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Dave Kranzler  

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  • Why Rental Housing Is In Danger Of Collapsing [View article]
    Furthermore, sorry but I have more facts here, the FHA share of the mortgage market hit a two-year high in Q2 this year:

    That represents a lot of first time buyers who are using a 3% down payment mortgage from FHA to buy a house they really can't afford to maintain. I see this happening all over Denver and know some young couples who have been sucked into home ownership because of the allure of a cheap mortgage. Many of them borrowed to make the down payment so they don't have ANY skin the game.

    Anyone who bought a home in Denver in 2015 this way is now underwater because the price reductions across the board in the market are spreading like the bubonic plague.
    Oct 4, 2015. 11:14 PM | Likes Like |Link to Comment
  • Why Rental Housing Is In Danger Of Collapsing [View article]
    Yes,great point. Let's do look at average down payment for mortgages. I'm glad you brought that up because you don't investigate the facts.

    The data is available thru Q1 2015. The average down payment of Government-backed loans, not including VHA which are 0% down required, fell to 3-yr low of 14.8%. This about where it was in the middle of the housing bubble 2005-2008.

    HOWEVER, the share of 3% or LOWER down payments jumped to 27% in Q1. The share of no down payment/3% down payment purchase mortgages has been lower since Q2 2013 than at ANY TIME in the last decade.

    And down payments now are defined to include gifted money OR seller concessions. The number of mortgages in which the buyer puts up NO money is even greater than what is shown in the numbers that get reported.

    In the metro Denver area - one of the hottest markets in the country - because of themonth to month (not yr/yr) price declines since June, anyone who bought a house this year thru June and used a 3% or less down pmt mortgage is now underwater. By the stats, that means at least 27% of all buyers this year thru June.

    In other MSA's it's worse. Thanks for bringing up this point because the perception out there thanks to media disinformation and propaganda is wrong vs the facts.

    The fact is the credit profile of the average buyer now is WORSE than it was at the peak of the bubble. And many buyers now either defaulted and/or were foreclosed on previously the first time around (in the big bubble years).

    Here's the data:

    And that's thru Q1 2015. Those numbers have deteriorated considerably since then based on the data that is available on a monthly basis.
    Oct 3, 2015. 10:45 AM | Likes Like |Link to Comment
  • Why Rental Housing Is In Danger Of Collapsing [View article]
    You are on the right track except it needs to be stressed that the "wave of demand' was an artificially induced "pent-up" demand created by ZIRP and Taxpayer-backed 3% down payment mortgages.

    The misconception is that sub-prime is not available like it was in the big bubble. But that's not true. FHA/FRE/FNM mortgages are mostly of sub-prime quality now. And private mortgage companies are issuing paper with low DTI and down payment requirements down to a 520 credit score. A 520 credit score means you almost never pay any debt you've ever taken on. You 520 because you can sign your name.

    We are about to witness a huge counter-reaction to this artificially induced demand and it will be ugly.
    Oct 2, 2015. 02:42 PM | Likes Like |Link to Comment
  • Is The Drop In Mortgage Activity A Warning Signal For Real Estate? [View article]
    Oh. So it's convenient for the housing bulls to put the seasonally adjusted numbers in the spot light when they benefit your argument BUT when they don't benefit, ignore them.

    Pal, the mortgage apps are seasonally adjusted. The MBAA (Mortgage Bankers Association of America) has a motivated interest to put its best "spin" in seasonal adjustements. The Jewish holiday would have have unequivocally been incorporated into their model.

    Sorry but you need to go back to the drawing board to find another explanation for the big seasonally adjusted drop in purchase apps.
    Oct 1, 2015. 09:11 AM | Likes Like |Link to Comment
  • Challenges Facing Sustainable New Home Sales In U.S. [View article]
    The Census Bureau's numbers are highly suspect. I will be writing an article detailing how the CB's "estimate" of contracts signed in August is not even remotely correlated with any other related data observations that should be highly correlated.

    If you believe the CB's numbers, then you also believe that the unemployment rate is really only 5.2%.

    And the market isn't shifting to lower end sales. Margins are suppressed from heavy incentive discounting. Read the homebuilder MD&A's when the quarterlies are released.

    It's a fact that the lower end segment of the market income demographic does not support home ownership.
    Sep 25, 2015. 09:54 AM | Likes Like |Link to Comment
  • Existing Home Sales Decelerating But Still Strong [View article]
    Here's a different, and much more analytically accurate view of yesterday's existing home sales report:
    Sep 22, 2015. 09:57 AM | 2 Likes Like |Link to Comment
  • New Home Sales Flying Off The Shelves [View article]
    Uh, flying off the shelves? Compared to what? The bottom in 2010? Were you even working in the markets in 2005 when new home sales peaked at more than double the current rate?

