patrick.net

waiting_for_the_fall says

"reflect your dipshit notion."

"you are a raving moron."

"Idiots like you"

Must have really hit a nerve there sport. Even hinting that prices will drop makes you go rabid. Baiting you into one of your rants is far too easy.

I purchased 2 investment homes in 2011 that increased by more than 30% since I bought them. But I am smart enough to recognize a bubble and not expect my paper wealth to continue when prices correct as interest rates rise.

My investment homes are for retirement income, not used for bragging on a blog about how other people that didn't buy are losers.

Amen.

I really dislike it when he takes over a thread with all the angry, defensive name calling.

Logan Mohtashami says

With this trend we could see 7.5 months of on sale inventory in 2014

I don't see that trend. It looks like inventory (months) rose slightly, as usual, during the spring season. The YOY change in inventory is still negative. What trend are you looking at?

At the pace of the uptrend now, it looks like to me we can get 7.5 month of on sale inventory at some point in 2014

With these metrics looking better in 2014

- More construction from new homes (SFR)
- More homes coming from distressed ( we still have 4.5 million homes that are either in foreclosure or in delinquency)
- With home prices rising back to back years you will have a better equity seller profile in 2014 than 2013
- Also, can't actually give a number for this, "Investors" will add some more supply to the market place.

I didn't believe the inventory cycle would come back in a big enough fashion in 2013 to make a difference as we are still below 2012 levels. However, the economic profile for 2014 looks better than 2013 for more supply.

http://loganmohtashami.com/2013/02/27/housing-inventory-hangover-will-continue-in-2013/

not sure where you are getting your "employment" figures from, but they are wrong.

You can't just inverse the unemployment claims graph and declare that actual employment has gone up...

source : http://data.bls.gov/pdq/SurveyOutputServlet if you look at 07 - current you can see just how bad the employment situation really is...

then look at a graph of inflation adjusted income (down) and per capita housing (up) and the fundamentals still don't look great. what the market has going for it is squatters & neg equity owners which is forming a shortage of sellers, which will prop up prices... I expect an bubble (much smaller this time) but i am over simplifying things. the american psyche is a hard one to calculate.

:)

I believe that chart you're showing is this metric

Where the jobs chart above is correlated to the BLS numbers and total employment rising. So it's 2 entire different metrics
So it's taking the actual numbers of job created to show the rise since the bottom point of the cycle correlated to the chart

To your another point Alex

YOY disposable per-capita income is up 1.45% , if you adjust it for inflation, its only up 0.43%.

Why is "pent up demand", from buyers whose credit is screwed, a totally realistic and quantifiable number when.......

The concept that banks were holding back unmeasureable inventory(unmeasureable because no action was taken when the person listed on the mortgage stopped paying) was total made up fantasyland bs?

dodgerfanjohn says

The concept that banks were holding back unmeasureable inventory(unmeasureable because no action was taken when the person listed on the mortgage stopped paying) was total made up fantasyland bs?

Because it is 100% measurable. Delinquent mortgage statistics are freely available.

tatupu70 says

dodgerfanjohn says

The concept that banks were holding back unmeasureable inventory(unmeasureable because no action was taken when the person listed on the mortgage stopped paying) was total made up fantasyland bs?

Because it is 100% measurable. Delinquent mortgage statistics are freely available.

Not if the banks were not recognizing them. Cmon, theres been countless examples posted of homes that went 3-4 years from first missed payment to when they actually got listed on MLS.

robertoaribas says

because lots of people who lost homes to foreclosure or short sale actually want to buy. Many will again, when they can. In fact, just this week, one of my tenants declined to renue their lease, and opted to go month to month, because... guess what? it's been 3 years since their short sale and they think they can get qualified now.

This "shadow inventory is going to swamp the market" meme has been the go to for all of those unable to think or do research for years. In reality, the numbers are public: corelogic has their numbers for non performing loans; ditto the credit agencies, ditto the banks own required SEC filings. Some of us do research, others just quote bs that they wish would happen. Let's all wait and see who (continues) to be right?

I know more people whose credit is screwed up beyond the house falling off their report. IOW, people who walked away, short sold, etc are HIGHLY likely to have other credit issues as well.

The swamped thing...I wasn't really alluding to that. Clearly with rising prices, fewer homes will go into foreclosure simply because the owners are above water. I was more alluding to the fact that you claimed in the past that since the banks refused to recognize missed payments, those homes simply didn't exist as shadow inventory yet somehow now you can claim some quantifiable number of "boomerang buyers".

dodgerfanjohn says

Not if the banks were not recognizing them. Cmon, theres been countless examples posted of homes that went 3-4 years from first missed payment to when they actually got listed on MLS.

