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Monday, June 20, 2011
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65 comments:
Can anyone say...slander of title?
What, exactly, has you rolling on the floor?
Also, an impact study commissioned by Sears said a move could send shock waves into the region with the potential loss of about 6,200 local workers and another 9,000 or so jobs rippling across nearby businesses, vendors and contractors.
Sears Holdings Corp., which is considering moving its Hoffman Estates headquarters out of Illinois, is scouting the Washington, D.C. area for a more favorable tax climate
At its current headquarters in the Chicago suburb Hoffman Estates, Sears occupies 2.4 million square feet and employs 6,200 people. The numbers dwarf those of other high-visibility relocations to the Washington region, such as Northrop Grumman, which will employ about 300 people at a 333,000-square-foot building in Falls Church.
cheryl
i believe the issue is that the GSE's and the walls treet banks have engaged in some very shady title practices.
they were required by trust law to transfer notes within 90 days from creation of a trust to the trustees ownership in order to avoid tax consequences and properly record interest.
what happened instead was the banks skipped all that bothersome stuff preferring to wait until they needed a property action.
the problem is Lehman and Bear/stearns held a good 50% of the notes back so when they went into bankruptcy, everyone was fired and they threw all the notes into the trash.
now the banks are trying to re-assign titles for foreclosure and are assigning titles and trustees in "Blank".
So, this guy in Tucson is doing the same thing.
if he's smart, he will assign them in blank from the bankrupt mortgage houses.
yes it's slander of title, but the banks have been engaging in slander of title.
Heck, if he wants to be annoying he should sign them all "Linda Green".
FYI linda green was the name used to assign all title actions by MERS, Fannie, etc. There is no Linda Green, so, the titles across america are in a shambles.
Robert,
Your article looks more like a bluff on the part of Sears to get a renewal of their expiring tax breaks in Illinois. However, if they do come I hope it's not to Tysons. My evening commute sucks enough already.
I've noticed you've been more active recently after a lull for a few months. Are the Great Falls price rebounds getting close enough to the bubble peak to make you reconsider selling your house? Or are you hoping some magic new demand (like these Sears jobs) will come along and get you the prices you saw your neighbors get in 2006?
Form over substance. Ministerial errors. No harm, no foul. The states want their recording fee's. Shall we throw the baby out with the bath water?
Jeremy,
The bullish postings really stick in your craw, don't they? That's why I post.
Robert,
No, they don't irritate me (I already bought, remember?). It's just funny to me the same people post the same kinds of things for years and expect it to mean something different this time. At least with contrarian it's usually so crazy that everyone ignores it. I was just wondering if all those potential jobs you have been posting all these years ever showed up and got you the bubble price you were so hoping to sell for when I first joined the blog. I think many people are still latching on to those bubble prices because they need that extra money to retire early and can't sell if they don't get them. I believe this is reflected in the area's increasing DOM. The thought of having to work another 5 years just to get back to where they would be if they had cashed out in 2006 has to be soul crushing.
Jeremy, I agree about the tone of the article, which simply mentions DC as one possible alternative location. I can't imagine how any tax calculation likely to be offered here could offset the additional costs of living Sears employees would face if relocated here, which Sears would have to compensate them (or new employees) for. Communities that are desperate for employees may offer huge tax incentives that often are not in the long term best interests of the community. Communities around NoVA are usually desirous of new employers (like most communities), but I don't think they are desperate enough to offer as sweet a deal as Sears could get elsewhere, and I doubt that Sears needs the levels of skills, education that the area offers.
"soul crushing"? A little dramatic when discussing well-heeled move-up buyers. I can't speak for Robert but I could not care less about a temporary decline in the value of my home. I wasn't aware that Robert bought at peak; not that it would matter.
Work 5 yrs longer? Jeremy, if your "retirement plan" relies on cashing out of your house you better get a new financial planner.
VA_I,
My retirement is so far away (35ish years) that the only plan I've got is maxing out my 401k. By the time I retire I'm guessing the mean retirement age will be 72-75 so if I can do it at 65 I'll consider myself lucky.
I give Robert a hard time because when I started reading here he was always talking how there are so many jobs here that prices couldn't fall. Every time I posted about how the prices were inflated he would come back with another article about jobs, jobs, jobs - as if this area hadn't always been good for jobs.
Fortunately I didn't listen to him and settle on what I could afford back then. I got lucky and bought last November when interest rates were at their lowest and got the house I had coveted for almost a year at 175k off initial list.
Well Jeremy, congrats to you. Let's all cheer eachother along and be supportive. I've been in my house since about your age. I have few worries about this region.
lol, temporary decline. Is a reversion to the bubble's peak on the horizon?
Jeremy,
You got me. My soul is crushed. I hammer away on this board in a desperate attempt to relive the golden age of 2006 real estate prices. I scour the web for Florida destinations where I can use my 2006 price to retire in luxury.
I think just one more corporate relocation or major war or financial crisis will drive prices back to their god-given level of 2006. Whew, I'm glad you called me out. I finally feel free to express my true self. Thank you.
cheryl
if these were minor ministerial errors, the banks wouldn't be so upset by the various court cases that have been going against them.
i'm not a lawyer, you are, so, i can
best show you the key cases where
MERS has lost key process rights.
NY and Michigan have taken away MERS rights to foreclose by notice, that they have to litigate.
the big problem is that these were all done under NY law, and now the NY courts are ruling against a lot of the failed process.
Plus, a big chunk of these were in Lehman and Bear and the property was never properly transferred.
sure, someday the bankruptcy court may fix these but until then, it's all clouded title.
the new york scumbags managed to
screw the pooch for millions of people.
kevin said...
lol, temporary decline. Is a reversion to the bubble's peak on the horizon?
You nailed it. I think some of the bulls here really do think that way.
I don't know how many years it will take before we see a CS of 250 again - but definitely a lot more than I consider "temporary."
Jeremy,
It has definitely been insinuated on this board before that the housing bubble was really an upward correction following a "down" market in the 1990's. It was a stunning sentiment to be sure. Not even the bulls in the news media would make such a silly suggestion.
Jeremy
One of the reasons I remain somewhat bearish on housing in this area, is i am a terrible believer in Reversion to the Mean.
