Category: US Housing
The analysis published under this category are as follows.
Wednesday, August 15, 2007
Wall Street and Main Street Are Joined at the Hip / Economics / US Housing
By: Paul_L_Kasriel
Watching Bubblevision and reading the Wall Street Journal (see August 7 edition, " Don't Panic About the Credit Market ," David Malpass), I keep hearing that what happens on Wall Street doesn't materially affect Main Street. I respectfully disagree. Main Street is more dependent on Wall Street than ever before.
Chart 1 shows the history of one simple definition of household surpluses and deficits. This definition subtracts the sum of Personal Consumption Expenditures (PCE) and Residential Investment Expenditures (RIE) from Disposable Personal Income (DPI). Both PCE and RIE are "line items" in the Gross Domestic Product accounts. RIE is essentially the value-added in the private residential real estate sector - new construction of homes, including remodeling of existing homes, and the value added by real estate brokers. DPI is equal to all income currently earned by households, including employer contributions to pension funds, interest on investments, dividends on corporate equities and rents on property less taxes paid by households.
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Wednesday, August 01, 2007
Putting Home Sellers on the Couch: The Psychology of why Sellers Refuse to Lower Prices / Housing-Market / US Housing
By: Dr_Housing_Bubble
Driving to a meeting, I tuned into a show called House Calls on a local FM talk radio station. The show centers on real estate investing and taking calls (massively prescreened) from the public. Whenever I'm in the car on a Saturday morning driving with the gorgeous California sun, I usually tune into this station to see what the media and the public are saying about the housing market. I've listened to this show for a very long time. And I can tell you that last year they were cheerleading Southern California housing like you wouldn't believe. Any caller mentioning the word “bubble” was painted as a tinfoil hat wearing bubblelista. Fast forward one year to summer 2007 and they are giving the advice of investing out of state for cash flow properties. Sounds like the strategy I've been purporting since the beginning but why mince words, these are the experts.
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Monday, July 30, 2007
Rich Investor, Poor Investor / Housing-Market / US Housing
By: David_Morgan
One of the most widely read books on money and investing has to be Robert Kiyosaki's Rich Dad, Poor Dad, which is a unique economic perspective developed by Kiyosaki's exposure to two “dads,” his own highly educated father, and the multimillionaire eighth-grade dropout father of his closest friend.
Saturday, July 28, 2007
Why Did the Housing Phenomenon Spread? Three Key Reasons for a Social Epidemic: Housing Connectors; Mavens; and Salespeople / Housing-Market / US Housing
By: Dr_Housing_Bubble
We can learn a lot from the social sciences especially in analyzing the current housing bubble. Many may see very little connection between housing and social science but behavioral economics and marketing have much to do and say regarding our current environment. This is particularly relevant in analyzing the current housing market because we are in a bubble; and by definition something in a bubble does not follow conventional rules.Read full article... Read full article...
Saturday, July 21, 2007
More Evidence of Spillover from US Housing Market to Consumer Sector / Economics / US Housing
By: Paul_L_Kasriel
We have been forecasting that the housing recession would have a negative knock-on effect on discretionary consumer spending. Six successive months of declining light motor vehicle sales is corroborating evidence of this. If J. D. Power has got its numbers correct, July is on course to mark the seventh consecutive month in which car and truck sales decline.Read full article... Read full article...
Saturday, July 21, 2007
Why the Housing Market Has Failed You. Five Major Failures of the US Housing Market / Housing-Market / US Housing
By: Dr_Housing_Bubble
I'm sure many of you already read the article about The Real Estate Prayer Luncheon in Florida where a group of hopeful agents prayed that the housing slump will end. I actually think this is a great idea to resurrect the housing market. So in light of this, I am going to pray that my new book coming out called The Wealth via Failure Code will be a major success. I'm praying that all of you will buy it. Since we are living a surreal housing environment, I figure writing a book with Orwellian themes will tickle many of your fancies.
