Cold Reality

What Strong Homes Sales Numbers Mean

Also would offer the suggestion that some of these mid-summer sales were due to buyers who elected to downsize from larger homes into condos, possibly after selling a larger home.

While it is possible that some dispossessed homeowners also made the jump to condos, that number would probably have to be small due to credit issues.

Some Sobering Economic News

Make that two.


On Aug 13 09:03 PM The Geoffster wrote:

> I think I'll have another drink.

Consumer Credit and the Credit Check Hurdle

The fallacy in your argument is that you assume that the credit report and resulting "score" is accurate. In a very very large number of instances, it is not. The credit reporting agencies do not care whether the reports are accurate or not, and make the process of correcting errors almost insurmountably difficult. In fact, in a perverse way, they seem to resist making a change to a report or score that would improve the report or elevate the score.

I know of an instance recently, where the victim of fraudulent billing had a credit report festooned with errors, spent two years doggedly working to correct have the erroneous information expunged, only to see the credit "score" remain stubbornly at a low value.

Yes, it is an invasion of privacy to use credit scores and spurious credit reports to judge a person to any degree whatsoever. In the current credit reporting and scoring system is so fraught with error and so flawed, that the reports and scores should not be relied upon for anything at all.


On Aug 12 08:12 AM Jason722 wrote:

> Interesting, thought-provoking article.
>
> "In terms of efficiency, knowing the credit score and all relevant
> bank and credit accounts of someone you are going to go a third date
> with strikes me as much more relevant than knowing the credit score
> for someone you are hiring to do data entry. Yet the idea strikes
> me, and perhaps you, as an invasion of privacy. Why don’t we feel
> the same revulsion for the data entry job?"
>
> My first instinct on this is that the comparison is off. In dating,
> you might make an emotional investment, but you are not making a
> significant $ investment (all jokes aside). When a company hires
> a person, they are committing almost instantly to a sizable investment
> in salary, benefits, etc. (which would be committed regardless of
> the person hired) and also in training and continuity (hidden cost
> of turnover). The latter costs have been shown to significantly
> affect the efficiency and performance of the human resources division
> and can impact the company at the bottom line.
>
> So the proper analogy is that of making an investment. Should companies
> be able to hide their balance sheet from you before you make a monetary
> investment in them? If not, then why should you be able to hide
> relevant financial information from a company seeking to make an
> investment in you. And if you are having financial difficulties,
> it certainly can affect your performance on the job. I agree with
> you that this should never be used as a filter (an automated process
> to weed out applicants), but I don't see companies that use this
> information in their decision-making processes as doing anything
> wrong.

Housing Woes Are Far from Over

When Zillow is downbeat, that's something, because they are another shill for real estate agents, and for the most part, their "Zestimates" are off by a huge amount--always high.

The Zillow data is always taken from the most real estate agent-friendly sources.

This information is amazing for its candor, if for nothing else. It's certainly no surprise.

Pending Home Sales: Longest String of Monthly Gains in Six Years

What is a "Pending Sale" anyway? Isn't that a sale that is dreamed about, but hasn't closed?

Housing Affordability Falls: Is Real Estate Market in Recovery?

Now is a great time to buy a home, if you are looking to see it drop another 20-30 percent in value over the next five years.

Relying upon real estate agents for investment or financial advice is a lot like going to a crack dealer for legal advice.

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

A good article as usual, with great graphics to show the prices headed inexorably back toward the trendline. In a month or two, this miniscule seasonal bump will look just like all the other miniscule deviations on this chart, with the continued trend downwards, and possibly a few sharp drops as the looming defaults and foreclosures continue to re-price the market.

NAR Keeps Whining About Appraisals

The real estate agents just can't over the fact that people are on to their decades-old scam.

They're squealing about appraisers turning in realistic real estate value appraisals now, but that's only part of what is spoiling their party. They want appraisers to return to the practice of restricting their "comp" evaluations to the absolute minimum of the most recent sales, because that way, each successful manipulation and escalation of a property price will result, all the more swiftly, in the next overpricing, which, in turn, leads to the next even more severe overpricing, etc. That is a major way in which they were able to engineer the mid-decade pricing bubble.

Make no mistake--they desperately want to continue the fraudulent manipulation of real estate pricing, and the move toward honest appraisals is interfering with this effort.

