New Home Sales And Prices “Likely Overstated”
Some housing bubble reports from Wall Street and Washington. “Sales of new homes fell 3.2% in October to a seasonally adjusted annual rate of 1.004 million, the Commerce Department estimated Wednesday. New-home sales are now down 25.4% in the past year. Measured out over the first 10 months of 2006 compared with the same period in 2005, sales are down 17.9%.”
“Median sales prices were up 2% in the past 12 months to $248,500. Home builders have piled on incentives, including offering free vacations and new cars, to sell homes and work off inventories. Such incentives are not subtracted from the sales price reported to the government.”
“Sales are reported when a contract is signed, not at the closing of the sale. Home builders have reported a large increase in cancellations in recent months. Cancellations are not reflected in the government data, so the reported sales are likely overstated.”
“The Commerce Department said…the number of homes completed and waiting to be sold rose by 6,000 to 166,000 in October.”
“The U.S. economy grew faster than first thought in third quarter on strong business investment, even as the housing sector posted its biggest decline in more than 15 years, the government said Wednesday. Investment in housing tumbled by 18 percent during the quarter. It was the biggest decline since a 21.7 percent slide in the first quarter of 1991.”
“Wolseley Plc, the world’s biggest supplier of plumbing and heating equipment, said it cut 2,000 U.S. jobs after a housing slowdown reduced earnings.”
“Copper fell to a one week low on speculation demand from homebuilders in the U.S., the world’s second-largest user of the metal, will slow as the pace of new construction declines. ‘Activity in housing is still very weak, and we are far from turning any corners here,’ Ed Meir, a commodity analyst said.”
“The Office of Federal Housing Enterprise Oversight, the regulator for mortgage financing concern Fannie Mae, said it intends to sue ousted chief executive Franklin Raines and former chief financial officer Timothy Howard in an effort to recover salaries from the time the company overstated earnings by billions.”
“An OFHEO report issued in May said that Fannie employees manipulated accounting to hit quarterly earnings targets and allow senior executives to collect performance bonuses between 1998 and 2004.”
“Former Federal Reserve Chairman Alan Greenspan said on Tuesday that the worst of the housing adjustment was over. But he also said there would be actual price declines in housing.”
“New signs appeared yesterday that the economy is stuck in a slowdown, but Federal Reserve Chairman Ben S. Bernanke made it clear he’s more worried about inflation and is not prepared to cut interest rates anytime soon.”
“The head of the nation’s central bank said in a New York speech that the ‘core’ inflation rate, which excludes food and energy costs, ‘remains uncomfortably high’ and could even trigger an interest-rate increase if not brought under control.”
“Carl Tannenbaum, an economist at LaSalle Bank in Chicago, said financial markets expected one interest-rate cut in 2007, and possibly two cuts. Now, with Bernanke’s statement, there’s a good chance interest rates will remain steady throughout next year, and possibly could be increased again, he said.”
“Lower oil prices and a U.S. commercial property boom will help offset the serious problem of a cooling housing market, Dallas Federal Reserve President Richard Fisher said in an interview.”
“German financial daily Handelsblatt said Fisher described the downturn in the housing market as a ‘very serious problem’ which had been exacerbated by keeping rates too low for too long.”
‘No one has lived at the gray, three-story, Victorian row house in Pittsburgh, since the owner died in 1995. ‘I just keep the shades shut and don’t look at it,’ said Imogene Boyd, referring to the front porch that draws a regular crowd of crack addicts who sneak through the weed-covered chain link fence for a smoke. The dilapidated home in the Hill District is among 11,000 derelict properties that Pittsburgh officials say can’t be rescued because their tax liens are controlled by MBIA Inc., the Armonk, New York-based bond insurer.’
11,000 derelict properties. My goodness, this will get ugly. Unfortunately, this will become more and more commonplace throughout the United States as more and more of the specuvestors and FBs who bought within the last 2-3 years leave the keys on the kitchen counter and walk. I can only hope that a lot of these local governments have been planing for the rainy day when taxes are not paid, but unfortunately I think not!