That means while Bernanke may be pumping out cheap money today, he can't do that forever, and
when he has to step on the brakes, it will be mean or better.
That also means houseprices will revert to a mean.
now that's a little stickier of a question.
Prior to 77, women didn't work, so the household income was low. Now all women work, so, is that income, going to be permanent? will the Millenials want that same thing?
i think women will generally stay in the workforce,
but households will dial down the stress level a bit
so will that mean, the ultra high housing ethic?
I"m not so sure. well, if we watch rental incomes we will see the floor.
Cheryl says anyplace that generates a cash flow will sell well, and in that vein i agree with her.
now what and where that all is, is hard to say.
Pat,
"Prior to 77, women didn't work, so the household income was low. Now all women work, so, is that income, going to be permanent? will the Millenials want that same thing?"
That's just a silly, sexist paragraph. "Women didn't work"???? What? First, look at the data. There certainly is a higher proportion of women who are working outside the home today than in 77, but there have always been many women in the workforce, particularly women who aren't in white, upper income households. Second, most objective studies (as opposed to breathless media reports from people with an agenda) show that many women are in the workforce because they have to be, i.e., they can't afford not to be. A large minority are not "coupled" and in many couple situations, they earn a significant proportion of the income, etc., etc. For those fortunate enough to have enough wealth or income from a partner to enable them to have a choice, the evidence suggests that most stay in the workforce or return to it when family responsibilities are lessened.
"Jeremy said...
kevin said...
lol, temporary decline. Is a reversion to the bubble's peak on the horizon?
You nailed it. I think some of the bulls here really do think that way."
Its not just bulls who think like that.
In my immunozone neighborhood, they dont much talk about the "decline" of the past few years -- largely because it was so slight to begin with.
Moreover, as May 2011 median prices in Arl & Alex are at new all time highs, its pretty understandable if anyone would think of the declines as being largely a "temporary" phenomenon.
Wow Ace
you should join NOW.
Yeah, sure, whatever,
enjoy the PC rant...
You still ignored my statement.
I'd suggest you read the two income trap before you get off on another
rant.
http://motherjones.com/politics/2004/11/two-income-trap
Pat, sexist crap has no place here. You've been called on it by other people before, and people (including me) have let other such comments slide. Keep it and the ad hominem attacks off the board and you may find that people will focus more on your housing related comments.
wow ace,
the official PC censor.
"Don't say anything un-PC or
i'll have you banned from the
boards, and especially don't
ever cite your work product
or I'll be really pissed off".
Right whatever, ace.
Please go off to hypersensitive-whingers.blogspot.com
I'm here talking real estate.
You can go sit in a drummers circle
with Andrea Dworkin, but
we are talking Real Estate with the
Adults.
Anon: Its not just bulls who think like that.
If rents and household incomes supported those price levels, I wouldn't be skeptical. Still, even areas in Fairfax County which saw only a 30-40 percent increase in household income over the past decade are trying to sell (and sometimes do) at a 100 percent increase over their value a decade ago. The aggregate price indexes show roughly the same pattern. So I remain skeptical, and believe that there is going to be a realignment or reversion at some point.
"Kevin said...
The aggregate price indexes show roughly the same pattern. So I remain skeptical, and believe that there is going to be a realignment or reversion at some point."
Its an OK theory, but in practice, its a dangerous game to play. Your problem, like that of all bears is timing. When will that "at some point" come?
In my case, I got bearish in 2003 when Case Shiller was at 145. I was adamant at the time... "Prices goin up 15% YOY is UNSUSTAINABLE! This WILL revert to the mean 'at some point'..."
Prices then rose 20% per year for another 3 years. Eventually, that "some point" came in 2006 when Case Shiller hit 250 and started reversing. Problem is, they only "reverted" to 165. Now, 8 years (and roughly 200K in rent later) I bit the bullet. I passed on CS 145, only to get in at CS 180.
So whats it gonna be in your case? When CS hit 165 in 2009, you said "nope, not good enough", and came up with various theories for why 165 is unsustainable. That put you on the clock -- you passed up on 165 in the hopes of getting 155 (or better) some point down the road. Now, 2 years older, you are staring down 183.
If prices get to 190, do you throw in the towel? How about 200? Lets say they decline 10% over the next 2 years down to 165. In that case, was it really worth paying another 4 years in rent only to get the exact same price you decided was "not good enough" 4 years earlier?
I need to stop here as this probably sounds too much like an emotionally evocative "buy now or be priced out forever" speech. Still, these are all difficult questions that I wished I had asked myself way back in 2003.
Anon
You at least recognize the logical arguments for the bear case in real estate, you just think the bear case breaks down at 180 or 165, not 120
or 140.
"We've agreed on the principle, now
we are haggling on price, madam"...
The deal is the Feds have been massively meddling in the market and making it hard to determine what's really going on.
1) Homebuyers bribe. Really, a stable market doesn't need that
2) Zero Interest rate policies.
if the feds were keeping interest rates at standard rates, but otherwise making Interbank lending open, then we might see what economic value exists when all those ARMS are reset to 4% or 6% short term rates. Instead with cheap money ARMS are way cheap.
it's very dangerous, but for the usual reckless types, it's very profitable artificially
3) Mark to Fantasy accounting: The banks are sitting on an assload of
inventory. The articles where the banks have 62 years of backlog in New York? Or how about New Jersey with 49? The banks used to be required to foreclose within 90 days of a deficiency and to sell the inventory within another 90 days.
Now they sit on these things for months.
Look, the feds are spending billions to keep the DC economy afloat, but, when the Bush wars end, what will happen to defense spending locally?
"Pat said...
You at least recognize the logical arguments for the bear case in real estate"
Sure. Who wouldnt? Lots of headwinds out there now. The difference between us, again, is the way we think those headwinds play out.
For example, lets look at your 3 enumerated factors (buyers bribe, ZIRP, & MTM) For starters, the buyers bribe has been over a year now. What did that do to prices in the DC area?
Second, what makes you think ZIRP and MTM are going to be reversed anytime soon?
I heard MTM wont be reconsidered until 2016. You really going to wait til then? What are prices going to be then? Will those policies being unwound bring prices blasting back all the way past 2009 lows? If they do, how long will that take, say another 3 years, putting us at 2019???