NAR Keeps Whining About Appraisals

You real estate agents keep referring to an appraisal as "errant" when it does not reflect your hoped-for inflated price. Why are these appraisals "errant" when the other appraisals--the ones that ratify the pumped-up real-estate agent inflated price, aren't?

Not once here have I read of a complaint about high "errant" appraisals.

Ever.


On Jul 28 10:27 AM User 82064 wrote:

> I am a real estate broker and have a finance degree. I've built
> homes and lead a 1000 acre land development project prior to the
> downturn. While most brokers follow the NAR religiously, I'm not
> one of them.
> BUT, the NAR has a point in this case. What the author and commentors
> are missing is that the pendulum has now swung too far in the other
> direction.
> While appraisers might have been pressured in the past, now they
> act with relative impunity. Which means the system doesn't have
> any checks in place. Without the checks, accuracy becomes a problem.
>
> Appraisers make mistakes. The system is now set up to where they
> can't be challenged. Many appriasals are coming back errant, and
> in most cases, that means low. This is due to the amount of pressure
> they feel given what has occurred over the past few years. Accuracy
> is the objective, not artificially low valuations.
> Because many appraisals come in low, the buyer/refinancer can't get
> their home/new loan as they would be able to if the appraisals came
> back correct. This serves to add to the problem of getting people
> into vacant homes and getting loans refinanced so more people can
> avoid the resets coming.
> While some may applaud this, I don't know why. It only serves to
> help further drive pricing down which only helps those that are renting
> or sitting on cash hoping for the buy of a lifetime. Perhaps that
> is what we have here. Or perhaps we simply have people who haven't
> thought out this issue thoroughly.

New Home Sales Jump as Supply Plummets; Prices Bounce Higher

Supply "plummets"? Where?

U.S. Housing Nearing Bottom, But Foreclosures Worrying

I agree with Ritholtz and Norris, as well as anyone else who understands that: 1. Much home inventory is not on the market and not yet reflected as unsold; 2. Pent-up foreclosures from Q2 lender forebearance are not reflected in these results; 3. Imminent higher-quality mortgage defaults are not reflected; 4. The effect of growing unemployment, small business failures and associated economic results are not reflected, and 5. This is, after all, a seasonal bump, coupled with opportunistic purchases at distressed prices (note decline in prices even as sales increase by a miniscule amount).

It would be difficult for the reasonable person to ignore these factors, as it would be foolhardy for anyone to use this data to declare any sort of bottom to the housing price declines.

Expect Housing Prices to Continue to Rise

You seem to be confusing a miniscule rise in June new house sales with a price rise. There has been no "price rise" in conjunction with the minor uptick in New Home Sales" as you aver.

Any "price rise" henceforth will likely reflect the higher-priced properties that are rolling into foreclosure and if sold, may skew the price data averages.

Your headline bears no correlation to the article you wrote or the data you cited.

New Home Sales Increase Three Months in a Row

It's BS. Check back mid- to late-September.

U.S. Housing Has Bottomed

This recurring "Housing Has Bottomed" refrain is debunked by the fact that A. The new housing sales data indicates further price declines; B. It's seasonal; C. There is a huge unsold overall inventory, including existing homes; D. We are about to enter a period of resets of Alt-A and Prime mortgages, in fact this has already begun and the defaults are soaring.

This miniscule reduction in inventory of new houses is hardly an indication of any bottom in the market if all relevant market data is taken into account.

More Signs of a Housing Bottom

Using NAR data for anything is like asking the National Association of Burglers how to make locks.


On Jul 24 08:03 AM Wesley Mouch wrote:

> This is almost becoming cliche'. Using NAR data to declare a housing
> bottom ignores absolutely every other fundamental piece of information.
> Considering rising foreclosures, foreclosure moratoriums, delays
> in bankers taking ownership, resetting finance structures (seekingalpha.com/symbo...),
> increased unemployment, unemployment benefits beginning to expire
> for the recession class of 2008, artificially low rates that are
> sure to rise (next week's treasury auctions of 1/4 trillion dollars!),
> inevitable tax increases from cash strapped governments, reality
> beginning to show itself in local property appraisals, commercial
> real estate's cross effects on residential housing, and a litany
> of other realities makes the NAR data little consolation.
>
> We (by that I mean the very independant, strong Federal Reserve who
> values the middle class over all banking and finance organizations,
> coupled with an honest, strong dollar policy touting treasury) are
> doing everything in our power to increase home sales. I wish us well,
> because it has to work out for all of our sakes.