From the WSJ:
Housing’s Up, but Is Foundation Sound?
The housing-market recovery is here but there’s a growing debate among bulls and bears over how long it will last and how strong it will become, with both groups pointing to the same data to make their case: U.S. demographics.
The bull case says the housing market is in the early stages of a rebound that should last several years because the U.S. hasn’t built enough housing to support the country’s growth. The recession and the foreclosure crisis led to a sharp slump in new-home construction and in household formation. But the population didn’t stop growing. Instead, households simply doubled up or moved in with family.
The bears argue that the recent gains in housing will be short lived, pointing to changes in access to credit, elevated consumer-debt levels, and an over-reliance on investors. They don’t believe housing will crash again, and they concede that it should provide some contribution to economic growth. But they see little evidence that the price or sales momentum is durable or that housing will provide the big boost to the economy that the bulls are expecting.
For anyone considering whether to buy a home to live in, the decision should focus primarily on whether they can afford the payments and other costs of ownership, regardless of where home prices go.
The slump’s impact set up today’s dynamics. The country added around 1.3 million new households every year for the 10-year period ending in 2007, after which household formation fell to more than half that level. New-home construction ground to a halt in 2008 as home builders were sidelined by rising volumes of foreclosures and other distressed sales.
Housing bulls see the slow economic recovery releasing pent-up demand, first for rental housing and then for home purchases. More young adults—many of them among the 65 million “echo” boomers born to baby boomers between 1981 and 1995—are moving out of their parents’ homes and into apartments. Others that had delayed home purchases during the bubble are ready to buy.
Rising prices in many parts of the country today show what happens when demand outstrips supply. To be sure, some homes are being held off the market by owners who can’t sell because they owe more than their homes or worth. Others are reluctant to sell at prices that leave them with little money to make a down payment on their next home.
Meanwhile, bulls still see too few homes being built, even after accounting for that “shadow” inventory. Population growth will require 14 million additional housing units this decade, around three-quarters of them single-family homes, according to Zelman & Associates, a research and advisory firm. Analysts at Zelman estimate that only 5.7 million of those units will be built by 2015, meaning the U.S. would need to add two million homes a year over the last four years of the decade—spurring a big boost of construction that would ripple through the economy.
“There’s just not enough shelter,” says Ivy Zelman, the firm’s chief executive.
…
The bear case, the outlines of which are laid out in a forthcoming paper by Joshua Rosner, managing director of Graham Fisher & Co., draws attention to several forces that had helped housing—and the economy—expand over the past few decades but whose end will now hinder growth.
…
In 2001, Mr. Rosner was among the first to prophesy how rising debt levels would fuel a housing bubble and later, in early 2007, he warned how the bursting of that debt bubble would trigger a severe financial crash. Now, he sees major drags not only from the potential echo-boom buyers but also from the aging baby boomers, who sustained huge losses in the housing-market downturn, leaving them less prepared for retirement and putting greater strains on the social safety net.Skeptics also haven’t taken comfort in the housing rebound because they see it as too dependent on investors. “We shouldn’t look at it as a fundamentally recovered housing market,” says Mr. Rosner. Sooner or later, he says, there needs to be “a handoff from the investor purchase to the primary-resident purchase.”
How that handoff unfolds will go a long way toward deciding whether the bulls or the bears have the last laugh.
From HousingWire:
Home price growth projected to exceed 7% in 2013
Home prices could grow as high as 7.2% in 2013, JPMorgan Chase concluded in a new report.
Analysts with the bank claim prices are posting historically strong gains as the market moves into the more active summer season.
With high investor demand contributing to booming home prices as well as growth in prices of lower-tiered units posting stronger gains than higher-tiered units in major metropolitans, JPMorgan is confident in its 7.2% growth projections.
Furthermore, the banking giant has revised its projections to 3.9% in 2014 and 3.2% in 2015, with surprises likely to be on the upside.
“Despite the lack of data for investor demand, we saw all-cash sales remain higher than 30% of housing sales,” analysts at JPMorgan said.
From MarketWatch:
In some places, homes sell in just one day
Here’s a sign of how tight inventory levels have been lately: More homes are selling in a flash—finding a buyer within 24 hours of being listed.
Sound unlikely?