Those are still counted. They'll be 6+ month delinquent.

actual employment is a much better indicator , because as you pointed out it takes into account the growing population, it also excludes those over 65 , so it naturally adjusts to our aging population...

our population has grown ~11% from 01 to 2013
our housing has grown ~23% in the same time frame

Official government reported inflation (which social security and other benefits are tied to) has been very low as of late. 1% for a while..

actual inflation on the other hand :

http://www.forbes.com/sites/davidmarotta/2013/05/01/cpi-inflation-rate-calculator-experienced-vs-reported/

.. I'm not saying i'm disagreeing at all that there really are no side-line buyers waiting in the wings.

I'm just saying you are playing loose and fast with your graphs. you are playing the game to make stats say what ever you want.

I do think we are recovering, employees on payroll are slowing going up, wages are slowly going up, inflation is staying low, though the average worker is losing ground. the housing market has done a large correction. I do agree disposable income is improving, and will continue to improve, which is really the most important thing to a consumer based economy. but i think most of the improvements are from people downgrading their housing costs. squatting, short selling, foreclosures.

so i agree with a lot of what you are saying, i'm just taking issue with how you are saying some of it, and i'm reaching some of the same conclusions, perhaps, though because of a different look at things.

seems to be more people in this thread so eager to disagree with everyone else they can't even take time to read what's been written.

I believe in the context to the original discussion with that chart, it was showing that the 4 economic indicators were rising

However, if you add the mortgage purchase application chart, even with a down trend in rates the pick up has been soft

We really have no wage growth inflation push the CPI index to move higher. However, we do housing inflation for sure

2014 will be interesting to watch the Data kick in

In regard to jobs, we all know the story there. Declining participation rates since 2000 due to the Demographics, and a massive rise of people going back to school. A lot of jobs coming in are low paying jobs so even though the monthly job average number is better in 2013 than in 2011 and 2012 the incomes of those jobs will have a hard time catching up with the housing inflation we are seeing.

I see Robertos 80k shitshack that he said was worth 80k earlier this year is still worth 80k.....might have even said it was worth that much last year lol!

robertoaribas says

So, while it points out that the recovery is not strong, at least in employment yet, there are several factors making it not as bad as you think:

2. The population is aging. One would expect this percent to become lower slowly through the years, due to much longer life expectancy and the retirement of the baby boomers.

Roberto, not as bad as he thinks? The charts and information provided thus far do not contain "all the details" that are needed to come to that conclusion. The worst part about the whole situation is the fact that (which is repeated on MANY financial sites not run by MSM) Most (not all) of the jobs lost since '06 have former employees returning to the workforce with MUCH lower compensation than they received pre-crash/recession.

To your second point, take a look at the chart Logan posted above. They're supposed to be retiring correct? Yet they are the two sections represented in that chart that have seen significant employment growth over the past 12.5 years........

It hasn't been pretty, however, in historical sense it really takes a country 9-12 years to fully recover from a financial depression.

robertoaribas says

Full time jobs are growing, just much more slowly, so it isn't like we are shedding full time jobs and turning them into part time jobs.

Actually that's exactly what's happening. Millions of people are being cut back to part time to keep employers from having to provide coverage under Obamacare. Other people are being hired to fill in the gaps.

Logan, see how you have been vindicated with the numbers released today.

A 1.2% drop in starts caused solely by interest rates rising.

I hope they double, triple, quadruple. Who needs social mobility.

Obviously a 300% increase in PMI is not screwing the middle class enough, force them to work two part time jobs, pay 29.99% mortgage rates and a 1000% PMI and be thankful you live in a 200 SQFT show box. As you can see it will be a felony to eat and sleep, panhandle on the streets.

http://thedailypr.com/miami-considers-jailing-homeless-people-for-eating-sleeping-in-public/

puhim says

Logan, see how you have been vindicated with the numbers released today.

A 1.2% drop in starts caused solely by interest rates rising.

That's a bit of speculation there. 1.2% is noise. Attributing a cause is a bit presumptuous.

tatupu70 says

puhim says

Logan, see how you have been vindicated with the numbers released today.

A 1.2% drop in starts caused solely by interest rates rising.

That's a bit of speculation there. 1.2% is noise. Attributing a cause is a bit presumptuous.

Really? I guess your not watching the markets. I can drill down a lot further with the economic data at my finger tips than most.

1.2% is not noise. It's also under the real figure. Way under.

You know what just keep believing that everything fine, nothing to see here.

Logan Mohtashami says

It hasn't been pretty, however, in historical sense it really takes a country 9-12 years to fully recover from a financial depression.

You need to take into consideration the "JAPAN SYNDROME"... Look we have all become Japan.

Japan will never recover and neither anyone adopting the same mental polices.

Only the death of the unemployed like the deaths during WW2 will create a recovery. . Perhaps that is their plan?

