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Something Doesn't Add Up Here


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2007 May 14, 3:25am   20,099 views  207 comments

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John Burns Real Estate Consulting has put out in their monthly newsletter that housing if falling faster than is being reported.

The housing market has softened much more than is being reported. We have been advising our retainer clients for more than one year about misleading national sales information, both with the Existing Home Sales and New Home Sales data. We are now going public with our concerns because we are concerned that policy makers are relying on national data to conclude that the housing market correction has not been severe.

Here is our support:
Closing Data: We purchase and compile actual home closing data for approximately 181 counties across the country, which captures the counties where about 55% of the U.S. population lives and a significant percentage of all of the counties where the large home builders are active. This data shows that sales have fallen 22% if you compare sales over the last 12 months to the prior 12 months. On a straight year over year comparison, the decline is much more.
Mortgage Bankers Association (MBA) Data: The MBA Seasonally Adjusted Purchase Application Index, which is a measure of the number of people filling out loan applications to buy a home, is down 18% from its peak in September 2005.1 With presumably more applications being filled out by borrowers who now have to shop around for a loan, how could sales have fallen by less than 18%?
Builder Data: The nation's two largest homebuilders, D.R. Horton and Lennar, are reporting that orders have declined 27% to 37%, year-over-year. 2 3 D.R. Horton and Lennar have dropped prices significantly in many markets to generate sales, while the resale market has not. How could their sales have fallen more than the resale market, even if new home communities tend to be in fringe areas?
Realogy Corporation Data: Realogy, which is the parent company of Century 21, Coldwell Banker, and ERA, participated in roughly 1.9 million brokerage related transactions in 2006 compared to 2.3 million in 2005, representing a year-over-year decline of 18% nationwide.4
2005-2006 NAR State Data: The National Association of Realtors state data does show sharp year-over-year corrections in major states: 28% drop in Florida, 24% drop in California, and a 28% drop in Arizona. Our data, however, shows the sales have probably dropped by 34%, 27% and 38%, respectively. The national numbers include some large states where sales volumes have not corrected substantially, such as in Texas and Ohio, but we believe these markets are not very healthy for other reasons. Interestingly, our calculations were tracking very closely with NAR data through 2005, as illustrated above. We did investigate NAR methodology and have found absolutely no reason to believe that the NAR is intentionally misleading anyone, as some have suggested.
New Home Data: The Census Bureau calculation of new home data does not calculate sales net of cancellations, and cancellations are running much higher than normal right now, which is why the sales numbers overestimate actual sales.

The preponderance of evidence shows that the housing market in vibrant areas where home building is prevalent has corrected much more than some people believe it has.

In summary, we believe that the Fed should know that the housing market correction has been quite steep and is also not showing signs of bottoming out, as evidenced by all of the above information, as well as significant additional research we have conducted. While the Fed has far more to consider than housing, they should know that the housing market could sure use some lower interest rates to help achieve stability soon.

This is my favorite quote "We did investigate NAR methodology and have found absolutely no reason to believe that the NAR is intentionally misleading anyone, as some have suggested. "

Um, yeah.

Overall I love this article though. I think we'll see much more of these types of reports as time goes on. I really think that people don't realize the magnitude of the boom and bust cycle we're in. Most people I talk to are much more pessimistic about housing than they were just a year ago but there is still this feeling that the market will be on an upswing in the near future. Articles like this make that seem unlikely.

Here's the link to the full article

SQT

#housing

« First        Comments 169 - 207 of 207        Search these comments

169   astrid   2007 May 15, 1:19pm  

GC,

Also, might want to talk about unresolved regret about not taking that pre-IPO Google job...*

But really, I admire your life. You work very little and at a job you somewhat like. You make enough money to live comfortably and spend lavishly on food. You went to the university my father would likely have attended if he wasn't interrupted by the Cultural Revolution. You seem to have enough friends and associates and attention from relatively attractive women. You have a great life!

*not constitute therapeutic advice, blah blah blah.

170   astrid   2007 May 15, 1:26pm  

FAB is an advocate of the top 5 biz school or you're out theory. I have no experience so I can't tell.

Depending on where you work, big law firms are a little more forgiving about law schools.

171   FormerAptBroker   2007 May 15, 1:33pm  

astrid Says:

> FAB is an advocate of the top 5 biz school or you’re
> out theory. I have no experience so I can’t tell.

I've always said to try for a top school (even top 20), but if an English major wants to go in to business I think they can learn something at any business school (even a JC at night paying $5 a unit)...

172   skibum   2007 May 15, 1:59pm  

Here's an interesting tidbit - a potential scam related to the housing bubble has hit the "fortress," including Palo Alto, Portola Valley, and Los Altos:

http://www.mercurynews.com/realestatenews/ci_5898867?nclick_check=1

173   HARM   2007 May 15, 6:07pm  

Harm,

I believe it prevented me from finding work in ‘02/’03 as I was percieved as too expensive. There was also no support from my school (intentially left nameless) while looking for employment. When I took the MBA off my resume I started getting calls and interviews. It could be coincidence but I don’t think that’s the case.

