Tag: housing prices

Stuff YOU might have missed if YOU have been fly fishing too much – 07/13/09


  • RSA’s Coviello: Cloud Computing Not Secure Enough [PC World] – Web 2.0 and widgets led to the cloud computing craze, so it’s no wonder security wasn’t part of the deal. Nonetheless, while RSA has a clear vested interest in pitching more secure web apps, I’m in complete agreement with Mr. Coviello. Only I don’t think RSA will be the sole innovator in the space.
  • Are You Helping Facebook Outrank You For Your Brand Name? [search engine land] – Get lots of attention over at a site you don’t control, and lose control of your brand in the process.
  • How to Ease Your Transition to Google Voice [LifeHacker] – The dial once, ring everywhere service formerly known as Grand Central is getting aggressive with invitations (even I got one), but I think Google really needs to add the ability to port numbers before it really takes off. PS: I heard Google is using the voicemail service to perfect it’s own text-to-speech services. Is that true?
  • Flickr adds direct-to-Twitter publishing [VentureBeat] – Now playing on Flickr, a way to automatically tweet your photos as you post them. This geek couldn’t figure out if the service would tweet all your photos or whether it could be done on a selective basis, but he couldn’t figure out how to link his Twitter account with his Flickr account either. Then he bailed on the idea altogether.
  • Finance

  • What’s North Dakota’s Secret? [Forbes] – North Dakota had twice the growth of the any other state in 2008, except Wyoming, which it still handily trounced. It presently has the lowest unemployment in the nation, and the 20th ranked GDP per capita. And a budget surplus. Huh?
  • U.S. Home Prices to Fall Through 2011’s First Quarter [Bloomberg] – Unemployment becomes the next leg in the foreclosure boom, and more than half of the major cities in the US are expected to see falling prices for the next two years.
  • The Rental Market Stinks Too [The Atlantic] – While some thought rising foreclosures would lead to rising rental prices as former homeowners mortgagees bailed, the opposite has happened in many places.
  • Mean Street: California IOUs and the Great American IOU Market [WSJ Deal Journal] – Banks won’t take them, and recipients have to eat. The SEC is coming to the rescue, declaring California’s funny money a municipal security and hoping a regulated market will arise for their trade. I wonder if anyone will be allowed to short them.
  • Fly Fishing

    Give yourself a break, will ya’?


    Rental Rates and Housing Price Gaps – What Goes Up Must Come Down?

    The International Monetary Fund has some interesting analysis (pdf) on US housing prices, with emphasis on comparison between rental rates and pricing, including some detailed data on the potential for regional corrections. Skip the writeup (for now) and head straight to the graphs at the end. (h/t Paul Kedrosky)

    And in the vacancies column…

    As of the second quarter – vacant home rates dipped about a quarter point to 2.8% while rental unit vacancies continued to hover in the 10% range, according to this analysis compliments of Calculated Risk.

    CalculatedRisk also noted that the homeownership rate has now retreated to mid-2001 levels, meaning the ownership rate is closing in on a 50% retracement to 1995’s jump-off point.

    Newton’s Law prevails?

    When the housing boom got started – Part II

    Homeownership rates jumped in 1995, and didn’t look back for a decade. According to Case-Shiller data points for its 10-City Composite, it took prices several more years to realize what was going on:


    I looked at the 10-City because it had the most consistent data for all years, but I believe similar price action would, with few exceptions, be similar to most places in the US.

    Put two big finance geeks in a box

    Bernanke Says `Saving Glut’ Still Helps Lower Rates

    Riddled with conflict. The savings glut is not domestic, the dollar is weak, there’s pressure to lower rates, and inflation lingers in staples. Mortgage rates have de-coupled from Treasuries – rates are dropping, but for lack of mortgage demand.


    Former Fed Chairman Alan Greenspan adds insult to injury by taking a shot at US housing prices (and notably in a foriegn paper).

    Mr Greenspan said he would expect “as a minimum, large single-digit” percentage declines in US house prices from peak to trough and added that he would not be surprised if the fall was “in double digits”.

    Greenspan no longer has his hands on the rate button, but it seems the button is now broken (and he knows it). He’s no stranger to conflicting commentary as of late either.

    UPDATE: Ok, maybe the button is just a little sticky.

    Home prices, wages, and crap

    Forbes just posted a graph showing the expanding gap between median home prices and median wages, based on data garnered from the National Association of Realtors and the Social Security Administration.

    Now, a whizbang economist could probably enhance this analysis by commenting on the relative interest rates during the period (taken from Ibbotson), the rising mortgage and consumer credit levels (from the Federal Reserve), and even the balance of trade between the US and foreign countries (from the US Department of Commerce). He or she could go on and on about how the difference between the two elements means housing prices are primed for a severe downturn or we are headed for depression-era styled times. Others might expound upon the information as a sign that hard assets are the place to be, and the numbers reflect good times, particularly increasing wealth versus working hours.

    I am no economist. I walk my dog around my neighborhood each morning and each evening. I see cars parked on the street in front of houses with large two car garages.

    Based on my data I still thought the graph needed a little work:


    Consumerism Is A Fantasyland

    The savings rate has been negative for an entire year only twice before — in 1932 and 1933 — two years when Americans were having to deplete savings to cope with the massive job layoffs and business failures caused by the Great Depression.

    This time the reasons for the negative savings rate are vastly different. Americans are spending all their incomes and then some because they feel wealthier because of the soaring value of their homes, which for many Americans is the largest investment they own.

    But analysts cautioned that this behavior was risky at a time when 78 million Americans are on the verge of retirement. The baby boomers start turning 60 this year, which means they can begin retiring with Social Security in just two more years.

    So says the Associated Press, via Taipei Times (just in case some US media outlet screwed with the story).

    After setting records for five straight years, sales of both existing and new homes are expected to decline this year under the impact of rising mortgage rates. The weaker sales will translate into slower price appreciation which in turn will slow consumer spending, analysts are forecasting.

    And what if housing price “appreciation” goes negative as well? It’s not the first time I have heard the “D” word.

    Leave it to chance

    Michael Milken once said “It isn’t okay to leverage to buy overvalued assets,” and I have been sticking to that adage for a while. Maybe the buying window is about to open, and maybe it is not, but Alan Greenspan has certainly become very chatty about asset price euphoria. I recollect a trader friend of mine saying that houses are trading like bonds, and if you read the article above closely, you’ll see that Greenspan might just think so too.

    What’s the catch?

    Still wondering about housing prices?

    “What goes up must come down” applies faultlessly to physical matters. But I have heard every excuse as to why it can’t happen to housing prices. Location, short supplies, and “no chance interest rates will ever rise above 6%” have all been used as reasons.