Angela Catanzaro thought so, too, until her Broward County, Fla., home received a written offer one day after their listing hit the Internet. The home she and her husband decided to buy was also on the market for less than a day; they pounced on it after struggling to find quality properties that didn’t “need work.”
They plan to close on both transactions this month.
“We weren’t anticipating our home to sell so fast, so we asked if it was OK to stay until June so our daughter could finish school,” Catanzaro said. The Catanzaros didn’t even use a real-estate agent to market their house. They simply posted it on Zillow, a real-estate website.
Glenn Kelman, chief executive of Seattle-based real-estate brokerage Redfin, calls quick transactions like these “flash sales,” and said there have been more of them since the beginning of the year. That’s due to low inventory in the most competitive markets, including Miami, Washington, D.C., San Francisco and Los Angeles.
San Jose, Calif., is also hot. It had less than one month’s worth of inventory in April, meaning that at the current pace of sales, it would take only a month to sell all the homes currently on the market. That made San Jose the tightest market of 22 analyzed by Redfin. There, 65% of homes were under contract in April within two weeks of being listed, while 20% were under contract after one week, according to Redfin data.
Over all 22 markets, the percentage of homes under contract within two weeks rose by 39% in April, compared with last year. Those under contract within one week rose by 54%.
…
“People used to get the news about a new listing on Saturday morning and see it over the weekend,” he said. Now, websites including Redfin will send messages to mobile devices the moment a listing hits the market, and potential buyers can set up showings immediately, he added.
@MMFlint: From the Washington Post: “Has the U..S become the type of nation from which you have to seek asylum?” http://t.co/zZrnivXhk3
From CNBC:
How Home Ownership Causes Unemployment
Before the housing market in the United States went into convulsions, you heard a lot of talk about the positive “externalities” of home ownership. The Bush administration made something of a fetish of the idea, saying its goal was to create an ownership society.
The best-known dissenter was the British economist Andrew Oswald. As early as 1996, Oswald was producing papers that forcefully argued that home ownership causes unemployment. The effect Oswald claimed to have discovered was strong: Every 5 percent rise in home ownership resulted in a 1 percent rise in unemployment. Oswald’s original paper set off a cascade of others that largely confirmed his results.
Oswald is out with a new study, co-authored with David Blanchflower, that sheds more light on the link between unemployment and home ownership rates:
We explore the hypothesis that high home-ownership damages the labor market. Our results are relevant to, and may be worrying for, a range of policy-makers and researchers. We find that rises in the home-ownership rate in a U.S. state are a precursor to eventual sharp rises in unemployment in that state. The elasticity exceeds unity: a doubling of the rate of home-ownership in a U.S. state is followed in the long-run by more than a doubling of the later unemployment rate. What mechanism might explain this? We show that rises in home-ownership lead to three problems: (i) lower levels of labor mobility, (ii) greater commuting times, and (iii) fewer new businesses. Our argument is not that owners themselves are disproportionately unemployed. The evidence suggests, instead, that the housing market can produce negative ‘externalities’ upon the labor market. The time lags are long. That gradualness may explain why these important patterns are so little-known.
From the Independent:
Be warned George Osborne: more home owners just really means higher unemployment
Unemployment is a major source of unhappiness and mental ill-health.
Yet after a century of economic research, the determinants of unemployment are still imperfectly understood, and unemployment levels in the industrialised nations are around 10 per cent, with some over 20 per cent.
The historical focus of the literature has been on which labour market characteristics – trade unionism, unemployment benefits, job protection, etc – are particularly influential. Contrary to what many on the right have claimed, they aren’t.
In a new paper Professor Andrew Oswald from the University of Warwick and I propose a different approach to the problem by exploring the hypothesis that high home ownership damages the labour market. Our study provides evidence consistent with the view that the housing market plays a fundamental role as a determinant of the rate of unemployment.
We find that rises in the home ownership rate in a US state are a precursor to eventual sharp rises in unemployment in that state. A doubling of the rate of home ownership in a US state is followed in the long run by more than a doubling of the later unemployment rate. We also find that high home ownership lowers employment rates. These effects do take some time to develop – roughly of the order of five years.
These articles are always misleading. NAR always says real estate is local. Yet these statements RE is back, homes selling over asking blah blah blah Select sections of countries, select towns and select condos and coops are selling super quick.