Also, I’ve had confirmation by a current coworker of the success via MBA deletion theory.

Paul,

Interesting. I had almost the exact same experience after I completed my MS in the early 90s. It seems to work against you when you are a fresh-out-of-college neophyte and not a member of the "Club" (you know, the families who tend to join Skull'n'Bones, get their names in the tabloids, etc.). I wasn't getting any callbacks at first, then got the same idea, took it off my resume and started getting called. I left it off for several years, until I started going for more senior positions.

Once you have significant real-world business experience under your belt, I think your MBA will come in handy, but probably not before then.

174   astrid   2007 May 15, 11:11pm  

GC,

I don't think you understand my boyfriend or me very well. That's all I have to say.

175   Peter P   2007 May 16, 2:28am  

lazy people are the most helpful ones in times of crisis.

If you can find a way to motivate smart but lazy people, they are your biggest asset.

176   astrid   2007 May 16, 2:43am  

On somedays, talking to my boyfriend is akin to banging my head against a wall repeatedly. I accumulate a headache and absolutely nothing happens.

177   astrid   2007 May 16, 2:48am  

Peter P,

Smart but lazy people are a pain in the ass to manage. Even if you get them momentarily motivated, they're liable go back to their lazy ways.

The bright side is that they're often too lazy to look for more renumerative work.

I guess stupid but lazy people are even worse. Followed by stupid and hypercontrolling people. Followed by stupid, hypercontrolling, passive-aggressives -- maybe that how my boyfriend sees me (okay, so this might be a bad day for me).

178   astrid   2007 May 16, 2:49am  

Peter P,

Smart but lazy people are a pain in the ass to manage. Even if you get them momentarily motivated, they're liable go back to their lazy ways.

The bright side is that they're often too lazy to look for more renumerative work.

I guess stupid but lazy people are even worse. Worse than that are stupid and hypercontrolling people. Worse than that stupid, hypercontrolling, passive-aggressives -- maybe that how my boyfriend sees me (okay, so this might be a bad day for me).

179   Peter P   2007 May 16, 2:53am  

Worse than that stupid, hypercontrolling, passive-aggressives — maybe that how my boyfriend sees me (okay, so this might be a bad day for me).

You are not stupid. How are you hypercontrolling? Do you ban certain food in your boyfriend's diet?

180   Peter P   2007 May 16, 4:19am  

The post was visible for a while and then it got deleted???

Really? Can you post again?

181   astrid   2007 May 16, 5:37am  

Thanks... :)

I am exaggerating somewhat. He and I live on opposite coasts, after all.

He likes my cooking. If anything, I overfeed him

The problem is that we had basically agree in principle about what he'll do for the next couple months, but...I feel that he's squandering all his break-from-work time on his fantasy baseball leagues and analyzing network TV programming

Yesterday I asked him to set himself some firm goalposts for the goals we discussed and the phone call basically degraded into me asking him to call me when he's REALLY made up his mind.

182   Peter P   2007 May 16, 6:45am  

In the rest of the world, sports are more of a social thing, as opposed to an addiction in this country.

I heard that in Europe there is a mythical sport called "football" in which a spherical object is kicked around.

183   astrid   2007 May 16, 7:01am  

GC,

Thank you very much, but I think I'll pass on your relationship advice.

184   Peter P   2007 May 16, 7:12am  

How can I become a poliburo member of this board?

When the time is right you will know.

185   astrid   2007 May 16, 9:32am  

"He seems to make you feel bad about yourself."

Generally, it's because he's irritatingly well adjusted and rational.

186   HARM   2007 May 16, 10:50am  

How can I become a poliburo member of this board?

The Patrick.net Politburo just wrapped up one of our weekly world domination planning sessions, but the word is still "no membership for GC", very sorry :-( .

However, you are always welcome to register and request thread-starting rights from Patrick.

187   Peter P   2007 May 16, 3:35pm  

Now don’t go giving him any ideas.

Anyone can request. But Patrick has the absolute power here. ;)

188   astrid   2007 May 16, 9:57pm  

Harm, I'm coming around to your view on the other thread. GC is either playing out some parttime antisocial personality online or he really needs help. Generally, I prefer erasing offending posts over banning if the person has some valid things to say, but even I have my ceiling on online Borat impersonators.

189   Listening   2007 May 17, 5:33am  

The clique dominating this board that is, oh so cool, and oh so sophisticated, and oh so witty, has created a suffocating environment.

The result-

Oh so boring!

190   HARM   2007 May 17, 10:10am  

justapeon,

We at the Patrick.net Politburo have taken your critique under careful consideration and have expansively debated the ramifications thereof, in a specially convened joint session with the Trilateral Commission. After thoughtful deliberation, we have come to the unavoidable conclusion that you are a tool.

But we thank you for your contribution. :-)

191   Paul189   2007 May 17, 11:32am  

Harm,

Thanks for the note.