Honestly, as has been the case for the past 2 years, I can see the next decade going for you as follows:
2009 CS @ 165. Pat said, dont buy now, wait til MTM, ZIRP, etc. are gone...
2010 CS @ 175. Pat said, dont buy now, wait til MTM, ZIRP, etc. are gone...
2011 CS @ 183. Pat said, dont buy now, wait til MTM, ZIRP, etc. are gone...
going forward, I could easily see this happening...
2012 CS @187 Pat will say, dont buy now, wait til MTM, ZIRP, etc. are gone...
2013 CS @190 Pat will say, dont buy now, wait til MTM, ZIRP, etc. are gone...
2014 CS @194 Pat will say, dont buy now, wait til MTM, ZIRP, etc. are gone...
2015 CS @198 Pat will say, dont buy now, ZIRP is ending! Now just wait til MTM, is gone...
2016 CS @198 Pat will say, SEE, prices stagnated! Now that MTM is being relaxed DOWN WE GO!!!
2017 CS @195 Pat will say SEE I TOLD YOU SO, 2009 was NOT the bottom!!!
2018 CS @190 Pat will say SEE I TOLD YOU SO, 2009 was NOT the bottom!!!
2019 CS @185 Pat will say SEE I TOLD YOU SO, 2009 was NOT the bottom!!!
2020 CS @185 WHAAAA? Why arent prices declining? Just a blip im sure, wait til (insert problem of the day here) happens, 2009 was NOT the bottom!!!
2021 CS @189 Crickets...Pat quietly gives up and buys a house.
So if this plays out, it means you will have passed on buying @ 165, only to spend 12 more years renting and buy @ 189. As was my case a decade earlier, youve been done in by timing...
Anon:
Its an OK theory, but in practice, its a dangerous game to play. Your problem, like that of all bears is timing. When will that "at some point" come?
I don't know. It took Japan 17 years for home prices to become fundamentally-supported. The disconnect here means that either prices have to fall quite a bit, income has to rise quite a bit, or a little bit of both.
If prices get to 190, do you throw in the towel? How about 200? Lets say they decline 10% over the next 2 years down to 165. In that case, was it really worth paying another 4 years in rent only to get the exact same price you decided was "not good enough" 4 years earlier?
I trust my own math on this issue and there is no throwing-in-the-towel. I sought to avoid risk, and the recent (past seven years') disparity between household incomes and housing prices has proven my hypothesis to be correct. Housing price bounces fueled by extremely low rates and a bribe for first time buyers doesn't invalidate this hypothesis. Also, something I pointed out a few weeks ago (which I don't think you acknowledged) is that since last summer, every month, DC prices have been declining. Strangely, when the CS report comes out, it shows a tiny increase. But if you look back in that same report, you see previous months have been revised and were declining when they were supposed to be rising. So you can leap for joy every time you hear that they rise, but keep those spreadsheets saved for later comparisons of those figures, because the revisions aren't insignificant. I just don't know what the meaning is behind them.
You do say "four years of paying rent" like a realtor. The cost of owning the equivalent house I'm renting is so much more that even were housing prices guaranteed to not fall (which by the way, rent HAS followed household income in this area over the past 10+ years, further proof that these prices are NOT sustainable), this is still a better deal. I'm not wasting money, I'm getting a discounted house to live in versus the debt pleb across the street from me paying a significant premium to pretend he's living the American Dream.
FYI, I've made two offers in the past nine months and might make an offer on this house, so I'm not some stubborn gnome waiting in a cave, avoiding debt/home-ownership. I just think you and a couple other people here are delusional in your optimism. Hence, I'll ell-oh-ell when a dummy calls the downward reversion and the biggest asset bubble in modern history a "temporary decline". Haven't heard anybody infer that dumb sentiment since early 2008, when even the koolaid-drinking realtards started to realize that a reversion isn't a temporary anomaly.
"Pat said...
Look, the feds are spending billions to keep the DC economy afloat, but, when the Bush wars end, what will happen to defense spending locally?"
Unlike the first 3 factors which I disagree with you on the significance, I do agree with you that this one can be significant. We had a similar set up back in the late 1980s, a housing bubble, followed buy significant cutbacks as the cold war ended.
Still though, lets look at the waaay back machine and see what happened here locally:
http://novabubblefallout.blogspot.com/2011/05/s-march-home-price-index.html
Back in January 1988, DC prices were CS@74 and rising 15% YOY. A bear would be justified in saying, this is UNSUSTAINABLE! Plus with defense job cuts on the horizon, and the unwinding of the RTC which will dump properties onto the market, causing instability, you would be a FOOL to buy now. We WILL revert to the mean! 1987 prices (i.e. CS@64) will happen eventually!
Problem for him is we never did see 1987 prices again. We did revert to the mean "eventually" but we did so (after the 1991 @ 1992 price drops) via years upon years of stagnation.
For this poor sap, he passed when prices were @74 in 1988. Only to buy (say in 1995) when prices were @89. 7 more years of renting, and 20% higher prices. Ouch.
"Kevin said...
Also, something I pointed out a few weeks ago (which I don't think you acknowledged) is that since last summer, every month, DC prices have been declining. Strangely, when the CS report comes out, it shows a tiny increase. But if you look back in that same report, you see previous months have been revised and were declining when they were supposed to be rising."
I saw when you said that a few weeks ago. While your conclusion is deeply and funadmentally wrong I choose not to adress it at the time as we were discussing how you were wrong (i.e. "put me down for CS 155 next june") and I didnt want to distract from that issue.
That said, I will explain it to you now if you really do not know the answer. Do you really want to know?
I ask that because (unlike Contrarian & a few others here), I believe you arent an idiot. I believe you know how to account for factors such as seasonality and comparing YOY prices, yet you choose to intentionally point to MOM price movements (kinda like the NAR does in the summer) for some unknown reason -- perhaps because it delays the inevitable -- you having to acknowledge that prices are rising.
Then again, maybe you really dont know. Do you care for me to explain why you are oh so wrong?
Anon:
"While your conclusion is deeply and funadmentally wrong I choose not to adress it at the time as we were discussing how you were wrong (i.e. "put me down for CS 155 next june") and I didnt want to distract from that issue."
