"Magazine-Cover-Indicator" Indicator....'s Comments

Home Prices Continue to Decline

Mon, 26 May 2008 10:54:57 -0400

OFHEO Director James B. Lockhart seems levelheaded and not so political. Fortunately OFHEO kept fannie and freddie from going even farther overboard during 2005-2007.

It's good to see public comment from a higher official, etc of the seriously important *positive* side of the price normalization.

The Housing Bubble Goes Pop

Thu, 01 May 2008 16:49:06 -0400

Tom B -- don't search for a reason to buy a house in a declining market. If you don't absolutely need to buy for some unusual reason (you have 7 dogs, etc), then rent for a year, and give yourself plenty of time to search for that next home.

From Housing to Employment: We're in Big Trouble

Wed, 30 Apr 2008 16:01:11 -0400

Price to Income of "4"

is a lot more than 3.5 (said to be a maximum sustainable level often),

or 2.7 , said to be the historical average.

www.usatoday.com/money...

As Home Sales Plunge, Some Say the Crisis Is Almost Over

Fri, 25 Apr 2008 11:27:49 -0400

If you live in Texas, expect house price declines this year.

Robert Shiller on America's 'Speculative Culture'

Thu, 24 Apr 2008 16:30:06 -0400

Wakeup---Yes, we are going to have a lower amount of consuming in the US, forced. The obvious mechanism is the decline in the Dollar and related change in basic necessity consumable prices, not to mention losing the bubble jobs, etc. In an even bigger picture, since we had a pronounced over-consumption, perhaps the lesser consumption level is kinda a needed adjustment, although it will feel awful for many.

The Impending Mortgage Crisis

Wed, 23 Apr 2008 21:19:41 -0400

ArnoldCountry -- that premium to own ratio or difference is far less than a big $2500 vs $1500. It's a lot closer to $1700 vs $1500, especially when no more rapidly rising prices are expecting for more than a decade by most experts.

Existing Home Sales Charts

Wed, 23 Apr 2008 10:39:18 -0400

Tim -- they could stabilize in a range near there eventually I'd guess. But if as you can see from the graph, most would-be buyers jumped in prematurely (in the bubble, afraid of waiting and building up a down payment, etc), then the buyers would be used up temporarily, so that first time buyers are below long term average for a while.

What's Ahead for Real Estate: Doing the Math

Thu, 17 Apr 2008 12:04:13 -0400

Good article. Interesting. I'll watch to see how well the predictions do.

How To Solve the Housing Crisis Tomorrow

Thu, 17 Apr 2008 11:59:09 -0400

When I say 500 hours, I'm not exaggerating or using hyperbole. When you propose a plan this momentous and gigantic, you need a proportional amount of work to it's significance and risk.

How To Solve the Housing Crisis Tomorrow

Thu, 17 Apr 2008 11:53:59 -0400

User 179274: Yes, he only needs to read and think and work out consequences in detail for another, say, 500 hours, like a professional that works hard, until he finally has a handle on the effects of his proposal.

How To Solve the Housing Crisis Tomorrow

Wed, 16 Apr 2008 11:56:55 -0400

"moderation in all things" is wiser than many people realize.

When we go to rescue families that speculated on rising house prices with their own home, we need to rescue some and not all.

Because....home *owners* are not *all* Americans.

There are Americans, families with kids included, that are working to be able to buy their first home.

They will rely on house prices normalizing back to typical levels vs incomes.

The Housing Crisis: Personal Responsibility and Wishful Thinking

Wed, 16 Apr 2008 09:56:57 -0400

Good article.

Mortgage Lenders Can't Escape Morgenson's Wrath

Wed, 16 Apr 2008 09:06:51 -0400

"Its amazing how barely literate people at the NYT become stars "overnight". Who crowned these bozos"

...

uh....the Pulitzer Prize folks did.....

...

Housing, Credit, Economy: At an Inflection Point

Mon, 14 Apr 2008 10:06:57 -0400

ArtS, thanks for helping try to preserve the English language.

It's going to need a lot of help over the next year, as every analyst and their dog tries to bend reality.

Housing, Credit, Economy: At an Inflection Point

Mon, 14 Apr 2008 10:04:53 -0400

uh.....

enter....recession....

recalculate....

The Folly in Calling a Housing Market Bottom

Fri, 11 Apr 2008 21:51:05 -0400

www.nytimes.com/2007/0...

The Folly in Calling a Housing Market Bottom

Fri, 11 Apr 2008 21:50:59 -0400

Evergreen: click the 2nd graphic on the left of this article labled "A slowdown ahead", and then examine the middle graph carefully, then see if you think 2004 is correct. Be aware the pink shaded part was a projection, which is already shown to be optimistic by now...

