Comments for "Tiered House Price Indices"
shill says:
Not first!
shill Tue Mar 31 14:14:18 2009 CDT #
CRbot says:
This comment thread has been HALO-IZED by CRbot.
http://realize.org/cr/halokit.php?halourl=http://www.haloscan.com/comments/calculatedrisk/3280375927761682682
CRbot Tue Mar 31 14:14:54 2009 CDT #
Yancey Ward says:
Man, that looked like "Tired House Price Indices".
Yancey Ward Tue Mar 31 14:17:02 2009 CDT #
nades says:
will there be a reversion to the norm? (ie all end up on the same path)
nades Tue Mar 31 14:20:35 2009 CDT #
mock turtle says:
hey get outta my way, im an investment banker, let me take my rightfull place...not first
mock turtle Tue Mar 31 14:22:17 2009 CDT #
nades says:
Another one bites the dust...
Gottschalks Inc. says “liquidation is now the only path” for the department-store chain that has battled numerous recessions and survived the Great Depression.
Declining revenue and increasing competition combined for a one-two punch that landed the Fresno-based chain in bankruptcy court in January, and now prompts liquidation of many of its assets, including its five stores in the Sacramento region.
nades Tue Mar 31 14:23:11 2009 CDT #
nades says:
In Sacto of all places, hoocoldaanode (sp?) /end snark... :)
Parent Post
nades Tue Mar 31 14:24:03 2009 CDT #
Anonymous says:
um, so the house that "mid-tiered" in 2000 at 450K, then doubled to 900K in 2006, is still "mid-tiered" in 2006?
I'm puzzled what year the tiering took place. Same year as data normalization (2000) ? Or present year? Or at chart start in 1987 ?
Or do houses move between tiers as their prices change?
Anonymous Tue Mar 31 14:24:12 2009 CDT #
Angry Saver says:
Equilibrate?
Is that possible when our eCOnomy and political systems are equiliBROKE?
Angry Saver Tue Mar 31 14:24:24 2009 CDT #
canonball says:
Looks like 9/11 really was the richman's recession...and this one is not going to be so picky. In SanFran at least.
canonball Tue Mar 31 14:25:08 2009 CDT #
Ministry of Truth says:
I remember the realtors shouting that desirable areas like San Francisco would never decline in price. Oops
Ministry of Truth Tue Mar 31 14:27:26 2009 CDT #
That\'s Ballgame, Goat Herders says:
Stupidest fucking headline ever: Wall Street set for best month in 6 years on tech, banks
http://finance.yahoo.com/news/Banks-techs-set-stocks-up-for-rb-14800144.html?sec=topStories&pos=main&asset=TBD&ccode=TBD
Those people should all commit suicide, like the senator said.
That\'s Ballgame, Goat Herders Tue Mar 31 14:27:29 2009 CDT #
CRbot says:
The Latest from Ritholz:
100 Days from Major Troughs
CRbot Tue Mar 31 14:30:33 2009 CDT #
That\'s Ballgame, Goat Herders says:
Small step in right direction: http://www.niemanlab.org/2009/03/nprs-adam-davidson-explains-the-explainer-a-model-for-complex-news/
That\'s Ballgame, Goat Herders Tue Mar 31 14:32:38 2009 CDT #
Bob Dobbs says:
I grew up in Solano and liked it well enough -- the southern end was blue-collar burbs for the local military bases and the industrial base in northern Contra Costa, across the water. The northern end was all ag and food processing, with one air force base.
Have gone back to Vallejo a couple of times in recent years and checked out the old neighborhood -- 60 year-old houses now , but still maintained and hanging tight. Partly because it's a good location -- in the middle of schools, parks, nearby library, etc. It looks better than when I grew up.
But past what used to be the "edge of town" are now literally miles of tight-packed houses and condos on cramped lots, shoddily built with no civic facilities nearby. They were practically turning into slums as you watched, even before the big subprime collapse.
Fairfield's like that, too, up in north county. Miles of ag land covered with anonymous tracts, largely for commuters.
Frankly, I expect prices in these subprime areas to continue to collapse. They won't equilibrate with SF and the inner Bay Area. They'll continue to go below. Because, absent easy credit and the promise of quick appreciation, there's no reason for them to be there. I doubt there's enough local economic activity to support them all, long-term.
Bob Dobbs Tue Mar 31 14:38:09 2009 CDT #
ShortCourage says:
This chart fits the South Bay Area quite well, from what I see. The Low tier has a little further to drop. The Middle and High tiers have quite a drop ahead of them.
