Tim Plaehn

U.S. Housing: Round Trip to Pre-Bubble Prices Underway

"There is no law which states that prices have to stop at 1998 levels."

Which is the whole point of this article that prices must fall an additional 25%. Prices in California have been increasing slowly for almost half a year now.

DryShips Q3: Beats Estimates

Do not forget the share dilution from 40 million outstanding to over 200 million. Good for shareholders!

Global Oil Supply: Learning from Lagos

Excellent article!

SoCal Median Home Prices Rise: Still Risky to Call a Bottom

Just the news of higher median prices will continue to bring more buyers into the market. News of bidding wars on attractively priced homes will bring buyers into the market. Lack of new home inventory will help stabilize prices.

A stable price market and the continued turnover of homes from high-price repos to lower priced starts for the new owners will build a stable base of ownership that will see their equity start to grow. 300,000 homes will be purchased this year in Southern California. 50,000 in Las Vegas. These are all homes with low prices and good rate fixed term mortgages replacing high-value ARMs. A new base is building and I do not believe that unemployment or the current foreclosure number will restart the downward price trend.

Step Two of a Housing Bottom?

Where do you get the idea that housing does not recover until employment recovers? Employment is the last to rebound once a recovery starts. Recovering employment figures will be the result of better housing numbers, not the other way around.


On Aug 19 06:34 AM chap08 wrote:

> Why does anyone care about housing? Housing never recovers until
> employment recovers. Employment never recovers until after the recession
> is ended. Housing is at the end of the chain. Worry about what's
> at the start of the chain instead.
>
> p.s. don't confuse housing with debt.

More on the Great Housing Recovery Debate

Your purchase rental criteria are easily met in many parts of California and Nevada. California prices have risen for 3 straight months, so if you do not get in now it will be too late.


On Aug 16 11:36 PM Can'tSpotABubble? wrote:

> There is no freaking debate amongst those who are sane. Housing
> will NOT recover until there is across the board price reversion
> to the mean with respect to incomes and inflation.
>
> My criteria for knowing housing has stabilized is the far off day
> that I can buy a property with 20% down cold, hard cash and turn
> around the following day and rent said property and have at least
> $1 of annual positive cash flow after P.I.T.I. and associated expenses.
>
>
> I'm getting real sick of everyone calling the bottom. I've been
> hearing it for over 2 years now.
>
> The bottom will not be ascertained until we are at least 2 quarters
> past it. That day seems far away.......

Housing Rebound: Why It Could Take 20 Years

The last up turn in California went from the the early 90's until 2006. I can live with 15 years of price gains.

Mortgages: More Support for Principal Reduction

Bad math. If a trillion in mortgages is 20% underwater that is $200 billion upside down. Still a pretty big number and the banks are holding $800 billion in real estate (today's value???). Easier to give across the board principal cuts on all fannie & freddie backed mortgages originated in 2004 thru 2006. Reduce all government backed mortgages by 20% and the bond pools take the same haircut. Instant equity for a huge number of homeowners and less chance they will walk away. Also, lower payments and a chance to refi the mortgage at current rates.

Has the Housing Market Hit Bottom?

Good article. I have been watching the CA housing market and home sales numbers have been increasing for well over a year, and the prices just now seem to be bottoming.

The interesting side to watch is the supply side. Foreclosure inventory against new homes. In 2008 California new homebuilders started only 33k single family homes. In the worst years of the 90's, they built at least 85k. The state's population has increased by 6 million since 1995.Existing home inventory has fallen to less than a 4 month supply in the state. Will the next surge of foreclosures coming to market be readily absorbed by increased demand, or will prices start to fall again?

Case-Shiller Home Prices Rise in May, But Don't Read Too Much into This

The Case Shiller data is for May and California had significant price improvement in June also. It will be interesting to see next month's numbers from C-S.

A Look Inside the June Existing Home Sales Report

Followup: At the current rate of price increases it will be only 2 to 3 months before we have a year over year price increase. Then the recovery horse will be out of the barn!

A Look Inside the June Existing Home Sales Report

I guess he missed the place in the report where median and mean sales prices have increased for 2 months in a row now!

Is Raser Technologies a Bargain, Or Just Cheap?

Razor has been an interesting story, but do they ever plan to generate any profits? The company continues to seem more like a money hole than an investment.

Detroit, Las Vegas and the 2000 Losers Club

Today's existing housing numbers put this thesis to rest. Sales and prices are on the increase. Detroit has serious economic issues aside from the national picture and Las Vegas was the poster child of over building. The rest of the country is starting to recover.

What Happened to Omega Navigation?

Shippers generally pay cash out of their free cash flow, not net income. The net can be significantly understated due to a lot of depreciation. Many shippers are yielding in the mid to high teens now, that is those that actually pay a dividend.

ONAV has plenty of cash flow to support the dividend. They probably had to suspend due to breaking bank covenants concerning asset values. After they pay down some debt the payout will start up again.