The Credit Bubble: Deregulation Gone Wild

Sun, 06 Apr 2008 16:03:14 -0400

When we talk of "regulation", there is only one regulation that really matters that isn't already in place. The only one we critically need that I know of is simply capital requirements, and very broadly. Regulation just universally, and in all instruments, reduce the level of leverage down to tight, safe levels, such as 7 to 1 or less, imo.

The Reverse Ripple Theory of Metropolitan Home Price Corrections

Fri, 04 Apr 2008 14:09:09 -0400

Genuinely interesting.

Bill Gross: If Housing Prices Decline Further, So Does the Economy

Tue, 01 Apr 2008 22:31:31 -0400

My car has declined significantly in value, and it's a crisis, because I could have sold it for a lot more money a couple of years ago.

It's true I only bought my car in order to sell it and walk.

Uh....well, you know, it was an investment, sort of.

This is a serious threat. Imagine, $5000 gone, suddenly (or over a year or two).

If every income earning in the US would just contribute $5000 personally to prop up home prices it should do the trick! (Ok, that's not quite $1Trillion, but....hey, *you* have to pay, right?)

Also, like Bill Gross, I would benefit a great deal if my asset prices that I am holding, whether bonds, or just my humble auto title, would get taxpayer support.

It's a crisis!

Housing: A Government Solution Is Likely to Be Necessary

Tue, 01 Apr 2008 22:21:25 -0400

My tennis shoes are getting old, and I think they have declined in value.

Perhaps it would be best for a government solution to this problem.

Also, I feel my car has declined in value also, and frankly, that's a bigger problem than even my tennis shoes!

Finally, I'm very concerned about some people feeling that their house has declined in value. I think we should all force the current folks that haven't bought to pay prices at least at the early 2007 level, regardless that some would whine that it would devestate and destroy their finances.

Stop whining renters! And step up and do your duty to home sellers!

Working Off Excess Housing Inventory

Sat, 29 Mar 2008 15:14:35 -0400

Tom in MN -- "Then everyone is a winner."

....everyone except....taxpayers who do not already own a home, and first time home buyers.

For there to be "winners" it implies there will be "losers". I don't like you "winning" by taking money out of my pocket, or my young friend's pocket, or my kids' pockets.

Upside to Falling Prices: Housing Affordabilty Index Reaches 4-Year High

Fri, 28 Mar 2008 12:13:09 -0400

While lots of self-defeating rhetoric and cooked numbers from the NAR will probably help put more and more realtors out of a job (by prolonging the seller reluctance to adjust prices), it's still true that no matter what houses are a good buy only if the price of a house isn't much higher than about 150 times a monthly rent for a similar size. By this "floor", prices are high to very high in most cities.

The Fed Is Leaning Hard Into a Headwind

Fri, 28 Mar 2008 11:46:28 -0400

Okpulot Taha, but I should also say that even while house prices in most places in America went above what incomes will support, it's still true that some areas did not rise much. So for example, if an average working family in your area can buy a house under 3 times their annual income, and the price isn't well above 150 or 160 times renting a similar sized house, then house prices in your area aren't too high.

The Fed Is Leaning Hard Into a Headwind

Fri, 28 Mar 2008 11:39:36 -0400

DanH you are entirely right to point out rent levels as a way to judge when house prices are getting to be a good value to buy. But the actual ratio when calculated very carefully is close to 150. Most of the nation, most cities, are far above 150.

Okpulot Taha, I'm sorry, but the graph in the article is accurate. As you can see, house prices are above where incomes can support them traditionally. Now that we no longer have interest-only, 100% loan to value, etc, we will return to traditional measures. House prices will head back to levels similar to the year 2000 ro 2001.

This is inevitable like a flood of water going downhill. Sandbags won't stop it.

Home Prices Down 15%

Fri, 28 Mar 2008 11:33:17 -0400

eh....even seeking alpha already has the graph showing the decline to re-balance to incomes is close to 30%

seekingalpha.com:80/ar...

Home Prices Down 15%

Fri, 28 Mar 2008 11:17:51 -0400

on a historical affodability basis, we have more like another 25%-30% to return to the mean of incomes vs house prices.

How Counter-Productive Is Realtor Association Spin?

Tue, 25 Mar 2008 13:28:24 -0400

Barry, good insight. the NAR is now clearly hurting realtors

NAR Existing Home Sales Report: Bait and Switch Headline

Tue, 25 Mar 2008 13:25:09 -0400

Good point user 133274.

NAR would actually be better off if prices adjusted rapidly! At this point, that big lag in info is actually becoming harmful to realtors.

Pulse of the U.S. Housing Market

Mon, 17 Mar 2008 16:54:31 -0400

Jason, house prices cannot be maintained at a multiple vs median family income of much above 3.5. Even 3.5 is a strain. It doesn't matter what the old replacement prices were. The re-sets in prices will also reset replacement costs lower. Because the bubble in house prices caused a bubble in both lumber prices and expert labor, and is also reversing.