
Naked capitalism has a article from FT regards JPM court filing which disclose that subprime securities are priced at 5cents on the dollar.
subprime securities are priced at 5cents on the dollar
sbarrkum | 03.24.08 - 3:23 pm | #

idoc writes:
jas

i agree with you that now would be a good time to short FNM/FRE. i shorted FRE a bit too soon but am holding.
idoc | 03.24.08 - 3:25 pm | #

Terry writes:
b2b said: "what is the reason behind either NAR or ratings agencies still being in the business of forecasting? The only people using either org, are people that want to manipulate political data."

You've answered your own question!
Terry | 03.24.08 - 3:27 pm | #

from bubble 2 bubble we go writes:
So what should you be watching now? Many telltale signs have to do with internal market dynamics, from stock price patterns to trading volume to investor psychology -- so-called technical indicators.

"Fundamental indicators are a blunt knife," says Sam Stovall, chief strategist at Standard & Poor's. "Technical indicators are a sharp needle -- the chances of pinpointing turns are greater."

The folks at Ned Davis Research are known for their knack for putting such market yardsticks in historical context. They're watching 12 different indicators currently, but mentioned three in particular.

First is the VIX index of options volatility. Extremely high levels indicate extreme fear -- which is the predominant sentiment when bottoms occur. The recent high was 31.2. Previous readings signifying ends of corrections of bear markets occurred at 45.1 (October 2002), 45.7 (August 1998) and 36.5 (October 1990). According to the VIX, we haven't seen a bottom yet.

Next is the percentage of stocks trading above their average price for the past 200 days. Extremely low readings indicate that a market selloff is overdone and likely to reverse. The recent low was 13.8%. Previous lows: 4.6% (2002), 12.5% (1998) and 11.1% (1990.) No bottom quite yet, according to the 200-day moving average.

Third on the list from Ned Davis Research is the ratio of advancing stocks to the number of declining stocks, averaged over the past 90 days. Extremely low readings indicate an over-sold market. The recent low: 83.9. Past lows: 78.3 (2002), 74.8 (1998) and 73.0 (1990).

Stack follows a bunch of complex, proprietary market indicators over at InvesTech. But one of his favorite non-technical technical indicators is a decline in bear market leadership -- in other words, a declining number of stocks hitting 12-month lows on the New York Stock Exchange.

That number has been up in the mid-500s recently, equivalent to about one in seven stocks hitting new lows. The number, says Stack is "not indicative of a market bottom." Look for the number to contract to fewer than 25 before the market bottoms, he says. Within the first month of a bull market, you'll see fewer than 12 stocks hitting yearly lows.
from bubble 2 bubble we go | 03.24.08 - 3:30 pm | #

Sebastian writes:
We should be watching 30-year fixed rates for clues as to what's likely to happen next with sales and inventory.

Although the focus here is on ARMs and their variants, the mortgage of choice for most homeowners is the fixed-rate, and sub-6% is a real stimulus.

Also, when these rates rise and/or remain high, homeowners *naturally* hold onto their existing homes and mortgages instead of "moving up." They have lower rates on their existing mortgages and so they keep them longer.

That affects the "duration" on mortgages, which CR and Tanta have explained before. But not that a *decrease* in rates would change that situation and inspire more home sales.

It's understandable that such a factor wouldn't get any "play" from our host and hostess. But just because they don't see fit to address it doesn't mean it's not a signficant factor.

And don't even get me started on the fact that most people keep their homes for 6 years or longer, meaning that there are lots of homeowners out there who bought well before the "bubble" peak and still have substantial equity.

Another honest oversight, I'm sure. "Fair and balanced.":)


Sebastian
Sebastian | 03.24.08 - 3:40 pm | #

halbhh writes:
hiker90 -- it's noticible how far behind the recent data the TexasRealEstate's posted info is now. I think part of this is how very wrong the forecaster was about the Austin market (he wrote a glowing forecast of course). His forecast was embarrassingly wrong it appears.
halbhh | 03.24.08 - 3:53 pm | #

ipodius writes:
Seb, I don't think the 30 year rate from a range of 5.5 to 6.25 is going to make much of a difference. The issue is purely price. People aren't even going to look if they sense that price still has a long way to fall, no matter what the rates are. Also, you need to be pristine now to even get a mortgage, so that limits the set of people that can play. Given that you're going to be even more sensitive to price if you think that your (now significant) down payment will be vaporized three months from now.