Perhaps you need to learn how to discern between an observation and a conclusion. You chose to ignore this point because what, you were too busy taunting me for modifying my stance while not capitulating to your bullish assertions? Oh, okay, we'll just pretend it's not a factor. Keep celebrating your monthly unrevised CS increases.
I believe you know how to account for factors such as seasonality and comparing YOY prices, yet you choose to intentionally point to MOM price movements (kinda like the NAR does in the summer) for some unknown reason -- perhaps because it delays the inevitable -- you having to acknowledge that prices are rising.
I know how to account for those seasonal factors. So does Standard & Poors. They offer seasonally-adjusted indexes as well, you know. Since one index isn't seasonally-adjusted and one is, how exactly does that explain downward revisions of past data? I'm not criticizing the Case-Shiller methodology, but I do want to (again) point out what the media and the bulls-with-blinders have ignored (or simply haven't bothered to look for). Every month when you're driving home and hear WTOP announce "prices in DC are up, woohoo", you're not hearing them say that the previous month when they said the numbers were up, they were actually down. Not only is the revision understating past performance, but it's overstating that new monthly figure which is being juxtaposed against the last MoM number.
Yes, I can discern MoM versus YoY. This is not nearly worth complaining about as are, say, inventory and sales. We're talking tiny percentages here, already built into the aforementioned seasonal indexes.
I see you have no contention to my above retort about how renting is saving me a lot of money, how "not throwing in the towel" has served me just fine, and how home prices are completely detached from household incomes and rental rates in the area. Should I assume that this is your way of capitulating? Or do you not think those core fundamental factors are as important as arguing about YoY versus MoM on the trivially-affected seasonal changes in housing prices?
"Kevin said...
I see you have no contention to my above retort about how renting is saving me a lot of money, how "not throwing in the towel" has served me just fine, and how home prices are completely detached from household incomes and rental rates in the area."
Trust me, I do have issues with this, but first I need to dispense with this Case Shiller revisions/declining prices issue.
For example, I seem to get a sense from your most recent response that you are irked that the monthly number are usually revised down, meaning that the gains are not as great as they were first reported. Still though, thats not what you said in the first instance.
At 2:10 PM today, you said:
"Kevin said...
Also, something I pointed out a few weeks ago (which I don't think you acknowledged) is that since last summer, every month, DC prices have been declining. Strangely, when the CS report comes out, it shows a tiny increase. But if you look back in that same report, you see previous months have been revised and were declining when they were supposed to be rising."
Emphasis in boldface is mine. Instead of "declining" dont you mean to say "increasing, just not as much as was first reported"?
The Anonymous said...
In that case, was it really worth paying another 4 years in rent only to get the exact same price you decided was "not good enough" 4 years earlier?
You do sound like a realtor when you say things like this. Renting is not always throwing money away. Maybe I'm wrong, but don't most of us rent a much smaller place than we are looking to buy? At least in my case, I was renting a 1 bedroom apartment and we bought a 4 bedroom house. We were saving money hand over fist while renting, and would be ahead if we had continued to rent (and save) versus pay interest on a mortgage. My PITI is over twice as much as my rent was. We were just shopping because it was getting close to our planned time to start a family, and we had our search narrowed down to a select few neighborhoods. We wanted more of a selection to choose from than just one selling season provides.
Jeremy, I promise I will answer in due time, but I first want to see if Kevin is willing to answer the question. My guess is he would like to slink away quietly, but now that I called him out on that, he will likely return and answer.
We shall see.
Anon:
Emphasis in boldface is mine. Instead of "declining" dont you mean to say "increasing, just not as much as was first reported"?
No, I meant exactly what I said.
July - 187.19
Aug - 187.09
Sept - 186.31
Oct - 185.04
Nov - 183.90
Dec - 182.97
Jan - 181.59
Feb - 181.01
Mar - 182.98
Down, down, down. Since you (and undoubtedly others with baseless, bullish market sentiments) have perceived this as increasing despite it being seven months of decreasing is very telling. Do you not look at the numbers? Do you hear the initial report as announced on WTOP and just say "woohoo, DC prices are going UP"? Are you so insecure about the reality of housing prices in our region being way higher than the fundamentals which would support them that you're willing to lie to yourself about reality? You mock others for not being "right", but I seriously doubt that you understand the DC housing market. You even knock me for renting and saving over $1000/mo versus the owning equivalent. How are you NOT drinking the realtard koolaid?
I seem to get a sense from your most recent response that you are irked that the monthly number are usually revised down
The only thing that irks me is that when I point out that not only are the numbers down, but the trend itself is opposite of what people think it is, I have to counter the willful ignorance of people who are too lazy to look at the numbers and realize what I'm saying is true. I have to have about a dozen post-offs with someone whose sole agenda is to dig up quotes from six months ago while taunting other posters over what they (or other posters) have said. Even up above, when I asked why you dodged this pertinent point, you admitted that it got in the way of your taunting. So yeah, your childish ignorance irks me, not the least because I think you are capable of understanding this stuff were you not intent on unfairly ripping on other people the entire time.
And just to save you the effort of talking about seasonally-adjusted numbers, I know those above numbers aren't seasonally adjusted. Nor are these:
http://novabubblefallout.blogspot.com/2011/05/s-march-home-price-index.html
Nor are the ones that you hear on WTOP. So let's keep it within this context. These reports say every month that we're UP when later it shows that we were DOWN.
Jeremy, I promise I will answer in due time, but I first want to see if Kevin is willing to answer the question. My guess is he would like to slink away quietly, but now that I called him out on that, he will likely return and answer.
You didn't call me out on shit. Look at those numbers. You could have taken two minutes to look it up yourself. I made this point weeks ago and you're either too fucking lazy to realize I was making a good (correct) point, or you don't even care since being an antagonist is your only purpose.
"Kevin said...
You didn't call me out on shit."
Oh, I think I did. After 14 hours of silence. I figured you were looking at the thread, trying to decide whether or not to answer or to let it die quietly. Then, sure enough, 8 minutes after I post, you appear and give me what I want.
Sad to say, your answer shows you are not as smart as I thought. You really really do think that the declining monthly numbers we have seen this past 6 months is significant.