    Can you explain how the Census Bureau calculates its rate of new home sales? Can you describe the seasonal adjustments?

    Did you look at the unadjusted monthly number that was surveyed?

    Did you notice that TOL missed earnings and revenues badly yesterday and the stock plunged more than 7%?
    Aug 26, 2015. 10:17 AM | Likes Like |Link to Comment
  • The 'Big Long' - Goldman Sachs And HSBC Buy 7.1 Tons Of Physical Gold [View article]
    Goldman, HSBC, and Gresham's Law:
    Aug 10, 2015. 06:57 PM | 2 Likes Like |Link to Comment
  • A Critical Reason To Hold Gold [View article]
    The United States Government is the biggest and most dangerous terrorist organization in the world The domestic police force counrywide kils one person every 7 hours. That is a fact. The military kills more people every year than all Islamic "terrorist" organizations combined have killed since Bush's "war on terror" began.

    The United States has more debt and contingent liabilities as percent of GDP than any country in the history of the universe. The fraud and corruption in this country is the worst in history.

    The United States Government is the reason to own gold, not Isis.

    Your friend who is "globally connected?" LOL Give me a break. She sounds like a dope.
    Jul 3, 2015. 09:46 AM | 7 Likes Like |Link to Comment
  • KB Home: Offering Investors The Largest Upside In The Housing Sector [View article]
    KBH's cash flow for operations - which includes all interest expenses including the interest expense that KB capitalizes and includes money dumped into inventory - is highly negative. They burn cash every quarter. On top of that it has an unsustainable amount of debt that requires cooperation from the junk bond market in order for KB to extend and pretend.

    Once the junk bond market fails, KBH hits the wall.
    Jun 25, 2015. 09:33 AM | Likes Like |Link to Comment
  • Eurasian Minerals: Move To The Sidelines [View article]
    Yes. And I've already spoken with management about that. There's A LOT going on there that the market is not aware of.
    May 27, 2015. 03:54 PM | Likes Like |Link to Comment
  • Eurasian Minerals: Move To The Sidelines [View article]
    Hey. So uh, did you happen to speak to management before you wrote your analysis? I bet not. You miss the biggest areas of valuation in this Company. I speak to management ALL the time. You are way off in your assessment.
    May 27, 2015. 03:44 PM | Likes Like |Link to Comment
  • Housing Repairs Aren't Making Much Noise [View article]
    Sorry, the data shows specifically that existing home sales are being driven primarily by vacation home sales (non-recurring) and smaller investor activity. As reinforcement for the latter fact, I personally know several people who have bought "investment" condos with their IRA's - 35% down/non-recourse financing. Alternative investment IRA custodians enable this.

    Condo rentals? Just in time for the massive influx of new apartment capacity hitting every major MSA. EVERY building in Denver now is offering a free 1-month incentive to move-in. Bye Bye investment rental market...

    Once again flippers/investors will get fleeced.
    May 5, 2015. 09:18 AM | Likes Like |Link to Comment
  • Housing Conundrum: A Poor Supply Of Fresh Inventory Or An Oversupply Of Poor Pricing? [View article]
    There's not an undersupply of inventory. Accoring to RealtyTrac, 35% of ALL homeowners STILL are in an "effective negative equity" position. This is defined as the value of the home minus the cost of listing, selling, and moving.

    A large portion of that would be considered "shadow" inventory if the homes were not in a negative equity position. As long as they can continue making their monthly home ownership payments, they can't sell.

    When interest go up by just a little, housing prices will drop and a lot of these households will go from "effective negative equity" to "outright negative equity."

    Unit sales volume is being driven right now by the non-recurring, unsustainable variable of a vacation home sales:

    It helps to analyze the facts when you do thorough due diligence you don't just regurgitate the NAR propaganda.
    Apr 26, 2015. 02:32 PM | 2 Likes Like |Link to Comment
  • March Existing Home Sales: More Sizzle Than Substance [View article]
    Hey bud, sorry I have not been perfect on my timing. However I have made a small fortune on my KBH and Beazer shorts. It's tough to short anything in this stock market bubble of historic proportions. The fact that I can make money shorting some homebuilders despite the almost daily new record highs in the SPX tells us I'm right and will make a killing when the market turns.

    I made 5% in two day on the DHI short positions I threw on Monday ahead of DHI's earnings.
    Apr 24, 2015. 09:40 AM | 2 Likes Like |Link to Comment