I wanted to bring up the idea of the ponzi scheme again–a person buying something at a foolish price hoping that another person will bail him out by paying for that something at even more of a foolish price. At the heigt of the bubble, I asked a friend who’s wife just completed a course in real estate appraising how long the course was. He said, “two weeks.” Fresno, Ca. It is too bad that comps are the only measure to determine price that the industry uses. Just because Joe got robbed and paid 100k than he should have shouldn’t mean that the relative comps rise in values as well. Even if his three buddies overpay by the same amount that shouldn’t mean anything in the long run and yet it has over the course of 5 yrs. I know this stuff has been mentioned on this blog a thousand times but each story is different and enjoyable but also tragic.
The real estate’s developers prayer is, “Dear God, please give me another building boom and I promise this time I won’t piss it all away,” but alas they inevitably piss it all away. My uncle runs his own business in Ventura, Ca-very successful remodeling schools/ million dollar jobs–he’s as frugal as I am but the wife is another story. He made 250k last year and mentioned to me in passing that he had to finance a petty item his wife and him purchased. My wife and I looked at each other with astonishment. He is sheltered from the residential side of real estate because he deals mostly with schools which are financed by bonds that pay for the redevelopment of those schools. He owns a million dollar home and rents out a 500k rental. I told him he could sell the rental and earn 25k in t-bills per year. His rental income is only 16,800. He countered my idea and cited the tax ramifications of selling the rental (-6ok). I did a quick calculation and he’d still be able to net more than his rental income. Unfortuneatly, he will again counter by assuming his rental will go up in value indefinetly from the appraised value of 500k.
Ponzi schemes and manias are two different things. We are witnessing the latter. To those left holding the bag the distinction may not make a difference.
You know what? With a spendthrift in the house (or two of them in the house), sometimes it might be better to acccept less of a return on illiquid real estate than to suddenly have a rush of money to invest.
If he and his wife did get $500k from the sale of that house, would they have the self-discipline to invest it (in bonds or elsewhere) and leave it? Seeing some relatives do similar things, I’d say the answer is quite possibly no.
They’d spend some of that windfall immediately, maybe even a lot of it. “It’s a lot of money, we’ll only spend some of it, and besides, we deserve it.” And then wherever he invests better be as illiquid as real estate, else they are likely to keep going back to that piggy bank every time they have a cash crisis.
Still, if it were me, and the profit on that rental was only 2/3 that of Treasuries, you know where my money would be. No, not at the mall *or* the car dealership!
Ponzi schemes generally are characterized by there being one central figure through whom all investors do the investing. If I recall the history rightly, Ponzi made himself a celebrity by making all the persons involved in the fraud know who he was and simultaneously adore him. That is unlike, say, a pyramid scheme in which once the investors at the top get their “payoff” they’re out, with the investors at the next lower level of the link left to finding new investors.
I won’t say the Ponzi idea isn’t possible, but I’d be looking for the one central controlling entity to whom all investors identify.
Well, that’s Pittsburgh for ya. You can buy entire city blocks for what a closet in San Francisco costs.
And all those tax liens are one reason why. This was only hinted at in the article, but lots of houses in Pittsburgh are worth essentially zero or negative when you factor in the tax obligations.
new home prices up
sure w free garage ,pool,hookers and beer
The data is garbage on new home sales. If the real numbers were reported prices and sales would be down. It is a corrupt system and business as usual.
The trouble with corrupt reporting on new home sales and prices is that the elephant is too large to hide under the rug anymore. The truth will set the housing market free.
Clearly the HBs and their whole campaign crew are desperate. They realize, as we all do, that the only way to keep this party going is to maintain/create the illusion that RE values are still rising. This campaign is flawed however in that the prospective buyers are the ones who know firsthand about all of the value-added tactics to keep prices aloft. Without the flipper the game is over, there is simply no debate on this. Be patient, Rome was not destroyed in a day…
Sacramento New Home Prices: Every new home I have seen sold in Sacramento in the last few months includes 5% to 35% added to the price for incentives. A friend told me he paid $487,000 for a new JTS home in Lincoln. The tax records showed a sale and assessment based on $514,000. Well, he got $27,000 from the developer to do the deal: 6 months interest rebated at close ($12,000 check please!), $10,000 credit in closing costs, $5,000 in back yard landscaping work.