Your problem, my friend, is that you are seriously, seriously underestimating the power of seasonality. Ask housebuyer about this as he (probably the most reasonable, throughtful poster we have here now) was caught flatfooted when the April 2010 print came out and it exploded upward.
In sum what you are ignoring is how drastic the summertime/wintertime directional swing in prices can be. Even during the 01-05 boomtimes and the 07-09 bust, you can clearly make out a seasonal pattern by looking at the monthly numbers. Go back and look at the winter 09 CS posts and you will note I came up with my 170-190 range prediction during a time when monthly prices were declining.
If you dont understand, which you clearly dont, the number you SHOULD be looking at is the 2nd derivative (identified as the "year over year change" in the 3rd column of Harriets CS post:
http://novabubblefallout.blogspot.com/2011/05/s-march-home-price-index.html
Go back to December 2008 when the 2nd derivative went from declining at a rate of -19.60% YOY down to say, a rate of -18.41% in March 09. Back then, (even though the monthly number was still coming in negative) Some of our most prescient bulls like CRT noticed this decline in the second derivative, and used it to thus call the bottom (which came in March 2009 @165.94).
Likewise, had you paid attention to the 2nd derivative, you would have noticed when it peaked in May 2010 at a rate of +7.73% YOY, and then started declining. This had me concerned, as I thought the 2nd derivative would swing all the way back over to the negative column (possibly as early as this winter), as the effects of the tax credit were erased.
Likewise, had you again paid attention to the 2nd derivative, you would have AGAIN noticed that it STOPPED declining in December 2010 at +2.33% YOY. The 2nd derivative improved to +2.36% YOY in Jan, and then 2.51% YOY in Feb, and now +4.31% YOY in March. (note I expect this March number to be revised down, perhaps to +3.0% YOY.)
While its still early, this is a (potentially) major development as it could be we will not go YOY negative, and will instead see prices increases of between +2 and +3 YOY, as you would expect in a normal market. I personally still think its too early for sustained price increases, but I am watching this carefully.
Bottom line, your watching merely the MOM numbers has hoodwinked you into completely ignoring the seasonality of prices and concluding that prices are going down when in fact they are going up (officially at a rate of +4.31% YOY). You really really need to pay attention to this.
In all likelyhood, at some point this summer the monthly numbers are going to come in +MOM. According to your rationale, this would then mean prices are going up. Thus, if you continue to focus largely on the MOM numbers, get ready, as its likely you are going to have some splainin to do!
Oh, I think I did. After 14 hours of silence. I figured you were looking at the thread, trying to decide whether or not to answer or to let it die quietly. Then, sure enough, 8 minutes after I post, you appear and give me what I want.
Your comment wasn't made until nearly two hours later. At that point I was on the road running errands, then went to a concert, and crashed at 1am. Pardon me for not bringing a laptop with me to keep up with your dodgy, antagonistic, dishonest discourse.
. You really really do think that the declining monthly numbers we have seen this past 6 months is significant.
I didn't say it's significant. I said that everybody thinks they were increasing when they were decreasing. You, the total dumbass, just proved EXACTLY that sentiment when you said:
Instead of "declining" dont you mean to say "increasing, just not as much as was first reported"?
It blows my mind that I can point out that "hey, the revised numbers show prices aren't increasing despite what the bulls are saying", show the revised numbers which are on this very blog, and you STILL try to argue that seven months of declining prices are "not increasing as much". That's either laziness, stupidity, or outright bullshitting. I gave you the benefit of doubt by assuming it was laziness before. That you're still arguing the point or trying to call me wrong on something irrefutable like this suggests probably a combination of stupidity and dishonesty.
Your problem, my friend, is that you are seriously, seriously underestimating the power of seasonality.
I am not underestimating it. I have caveated my posts above with it. I'm keeping this within the context of all past posts. I have pointed out that there is a seasonally-adjusted index. I'm guessing you were unaware of this, since you're conflating revisions with seasonality. My point was that prices were not rising and the only reason people thought they were is because the fresh data showed that to be the case, but was in fact the opposite when revised.
I boldfaced this because I've said it like a dozen times and you are continuing to argue what is undeniably true. I am not arguing that prices are tanking. I'm not arguing that this isn't seasonal. I'm not saying that prices are going to fall by 50%. So stop projecting these statements and sentiments to me and stop thinking there are points to be won by being antagonistic. I have wasted way too much time pointing out what I thought was an interesting phenomenon in the Case Shiller data. Every month people think that prices were increasing, they were decreasing. You don't find that interesting? Fine, just say that rather than trying to argue against the truth of the matter. You've clearly shown that you didn't even look at the fucking numbers when you made that idiotic statement above.
"Kevin said...
My point was that prices were not rising and the only reason people thought they were is because the fresh data showed that to be the case, but was in fact the opposite when revised."
No they are not. The reason people are saying prices rose is because they are still up YOY on both the fresh data AND the revised data.
For example, the initial March 2011 print came in at 182.98. Thus, given that this fresh number was 4.3% higher than the March 2010 number of 175.42 it was reported as "home prices in DC rose +4.3% on a YOY basis"
Now, if the March 2011 print is revised down (as I suspect it may be) to say 182.20, that is still higher than last March's 175.42. Thus, in this instance its correct to say that per CS "home prices in DC rose +3.9% on a YOY basis".
Thus, again, as I said, prices are rising (based both on fresh and revised data) just not as much as was initially reported.
Also, as a follow up, if the revised March 2011 print came in lower than the March 2010 print (i.e. it was revised down to 175.41 or below), then and only then can we say that your statement:
"prices were not rising and the only reason people thought they were is because the fresh data showed that to be the case, but was in fact the opposite when revised."
is true. Otherwise, you are just wrong. Can you really not see this?
Thus, again, as I said, prices are rising (based both on fresh and revised data) just not as much as was initially reported.
'Rising' is an active verb, a present and continual state of being. If you really meant year over year, you would say "year over year" or "compared to this time last year". I know you know this and you're just trying to save face because you were 100% wrong up above, but substituting bad semantics for bad analysis doesn't necessarily make you appear brighter.
Otherwise, you are just wrong. Can you really not see this?