Monday, July 16, 2007
Mission Accomplished: 3 Housing Issues: Multiple Bottoms, Declining Dollar, and More Sub-prime and Alt-A Defaults / Housing-Market / US Housing
By: Dr_Housing_Bubble
It is said that the definition of insanity is doing the same thing over and over and expecting a different result. If we adhere to this definition, housing pundits must be clinically insane because since the middle of 2006 we've been hearing rhetoric of “yes, today we've reached bottom.” Amazing how these folks live on one way streets. During the past seven years, each new record high was welcomed and when asked if this was a peak most would respond that the sky was the limit. No end in their immediate future. If up to them, housing would appreciate 20% each year until the end of time.
Thursday, July 12, 2007
Where Are All The Homebuilder Bargains? / Companies / US Housing
By: Brady_Willett
Brady Willett & Todd Alway write: With U.S. homebuilder confidence slipping to a 16-year low in June and subprime contagion fears omnipresent, no one seemed to notice when Toll Brothers reported a 93.5% increase in its ‘Provision for inventory write-downs/write-offs' for the six-months ending April 2007. However, as the losses and/or inventory write-downs at Toll and other builders mount in the coming quarters, the carnage could prove difficult to ignore. After all, following more than a decade of truly spectacular gains, the good times for U.S. homebuilders are over.Read full article... Read full article...
Saturday, July 07, 2007
Comparative Analysis of 3 U.S. Cities: Contrary to What Your Parents Told You, Not all Bubbles are Created Equally / Housing-Market / US Housing
By: Dr_Housing_Bubble
As we are witnessing the mortgage debacle unfold in California, there are other parts of the country that felt very little impact by this seven year credit bubble. For the most part, this bubble has been isolated to coastal metro areas. Not uncommon in beach locales, housing in prime locations always yields a commanding price in the market. But to what extent? Actually to the extent the market can sustain the price, sellers will ask for Pollyanna if they have the inclination they will get it. Yet this desire for higher and riskier mortgages has added fuel to a housing craze unparalleled in history.Read full article... Read full article...
Sunday, July 01, 2007
So Much for the Spring House Selling Season! / Housing-Market / US Housing
By: Money_and_Markets
Mike Larson writes: I'm an optimist. No, really. In "regular life," I like to look at the bright side of things. Anyone who has known me for a long time will tell you the same thing.
But when it comes to the markets, I don't mess around. Starry-eyed optimism is a recipe for disaster. You have to approach trading and investing in a cold, rational manner. I don't care if you're talking about bonds, stocks, real estate, or anything else.
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Thursday, June 28, 2007
The Housing Tipping Point. 3 Factors That Will Burst the Bubble: The Negative Wealth Effect, Negative Press, and Suffocating Debt Payments / Housing-Market / US Housing
By: Dr_Housing_Bubble
As the Fed does an ostrich impression by sticking its head in the ground and pretending everything is okay, we are facing an economic tipping point ushered in via housing. The Fed has left the key interest rate steady once again. At this point, they are backed to a wall because lowering rates will signal that the economy is weak and needs additional help thus stunting consumer confidence. If they raise rates, they accelerate the bursting bubble because debt service on millions of American's mortgages will go higher thus taking money away from the national past time of mall shopping. We are quickly approaching a global tipping point.
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Wednesday, June 27, 2007
So, the US Housing Recession Is Contained? / Economics / US Housing
By: Paul_L_Kasriel
That's the conventional wisdom, but recent reports from retailers might suggest otherwise. Early in June, Bed Bath & Beyond issued a profit warning. BB&B's chief executive, Steven Temares, said: "Based upon what we have experienced and has been reported by others, the overall retailing environment, especially sales of merchandise related to the home , has been challenging" (emphasis added).Read full article... Read full article...