For instance Southhampton is red hot homes selling for 20 million in a flash. Meanwhile Hampton Bays which is part of hamptons too homes are selling for like 225K, which is around 1985 prices. That town has been stagnant for a quarter of a century. Brooklyn trendy neighborhood near city a condo listed prices wares errupt. Far Rockaway a condo listed is usually by a bank or a short sale going for 1999 prices.
The articles being published makes it seem just list your mold infested dump in a so so neighborhood in a non train town and there will be a bidding war.
Guess what in 2004 I saw that, I dont see that today.
“They Don’t Think It Be Like It Is, But It Do.”
5 – that one seems interesting. I’d like to read the paper to see if the author cites other evidence but the link to it seems to be dead.
8 – There is an interesting comment on the CNBC piece about causation and Detroit. The premise is that the argument is flawed, since the population can adjust to the local jobs. For example, if everyone in Detroit rented, and the auto industry failed, everyone would leave Detroit, and the unemployment rate would fall (as exit barriers are significantly lower). But this doesn’t necessarily indicate a better local economic position as a result.
Did anyone else think there were a lot of open houses on the weekend? Esp in Essex, I’m wondering if there is more supply coming on after recent publicity. Anyone seen any uptick?
I’m not sure if it should get tigher as things supply all gets bought and people dont want to sell low, or looser as people who’ve waited to sell realise there finally are buyers out there.
302051AQ0
EXIDE TECHNOLOGIES SR SECD 8.62500% 02/01/2018
Bid Ask
Price 57.500 Price 58.000
chif, ever see a bid/ask so tight on a company 30 minutes after they declared BK?
Anyone here care to voice an opinion on Snowden? He fingered Obama directly. I gather back in 2008 Snowden drank way too much Hope and Change Kool-aid. He better be good at hiding off the grid there are bound to be a few spooks looking to ice him.
Juice he’s screwed both sides are going to want his head. Peter king was screaming he was a spy for the chinese and a traitor on the Fox morning show. Can’t have us proles wanting the the constitution enforced after all it was like written by teddy roosevelt or some other slave holder who rode a dinosaur while slaughtering the indians. We are civilized now with the changer in chief in charge. Why are you a racist?
According to Msnbc Snowden is a racist. That’s quality news programming.
I propose building a national monument for Snowden next to the Thomas Jefferson memorial.
13 – Peter King also made the point that the data from these types of records were used to foil a 2009 subway bombing plot. Hundreds of New Yorkers might have burned alive.
http://www.dailymail.co.uk/news/article-2337865/NSA-phone-spying-program-foiled-2009-NYC-subway-bombing-plot.html
Who here is really surprised that the Government was in posession of these types of records?
You are the enemy of DC. It will ge much worse. Capital controls are coming. You are an unsecured creditor to a bank.
Anon [3];
When does he leave? I’d offer to buy his ticket, but the ‘man of the downtrodden’ — some of whom under his own feet — has is own jet to take him anywhere in the world that will have him.
Then again, Obama’s no danger to HIM — he’s on the ‘correct’ side of the political divide.
Brian they have been using every foiled terrorist attempt to justify intrusions on constitutionally enshrined rights even if it had no bearing on the plot being busted. Not the best source but here is some support for that theory. Does not matter either way both Rs and Ds want us sleeping so they can continue to grind us into obdient automatons.
http://scaredmonkeys.com/2013/06/09/security-expert-lt-colonel-tony-shaffer-nsa-program-prism-did-not-foil-2009-ny-city-subway-plot-we-were-aided-by-the-british/
AG [14];
Obama house organ MSDNC is once again singing to the tune of the the old Dr. Pepper commercial, mutatis mutandis.
Since my family and I live in NY/NJ, I recommend that Snowden be put to death immediately. If he was so brave and civic minded, why did he flee. He is going to be responsible for deaths in the future. I would charge him with Murder 1……cowardly bastard…..
@FabiusMaximus01: Understanding America: Why we are 2nd Amendment Fundamentalists but the 4th Amendment doesn’t count, by Juan Cole. http://t.co/swKFaNjCMu
Gubmint going to have to give us some better narc0tics to get us to go back to sleep.
We need to wake up and understand that the gubmint’s definition of terrorist is anyone who thinks for himself and doesn’t respond well to propaganda and brainwashing techniques.