I'm not wrong. You're projecting false sentiments and statements to me and trying to use semantics to change the purview of the discussion. In fact, you almost always use false projections. "Ok Kev, when will you thrown in the towel, admit that renting was a waste of your money" is a perfect example. I've stated on this board that I've been making offers on houses. Now you're uttering embarrassingly lame and economically-stupid realtard propaganda. When you start parroting lines made by the idiots in NAR, despite whatever self-awareness you have about it, you can't accuse other people of 'not being that smart'.
"Kevin said...
If you really meant year over year, you would say "year over year" or "compared to this time last year". I know you know this and you're just trying to save face because you were 100% wrong up above, but substituting bad semantics for bad analysis doesn't necessarily make you appear brighter."
You will note, in the very first instance when I address the CS issue yesterday at 3:26pm, I say in part "I believe you know how to account for factors such as seasonality and comparing YOY prices, yet you choose to intentionally point to MOM price movements..."
Once the parameters of YOY vs MOM were set, I did not think that they need to be restated in every instance going forward. Thus, at 5:45 pm, I did not restate what I thought was obvious to everyone that we were speaking on a YOY basis. So if it makes you feel better, then yes, point to you Kev. I am devastated.
As such, let me amend and restate my post from 5:45 pm last night as follows (amendments are in CAPS):
++++++++++++++++++++++++++++++++++
"For example, I seem to get a sense from your most recent response that you are irked that the monthly number are usually revised down, meaning that the YEAR OVER YEAR gains are not as great as they were first reported. Still though, thats not what you said in the first instance.
At 2:10 PM today, you said:
"Kevin said...
Also, something I pointed out a few weeks ago (which I don't think you acknowledged) is that since last summer, every month, DC prices have been declining. Strangely, when the CS report comes out, it shows a tiny increase. But if you look back in that same report, you see previous months have been revised and were declining when they were supposed to be rising."
Emphasis in boldface is mine. Instead of "declining" dont you mean to say "increasing ON A YOY BASIS, just not as much as was first reported"?
6/23/11 5:45 PM
++++++++++++++++++++++++++++++++++
Thus, before we move on to other topics, let me ask you, again, to respond to my 5:45 pm question. Can you answer this Kev?
Once the parameters of YOY vs MOM were set, I did not think that they need to be restated in every instance going forward.
My observation was based on monthly price changes and how the perception of increases was wrong. Since this is the thirteenth time that I've explained it, you know that the observations I was sharing were not and could not have any relevance to YoY. Hence, in RESPONSE to my observations and comments, you were not setting any parameters, you were trying to change the parameters in order to make a deflection.
Emphasis in boldface is mine. Instead of "declining" dont you mean to say "increasing ON A YOY BASIS, just not as much as was first reported"?
6/23/11 5:45 PM
++++++++++++++++++++++++++++++++++
Because my observations were based on several points, and wrongly perceived current upward momentum. As you like to constantly show off your proficiency in Calculus 1 when discussing rates of change, I find it funny that you are questioning why somebody else would look at the rate of change.
If you find MoM to be such an offensive measure of change, I suggest you request that Harriet stop including it in her blog updates, as well as yourself (posted on 10/28/2010).
Thus, before we move on to other topics, let me ask you, again, to respond to my 5:45 pm question. Can you answer this Kev?
Rate of change, as stated above.
I doubt you're interested in other topics unless it's to completely dodge a current topic. I mention rental/ownership disconnects, you don't want to discuss it. Household income to home prices, you don't want to discuss it. Quirks in the Case-Shiller revisions which make decreasing prices appear to be increasing, you'd rather waste an entire day bickering over the period of comparison than discuss it.
"Kevin said...
My observation was based on monthly price changes and how the perception of increases was wrong. Since this is the thirteenth time that I've explained it, you know that the observations I was sharing were not and could not have any relevance to YoY. Hence, in RESPONSE to my observations and comments, you were not setting any parameters, you were trying to change the parameters in order to make a deflection."
Correct, as I noted in the very first instance yesterday at 3:26 pm, "you choose to intentionally point to MOM price movements..."
In fact, if it makes you feel better, yes I was trying to "change the parameters" in order to "make a deflection". That is PRECISELY what I wanted to do, "deflect" away from the largely meaningless MOM numbers and get you to focus on the far more important YOY numbers.
Seeing as you still will not clearly answer the YOY question, let me go one further and fully concede your MOM point. YES the monthly numbers are down, down, down, and down some more. Points to you Kev, a devastating, whithering attack.
Now that is disposed of let me try this again, going back to my now amended and restated question (where I am clearly and unrepentantly trying to deflect the topic to YOY numbers) yesterday at 5:45 PM:
++++++++++++++++++++++++++++++++++
"The Anon said...
For example, I seem to get a sense from your most recent response that you are irked that the monthly number are usually revised down, meaning that the YEAR OVER YEAR gains are not as great as they were first reported. Still though, thats not what you said in the first instance.
At 2:10 PM today, you said:
"Kevin said...
Also, something I pointed out a few weeks ago (which I don't think you acknowledged) is that since last summer, every month, DC prices have been declining. Strangely, when the CS report comes out, it shows a tiny increase. But if you look back in that same report, you see previous months have been revised and were declining when they were supposed to be rising."
++++++++++++++++++++++++++++++++
So Kev, given that I am readily, and fully conceding the oh so devastating point that the MOM numbers are declining, which they often do in the wintertime months... I want to now, once again attempt to "deflect" your focus away from the MOM numbers and go to the YOY numbers. Ready?
Given that we are now clearly understand that in the first instance I was talking about YOY instead of MOM numbers, instead of you saying "declining" would it not be appropriate to say that prices are "increasing ON A YOY BASIS, just not as much as was first reported"?
Again, I am happy to discuss other topics, but Id like to get this into the "asked and answered" category. Also, quite honestly I want to see if you have the intellectual capacity to admit in a clear, unambiguous manner whats happening to prices. Excuse me, prices on a YOY basis. Oops, I mean prices on a YOY basis IN DC...per Case Shiller (dont want any more confusion here).
Can you do this Kev? Im not totally sure that you can...
Can you answer this Kevin?