Paul

192   astrid   2007 May 18, 4:40am  

SQT,

I'm sorry that I sometimes give off a bad impression of my boyfriend as somehow highly critical or very flawed. Generally speaking, he is a great person be around and someone who stuck by me through lots of bad times.

Right now is one of the rare times when he's bringing conflict into our relationship. I'm a little worried about him and I feel powerless to help him make up his mind and move forward, so that's mostly what I'm venting here.

193   Listening   2007 May 18, 5:39am  

"HARM Says:

May 17th, 2007 at 5:10 pm
justapeon,

We at the Patrick.net Politburo have taken your critique under careful consideration and have expansively debated the ramifications thereof, in a specially convened joint session with the Trilateral Commission. After thoughtful deliberation, we have come to the unavoidable conclusion that you are a tool.

But we thank you for your contribution."

Thanks for proving my point.
Enjoy your chosen mental prison!
And pleeeeese shadup about your boyfriend, Astrid.
Oh, go ahead. I'm not coming back.
Your a bunch of bores.
Do you ever wonder why there are so few that hang out here?
Of course not. You are oblivious.
Enjoy your requisite witty, sarcastic ,parting comments!
You are all so clever!
Bye bores!

194   Peter P   2007 May 18, 5:41am  

Astrid, conflicts are not all bad. Life is boring without some conflicts, right? Resolution is the key.

Just give him some time.

195   astrid   2007 May 18, 11:31am  

Peter P,

That's what I'm hoping for. I am worried though. He's already had two months off and did virtually nothing. He really should be taking summer classes (which he has refused...fine), take the patent bar and study for the LSAT with the free time he has this summer. He agrees with me in principle, but then everytime I call, he's still not done anything.

But it's best not to push him. He did say he had a dream about working the other night. Maybe it just takes a long time to get focused again.

Would be much better if he didn't have fantasy baseball though (at least the TV season is over).

GC,

Since no one left here is likely to be easily offended, I'm not going to ask that comment to be strucken...but it is in extremely bad taste. And if you asked it offline, you deserve to have a drink thrown at you.

And I don't answer that kind of questions, online or offline.

196   Peter P   2007 May 18, 11:39am  

Astrid, sometimes it pays to sit back and think hard about the next step.

I practically squandered seven years of my time working in the wrong career. And I am still doing that.

But it is fine. Even though I am getting old I am still young.

197   astrid   2007 May 18, 1:19pm  

Peter P,

I know. That's why I feel bad about it and I'm giving him space.

I'm not very tolerant of indecisive characters, that's probably what's irritating me the most. I would feel better if he decided to be a subway musician or mountaineer. -- that would be absurd, but it would be something. It's the unwillingness to act or think...(breath, give him more time...well, we'll see)

198   astrid   2007 May 18, 1:25pm  

GC,

You already declared everything women say to be rubbish, more or less, so I'm not surprised by your response. As it is, although my boyfriend has a minor in German, he has no interest in Nietsche.

Anyhow, good luck with your search for a sugar mommy who'll put up with your neuroses. I know I won't be a candidate.

199   Peter P   2007 May 18, 5:59pm  

I’m not very tolerant of indecisive characters, that’s probably what’s irritating me the most.

You mentioned he is a Gemini, right? I afraid indecision is something you have to live with.

However, you can also help with the decision making. Who says that the man has to decide on everything? :)

200   Malcolm   2007 May 19, 10:05am  

I like playing sports just for the activity. I actually think people who waste half of a Sunday watching someone else play on TV and then actually yelling at their wives when their team loses is pathetic. One of my friends (actually a very bright guy but...) has instilled such an importance on Charger's victories that his little boy cries when they lose. That is so stupid it makes me question who I hang out with.

201   astrid   2007 May 19, 10:57am  

SQT and Peter P,

Thanks.

202   Peter P   2007 May 19, 12:47pm  

My favorite golfer has not won in a while. :(

I want his swing.

203   astrid   2007 May 19, 10:23pm  

"Nigel Swaby"

If you're the real Nigel, which doesn't seem to be the case based on your IP address and email address, get lost. I think there's pretty universal agreement here that you are persona non grata.

If you're not, consider distinguishing yourself from that Nigel Swaby.

204   Malcolm   2007 May 20, 4:39am  

Nigel,
I suppose the masses need to feel involved in something. It really is easier than taking their kids fishing. Just sit around and get drunk for 1 out of their only 2 days off, and immerse themselves in something that they have absolutely no control or stake in. Then the next weekend comes by and they get to have that nail biting experience all over again, while being told that their lives won't be complete unless they get the new Chevy Tahoe.

205   astrid   2007 May 20, 10:31am  

I just wish I was a better uphill hiker. I hiked Dark Hollow Fall yesterday and I was absolutely pathetic. Right now, 75 year old ladies with one bad knee could probably outhike me.

206   Peter P   2007 May 20, 4:47pm  

Right now, 75 year old ladies with one bad knee could probably outhike me.

You can outhike me.

207   astrid   2007 May 21, 2:06am  

Peter P,

Consider hiking in China. Then you can hire a sedan to carry you all the way to the top. :)

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