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"Home sales fell 3.5 percent last month to a seasonally adjusted annual rate of 4.67 million homes, the National Association of Realtors said Thursday. That's far below the 6 million that economists say must be sold to sustain a healthy housing market.
And this year's pace is lagging behind last year's total sales. The 4.91 million last year were the weakest sales figures in 13 years."
30 comments:
Dos this suggest another dip down in the housing market nationally or just stagnant for a while longer? Lowest in 13 years even surpasses the lows of 2009, is this the W curve so many talked about last year?
wunderbar-
If the economy & stock market do not pick up fairly soon housing will probably continue to slowly go lower, but I still don't expect to see massive price declines unless we have a depression.
Right now we are either in a second recession (much more mild than the last one) or at least very slow growth. Both of those probably mean housing will at best remain fairly flat, but it really is dependent on what the economy does going forward.
"sehrwunderbar said...Dos this suggest another dip down in the housing market nationally"
I'd say so. If you look at inventory (too high) and MOI (9.4 is way too high) on a national scale, it seems like another dip is almost inevitable.
http://www.calculatedriskblog.com/2011/08/existing-home-sales-in-july-467-million.html
In some ways, its surprising there ever was a 09-10 bounce given that MOI stayed high during that timeframe. Until MOI gets down into the 6-7 range and stays there, its too early to call bottom nationally, much less an upturn.
contrarian,
When do we break 9000? How bad will it get? How long will we be below 9000? Same questions for WDC-CS. Are you shorting the market? Are you in cash?
What do you think about gold? Rational?
Absent a crystal ball, I will continue to put one foot in front of the other and live my life. You place your bets and you take your chances....
Contrarian said...Hey brainless, er, I mean Anon,
In your fantasy world (along with CRT, et al.), you have been saying the bottom has been seen in housing and the stock market."
Locally, in DC, yes we have hit a bottom. Hit it in March 2009 and now 2.5 years later we are 10% above it. Nationally, we have not.
To my knowledge, Ive never opined here on the stock market and I dont plan to now. Nevertheless, I will note that even with the big losses seen lately we are still 70% above the march 2009 levels when you wrote this classic missive:
+++++++++++++++++++++++++++++++++
Contrarian said...Are you surprised? I guess denial is a wonderful coping tool, eh MM?
BTW, the Dow was up around 9000 at that time. Others also suggested I was way off base.
The question now, is:
At what point, if ever, will TedK, The Anonymous, MM, etc., accept the obvious? And, if for some reason it has not become obvious, why not? :-)
Have you all thought about starting a 12 step program and calling it A-D-D Anonymous?
Members would include those who chose to simply sit there during the greatest collapse of wealth in history and watch their Assets Deflate Daily.
Sad, but true. So sad. People choose to be victims, martyrs, instead of dealing with life on life's terms. Truly amazing.
3/5/09 4:47 PM"
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Im curious Contrarian, what were you advocating for on that day,5/5/09, one day before one of the largest rallies in the history of US stocks?
Specifically, what were you suggesting someone would have done that day to give up their membership in "Assets Deflate Daily Anonymous"? What were you suggesting that MM would then do if he were choose to "deal with life on life's terms"?
In the last 2.5 years, youve never given me a straight answer on this. Do you want to do that now, or do you want to go ahead and pull a "I dont know if Hal Turner is credible" and run away now???
God I love it when the market it tanking...It emboldens you to trot out the most choice of quotes which I am now saving in view of your eventual deletion, (followed by your denial of ever saying them in the first place). In all seriousness, thank you for continuing to entertain me!!! Glug, glug, glug, glug, glug...
"contrarian said...
I expect Wave 1 to bottom soon around 10,500 range. Wave 2 should take the Dow back up above 12,000. When it appears Wave 2 up is nearing its end, I will go short.
My guess is once wave 3 down breaks below 9000, it will go so low it will remain below 9000 for a few decades and very possibly the remainder of our expected life time. But, that's just an informed guess.
Currently in t-bills. Banks, for the most part, are not safe.
Gold = bubble, should deflate with everything else. Sub-wave 5 of Wave (5) of Primary Wave [5], appears to be nearing its' final stages.
8/18/11 5:56 PM"
"contrarian said...
Delete what, Anon? You simply make this crap up every time and attribute it to me."
Lets try this one. Contrarian, did you say this, yes or no???
++++++++++++++++++++++++++++
Contrarian said...Are you surprised? I guess denial is a wonderful coping tool, eh MM?
BTW, the Dow was up around 9000 at that time. Others also suggested I was way off base.
The question now, is:
At what point, if ever, will TedK, The Anonymous, MM, etc., accept the obvious? And, if for some reason it has not become obvious, why not? :-)
Have you all thought about starting a 12 step program and calling it A-D-D Anonymous?
Members would include those who chose to simply sit there during the greatest collapse of wealth in history and watch their Assets Deflate Daily.