So people will be looking at pricing first, and rates second, logically. So that's where the fair and balanced is. Again Seb, look to the Northeast to see what is happening there and it will foreshadow everywhere else. We're at over 20% from peak, inflation adjusted right now.
ipodius | 03.24.08 - 4:02 pm | #

calculated bitch writes:
I can hardly wait for the good times to return soon, like next week. Calculatedrisk was a lot nicer without all these extra posters that have added too much chaos here. This is a real estate/mortgage blog dedicated to selling real estate....get out and go somewhere else!
calculated bitch | 03.24.08 - 4:10 pm | #

halbhh writes:
idoc, I gather there is some difference between freddie and fannie, though I'm no expert. for instance, freddie's ceo was saying house price fall was only 1/3 done. that's pretty good awareness. so I wonder if freddie is a lot safer. no position.
halbhh | 03.24.08 - 4:10 pm | #

m writes:
Wall street, Wahsington, Cramer, Stocks, all say crisis is over. Go long with everything you've got, hell, go margin up now that you can borrow again!
m | 03.24.08 - 4:12 pm | #

m writes:
calculated bitch

*&(&* you
m | 03.24.08 - 4:13 pm | #

Anonymous writes:
We need an end to this type of crap and I hope to God, Mccain has bush as a VP!! We can not afford to lose control of this government!!

Home prices dropped almost 9 percent last quarter — home prices for everyone. If you’ve paid off your home, if you have a fixed-rate mortgage with a manageable interest rate, you have suffered the steepest decline on record. That means families have lost at least $1.9 trillion in housing wealth so far, nearly two-thirds of the size of the entire United States government budget.

And today, nearly 9 million families are struggling with mortgages that are under water. They actually owe more for their mortgages than their homes are worth. So what was once their biggest financial asset is now a financial liability.

The housing crisis is also a crisis for our cities, our towns and our neighborhoods. At least 41 million homes will lose value because of foreclosures in their neighborhoods, including 1.7 million homes right here in Pennsylvania.

Abandoned homes and boarded up neighborhoods mean higher crime rates, lower property values and plummeting tax receipts for cities and towns across America.

Now, a year ago in March 2007, I called for immediate action to address abuses in the subprime market and I laid out detailed concrete proposals for how to do so. I warned this administration that the problems in subprime mortgages would soon spill over into regular mortgages.

The response from our president? Well, his treasury secretary told Congress that the problem was, quote, “contained.” And president himself assured us there would be a, quote, “soft landing for the housing market.”

The housing crisis soon spread from subprime to traditional mortgages. And in August of last year, I warned the administration that the housing mortgage crisis would soon ripple out through the entire economy.

Again, I called for immediate action and laid out concrete proposals to prevent foreclosures and help states hard-hit by this crisis.

I also called for tighter regulation of the housing market, starting with unscrupulous mortgage brokers who were taking advantage of our families.
Anonymous | 03.24.08 - 4:13 pm | #

hiker90 writes:
"it's noticible how far behind the recent data the TexasRealEstate's posted info is now."

Especially the permit data, 1 year and quarter behind. Seems inexcusable to me. The only reason why I posted the sales data cause it is current.

Best,
hiker90 | 03.24.08 - 4:28 pm | #

Jas Jain writes:
--
calculated bitch,


You need to get better at bitchin if you want to keep your reputation as a bitch.

You need to bark and scare people away!

Jas
Jas Jain | 03.24.08 - 4:29 pm | #

halbhh writes:
hiker90 -- Do they have Feb for Austin up? I didn't see it.

http://www.recenter.tamu.edu/dat...a/hs/ hs140b.htm
halbhh | 03.24.08 - 4:45 pm | #

halbhh writes:
hiker90 -- my earlier post was Feb data (from the Stateman), and also March(!) to date pending. Since it's only computerized info, I wonder why TREC is slow if not reluctance.

http://www.statesman.com/blogs/ c...eighth_con.html
halbhh | 03.24.08 - 4:48 pm | #

Ethan writes:
I've been reading this blog for 2 to 2 1/2 years and I do long for the good old days of long ago when the comments contained information and analysis not just blathering about how one's puts are faring or what one did in one's shorts.