$27,000 on $487,000 is 5.5%. So instead of this house price “increasing” the median 2%, it really should drop it 3%. And we are ignoring the fact the $487,000 is down from the $650,000 a bunch of greater fools paid 6 months ago.
The piper is standing by and will need to be paid very soon.
Good point
At the current sales pace, it would take 7 months to exhaust the supply of unsold homes. That’s up slightly from a supply of 6.7 months for September.
What does this mean? Are there that many people in apartments and hotels waiting to buy or are some of these same sellers moving to those apartments, hotels or Mexico?
And does this mean in 6.7 months there will be no homes for sale.
Months supply number appears to make no sense.
Can someone explain.
and one question I have, is what is the sale rate they are using to calculate the months’ of inventory? Are they looking at the rate of home sales for this time last year, or the current rate? If you have twice as many homes on the market, and they are moving at only half the rate, seems to me like it would take 4X as long to clear the current inventory. Can someone tell me, how do they actually calculate the number of months to sell current inventory? Thanks
It’s just simple arithmetic: current active listings divided by sales for the month. Obviously no one expects the supply to stop after 6.7 months. It’s just an indication of how quickly current supply is being taken up. If people stopped listing properties today but buyers continued to buy at the current rate, it would take seven months for the supply of housing to be exhausted.
Months supply is the inventory number divided by the sales number. So a lot of inventory and low sales volume will equate to a higher months supply. It basically says that it will take seven months to sell available properties. An increasing number is a sign of a weakening market.
Not to worry…David Lereah said on the business news CNN yesterday that sales will pick up after the New Year…
That’s correct!
It’s got something to do with the Super Bowl, although I’m not quite sure how it works.
And David is never EVER wrong. He only has *YOUR* best interest at heart.
/and if you believe that, I have a piece of swampland in Florida to sell you on an i/o mortgage.
I think they divide the inventory by the latest number of homes sold per month. This has nothing to do with how many homes will be for sale in 6.7 months; the only significance is when you compare it with the number for a different time, such as comparing it with the number from a year ago. If the number was 3.5 a year ago and it is 6.7 now, housing sales are doing worse.
And the reason why the months of supply of unsold new housing is growing is, that every single month, the number of housing starts exceeds the number of sales!
I think of it simply as a measure of supply/demand (assuming of course that the sales are really sales and not just contracts).
“Sales are reported when a contract is signed, not at the closing of the sale. Home builders have reported a large increase in cancellations in recent months. Cancellations are not reflected in the government data, so the reported sales are likely overstated.”
Besides the incentives, this makes the numbers even more unreliable.
North GA, my sentiments exactly. What the hell do these numbers mean if they are counted at the time of a signature? How about those knuckleheads go back and report the number of sales based on closing of escrow. Geez, how hard would that be? However, we know why they count signatures, it makes the numbers look better.
And we all know that NOTHING is more important than making those comatose number look better!
Mr. Fisher has you been visting here? If so - Hi!
When I look at the stats on my lowly blog I see visitors from all branches of the Govt, HB’s, Realtors, Brokers (The largest one seems to enjoy my site), newspapers, and much more.
What’s your URL?
http://bakersfieldbubble.blogspot.com
Ford’s laying off half it’s work force with GM following suit, housing is tanking, the dollar’s crashing, record debt, negative savings, stagnant wage growth and the Kid and Pammy are getting divorced………YET the market’s on another tear today!!
The market may be on fire, but just look at where Buffet and Gates keep their money. Heck, just read up on some of what Buffet has said about the market recently. This guy has very little in the market right now. All this crap about the market being up is just that. Consider that the average bonus this year on Wall Street is going to be 249K and that tells me all I need to know about why stocks keep rallying. Well that, and the fact that the sheeple keep putting their money into it.
Meant to say, average bonus will be 240K, not 249K.
oil up, gold up and silver up. so is the dow. how does that work?