How's your rental property doing now?

To be honest, today's sales report wouldn't have the full impact of the rising rates.
A more realistic number to get the impact of rising rates is going to be the August and September reports.
All Pre Q's starting in mid June and July would have the rising rates in them, if the buyer could qualify. Some buyers were Pre Q'd in March April and May
In the short term the Mortgage Applications is only clear data we have. The refinance index has just be destroyed

However, also the purchase application have had a recent negative trend as well. I believe they were at at 14% increase YOY and now down to 5%. So, the next few months of data should be interesting

Japan... Ughhh... Can they ever get inflation before demographics just destroy them... Data is a bit old but you get the Drift

The size of their QE simply is just Godzilla QE

Hey Logan,
Don't think that us sideline buyers don't exist because we do, although we may be in small numbers. It is just that we are not going to throw good money after bad. I am quite willing to give the market up to 5 years to correct. Even though I could buy right now in the RBA I choose not to because interest rates are low and home prices are high. It is my understanding that you can always renegotiate the price of the money you borrow but the sellers will never renegotiate the price of your debt. Plus, the opportunity cost of buying right now is to high. If I the market doesn't correct in the next 5 years, I can still move and buy a home cash for the same amount I would use on my down payment.
Most sideline buyers can see the righting on the wall, home price in CA are to high and if they don't correct there are plenty of opportunity out there in other markets.

"On an annual basis, the Zillow Home Value Index (ZHVI) rose 5.8% from June 2012 levels"

http://www.zillowblog.com/research/2013/07/22/2013-spring-selling-season-was-hottest-since-2004-as-recovery-accelerates-widens/

FHFA reports prices up 7.3% increases from last years, back to Jan 2005 levels, just 11.2% below the 2007 peak

http://www.fhfa.gov/webfiles/25364/MonthlyHPIMay072313.pdf

At the peak of the markets in 2007 the 10 year was at 4.7%
At the peak of the markets in 2000 the 10 year was at 6.2%

Today we are at 2.52%

Who drew those trend lines on the GDP charts? They need some help...

tatupu70 says

Who drew those trend lines on the GDP charts? They need some help...

Who else could have but the infamous Lance Roberts!

tatupu70 says

Who drew those trend lines on the GDP charts?

As Bubbabear said... Lance

http://streettalklive.com/

Numbers out today from MBA:

The Refinance Index decreased 1 percent from the previous week driven by a 12 percent drop in the Government Refinance index while the Conventional Refinance index rose by 2 percent. The Refinance Index is at the lowest level since July 2011. The seasonally adjusted Purchase Index decreased 2 percent from one week earlier.

A better chart to reflect the higher rate impact on purchase apps

I like the godzilla & monster picture. :)

the part time vs full time graph is also very telling.

so incomes are flat or down. # of employed is down, # of houses is up, new housing starts is down ...

wonder which way home prices is gonna go ? (long term) soon as banks get solvent enough to do mass foreclosures ... we will be in for a rocky ride

Alex Rademacher says

wonder which way home prices is gonna go ?

Rates will continue to climb followed by supply / demand reversal...

Per LPS: Today

June “First Look” Mortgage Report: After Five Consecutive Months of Declines, Delinquency Rate Sees Seasonal Spike of Nearly 10 Percent
LPS’ June “First Look” Mortgage Report: After Five Consecutive Months of Declines, Delinquency Rate Sees Seasonal Spike of Nearly 10 Percent

Number of properties that are 30 or more days past due, but not in foreclosure: (A) 3,328,000

Number of properties that are 90 or more days delinquent, but not in foreclosure: 1,345,000

Number of properties in foreclosure pre-sale inventory: (B) 1,458,000

Number of properties that are 30 or more days delinquent or in foreclosure: (A+B) 4,785,000

The timeline to get these homes to market is just too long.
Plus with the Robo signing settlement and the CA home ownership Act in place. A loan Mod and short sale will be the first 2 lines of options before foreclosure

judicial timeline are still long as well

tatupu70 says

Logan Mohtashami says

With this trend we could see 7.5 months of on sale inventory in 2014

So... in this thread, you predicted 7.5 months of inventory in 2014. How did that turn out?

Also, at least at this time, you seemed to know that high inventory would be bad for prices, but now you claim something different, that today's low inventory doesn't matter.

seriously, you are an empty suit. Look good, know nothing!

youareworthless says

that today's low inventory

Today's under 6 month inventory gives legs to pricing

But the context of the discussion was ..... People have used the low inventory to say that is why housing demand has been held back in this cycle.

My thesis is very simple

We have

Higher inventory
Lower rates
Higher Wages
Long expansion growth cycle

Still... demand is much less now than in housing ....

Come on you're better than this....give me something more juicy