The real question is whether 2000 is a reasonable stopping point, or if prices will drop back to mid-1990 levels (or lower?) in the Bay Area.
ShortCourage Tue Mar 31 14:38:48 2009 CDT #
CRbot says:
The Latest from Jesse:
Derivatives: the Heart of Darkness
CRbot Tue Mar 31 14:39:08 2009 CDT #
Anonymous says:
OK, the datasource says "Tier breakpoints are as of Mar 2008."
Anonymous Tue Mar 31 14:40:19 2009 CDT #
energyecon says:
Looking at money flows, some of the biggest selling on strength today is for IEF, SHY and IEI...just sayin'
http://online.wsj.com/mdc/public/page/2_3022-mflppg-moneyflow.html?mod=mdc_leader
energyecon Tue Mar 31 14:41:06 2009 CDT #
Anonymous says:
Well, Solano County is not in the San Francisco MSA and not included in these tiers. But I otherwise agree that the low end got hit first and has probably gotten through about 75-80% of the decline while the upper-end still has 50%+ to go.
Anonymous Tue Mar 31 14:41:10 2009 CDT #
Anonymous says:
The U.S. dollar will remain the world's reserve currency and the strength of the United States' economy is unmatched, the White House said on Tuesday, when pressed about comments from Russia and China about a new world reserve currency.
<tt>"We've been quite clear that the reserve currency of the world is now and will continue to be the U.S. dollar," spokesman Robert Gibbs told reporters aboard Air Force One, which was carrying President Barack Obama to Britain for this week's G20 summit.</tt>
<tt>"The strength and breadth of our economy is unmatched."</tt>
http://www.iii.co.uk/news/?type=afxnews&articleid=7248281&action=article
Cocky little bastards ain't they?
Anonymous Tue Mar 31 14:41:17 2009 CDT #
Anonymous says:
I'm not clear on when the home's tier range is assigned. 2000? Buble peak? Today?
Anonymous Tue Mar 31 14:42:09 2009 CDT #
nades says:
a nice 12:30 sell off... (PST)
BBAD everywhere
..............
nades Tue Mar 31 14:44:28 2009 CDT #
picosec says:
There seems to be a lot of seasonality in the "High Tier" data, peaking in summer. I'm guessing that means that in 6 months we'll get a better picture of that tranche, as in how it performs during its peak season.
picosec Tue Mar 31 14:46:24 2009 CDT #
Deflationary Jane says:
Well I live in the "budget belt" of CA and here is what I see in my neighborhoods and as someone who watches the markets. Prices in the better neigborhoods dropped from Oct to Jan. Now is the spring bounce and the properties who stopped their once a month reductions or raised prices to take advantage of the stimulus monies are sitting with little traffic.
Now there are properties that have gone in and out of pending since last june and about 40% are back on the market - some with price cuts and some without. Homes held by the GSEs are priced stupidly but at least they hold little interest for the speculatards.
Job losses here are bad and aren't reflected in the unemployment numbers. Many people have had to take work at a fraction of their previous wages just to keep food on the table. I wish I had the math to guessimate the multiplier effect on the loss to local money movement. Business shuttering everywhere but CRE especially retail was severely overbuilt so this had to happen.
Of course, the attractiveness of the region is going down as crime rate goes up. What were once upscale neighborhoods are now being rented out as section 8 housing just to keep tenants in. My little culdesac is either owned by city or county safety workers or are in default. I can just see someone trying to squat in the wrong house and staring into a service revolver.
I'm guessing that the people buying (or trying to buy) are monied folks from the BA. Yesterday, I had two suits stop me to ask about the house next door which is vacant and in default. Plate frame was an advert for a RE co in Palo Alto. I took great joy in misdirecting them to an overseas asset management firm. I hope they have fun burning up the cell minutes and working hours on hold.
Back to enjoying the slight breeze off the lake, playing with the dogs, the sounds of song birds, and a little victory gardening on my day off >; )
Deflationary Jane Tue Mar 31 14:47:49 2009 CDT #
nades says:
speculatards ~DJ
Do you own the rights to that word? Can I use it?
Where is the 'budget belt' anyway?
Final question, is that your hand in your avatar? I like it :)
Parent Post
nades Tue Mar 31 15:04:01 2009 CDT #
Barley says:
CR - Instead of "real adjusted" do you mean "disinfaltion adjusted"
Barley Tue Mar 31 14:48:23 2009 CDT #
energyecon says:
That a dash for the exit? Nah, the bottom is in! /snark
energyecon Tue Mar 31 14:49:28 2009 CDT #
Blackhalo says:
Whoo, hoo! Doubbled-down on my FAZ at exactly the right time.
