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Some Indicators


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2006 Jul 25, 2:46pm   17,152 views  197 comments

by Randy H   ➕follow (0)   💰tip   ignore  

ITB
XHB

Homebuilders not looking so good. An early indication of a sharp decline to come? A "hard landing" perhaps?

Chart #1 is ITB: iShares Dow Jones US Home Construction
Chart #2 is XHB: SPDR Homebuilders

IYR
ICF

Broader real-estate indices have yet to turn so negative, though.

Chart #3 is IYR: iShares Dow Jones U.S. Real Estate Index Fund
Chart #4 is ICF: iShares Cohen & Steers Realty Majors Index Fund

** Important note, charts #1 & #2 have significantly less data and are relatively new ETFs, so the early part of the charts may reflect a lack of liquidity more than true underlying value.

If you're not familiar with ETFs, which is what these graphics are charting, they are simply industry-focused "mutual funds" which trade like stocks on the market. They provide a nice way to get a quick read on the health and direction of an industry or sector.

  • Click charts to see the large versions. You may have to "zoom" in your browser depending upon your screen size.
  • Traders, quants, experts, chartists, fundamentals-ists and geeks: dispute these metrics and suggest better ones.

--Randy H

#housing

« First        Comments 146 - 185 of 197       Last »     Search these comments

146   Peter P   2006 Jul 27, 4:33am  

If you live in a relatively dry area, building your house underground will dramatically curb your power bill and give your home a cave like ambience.

But underground square footage is not "legally" counted. So when you sell the house you willl have to list it as

0 sqft with BIG basement.

147   astrid   2006 Jul 27, 4:33am  

Peter P,

One day :) Right now I'm still stuck on the east coast with about a zillion mosquitoes.

148   astrid   2006 Jul 27, 4:39am  

"0 sqft with BIG basement."

(Outside of CA)Would that lower property taxes on the home?

149   astrid   2006 Jul 27, 4:42am  

I've never heard of dog meat sashimi, though I've heard of horse and beef and even pork sashimi.

Funny you guys brought up sushi. I was reading about the fresh availability of Kobe beef (incl. sashimi) in the NYTimes.

http://tinyurl.com/mczts

150   Peter P   2006 Jul 27, 4:49am  

I was reading about the fresh availability of Kobe beef (incl. sashimi) in the NYTimes.

Must be expensive. Let's hope the supply will not be interrupted again. Now let's hope that puffer fish can come in too. :)

151   DinOR   2006 Jul 27, 4:51am  

astrid,

That's a good idea! I'd heard of "earth sheltered" homes and that they can be effective in just about any climate. Hot or cold. Since the place I'm visualizing is off the beaten path and unattended for much of the year I worried vandalism/vagrants might be a real problem. Creating a "faux" home as an entry way (and decoy) might convince tresspassers there was nothing there to steal or break.

152   astrid   2006 Jul 27, 4:51am  

They were quoting 70 to 80 dollars a pound wholesale. A piece of sashimi would set you back $9.

153   Peter P   2006 Jul 27, 4:53am  

Not often. Still, it is like insurance. You pay a lot for insurance, right? The generator is like power insurance.

True. There should be a case for redundant AC too. I love redundancy and over-engineering. :)

My friend's AC broke during the heatwave and it was extremely difficult to get help fixing that.

154   Peter P   2006 Jul 27, 4:55am  

They were quoting 70 to 80 dollars a pound wholesale. A piece of sashimi would set you back $9.

Really? That is not bad, considering that domestic wagyu costs $50 - $100 a pound. There are many grades of Japanese beef though.

155   Peter P   2006 Jul 27, 4:56am  

Creating a “faux” home as an entry way (and decoy) might convince tresspassers there was nothing there to steal or break.

LOL :lol:

And you can list that as

800 sqft teardown/fixer-upper with 4000 sqft luxury, fully finished basement with hardwood floor and granite kitchen.

156   DinOR   2006 Jul 27, 4:57am  

A lot of our friends don't have A/C here in OR. Most newer homes seem to have or at least offer to install a "climate control" system but for the two weeks out of the year you might actually need it, well it just seemed like a bad "return on investment".

BUT, almost all motor homes/campers come with A/C so we know a lot of people that slept in their CAMPERS for the last few nights! It was uncomfortable, (I'll grant you that) but when it's hot you don't seem to need as much sleep. Or at least I don't. When I was stationed in the Philippines I operated off of 2-4 hours during a 24 hr. period. It didn't seem like a sacrifice at all!

157   astrid   2006 Jul 27, 4:58am  

DinOR,

Hehe, your idea is quite similar to Chinese imperial mausoleums. Since a lot of goods were buried with the deceased emperor, they would hide the entryway (and kill the builders with knowledge about the entrance) and build a separate temple nearby for their descendents to offer sacrifices.

I might be wrong, but I believe earth sheltered homes work particularly well in areas with low water table, since humidity is not a problem.

It's surprising that this idea is not more of a hit than it is. I know lots of people who spend the majority of their at home in the basement rec room/entertainment center.