Sad, but true. So sad. People choose to be victims, martyrs, instead of dealing with life on life's terms. Truly amazing.
3/5/09 4:47 PM"
++++++++++++++++++++++++++++++++
http://www.blogger.com/comment.g?blogID=4787878578920468587&postID=141772809946587924
I wont be back til 9ish tomorrow, so if you do respond, please leave it up til then.
So again Contrarian, are you willing to step it up and lie to me directly? Lets see...
Specifically, did you make this statement above on 3/5/09 4:47 PM? Yes or no???
contrarian said..."Currently in t-bills. Banks, for the most part, are not safe."
Wow, he discloses his position. So, contrarian has his money in t-bills which currently yield .1%. I figured a guy with a crystal ball would own some S&P puts, credit default swaps or something else with the potential for a bigger return. I guess he doesn't have much conviction in his doomsday prediction.
I never said that cash is a bad place to have your money, especially while the market is in a correction. I just thought that since your crystal ball was so accurate that you'd try of for bigger return making bearish bets.
You also read that Buffett just bought more shares in Mastercard, Wells Fargo and Dollar General, right?
http://blogs.wsj.com/deals/2011/08/15/warren-buffett-buys-into-dollar-general/
By the way, did you see the CPI report today? Up .5%.
contrarian-
Berkshire has almost $400B of assets, so his treasury position is only about 10% of his total position. He mostly uses this as a liquid asset that will not make/lose money while he waits for opportunities to arise.
"contrarian said...
And so what is your point about the CPI?"
Its an indication of just how truly wrong you are.
You staked your claim of "imminent deflation" back when CPI was around 200.
If this truly was the "Great depression II" and we had deflation like we had back then, CPI would be down about 25% to around 150 or so by now.
Instead, CPI today is at 226, a full 13% above where it was when you went all in on your deflation is imminent thesis.
Thus, as David noted, with CPI rising, you are more and more wrong all the time. Even if we headed into a severe deflationary spiral starting now (unlikely), it would probably take another 2-3 years just to get us back down to your "imminent deflation" starting point of 200 CPI.
Adding 2-3 years to the last 5-6 years you spent on the sidelines means that you have been wrong for nearly a decade. So just like that, 1/4 of your useful investing life has gone WOOOOOSH, right down the toilet.
contrarian,
You seem to "talk the talk" but not "walk the walk". With your certitude (I've never seen you qualify your remarks as "educated guesses" before) I would think that you would have profited by putting your money where your mouth is/was over the past 5 yrs.
To see you sit in T-bills tells me that you are not certain at all in your beliefs. It speaks of paralysis. I may be wrong in my predictions, but I am honest in them as I have taken the actions that I have advocated here.
"contrarian said...
Anon,
Is David another of your many pseudo-names? The question was to David. And, of course, David is nowhere to be found."
Am I David? Maybe, maybe not. Either way, im glad to know I am in so deep under your skin :)
"Contrarian said...The CPI (minus food and energy) is at its' lowest level since the 1960s."
No you freaking idiot. Core CPI is at its lowest rate of increase since the 1960s, but its still increasing nonetheless. Per your own chart, every month that graph is above zero is an increase - and your chart clearly shows, there have been increases, each and every month for 50+ years.
Think about that, each and every month even Core CPI slowly lurches higher and higher, while you continue to sit there on the sidelines, hoping, praying that it will one day crash down to your break even point of 2006 levels, much less the -25% from 2006 levels we would have to see if we had GDII.
As I noted before, even if it starts going negative now, it will be years before it gets back to the levels it was at when you were predicting "imminent deflation" -- and thus nearly a full decade of your investing life has gone WOOOOSH, right down the toilet...
Glug, glug, glug, glug...
There is a correlation between stock market and home prices. Home prices improved with better stock market, more so in DC area.
DC area benefited both from this improvement as well as federal spending. Federal spending hopefully should be cut, and there ought to be a correction in home prices in this area. Statistically the home prices here don't make much sense.
"Sub-wave 5 of Wave (5) of Primary Wave [5], appears to be nearing its' final stages."
Not to poke my head into the middle of a fight, but this made me laugh. Chart reading (technical analysis) is no better than astrology or phrenology. That said, my instincts always run contrarian - I stayed a renter while my friends bought in 2004-2006, I bought a short-sale in spring 2009; and with the market, when everyone is selling equities and moving to treasuries, doing the opposite seems better to me.
I just don't believe there are any secret patterns or magic, I play at the margins - making small adjustments over time.
FYI, I think the national housing market is largely back to baseline trends re inflation adjusted return - and will stay there until the next generation forgets the 2000s bubble. There are too many investors chasing yield for it to ever be below trend for too long. http://www.jparsons.net/housingbubble/
"contrarian said...
Anon,
You're totally delusional.