I’d say it shows that the smart money is slowly getting out of the market and into commodities while the GFs are just getting into the market and buying up their shares.
The dollar is down!
It is borats fault now. Kid rock was not very happy with the scene w/ pam and borat in the movie. SEXY Time for poor borat.
“Carl Tannenbaum, an economist at LaSalle Bank in Chicago, said financial markets expected one interest-rate cut in 2007, and possibly two cuts. Now, with Bernanke’s statement, there’s a good chance interest rates will remain steady throughout next year, and possibly could be increased again, he said.”
This explains why the market is on a tear today. Everyone knows that the prospect of a higher FFR will encourage contrarians to buy more stocks…
Anyone actually believe anything this Bernanke says?
Ah, the greatest con man in the world speaks! The old maestro soft shoe shuffle at work once again, conducting two symphonies at the same time. Symphony #1: “The worst of the housing adjustment is over.” Followed quickly by symphony #2: “But there will be price declines.” It’s Washington Hack Greenspan’s favorite trick. Also known as, “Covering Your Flabby Ass.” Okay, Maestro, seeing as you seem to be so confident, you must have a good idea as to the extent of the coming decline? Hello! Maestro?! Oh, he’s gone again..
It just keeps amazing me the spin that spews for in this country about such things. Politics and faith aside, there are certain things you can’t argue with. When you live in a neighborhood that requires AT LEAST 200K to buy, don’t give me a song and dance about price declines. DON’T GIVE ME ANOTHER ONE ABOUT HOUSING ADJUSTMENT! These guys are idiots. I guess that the line about continuing to perpetuate the lie eventually makes it true is true. If you keep telling the sheeple what they want to hear, depsite all the facts in front of your face, then the statement is true. How sad that this is what this country has been reduced to. 600-700K housing prices, don’t worry! Your affordability has never been better. Sure, wish my employer realized that I should be making 300K/year. Sheesh, what would that put me in, the top 2.5% of the country? Don’t get me wrong, I am not complaining about my salary. As I always say, there 2/3 of the world is jobless and/or hungry everyday. We have it pretty good here in the good ‘ol US of A, but when these hacks start spewing this crap to make everyone run out and buy more junk without ever giving thought to what they say or lead people to do just makes me want to puke.
Oh , and what factor is going to make the demand for housing go up so all the outstanding inventory,( listed or not listed ), can be absorbed so one can say the worst is over ? Do they have a new loan where you don’t have to make any payments ? Oh yes that’s right ,the builders are making the payments for buyers with inflated appraisals with kickbacks . Why doesn’t Greenspan address the secondary market bagholders and tell them why everything is alright ,just wonderful .
Greenspan is too busy counting his money to worry about the common folk. He is probably partying w/ paris and brittney somewhere over in vegas. Maybe they have a secret dungeon over at the palms.
what an awful visual
yuk
LMAO, Mike. Greenspam may have retired, but he just can’t keep his pie-hole shut.
Greenspan on the economic front, Henry Kissinger on the political front, another one who can’t keep his pie-hole shut. Two repulsive characters, and the US looks like a Conan O’Brien “If They Mated” episode. LMAO!
No kidding –some “retirement”! So when exactly does he don the plaid shorts (hiked up to belly button) & captain’s hat and head for the Keys with the rest of the moneyed geezers? Isn’t BB supposed to be in charge now? Didn’t Greedspan get the memo?
So when exactly does he don the plaid shorts (hiked up to belly button) & captain’s hat and head for the Keys with the rest of the moneyed geezers?
Greenspam realized he can’t afford hazard insurance if he buys a place in the Keys, so he just has to keep working till he can afford it. Just a few more years…
Well, unless Bernanke grows some stones, he’s pretty much neutered as long as Greenspam keeps bypassing him and making pronouncements.
That’s funny. You don’t hear much from Paul Volcker these days, and I bet he kept his mouth shut in 1987 after he left the Chairmanship.