Blackhalo Tue Mar 31 14:56:54 2009 CDT #
EvilHenryPaulson says:
I don't see the attraction of a leveraged ETF over something like American Puts
EvilHenryPaulson Tue Mar 31 14:59:23 2009 CDT #
nades says:
EHP - way less thought...
Parent Post
nades Tue Mar 31 15:04:20 2009 CDT #
ATM card and $19 in the bank says:
Breaking from Reuters:
<h5>GM preparing to file bankruptcy by June 1; plan forms new company of most profitable parts; components like Saturn, Hummer to be sold or wound down: source 3:41pm EDT</h5>
ATM card and $19 in the bank Tue Mar 31 14:59:59 2009 CDT #
energyecon says:
EHP,
What about options on the leveraged ETF's? lol
energyecon Tue Mar 31 15:01:32 2009 CDT #
Deflationary Jane says:
Bob -I actually like the eastern end of Solano. There is a 10 acre plot with a suitable slope for some grapes and a rich flat for gardening and house site I have my eye on 8-)
Now I also heard that prices of traffic tickets have gone way up, greater then 200% in Solano and the cops are being agressive. A 165 speeding infraction is now $371. So you get the good and the bad.
btw, have you heard anything about the UCRP funds decline? Rumors here have the fund going from 180% of their 'needs' to 65%. The state's 4% contribution which UC quit taking years ago is no longer available. If true, employee contribution requirements could soar.
Deflationary Jane Tue Mar 31 15:02:41 2009 CDT #
nades says:
"A 165 speeding infraction"
Sh*t girl slow down... whats the rush? LOL! :-D
Parent Post
nades Tue Mar 31 15:08:36 2009 CDT #
Latka says:
Bob Dobbs said...
Frankly, I expect prices in these subprime areas to continue to collapse. They won't equilibrate with SF and the inner Bay Area. They'll continue to go below. Because, absent easy credit and the promise of quick appreciation, there's no reason for them to be there. I doubt there's enough local economic activity to support them all, long-term."
Same thing in DC. The low end went higher, fell lower and is getting creamed harder now than ever before. DC high end, while still down, the rate of decline is lessening. Never thought it would work out this way...
Latka Tue Mar 31 15:02:57 2009 CDT #
ATM card and $19 in the bank says:
EHP,
Leveraged ETF = IRA account. I have yet to see reliable guidance that the IRS is okay with long puts and calls in an IRA. If anybody has a link to such guidance, I would love to have the extra tools to work with...
ATM card and $19 in the bank Tue Mar 31 15:04:57 2009 CDT #
nades says:
ATM I asked about that a while ago. Someone wrote that Chucky Schab allows puts only if you own the under lying stock. I have scottrade and none of the good stuff is allowed...
Parent Post
nades Tue Mar 31 15:10:14 2009 CDT #
lookieloo says:
Following the demise of our and the world's economy can't be good for you. My rationale is I want to be able to say I spotted the bottom and went forth spouting the good news to all around me.
I'll know we are getting closer when I trade my space telescope for a spotting scope to recognize the approaching bottom. Of course the bottom might come with armed men and long lines leading somewhere but at least I'll recognize it for what it is. Until then live by the credo:"When you don't think it can get any worse it starts raining."
Seriously, the charts are bad, the news is dire and the Pres has a VERY big week abroad. I suspect some horse trading will be happening and the course of the next year will be set by the G20, Nato, and EU meetings this week. Hillary has set the ground work and now we will see what political capital we have left in our coffers. Interesting times.
PS Netanyahu has told the US if we don't deal with Iran then he will. Never take your eye off the ball in the Middle East. No matter how hard I try to be America centric and forget about the other 6 billion people sharing my air I keep getting this niggling feeling that world events now has the most to do with my future and not the price of BAC.
lookieloo Tue Mar 31 15:05:54 2009 CDT #
EvilHenryPaulson says:
ATM card,
good find. seems to be a second story after Fritz's initial comments. Only Reuters has it so far.
Has got to qualify as a watershed moment
EvilHenryPaulson Tue Mar 31 15:07:22 2009 CDT #
debtinator says:
I'm tiered of this whole mess.
debtinator Tue Mar 31 15:07:23 2009 CDT #
Government Motors says:
Realtors and home builders need to offer a plan to make the payments if a buyer loses a job, the house depreciates, etc. People want a backstop.
Government Motors Tue Mar 31 15:09:39 2009 CDT #
EvilHenryPaulson says:
odd thing IRAs are. Pretty much anything goes for Registered Savings Plans in Canada (there's Retirement, Education, General Tax Free Savings, maybe some other versions thereof)
I guess it has to do with forcing people with retirement accounts to pay a fee to some manager (wasn't that a driving force behind the defined benefit -> 401k?)