Wednesday, June 20, 2007
Irrational Housing: Insiders Out Early and the Duesenberry Effect / Housing-Market / US Housing
By: Dr_Housing_Bubble
Markets operate under the assumption that key players act rationally in most circumstances. Their premise is such that market stability is based on people acting to a set of according rules. Much has been debated about this because economics as a science is cold and aloof; it is a matter of simply stating the facts. Yet we have learned in the recent housing mania that market psychology and behavioral economics play a large role in how people interpret risk and what constitutes an investment.Read full article... Read full article...
Tuesday, June 19, 2007
Subprime Mortgage Problems Quarantined? Ask the Home Builders / Housing-Market / US Housing
By: Paul_L_Kasriel
The National Association of Home Builders (NAHB) index of current sales of new single-family homes edged down a tick to 29 in the June survey, the lowest reading for this housing cycle and the lowest reading since early 1991 (see Chart 1). Why? I will let David Seiders, the NAHB's chief economist, tell you in his own words: "It's clear that the crisis in the subprime sector has prompted tighter lending standards in much of the mortgage market, and interest rates on prime-quality home mortgages have moved up considerably during the past month along with long-term Treasury rates."Read full article... Read full article...
Sunday, June 17, 2007
America's Codependence on Housing: 30% of Job Growth Contributed by Real Estate. Five Point Plan on how the Bubble Will Burst / Housing-Market / US Housing
By: Dr_Housing_Bubble
America has gone housing crazy. In the last six years, housing has contributed to 29% of total employee additions. How does this equate to past decades? Let us take a look:
1971-1979: 10%
1980-1989: 12%
1990-1999: 10%
2000-2006: 29%
Friday, June 15, 2007
Homebuilders Stocks Rallying : How could this be? Part II / Housing-Market / US Housing
By: Michael_K_Dawson
My trading strategy is fairly simple. I identify a dominate theme and then buy leading stocks in that theme. This has worked quite well for me over the years. Back in the good old days it was the Internet and stocks like AOL (TWX), CMGI (CMGI), Cisco (CSCO), Intel (INTC) and Microsoft (MSFT). Over the past three years, it has been industrialization of the emerging markets. This led to the formation of my Big Build-Out (BBO) portfolio and stocks like Companhia Vale do Rio Doce (RIO), Southern Copper (PCU) and BHP Billiton (BHP). Read full article... Read full article...
Tuesday, June 12, 2007
Housing Market Crashing? Yes, In Slow Motion / Housing-Market / US Housing
By: Phillipa_Green
Interesting video on the US housing market crash by Itulip.Read full article... Read full article...
Monday, June 11, 2007
So-Called Fed Model Suggests Housing Market Is Over-Valued / Economics / US Housing
By: Paul_L_Kasriel
Better late than never, huh? The so-called Fed model is often used to gauge the under-over-valuation of corporate equities by comparing the earnings yield on, say, the S&P 500 with the yield on the Treasury 10-year security. The same kind of analysis can be applied to owner-occupied housing by dividing the "earnings" or services produced by owner-occupied housing by the market value of that housing. The services produced by housing are estimated by the Bureau of Economic Analysis in its National Income and Product Table 2.45U, line item "Personal Consumption Expenditures: Owner-Occupied Nonfarm Dwellings: Space Rent."Read full article... Read full article...
Saturday, June 02, 2007
What a Housing Market Recovery Will Look Like - Housing Bust Recovery in 1930s / Housing-Market / US Housing
By: Submissions
The housing bust is here and we can all expect home prices to decline every year for years to come. However, recovery will eventually happen and when today's market seems bad just take a look at this video to know what a recovery looks likeRead full article... Read full article...
Friday, June 01, 2007
Price is Everything in Today's Housing Market! / Housing-Market / US Housing
By: Money_and_Markets
Mike Larson writes : There is demand for housing out there. Yes, you heard me right — people are willing to buy homes.
There's just one catch: The prices have to be low!
That's one message from the April housing data. The other is that we are literally swimming in homes for sale — condos, town houses, single-family homes, you name it!
Let me tell you what this means …
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