Volker was incredibly underrated as a Fed chair. What he did (fighting systemic inflation by causing a recession, and forcing inefficient industries, farms etc. to contract or go under) was necessary for the US’s long-term health and would be almost impossible to pull off today. And I say that having lived in the part of the country that got hit the hardest by Volker’s policies.
pass, very few people have the wisdom, as you do, to understand that sometimes medicine has to be taken, no matter how bitter the taste and unpleasant the side effects, if you want to live.
Didn’t Nancy Reagan put the kibosh on Volcker? I may be way off the mark, but somewhere I remember hearing that they clashed.
Volcker has been occupied scoping out UN corruption and possible methods for improving that situation. He made a recent statement about how intense the pressure is to ignore signs of serious inflation and not respond as necessary.
Wish he had more influence right now. People don’t want to hear the truth.
get raines howard and the jerks from fre too
gov clerks stealing millions
I decided that today I will finsh moving my 401K into a fixed income to ride out the storm. I will finish the year with a nice gain (over 13%) and will be in position next year to take advantage of what comes.
Like ChillintheOC, I do not get it so I am going to secure my gains this year and watch getting my 5% until something gives.
(why is it okay for reporters to write a story on the state of the real estate industry and only to talk to representatives of the National Association of Realtors (NAR), an organization whose members make their living by selling houses?)
http://www.prospect.org/deanbaker/2006/11/post_article_on_auto_industry.html#014660
As an EE student I took a number of technical writing courses. One thing that they kept stressing was the illiteracy of the American Public. They said that the “average” American adult could easily read an article written at the 7th grade level. Anything math or science had to have explicit pictures and graphs to have even a chance at being comprehended. You will notice that newspapers and nearly all press releases have no meaningful data presented in photo or graphical form. That means that most published information will not be properly processed by most adults.
In this country news wirters and readers are merely entertainers, the journalism profession is nearly gone. My local paper acquires most of it’s non local content from the AP - a truely pathetic organization. Just like the wire stories, the local stories are riddled with logically incomprehensable statements. Such as “The truck lost control and crashed, killing a 10 year old child.” Disney has had such success in our country that we seem to actually believe that cars are sentient beings.
So true Climber:
Case in point: Local Syracuse news station read the AP wire this week and reported that the Iraq War had now gone on for longer than WWII.
The facts are that the U.S. has now been in Iraq longer than it fought in WWII but WWII is considered a 6 year event: Sept 1, 1939 invasion of Poland to August 15, 1945 Japanese surrender. I’m wondering how many locals or even news staff people even noticed the error.
To say nothing of how long we occupied Germany and Japan following the war.
For Germany, 61 years and counting. We’re still there!
Japan too.
Both loyal vassals of the empire.
Don’t forget South Korea. Only 56 years years so far.
“Former Federal Reserve Chairman Alan Greenspan said on Tuesday that the worst of the housing adjustment was over. But he also said there would be actual price declines in housing.”
Nothing like forecasting while looking through the rear view mirror…
Ummmm…. how does that work?
Easy — make a forecast which is already confirmed in the current data. You will be correct with 100% accuracy.
From today’s Wall Street Journal in reaction to the new home sales report:
“The sector has begun to stabilize. The improvement in homebuilder sentiment and increase in mortgage purchase applications in November, along with unseasonably warm weather, tentatively point to a pickup in housing activity this month. –Bear Stearns Economics”
What’s even more laughable is that whoever wrote this probably is due for a $1 million year-end bonus.
This sounds less truthy and more truthful to me:
“‘Activity in housing is still very weak, and we are far from turning any corners here,’ Ed Meir, a commodity analyst said.”
The revised GDP numbers are way north of what I was expecting. An unreal 2.2% GDP growth in the third quarter has put the kibosh on getting a BLS approved recession anytime in the near future.
The devil may be in the details but the headline number was good and falls into my understanding of a “soft landing” vs. a “hard landing” which is unfortunate for my short positions. Rats!
The revisions upward are primarily due to an increase in inventories which one blogger referred to as a “robbing peter to pay paul” manuever and reduction in imports due to lower oil prices which should be a repeat in the fourth quarter.
Interestingly a third of the growth came from motor vehicles which is odd ( “Excluding motor vehicles output GDP increased 0.9%”) as I thought this was an error and was suppose to have been corrected per various economists quoted in the MSM at the end of October.