Aren't there chat rooms where you can brag about your investment/trading acumen?

Remember Banker? I'm sure we didn't see eye to eye politically, but he/she had relevant experience, good information, and fundamental analysis. I think the new tone of the blog drove him/her into the Banker Dome to wait it out. I hope he/she is safe and comes back soon.

CR, Tanta, Dryfly, Miesen, and the like, even Sebastian, Crispy & Cole, Jas Jain, and the like -- keep posting; the rest of you blow-hards -- bugger off.
Ethan | 03.24.08 - 4:49 pm | #

sam writes:
jas, that bhang seems very potent. Up in the mountain, it is a killer.
sam | 03.24.08 - 4:56 pm | #

Fish writes:
sebastian

you can't be serious with your comment about rates and their impact on housing. With all that has happened over the past year, you mention rates ?

subprime, stated, teaser rates, specultive buying, foreclosures, bailouts, etc., etc.

is housing more affordable with lower rates? of course, but you can't honestly base any sort of argument on that given all of the other headwinds that exist

And your comment about 6 years being an average holding period.... the issue that has been discussed here ad nauseam is the lending/speculation from 2003-2006. Not the 6+ year buyers... even Cramer says so.
Fish | 03.24.08 - 5:04 pm | #

Worried writes:
Banker went away in shame.

He imagined he knew better than ordinary people and imagined his superiority and breeding enabled him to use his intellect to think better than joe average who thought the whole house of cards was a big stinking pile just waiting to collapse.

The Banker types created this mess.

Banker left when it became clear to him his presence revealed the inner workings of the bankers mind rather than the spin he wanted us to believe that LTCM was a real event and this was no big deal.........we are way past Banker now.
Worried | Homepage | 03.24.08 - 5:11 pm | #

halbhh writes:
for clarity "pending" in my post re Austin above means pending at some point in Feb presumeably, and thus affects sales for march (if the money comes thru!). Basically, it's the same result -- Austin was only behind the curve, but on the same curve, most likely. It should be interesting to watch. Let's return to this next month also.
halbhh | 03.24.08 - 6:19 pm | #

Tom writes:
I thought this excerpt from the March 17 Lawler Economic & Housing Consulting Daily was interesting:

Based on what we’ve seen so far, we estimate that existing home sales ran at a seasonally adjusted annual rate of about 5.03 million in February, which is down 23.8% from last February, but up 2.9% from January. Note that in some markets, the better showing in sales last month versus the previous few months has not been a sign of strength, but instead reflects the sharp increase in foreclosure sales vs. last year (SoCal, Detroit, etc.), as well as an uptick in investor buying of properties at “distressed” price levels (Sacramento, Detroit, etc.). In markets where local boards report sources of financing, we saw substantial gains in the FHA share of the market, a trend that will accelerate dramatically in late spring and summer.
Tom | 03.24.08 - 6:40 pm | #

Flic writes:
"I'm seeing a LOT of "sold" signs in minneapolis lately."

We had two house in my neighborhood with 'Pending' signs for a while. Ooe now has up a new 'Short Sale' sign and the other has lost the 'Pending' part.....
Flic | 03.24.08 - 9:03 pm | #

non-typical_white_person writes:
I seriously question Inventory levels. As a spokeswoman for the NAR admits below, "foreclosure properties" are omitted from the "listing pool."

But market watchers say the foreclosure wave in Northern Virginia will have to run its course before prices can normalize. "The correction will continue, but foreclosure properties will be out of the listing pool," said Jill Landsman, a spokeswoman for the Northern Virginia Association of Realtors.


http://tinyurl.com/28dv6j
non-typical_white_person | 03.25.08 - 2:11 am | #

baba writes:
In some beaten-down markets, the price cuts have been stark. The Detroit Board of Realtors recently found that home sales in the city (excluding suburbs) in the first two months of this year jumped 48% from a year earlier, to 1,540. The average home price there sank 54% to about $22,000

http://online.wsj.com/article/

So all we need is a 54% drop and all will be well
baba | 03.25.08 - 2:31 am | #