EvilHenryPaulson Tue Mar 31 15:10:40 2009 CDT #
EvilHenryPaulson says:
wtf
Reuters website has replaced the GM bankruptcy by June 1 (end of govt grace period), and now has some fluff "breaking news" bit about the indices closing up 1%
EvilHenryPaulson Tue Mar 31 15:12:03 2009 CDT #
energyecon says:
Also in the bill is an amendment to allow the FDIC to increase its borrowing...
Senate Panel Approves Bill Limiting Credit-Card Rates (Update2)
By Jeff Plungis
March 31 (Bloomberg) -- A Senate panel approved new restrictions on credit-card interest rates that are broader than those adopted by the Federal Reserve in December, brushing aside objections from Republicans and the banking industry.
Senate Banking Committee Chairman Christopher Dodd said the measure was needed to protect consumers from having their interest rates raised on previous balances, unless certain conditions are met. The legislation would prevent credit-card companies from unilateral changes to the terms of an agreement.
http://www.bloomberg.com/apps/news?pid=20601110&sid=awXUKezTGT60
energyecon Tue Mar 31 15:13:57 2009 CDT #
nades says:
Senate Panel Approves Bill Limiting Credit-Card Rates (Update2)
This is definitly inflationary right? LOL!
Who is going to support the economy now?
Parent Post
nades Tue Mar 31 15:21:41 2009 CDT #
ghostfacedinvestah says:
Now you see why Fannie and Freddie are facing the problems they are. They chased those low-priced lines all the way up, spewing out affordable programs one after the other: MCM, EA... That's not to mention the behind-the-scenes changes they made to DU and LP, waiving documentation for 70% of approvals.
You can thank the never-ending increases in CRA goals for that.
ghostfacedinvestah Tue Mar 31 15:14:30 2009 CDT #
Blackhalo says:
"You can thank the never-ending increases in CRA goals for that."
CRA is such a tiny piece of the pie that I find that hard to belive, although the (R) would like you to belive that. Otherwise this debacle clearly falls on their watch and has their fingerprints all over it.
http://en.wikipedia.org/wiki/Community_Reinvestment_Act
"Some legal and financial experts note that CRA regulated loans tend to be safe and profitable, and that subprime excesses came mainly from institutions not regulated by the CRA."
Parent Post
Blackhalo Tue Mar 31 15:34:32 2009 CDT #
ghostfacedinvestah says:
"Some legal and financial experts note that CRA regulated loans tend to be safe and profitable, and that subprime excesses came mainly from institutions not regulated by the CRA."
Anyone who has ever looked at mortgage performance data knows that is not true. Take two borrowers, equal in every way, except one has twice the loan balance of the other (pick any two loan balances, 20K to 40K, 100K to 200K, 1MM to 2MM). Assume everything else is identical, FICO, DTI, mortgage product, etc.
The borrower with the higher income will always outperform the borrower with the lower income (on average, of course). The borrower with the higher income has more disposable income to compensate for unexpected costs, housing related or otherwise.
Some people just don't make enough money to afford a house.
Parent Post
ghostfacedinvestah Tue Mar 31 15:50:57 2009 CDT #
Blackhalo says:
CRA only requires that lenders must use the same lending standards (income, assets, down payment) for the rich zip codes, as the poor. It was the banks that ran out of prime borrowers and started reducing those standards to keep the ponzi going, NOT the CRA. CRA is NOT subprime. Defaluts in CRA banks were lower than non-CRA institutions.
Parent Post
Blackhalo Tue Mar 31 16:02:33 2009 CDT #
EvilHenryPaulson says:
energyecon,
That means go long JPM right?
bigger sham than GS if you ask me. they'll choke off their lucrative commodity dealer position soon enough, and they'll just have losing credit cards, on top of losing derivatives, on top of losing analysts, on top of losing overbuilt bank branches
EvilHenryPaulson Tue Mar 31 15:16:11 2009 CDT #
ATM card and $19 in the bank says:
EHP,
The semi-plausible explanation that I heard about prohibiting long options is that in the event that there is something (inattentive account owner, market failure, etc) that prevents a close-out by liquidation prior to expiration, then the IRA risks IRS disqualification because in order to exercise an in-the-money option, the account would incur a debit balance (or a short sale) that possibly would create a temporary margin-like situation. Margin=borrowing, and IRA accounts are prohibited from borrowing. Sounds like a bunch of BS to me, but as I said, I have yet to see IRS-approved guidance to the contrary.