8/19/11 5:02 PM"
Thats all you can say? Really? Why dont you call me fat while you are at it?
Look, im sorry that you cant read a chart right, and actually posted someting that proved we are having inflation, not deflation. I know that is embarassing for you, but still, cant you come up with a more cogent response than this???
I would be skeptical of CPI numbers put out by the government. Many transfer programs are based on CPI, including Social Security increases. Lower numbers save the gov't massive amounts of money. I think that the CPI has been manipulated for years. Just my thoughts.
Congrats at selling at the peak. Certainly only a minority timed that correctly. I do believe that an opportunity was missed in later 2008 and all of 2009. How much has your home actually decreased at this point? And how does this compare to where you would be on the am schedule (principal paydown) versus your non-deductible rent. An apples to apples comparison would be appreciated. Some here claim huge savings by renting, but the rentals are in many cases inferior to the homes whic are compared.
I have never ascribed to selling the family home as a form of market-timing. If you were to factor in transaction costs (in and out) and the intangibles of moving; how much have you actually gained? My neighborhood is within 10% (or less) of 2005 prices. Transaction costs would have wiped away any "windfall". I wanted to short CS in 2006 and would have if I was the only decision maker in my household.
In addition, I am on a fifteen year mortgage and being out of it for 6+ years is not a good plan in my mind.
Of course if you were foolish enough to have bought in an area that got slammed and is years from getting back to peak, it MAY have been worth it.
I know what has happened in your target neighborhood and it does appear that the only bargains (of which there were few - 2 or 3?) are long gone. I'm not saying that there absolutely won't be a further downturn, but I find it unlikely that it will be attractive enough to offset your earlier costs.
As to the stock market, I am a complete failure at timing that and, infact, consider my purchases a good contra indictator.
I just find it disingenuous to post the doom that you do when you yourself seem not to act on your convictions. Is it your purpose to scare the bejesus out of people?
A few years from now indicates 3 and I gather your "educated guess" is that equities will be down 90%? Why not short the market with a portion of your cash stash?
I am perplexed that you fail to act and really take advantage of the certain crash coming our way.
"contrarian said...
Anon,
The issue is that you and I are talking apples and oranges. When we talk past each other, then it is a waste of time responding."
Uhh, No. We are both talking apples here. You said (in sum) "hey anon, look at this basket of apples, it says we have the fewest apples since the 1960s"
I pointed out that, (a) you are an idiot and (b) this isnt the "fewest apples" since the 1960s -- instead its just the lowest rate of adding more and more apples since the 1960s. The difference between these positions is simply huge, and you misunderstood it.
It is thus at this point that you, angry and embarassed at your mistake lash out at me with the simple child like "oh yeah -- your delusional" response. I understand where this comes from -- you are beaten soundly by the facts. Thus, go with personal attacks and other tangential affairs (anything other than the facts).
In any event going back to what I noted before, you have been dead wrong on your "imminent deflation" thesis for several years as inflation (core and otherwise) continues to climb slowly higher and higher. We are so far above your initial "deflation is imminent" starting point, that even if it started tomorrow and continues, unabated for years, we will only get back to the very same starting point where you went on the sidelines.
Thus, at this point, its baked into the cake. 10 years -- 1/4 of your investing life has been spent on the sidelines, all the while your "imminent deflation" has gone WOOOOSH, right down the toilet.
Vinny,
It seemed to me that money went to real estate after the dot-com implosion.
Purple man is correct. Investors put in a floor (as I said they would several years ago). Lower-end is attracting bidding wars from cash buyers and has been for quite some time now.
"contrarian said...
Va_I,
There are two answers to your question.
First, I sold investments when the stock market topped. We sold our home near the top of the housing bubble. In the mean time I am content investing in cash and cash equivalents. We are debt-free. As the stock market and banking system collapses, the cash becomes worth more. If others want to risk (and likely lose) their money, let them.
The ultimate question is: If you have $1000, would you rather buy ten shares today @ $100 per share; or, would you rather purchase 100 shares a few years from now for $10 per share? Anything in between is gambling and I am content waiting. When stock prices rise again, I will make more owning 100 shares instead of 10. In the mean time, we continue adding to cash reserves and traveling, while others are in debt and underwater, stuck in an upside-down mortgage.
In the last two weeks, we have watched the markets go up and down 400+ points several times. If you want to play in that sandbox, go ahead.
Second, I will take a short position when the opportunity arises, but I said this above:
When it appears Wave 2 up is nearing its end, I will go short.
Others here were recently claimed bank failures were on a decline. I said bank failures were about to increase (as the stock market downturn picked up speed). I said yesterday that Bank of America was valued at Zero. Today BoA announces more layoffs. When BoA goes belly-up, so will many other banks.
8/19/11 2:10 PM"
Saving as im sure this will be deleted soon. Glug, glug, glug...
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