Oh goody, Anonymous, you've broken out of your spell of antagonism and actually want to have a discussion. I'd better take advantage of this moment while it lasts....
The first time homebuyer tax credit was in its final months last summer, well past the March 2010 point you're begging me to use as a comparison. Prices increased per C-S by almost 7% from March through July, and decreased for seven straight months, apparently not enough to fully revert from the credit's influence.
Your insistence on looking at YoY for an increase is begging for me to believe that the market which was fueled by a tax credit is an apple-and-apples comparison to today. It also begs that the surge in prices which occurred after four more months' of the credit's life be attributed to a naturally strong market. Isn't that the point of YoY? Isn't that why you derailed this discussion?
If that's indeed the logic you want to apply here, maybe I should compare prices in March 2011 to March 2006 to project what a TANKING housing market we're currently in. Of course, that would be insultingly dishonest since the market was an economic aberration at the other measuring point (2006), just as your comparison point in the midst of the tax credit is hardly unobstructed by the effect of Congress' bribe at the time.
How'd I do, buddy? Did I earn any points for responding correctly to your no-brainer of a question?
"Kevin said...
How'd I do, buddy? Did I earn any points for responding correctly to your no-brainer of a question?"
Kev -- I hate to do this to you, but im looking over what you wrote here -- carefully, and honestly I really cant see where you answered the "no brainer" -- either "correctly" or otherwise.
I mean this in all seriousness, but I really cant see where you answered the question...certainly not directly.
As you know, clarity is extremely important here -- cause as you told me earlier:
"If you really meant year over year, you would say "year over year" or "compared to this time last year".
Likewise, if you were to answer my "no brainer" in the affirmative, you would say "of course prices are rising YOY" or "yeah, compared to this time last year, no doubt prices have risen"...
Still, I am looking carefully over your most recent comment at 3:45 pm today, but again, honestly, I do not see it, or frankly anything close to it.
Thus, while I hate to do it, I have to ask, which part of your comment at 3:45 pm was meant to convey something along the lines of "of course prices are rising YOY" or "yeah, compared to this time last year, no doubt prices have risen"...
Do you see it Kev? Frankly I dont.
Kev -- sorry but Im looking again, and I still cant see it.
Best I can come up with is where you said...
"apparently not enough to fully revert from the credit's influence"
This may be where you answered the "no brainer", but boy, you can see why I am having difficulty finding your answer to the question cant you? I mean, given that we have established how important clarity is here, I dont think its too much of a stretch to say, you really didnt provide an "answer" as such.
Still, I will admit, there is a chance I am just having a brain fart and the answer (either in the affirmative or in the negative) is there, it is clear, and it is directly in front of my face. Its the type of thing where any 3rd party would pipe up and say, "Look the Anon - in the second sentence from the bottom, Kevin clearly said..."
If so, consider this a carrot for you. If its there, point it out and (rightfully) take a jab at my intelligence or reading comprehension skills for failing to see something that said (in sum) "yes, prices are rising on a YOY basis", or "no, prices are not rising on a YOY basis".
Good luck!!!
Pardon me for forming a thoughtful retort and explanation of why a comparison to mid-credit prices is invalid if all you were looking for was the shared observation that prices are higher now than they were a year ago. You're like a petulant child who is only satisfied by being "right", not by being insightful or intellectually stimulating (unless it explicitly serves your purpose of being "right", which is less frequent than in the past).
"Kevin said...
Pardon me for forming a thoughtful retort and explanation of why a comparison to mid-credit prices is invalid if all you were looking for was the shared observation that prices are higher now than they were a year ago. You're like a petulant child who is only satisfied by being "right", not by being insightful or intellectually stimulating (unless it explicitly serves your purpose of being "right", which is less frequent than in the past)."
Point taken. I am being obstinate as shit here -- but thats by design.
I am treating you roughly as I would any witness in a thorough cross examination. You always want to first establish the AGREED UPON FACTS before you attempt to take the conversation any further. Reason being, while I am 99% sure you agree with the basic fact that prices are rising on a YOY basis, I am not 100% sure of this because of your refusal to say so. Thus, from the beginning I was looking to establish that we agree upon certain facts vis a vis statements like "yes, XYZ is true" or "No, XYZ is not true"...
Now, in your case, where I am 99% sure that you do know that prices are rising on a YOY basis, but you have an extreme, almost visceral reaction to saying so, I choose to highlight this aspect of your personality. Again, if this were a courtroom, I would beat on this point again and again to show (a) your lack of candor, (b) your lack of trustworthiness, etc. Its as if I am saying to everyone else here "before you listen to anything Kevin has to say, understand he has a viewpoint to push, and (as I have shown here) he will go to extreme lengths so as to prove his views are correct".
Note thats not to say you cant qualify your answer. For example, had you said "as of this point, yes prices are up on a YOY basis, BUT I dont think this will last because of XYZ..." or "yes they are up, but I dont think its legitimate because..." either of these answers would have been fine. We would perhaps have to agree to disagree about the impact of XYZ or whatever, but at least there was no disagreement on the basic facts.
Instead, you decided not to take this path. You choose to go down the well worn path taken by nearly everyone who has an outspoken personality on this blog, and torque, twist, etc so as to not say something you desparately dont want to say. Normally these pissing matches end with the tormented running away, but seeing as you are as dogged as I am, we are now 24+ hours and 14 posts in to trying to establish some basic facts.
Having fun yet???
I am treating you roughly as I would any witness in a thorough cross examination. You always want to first establish the AGREED UPON FACTS before you attempt to take the conversation any further. Reason being, while I am 99% sure you agree with the basic fact that prices are rising on a YOY basis, I am not 100% sure of this because of your refusal to say so. Thus, from the beginning I was looking to establish that we agree upon certain facts vis a vis statements like "yes, XYZ is true" or "No, XYZ is not true"...
So when you say you're interrogating me, you're essentially admitting that you are unwilling to engage in a constructive conversation? Shocking. You're saying that this pointless exercise was to get me to say "183 is greater than 175"?
