urbanexus

America Does Not Produce Nothing

Thanks for some excellent perspective and insight.

What Disruptive Technology Can Teach Us About the Economy

The title of this post does little justice to what it contains. I think you are on to something here that may help explain why many declining metropoloitan regions cannot adjust to the evolving economy. It might be appropriate to retitle this and post it at additional sites such as Planetizen to see what kind of response it generates.

Why Isn't the Stimulus Stimulating?

Thanks for the references to the Barlett pieces. Great perspective.

I think there is a word missing from the first sentence of the last paragraph of your post--that word would be "not." I think you mean to say "As Bruce Bartlett points out in in this article, there has NOT been a successful stimulus package since WWII that actually provided stimulus with the correct timing."

Whitney Tilson's Updated Housing Analysis

There is an analysis from T2 with a more recent date of June 2, 2009 at moremortgagemeltdown.c...

Housing Market Datapoint of the Day

It looks like the data in the chart is for the City of Detroit by itself. If you look at the Case/Shiller (CS) data for the metropolitan area, the peak in values came later than for the city. In November 2005 the CS Index for the Detroit metro area was 126.68 and declined to 77.56 by January 2009--a decrease of about 39%.

If you look at CS index data for other metropolitan areas, the percentage decline for Detroit seems rather modest by comparison. For example, consider the same numbers for Phoenix, Los Angeles, Chicago and Minneapolis (peak index number and date, January 2009 index number and percentage decline):

Phoenix -- 227.42 in June '06, down to 117.11, a 49% decline

Los Angeles -- 273.94 in September '06, down to 166.54, a 39% decline

San Francisco -- 218.37 in May '06, down to 124.33, a 43% decline

Chicago -- 168.60 in September '06, down to 130.80, a 22% decline

Minneapolis -- 170.90 in June '06 down to 120.18, a 30% decline.

When looking at data for the broader metropolitan area, there may be cause to wonder about both the left and right hand side of the chart.

This Recession Is a Reset to a New Normal

H. Pike Oliver - Senior Lecturer and Executive Director of Outreach for the Cornell University Program in Real Estate and interested in regional planning and metropolitan development.

New Home Prices vs. Median Income Chart

This is interesting but national figures mask the tremendous variations in metropolitan housing markets. And we must keep in mind that while affected by monetary and other national policies, there is no national housing market. In a chart like this it would be interesting to have third line that would showing the net aftertax cost of owning the median priced house (which would require assumptions about the percentage of purchase price financed, etc.)

Over-Correction in the Phoenix Housing Market

If the "over correction" conclusion is correct, a decision to keep foreclosed houses off the market for awhile could benefit both the lenders and the remaining homeowners in the affected neighborhoods. However, if lenders cooperated on such an approach, it could raise anti-trust issues.

Over-Correction in the Phoenix Housing Market

If the "over correction" conclusion is correct, a decision to keep foreclosed houses off the market for awhile could benefit both the lenders and the remaining homeowners in the affected neighborhoods. However, if lenders cooperated on such an approach, it could raise anti-trust issues.

Housing Solution: Crashing Home Prices or Cheaper Mortgages?

Prices would still have to fall significantly in more expensive markets, such as San Francisco and Los Angeles to return to any reasonable ratio between incomes and housing prices. Also, regional median price figures mask significant variation with regions. Most of the dramatic declines in pricing have been on the fringes, far away from jobs where buyers would be gambling on whether there will be a return to higher gasoline prices.

The Debate: McCain's Insane Mortgage Proposal

Helpful analysis on McCain's impulsive housing proposal. Thanks. As to taxes, both candidates have proposed significant cuts. McCain would leave 62% of filers with no Federal income tax liability. The figure for Obama's proposal is 63% (taxfoundation.org)

As Mortgage Securities Disappear, What Will Replace Them? [Housing Tracker]

Bank Stocks Drop Anew Amid Worry Over Falling Home Prices

The recent price cutting of foreclosed properties held by financial institutions is good news. If individuals and investors continue to acquire these homes -- as now appears to be happening in Southern California, Las Vegas and Phoenix -- the overhang of foreclosed properties may be liquidated more quickly than previously anticipated. Once that happens, the residential markets can move toward recovery -- at lower price levels.

The big question is when lot pricing will recover to levels where creating new improved lots makes economic sense. I don't have the answer to that but it may happen more quickly than many people think.

Production home builders are getting their direct costs down into the high forty dollar per square foot range -- for smaller product than typically built in recent years. The lower direct costs will, at least in part, offset the lower retail house prices, leaving room to pay for fees and lot improvement costs and ultimately generate some residual value to land.

NAR Home Sales Report Shows Some Nasty Declines

One of the interesting things is how high cost metropolitan areas such as the SF Bay Area, where land use and environmental regulations are tight and the ratio of incomes to housing prices is high, have suffered relatively lesser declines as compared to nearby less regulated and lower cost regions such as Sacramento and Stockton. Is this because there was less sub prime activity in the high cost regions coupled with the perceived quality of life helping to stem declines in housing prices?

12 Observations on Residential Housing

Very nice complilation of information!

A Housing Bubble Within a Bubble

The impact of boomers selling off will vary by region. High growth metropolitan areas will be less affected by the boomer sell off factor, because overall demand will be higher. Similarly, areas that are attractive to retirees will be less affected by this phenomenon.