158   Peter P   2006 Jul 27, 4:59am  

A lot of our friends don’t have A/C here in OR. Most newer homes seem to have or at least offer to install a “climate control” system but for the two weeks out of the year you might actually need it, well it just seemed like a bad “return on investment”.

I will install one for that two weeks. The heat really bothers me. I may not need a fireplace or even a heater though.

159   DinOR   2006 Jul 27, 5:03am  

Peter P,

We found that here too! Just when you actually needed it, the damn A/C went south on you! Most won't be repaired until after it's over.

You can go ahead and laugh, but break-ins/vandalism and "vacation" homes DO go hand in hand. In a gated community you might get some kind of response but in La Pine, OR (for example) the sheriff won't even come out and fill out a report. He'll put his feet back on the desk and think to himself "dumb ass Portlanders". (Even though we're not from Portland) in small town OR if you're not from "there" you must be a Portlander!

160   DinOR   2006 Jul 27, 5:11am  

astrid,

I had thought about the "exterior" being more a less a pavillion? Just a roof and some half walls w/a "dirty kitchen". In the P.I dirty kitchen usually implies a place where chickens are plucked and pigs are gutted (hence the term). I don't mean to sound like a security freak but think about it. With 40% of the homes sold in 05 being vac./2nd/specuvestor homes how many will be abandoned? In eastern Oregon they actually have had cases of "squatters" moving in! Typically small time criminals and vagrants but MAN do they make a mess of the place!

161   astrid   2006 Jul 27, 5:11am  

Electric fans seem to be effective cooling until the temperature hits about 90 in humid heat and 95 in dry heat. I actually prefer it to air conditioning since it cools me just the right amount. When I was young and in Shanghai, we didn't even have electric fans until about 20 years ago, and AC units only started becoming available in the mid 90s. Before that, everyone just sweated the summer out with fans and wet towels...obesed people can't survive in that environment.

DinOR,

I do believe you. Vacation home break in is no joking matter, and it's another thing that makes owning a vacation home impractical for most people (who only have a week or two of paid vacation time anyways). And just wait until the economies in these towns become depressed when the housing bubble goes away!

162   Peter P   2006 Jul 27, 5:15am  

When I was young and in Shanghai, we didn’t even have electric fans until about 20 years ago, and AC units only started becoming available in the mid 90s.

But now the AC industry in China is huge.

163   astrid   2006 Jul 27, 5:18am  

I was thinking of a used trailer or some sort of small cabin kit for the fake home. Install a kitchen (old electric everything, so they don't screw up the gas lines and blow things up) and a laundry unit, and some cheap platform beds. No HVAC at all. No insulation. Single pane windows. The place should be as unwelcoming for squatters as possible.

164   astrid   2006 Jul 27, 5:21am  

Yeah, everybody in Shanghai has a unit now. Everywhere I walk I get the drip drip of AC units splattering on me. The rate of modernization there is incredible and then people act like they lived with these things their entire lives. Keeping any of my cousins from a shower everyday or AC or cell phone or soap opera of their choice is like torture to them.

165   DinOR   2006 Jul 27, 5:26am  

astrid,

Oh absolutely! Especially here in OR where so much relies on tourism. In fact, I hear they're complaining already.

I actually like those little "cabin in a box" kits. Some are designed to be assembled in a weekend with 3 friends and a case of beer. I wouldn't count on putting too much of anything of value in a vac. home anyway. When we were kids it was pretty common to have a cooler substitute for a fridge anyway.

166   Peter P   2006 Jul 27, 5:32am  

With the threat of rolling blackouts, isn't it prudent to install backup generators?

167   DinOR   2006 Jul 27, 5:39am  

Peter P,

You mean like they had back in, what was it? 2000?

168   Peter P   2006 Jul 27, 5:43am  

You mean like they had back in, what was it? 2000?

Something like that. The market is heating up here though. It is not outrageous to say that it is 1999 all over again in at least some segments.

169   DinOR   2006 Jul 27, 5:48am  

I had thought that much of the brown-outs in CA were due to market manipulation from the power "traders" like Enron etc? There never really was a supply or a logistic problem or was there?

170   Peter P   2006 Jul 27, 5:51am  

There never really was a supply or a logistic problem or was there?

People just do not like new power plants. I thought it is best to have 30% extra capacity beyond peak usage. Obviously, there is a supply problem.

Or, perhaps there is a pricing problem.

171   DinOR   2006 Jul 27, 6:01am  

Conor,

That is a HUGE increase! CA's pop. hasn't grown THAT much in 5 years has it? Not from the data I've seen. How do we explain this over the top demand?

172   StuckInBA   2006 Jul 27, 6:05am  

... providing further evidence that the once-booming housing sector is slowing.

Maybe it's just me. But I am SICK of this half sentence that gets added in EVERY news report. Can't they use different words ? I mean apart from replacing "once-booming" with "previously red hot".

It feels like yesterday, when I was feeling like reading day before yesterday's news.