ATM card and $19 in the bank Tue Mar 31 15:17:42 2009 CDT #
debtinator says:
I feel great that Chris Dodd is solving our problems. He'd be President if James Beam hadn't incapacitated him.
debtinator Tue Mar 31 15:18:17 2009 CDT #
EvilHenryPaulson says:
ghostfacedinvestah
Don't have the time to get into it now, maybe someone who remembers one of my posts on why subprime didn't cause the real estate bubble can chime in.
But I will put it this way, do you think minorities are responsible for the $13tn+ outstanding in mortgages? The 19mn and growing vacant housing units?
EvilHenryPaulson Tue Mar 31 15:19:59 2009 CDT #
ghostfacedinvestah says:
EHP wrote:
"But I will put it this way, do you think minorities are responsible for the $13tn+ outstanding in mortgages? The 19mn and growing vacant housing units?"
Minorities <> CRA. People who don't make the median income = CRA (roughly). People who don't make the median income have ZERO disposable income to pay for unforseen expenses, should not own houses.
And BTW, I was not equating the problems in the housing market with the problems with Fannie/Freddie (though they are related). My point was that F/F could have avoided much of their problems by sticking to their traditional business. I knew a lot of the credit managers on the guarantee side, and they in no way wanted to take on a lot of that risk. But they were forced to chase the bubble.
The portfolio side of the business, on the other hand, was crazy.
Parent Post
ghostfacedinvestah Tue Mar 31 15:40:58 2009 CDT #
Lawyerliz says:
Well, today was a 3 new foreclosure day. One in the morning, one faxed, and one in the afternoon. And a closing not closing day.
The saddest was the afternoon one. Heavy equipment operator, who knows nothing else, with no work, or rather half time work.
Lawyerliz Tue Mar 31 15:29:06 2009 CDT #
Michael says:
Headline should read.
Quarterly Stock Market Loses Add an Additional 11% to Last Quarters 37% Loss.
Michael Tue Mar 31 15:31:32 2009 CDT #
levity says:
Funny break.
http://news.bbc.co.uk/newsbeat/hi/newsbeat/newsid_7961000/7961224.stm
levity Tue Mar 31 15:32:54 2009 CDT #
CRbot says:
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CRbot Tue Mar 31 15:33:01 2009 CDT #
EvilHenryPaulson says:
Blackhalo,
Hardly even matters. I remember reading Freddie and Fannie were in the practice of borrowing quota-type loans from the private market, just to have on their books during the reporting period (a few days each quarter)
EvilHenryPaulson Tue Mar 31 15:39:03 2009 CDT #
Blackhalo says:
I remember reading Freddie and Fannie were in the practice of borrowing quota-type loans from the private market, just to have on their books during the reporting period (a few days each quarter)
That sounds beliveable. Too little CRA going on to meet quota. Good thing they were able to take care of Joe house-flipper.
Parent Post
Blackhalo Tue Mar 31 16:19:26 2009 CDT #
Tom says:
Per this analysis for price to income to normalize we still have to get down to $130Ks median. That said, it was done before the Fed waged war on long term rates so affordability should be higher - maybe a $140Ks median.
http://is.gd/ozYF
Tom Tue Mar 31 17:07:39 2009 CDT #
anon says:
CR,
Could you please make a graph showing the three tiers for Wash., D.C. from '87 to current? Thanks.
anon Tue Mar 31 20:00:38 2009 CDT #
Anonymous says:
http://lawprofessors.typepad.com/environmental_law/2009/03/where-has-all-our-money-gone.html
Last great bubble in financial industry salaries? 1930ish.
It's a leading indicator for crashes.
Whoodathunkit!
Anonymous Tue Mar 31 20:22:33 2009 CDT #
Tom Stone says:
Sonoma county is going to get stomped,set on fire,then pissed on.Here we rode the Telcom bubble and when that popped jumped on the RE and MEW bubble which had an exagerrated effect due to the structure of the local economy which other than FIRE was high priced wine and thus high priced grapes and "Hospitality".Lots of Restaurants and B and B's LOTS of construction related jobs and at one point almost 300 realtors and 5 title companies in my town of 7800 people (fewer souls than people by a bit more than 300).I expect the high end to drop a lot but still move because there are always some people with money that want an estate in the wine country...and some people will still be able to afford low end homes and want them,but the ones in the mid range are SOL.Agilent is laying off about 300 people and probably 200 of those bought homes in the $800k range and can now kiss them goodbye.
Tom Stone Tue Mar 31 20:48:12 2009 CDT #
END