From 22.
“So we have to allow mentally ill people to have high-powered weaponry and to go on safaris hunting our children in our schools. But we can’t push back against Big Brother in our private communications.”
I like this quote….
“From the pancake house I drive directly to the county morgue. The contrast is not especially striking.”
― Carl Hiaasen
Scrapple remember all those jokes about the NSA and DHS monitoring this site and others like it. Looks like we were never far off. Does not matter to the morons anyway, help me some terrible mooslim is going to blow me up so burn the constitution keep me and my family safe. Meanwhile they are in more danger from little Graydon and Ellery texting while piloting mom’s sububan status symbol tank. People are pussies
I think grim is the real threat to our national security.
also ….
“The great thing about Florida is usually the crooked public servants are really stupid,” he says. “It’s not like Boston or some other places, where there’s a certain skill or a certain style. Here it’s just clumsy grabs for cash.”
Gotta go. Black helicopter just landed out back.
The Snowden leak is very intriguing. If the story is genuine then this guy has a gigantic pair of brass balls. He wisely went public. The whistleblowers that get disappeared are ones that threaten to disclose prior to disclosure. Breitbart is a good example. Snowden played it smart. He released the info with documentation and then followed it up by revealing his identity.
He also understands that he and his family will be harassed for the rest of their lives. Then someday he will be found to have committed suicide with multiple g_n shots to the head. A risk he was willing to take.
Interesting that this guy was a Ron Paul donator in the 2012 election.
31
The defense contractors need to do a better job at screening their employees ;-)
Hey Ragnar, get a load of this. It sound to me like VHD is describing Obama as the public face of Francisco d’Anconia.
Obama Is Just Obama
It’s nice to see the right beating up Obama just as the left beat up Bush. It shouldn’t be long before they claim O man vacations too much at Kennebunkport, oh wait.
Baa, baa.
Pain (27):
The constitution is just a piece of paper to the Constituitional Professor In Chief. I love how he said that no one is listening to your phone calls. He never said that they were not recording your phone calls.
Snowden called out Obama, Congress, the NSA, CIA and the FBI with those documents and they are all pissed. They will be looking for his head for the rest of his life.
However, if he were smart he would have even more information to leak if he meets an untimely death. That would keep Chariman Obama off his back for a long while.
Anon, (33)
I don’t get the d’Anconia connection out of that essay.
I don’t think Obama is a leftist “mastermind”. I think he’s a leftist slacker with very few original thoughts. If there’s an Ayn Rand character that fits him, I’d say Peter Keating does. A “second-hander” who tries to be what others want him to be. (Actually most politicians fit this approach). He absorbed lefty ideas in his Ivy education so decided to play his game on that side of the aisle. If you listen close, his allegedly brilliant speaches are full of political plattitudes.
In essence, Obama’s success is simply due to him being able to capitalize on the fact that productivity and independent thought are only found in a shrinking minority of American voters. The problem isn’t Obama, the problem is what has happened to American thought.
Ragnar [36];
I don’t picture Obama as any mastermind either. I’m just reminded how playboy Francisco traveled in ‘polite’ company amongst his many backers after the seizure and failure of the San Sebastian mines. ‘I did my best…’, ‘I’m just a no-account playboy, what did you expect…’, etc.
Lib [34];
Well, we could just compare their economic records — but the low-information voter doesn’t want to do that, either. So long as the milk… er gov’t checks, keep flowing. Not baa, baa — More like snort, snort: pigs at the trough.
Dancing with your cellmate?
http://sports.yahoo.com/blogs/nfl-shutdown-corner/chad-johnson-sentenced-30-days-jail-slapping-lawyer-155036838.html
Grim,
The ghetto Honda guys say I’m number one on their list of there. I got their dumb deposit down to $500 and they will let me put it on my credit card. I will be very careful with the wording on the deposit agreement so I can get it back if I desire to. At least they admitted that the deposit is not a Honda requirement but something they are doing to keep the list down to serious buyers. They also admitted that they don’t know the next shipment date. I’m willing to risk $500 to be #1 on their list. Will let you know how it goes tomorrow.
Anon (37)
Have you finished Atlas Shrugged yet, or are still reading it?