173   astrid   2006 Jul 27, 6:07am  

DinOR,

I'm just guessing, but all those new houses in HOT Central Valley and SoCal's high desert can't be helping. The McMansion trend may be a contributing factor.

174   requiem   2006 Jul 27, 6:17am  

Some time back I took a mental accounting of how much of stuff would keep working in an outage. (Between laptop computers and UPSen for the server, net connection, replayTV, etc., the only real danger would have been to the fridge. (Cook on the grill, etc.) No AC, but the house still stays reasonably cool.

On underground homes: I think many people think that they'd be claustrophic underground, without windows, etc. Personally, I love the idea. Light bars and fiber optics should be able to channel daylight into the rooms to create a proper ambience, and proper decorating (plants, mirrors, etc) can create the felling of spaciousness without using windows.

My goal would be to have the above-ground nicely landscaped (park, English garden, etc) with an entrance that was almost just a doorway. Ideally, get David Copperfield to design an entrance that looks like a doorway to nowhere, but when you walk through it the right direction, you go downstairs.

175   Peter P   2006 Jul 27, 6:20am  

Some time back I took a mental accounting of how much of stuff would keep working in an outage. (Between laptop computers and UPSen for the server, net connection, replayTV, etc., the only real danger would have been to the fridge. (Cook on the grill, etc.) No AC, but the house still stays reasonably cool.

Get a 25 kW generator and everything will still work. :)

You will still have to "UPS" your computers though, as the generator takes 60 seconds to kick in.

176   DinOR   2006 Jul 27, 6:24am  

To BA or Not to BA,

How about this one?

"In yet ANOTHER sign of a cooling housing market"

That seems to be Bloomberg's Suzie Assad's favorite. I used to work for this dickhead sales manager (oh, I suppose that was redundant) that ALWAYS used the phrase; "Having said that". Or "That said" and it was completely maddening! We used to joke around the water cooler and create entire meaningless paragraphs around his limited vocabulary! Even today, the guys that worked there know exactly who you're mocking when you do that. Conversation going a little slow? Just toss in a few "that said" or "having said that's" and you're bound to get things livened up in no time!

177   astrid   2006 Jul 27, 6:26am  

I think once we start producing cost effective, long lasting fuel cells, most things we value can continue to work without plug in electricity.

I like underground homes and inward looking urban homes a lot. They give their owners a lot of control over their environment and achieve the feel they want. Besides you look at most suburban subdivision homes and townhouses, 80% or more of the windows have blinds down or window treatments.

178   astrid   2006 Jul 27, 6:30am  

English style gardens are hard to keep though. A combination of desert plants and Mediterrean climate plants (esp. Australia and South Africa) will give better results in the West.

179   DinOR   2006 Jul 27, 6:30am  

requiem,

So true. If I were a lot younger living underground would drive me batty. Once you've seen the world (and are pretty sure you've seen enough) it seems like so much less of a sacrifice. Besides, I've heard that they are near silent! No neighbors dog yapping, sirens, boom boxes etc. I'm sure I couldn't afford David Copperfield but I understand there are in ground homes that we drive past all the time and never even notice.

180   DinOR   2006 Jul 27, 6:38am  

MA,

If you had used that phrase I sure didn't notice. What I'm talking about is an extreme situation. Maniacal. The guy whipped it out before you could even finish answering the question he JUST asked you! It was more like tourette's syndrone (or something like that?) Uncontrollable and inappropriate outbursts!

Mostly I think it was he laziness and unwillingness to communicate genuinely with people. The guy was a total mooch. When we figured out we were getting the axe anyway we just totally drug our feet until we knew we'd be fired (collecting a meager salary) just to hear this guy have one of his foaming at the mouth "that said" fits! I hear he got fired not long after. Prick.

181   DinOR   2006 Jul 27, 6:39am  

-he
+his

182   DinOR   2006 Jul 27, 6:57am  

MA,

I do hear ya' believe me. What I was thinking is that my "lair" would be at an undisclosed location just outside Las Vegas. So sun would be in abundance.

183   requiem   2006 Jul 27, 7:03am  

Mediterranean plants would be good; I remember how much Italy resembled the Central Valley when I was there.

I'm not sure how far down you need to go for proper insulation; the larger caves I've been in (Moaning Cave, California Caverns) maintain a year-round temperature of around 50-60°F. Of course, they're also deep enough to be unaffected by earthquakes, or so say the guides.

184   astrid   2006 Jul 27, 7:04am  

Maybe a big ole fiber optic cable running to the surface? You could have the sun provide light during the day and then supplement with other lights at night.

185   astrid   2006 Jul 27, 7:08am  

Las Vegas in the summer would be miserable though. You really can't be outside during day light hours.

requiem,

I think you'd only have to go down 5 or 6 feet. Most underground homes seem to be quite near the surface. I guess earthquake could be a problem in places with high water tables or loose soil...

Coastal California is actually very plant friendly, but growing roses, lilies, and rhododenren is always quite a bit of work, even in ideal weather.

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