There is a bit more information contained in the MarketWatch article below:
http://tinyurl.com/y7fp5j
..oil prices which should NOT be..
My observation from yesterday’s CA thread. Reposiing for more to see:
So many great statements and posts. My $.02 worth.
1) I already left CA now - life is MUCH BETTER outside of CA for my family. Got a house, lot more to do, etc. Much lower cost to live. Tell people in CA that New Mexico is a terrible place to come. Don’t need anymore liberal tree-hugging, intolerant folks here.
2) Arnold will NOT save the state.
3) I agree with EVERY word that Jetson put down. Only I would rant even harder.
4) My wife and I combined (both hold masters and had professional jobs made about $123K combined. And I certainly did not feel like I wanted to take on a $500K plus mortgage there.
5) If I bought a starter home in BA or LA/OC/IE, I would need 6 German Shepards, iron fence around the postage side yard, assault rifles for defense, and a fund to pay an off-duty policeman to stand guard 24/7 of my 750 sq ft 90 yr old piece of paradise.
What did I give up CA for - less stress, much less traffic, beautiful mountain views, clean air, affordable cultural/family friendly entertainment, wife’s dream house, making friends with the neighbors, close by skiing, outdoor activities galore, etc.
need 2, may I offer my congratulations? I know you have worked hard to make this happen during a very rough time.
Congrats, Need…
I love New Mexico, and wish I could live there… but, alas, my industry is basically non-existent in the Land of Enchantment….
“Sales of new homes fell 3.2% in October to a seasonally adjusted annual rate of 1.004 million” - or in simple math terms 83.4K homes.
“The Commerce Department said…the number of homes completed and waiting to be sold rose by 6,000 to 166,000 in October.” This is the October number, as the article gives the total supply of unsold homes at 568,000.
If I read this right, the unsold completed new home total is increasing by 90K per month.
“… the unsold completed new home total is increasing by 90K per month.”
That would be the elephant I referred to in my comment above.
Thanks. I thought with numbers this large, I was missing something. That I wasn’t is rough.
“Lower oil prices and a U.S. commercial property boom will help offset the serious problem of a cooling housing market, Dallas Federal Reserve President Richard Fisher said in an interview.”
This is so dishonest. First, at its peak residential investment was double commercial investment. Second, if commercial can avoid turning down following a confirmed collapse of residential (which almost always happens), it will be a minor miracle.
In the last 2 quarters, the so-called “booming” commercial investment wasn’t even close to offsetting the decline in residential. Even worse, commercial is ALREADY trending down (up 20% in Q2 followed by up 14% in Q3).
As to oil, what more can be said? The decrease in oil clearly has not translated into increased consumer spending.
Fisher is one of my least favorite Fed presidents.
“This is so dishonest.”
I see no problem there, provided it gives the Fed cover for more rate hikes.
And what counts as commercial property anyway? Condotels? Apt buildings? Mixed-use w/ commercial ground floor, condos upstairs? Someone who knows, please describe the boundary.
I generally view commercial as industial, retail, office and some specialty type products (like self-storage, marinas, etc.). More generally, I think people view commercial as anything that does not have the expectation of full time residents living there (either as owners or renters).
Hotels generally fall under “hospitality”, which some consider commecial, but others leave in their own special category.
A building with condos above retail would be considered mixed-use, with a portion as commercial space, and a portion as residential.
Anyone have different thoughts on this?
In short anything that is not a 1-4 unit residential building.
Fisher’s a moron.
I just can’t see that New Home price went up. I see the market place and it’s not going up in DC area. It’s not wishful thinking, I believe they are not getting the data correct. It soesn’t make any econmical sense that with all the negative, prices rise.
“I just can’t see that New Home price went up.”
Then look a little closer at the reports coming out:
“Median sales prices were up 2% in the past 12 months to $248,500. Home builders have piled on incentives, including offering free vacations and new cars, to sell homes and work off inventories. Such incentives are not subtracted from the sales price reported to the government.”