Hype the largest floods start with a trickle Bradley Manning, now this character. O better watch his back since he filled his cabinet with syncophants one wrong firing and he will probably get the mother of all whistleblowers.
The Good president is no liberal mastermind, he is the ultimate product of the low bar set by affirmative action. He is the well spoken mulatto Forrest Gump whose path has been set by divine providence rather than hard work, no wonder why boomers love him. Reading up on his accomplishments or lack there of reinforces the simple truth that he is nothing more than an empty suit who loves the trappings of power but cannot be bothered with the responsibilities that come with it.
Rags [41];
Yes, I know… the boat sinks. ;-)
I agree with the path he has taken, but not the cause. Also, I don’t support the caustic language. He is not Forrest Gump. He is a talented guy who is no better than a great number of other peers. However, he can be faulted since he has mistaken the preference he has received throughout his career as a sign of WHO he is. As if it has been earned by his masterful ability to persuade or strategize. In reality, much of his accomplishments can be attributed to WHAT he is. The only problem I have is not so much that such a thing has happened at the level of the Presidency, but rather how little O-Man seems to appreciate this reality. I have dealt with a good number of characters throughout my career cut from the same cloth. Some are just as fortunate, but I respect them because of their clarity of thought and objectivity. This guy is truly doesn’t give a sh!t…..from the beginning it has always been about the gravy train that starts in January 2017…..he is just stoked that he is going to be so young to enjoy it.
Painhrtz – Disobey! says:
June 10, 2013 at 3:35 pm
The Good president is no liberal mastermind, he is the ultimate product of the low bar set by affirmative action. He is the well spoken mulatto Forrest Gump whose path has been set by divine providence rather than hard work, no wonder why boomers love him. Reading up on his accomplishments or lack there of reinforces the simple truth that he is nothing more than an empty suit who loves the trappings of power but cannot be bothered with the responsibilities that come with it.
Whoooo Brady must be scared.
Patriots Sign Tim Tebow
[45] juice
Weren’t the merits of this very move discussed on this lil old board months ago? I seem to recall some of you raising it.
As usual, NJREReport.com was way ahead of the curve.
[45] juice
And I seriously doubt Brady is scared. The Pats have had problems with second string QBs ever since Cassel left. I see this as complimentary to the offensive scheme and I would not be surprised if he saw playing time.
Class action filed by Larry Klayman former prosecutor and founder of Judicial Watch against Verizon and the NSA.
http://www.scribd.com/doc/146930457/PRISM-Class
http://www.gpo.gov/fdsys/pkg/PLAW-107publ56/html/PLAW-107publ56.htm
“(a) In General.–Any person who is aggrieved by any willful
violation of this chapter or of chapter 119 of this title or of sections
106(a), 305(a), or 405(a) of the Foreign Intelligence Surveillance Act
of 1978 (50 U.S.C. 1801 et seq.) may commence an action in United States
District Court against the United States to recover money damages. In
any such action, if a person who is aggrieved successfully establishes
such a violation of this chapter or of chapter 119 of this title or of
the above specific provisions of title 50, the Court may assess as
damages–
“(1) actual damages, but not less than $10,000, whichever
amount is greater; and
“(2) litigation costs, reasonably incurred.
Any Verizon customers out there?
I finally agree with Chifi. The prez is a very young George Jefferson. we’re movin’ on up!! Yeah baby!!
“It’s going to be a bumpy ride for the homebuilders,” Blitzer, explained, suggesting the evolution in housing starts for single-family homes, inventories, and prices could help forecast the future path of homebuilder stocks.
If the Pats could squeeze decent play out of Randy Moss, they will get a hell of a lot more out of Tebow. Five touches a game for him, and I’d start watching football again.
I just remember walking into the house at 6:30 on Sunday night a couple of years ago, and Tebow was doing something to help the Broncos win a game.
It seemed like 6:30 every Sunday, same announcers, same endings.
Whatever happened to Brigadoon Upon Hackensack?
ESPN says Tebow will be 3rd string QB.
Comfortable in your retirement plans? Have a 401k? The below Frontline piece doesn’t even take into account taxes.
http://www.pbs.org/wgbh/pages/frontline/retirement-gamble/
Caveat emptor.
Jack Bogle of Vanguard is featured in the above Frontline piece, too.
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