If the difference between being an argumentative asshole and being a troll is whether or not someone has a point, then you've crossed into troll territory. You took a measure I wasn't using and (admittedly) re-framing the conversation in an attempt to acknowledge or discuss my observation. You projected an argument onto me which I wasn't making, which you couldn't even ask directly and had to rephrase yourself a number of times. You want me to admit that price levels now are higher than they were a year ago (which is entirely attributed to the end of the tax cut), something that wasn't even debated, part of the discussion, or relevant to my observations. Tell me you're just an argumentative asshole and not a troll, because that's textbook trolling. You baited me into a pointless argument rather than discussing what (I thought) was an important phenomenon with the data. Of course, this followed your pattern of completely avoiding other pertinent observations, so why should I be surprised?
Having fun yet???
No, I find your bullshit more tiresome by the day. It feels like a long time since you've been a worthwhile observer of the RE market. You even admit that you're sprouting realtard propaganda. I admire your self-awareness, but pity you for so very much reducing your insight and input in this topic.
From all of that back and forth, this is what I think I've gleaned from the *ahem* conversation.
Month over month is down over the few months around the winter season when this is the historical norm.
Year over year is up. Given an apples to oranges comparison of this year not have any buyers bribe - and being higher - as compared to last year with the bribe - and it being lower.
I don't see how either of these points are particularly bearish.
My $0.02
mtw,
Agreed. It seems that arguing that the buyer's bribe inflated prices (it did) really undermines the argument that prices are dropping because YOY they aren't. If the price inflation of the 8k was a blip, we would see lower YOY CS.
If we get negative YOY then that might get interesting. I witnessed prices on the low end fall after the 8k but they have since rebounded.
At this point I don't see how anyone can say that buying at CS 165 was a mistake. Of course it always boils down to the actual property - not the market in general.
There is a continual drum beat about the stupidity of buying at peak. Yes, well, every gets that. The question at hand is what happens in the next few years.
Inventory (which should be watched) remains well off the numbers of 2007 -2009 and while my comment has been twisted and mocked; the point is that if you can't stomach some price fluctuation (5% is my guess, but I'm fairly confident 10% would be the max) then it is best to continue renting.
I believe that late 2008 and thru 2009 were the best times to buy in this region (in general).
VA_I,
This purchase also boggles my mind. It says it closed at $575k for a 2/1 in 22205.
http://franklymls.com/AR7561283
I think that's at least $100k over priced but someone liked it enough. If this is what the market is yielding then the reversion to the mean, as the bears would have it, will remain unlikely IMO.
My $0.02
"Kevin said...
Tell me you're just an argumentative asshole and not a troll, because that's textbook trolling."
Toward the end of this conversation, yes, absolutely, guilty on all charges.
"Kevin said...
You baited me into a pointless argument rather than discussing what (I thought) was an important phenomenon with the data."
Hold up. If you recall, you raised the issue a month or so back, and I ignored it at the time. Thus, when you raised it again thursday at 3:26 i.e. when you said...
"something I pointed out a few weeks ago (which I don't think you acknowledged)"
at that point, it was I who rose up and take the bait that you again dangled in front of me.
Also note, you said you thought it was an "important phenomenon with the data". I remember seeing this and thinking, in all seriouness "Really? He's actually a fairly smart guy...Can he really think this data (especially in light of the 2nd derivative continuing to increase) is that important?"
But again, since you brought it up, twice, I started thinking "wow, perhaps he doesnt know -- perhaps he doesnt realize how unimportant that data is -- perhaps he is not as smart as I thought". In all fairness, I did kinda goad you into this morass at this point by saying your reasoning was "deeply and funadmentally wrong", so if that was the "baiting" fair enough...
In any event, as to the data itself, if you havent already surmised, I honestly cannot say the declining MOM data (fresh or revised) is "important" or anything close thereto. If anything it reminds me of when the permabull Lance pointed to rising MOM medians in the spring of 2007, and Leroy (rightly) tore him to shreds for trying to say that monthly data was "important" when the YOY data was very negative. To be fair, you were not here during those early days, but I thought how ironic it was that now the bears are citing MOM data when they used to (correctly) show how unimportant it was.
Bottom line, if you still want to hang your hat on that declining MOM data (fresh or revised), then we'll just have to agree to disagree upon how important it is. Just so you know, while I do think you are fairly smart, you have some major blind spots IMO. Thus, I would not be surprised if this issue ranks right up there with the "just wait til the foreclosure moratorium expries" and "arlington is due for a nose dive" botched calls of the past.
Best guess, is that the March 2011 data (which right now is positive both MOM and YOY by the way) will remain so when revised next month. Thereafter, I believe we are likely to see 4 or more months this summer where the data is MOM positive. Thus, if you want to remain a bear, better get ready to throw the "MOM data is negative" into the trash bin with the "foreclosure moratorium" and "arlington nosedive" themes of years past, and come up with a new reason du jour for why there is trouble on the horizon. In any event, dont be shocked when this happens, and dont say, you werent warned...
I guess my repeatedly iterated point that the perception of monthly increases when each CS report comes out - that it's actually the opposite of what later data shows - flew completely over your head. Note that I haven't made a big deal about price increases. Your projection is that I have. This isn't a matter of agreeing to disagree, you are simply presuming a different point than I am making.
"Kevin said...
Note that I haven't made a big deal about price increases. Your projection is that I have."
True Kev. I have mistakenly assumed what you called last friday an "important phenomenon with the data" was something you assumed to be an "important phenomenon with the data" -- but apparently, its not.
Thanks for clearing that up...
Important phenomenon: revisions to the data painting a different picture. Thought it was worth some consideration no matter which direction it's pointing. Continue ignorantly interpreting this the wrong way.
"Kevin said...
Thought it was worth some consideration no matter which direction it's pointing."
So the "important phenomenon" is worth some consideration. OK. Thanks for clearing that up.
I wouldn't need to clarify anything were you not always projecting utterly false and baseless sentiments and notions onto me.
Another C-S index was published today. March's previous index figure of 182.98 has been revised to 181.30. This isn't terribly significant, but it's largely ignored by even those such as yourself who claim to analyze this data.
"Kevin said...
Another C-S index was published today. March's previous index figure of 182.98 has been revised to 181.30. This isn't terribly significant, but it's largely ignored by even those such as yourself who claim to analyze this data."
If you look at todays thread, I noted that the March figure was revised. IMO this is precisely the amount of attention this matter deserved.
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