New home prices haven’t necessarily gone up. What has supposedly risen is the *median* price. Putting aside the fact that any new home price these days likely includes incentives — cash back, closing costs, what have you — just keep in mind what the median price means and doesn’t mean. All it statistically means is that half of houses sold for more and half sold for less. To interpret, a rise in median last month could just mean there were more GFs in the upper end of the market than the lower. If you look at Walmart’s recent crappy sales numbers, it would suggest lower-income people are generally getting the squeeze right now more than higher-income households. But again, a median rise doesn’t mean that all new home prices rose 2% or whatever. Though the way the media reports such numbers, it’s no wonder people get confused.
I heard I great line on median price/income. Assume a bar filled with patrons and then walks in Bill Gates, this makes the median income automatically go into the millions.
Um, no. The MEAN would go up by millions, but the MEDIAN would at most just bump up to the next richest guy in the bar from whatever it was before Bill walked in.
Wrong! It makes the average go up by a large amount, but the median will barely budge unless there are very few patrons in the bar. The median is what is known as a robust measure of central tendency for this very reason.
I agree with pass & GS, but as we have discussed, the Case-Shiller idea of watching repeat sales of same properties is probably more meaningful for our purposes.
-
stating the obvious -
yeah but if a bar is filled with 7 average $40k/yr joes - but then gates, buffett, dell, ellison, and allen walk in, the median and the mean will get skewed higher.
if more higher priced homes happen to be selling than before (due to price cuts), the median and the mean will get skewed.
But will the bartender’s mean or median tip go up? Will gates and Buffett drink more or tip a higher percentage?
A regressive tipping system based on income?
Ya be careful on that one. I got seriously flamed on fark because I didn’t know the difference between median and mean but kept insisting I was correct about the point you just made. Some very intelligent people proved me wrong by posting the equation for calculating median.
I’m waiting for the Spring when all these financial geniuses proclaim to be “surprised” at the sudden rush of new “For Sale” listings.
Right now they’re playing stupid because “stupid” works for consumer sentiment heading into the holidays. But the experts know full well that the goal of “relisting in the Spring” is so widespread that it will constitute a major upward force on available inventory (and major downward force on prices).
OK, everybody start practicing your “surprised look”. We can all put it on in mid-March.
Spring is going to be very interesting. People who live on corner houses should look into offering to rent out their lawns for the massive amount of For Sale signs that ppl will want to put there. Might be able to make some quick cash.
You might want to find some publicly traded balloon manufacturers to invest in as they will have record sales from all of the Realtors putting them on openhouse signs day after day to no avail.
Hi, everyone. Check out this spin: http://www.forbes.com/video/?video=fvn/business/ab_rethreep112806&partner=yahootix
I have a question. if the housing slowdown is reflected in the price of lumber, why isn’t it showing up in the base metals? I know the base metals are in low supply, but why doesn’t the market shake it off and prices lower? why hasn’t demand lessened for base metals? I don’t follow base metals closely, so take that into account.
I heard canada is trying to ship all the lumber it can before some trade deal ends or something, is this true?
IMO, durable goods are strong, growth in Asia and Europe is also quite strong.
A note about holiday sales - the state of S. C. had a one time sales tax holiday of 5% off every sale for Friday and Saturday. They’ve had one in the fall for a few years now but that one only applies to school supplies. This one applied to everything. A large boost to weekend sales that should not be expected to continue through the remainder of the shopping season.
OK, now I have this image in my head of North Carolinians lined up 20 deep at the SC line at 5 am on Friday, ready to stampede over each other to rush into South Cackalacky to buy stuff.
“Lower oil prices and a U.S. commercial property bubble will help offset the serious problem of a cooling housing market, Dallas Federal Reserve President Richard ‘Ninth Inning’ Fisher said in an interview.”
Of course, when oil was going up, it was never going to stop the almighty borrow-and-spend U.S. consumer even if it hit $200/barrel. But now that gas is “only” $2.50 a gallon (at least here), it’s going to be our salvation.
And with all the insane Ponzi lending that’s gone on for the past five years, how the hell did they forget to hyperinflate commercial property as well? Disgraceful.