I just noticed that we have 3 consecutive posts without a chart or graphic.
This will not do.
To remedy this, we have scraped a chart from today’s NYT. It shows the increase in House inventories and prices:
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Click for larger graphic
Graphic courtesy of the NYT
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Oh, yeah. Hmmmm, That feels much better.
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Source:
New Signs of Cooling in Housing
JEREMY W. PETERS
NYTimes, August 24, 2006
http://www.nytimes.com/2006/08/24/business/24econ.html
Barry, maybe start by saying Affordable Housing followed by Bubble Bath. Then remove the Affordable Bath.
Seriously though, great to see lots of housing coverage on a more mainstream blog.
I was wondering about sales of existing homes, thanks for the pointer.
See also my post on for-sale inventory as a percentage of owner-occupied housing (the census numbers, now). Expressing the chart in that ratio should normalize out both population growth and any changes in second-home ownership.
On the one hand, this chart makes clear that the ratio recently exceeded its forty-year two-stdev band. On the other hand, the picture in 1985 showed exactly the same thing. Unsold inventory is just one data point. If you’d sold in 1985 on that alone, you’d have missed the real peak by four years.
That said, like you, PIMCO and Robert Toll, I believe housing is cracking now, not in 2010.
Housing Bubble to Deflate;Recession to Follow
(I posted this a year ago this coming weekend):
That [headline is] the prognostication of economist Ed Leamer:
Not that I am a Democrat or a fairy, but by george, Barney Frank has more sense than Kudlow and Ann Coulter put together.
Than Kudlow and Coulter together times ten! Oh just typing their names is giving me the willies and triggering the gag reflex.
Same data in WSJ today. However I find these data points too vague. On a macro level, ok, the housing markets cooling. But take the West region. A house in SanFran is a totally different play than a house in Billings, Montana (both in the same region on that map).
Question for you guys:
Scenario: Housing cracks. Consumption slows more than expected by the Fed. Lowers rates.
Then what: do people jump in again and buy? Does the housing party restart where it left off?
Have to ask what did Barney have to say about it all ?
Normally I don’t indulge but in this context, please forgive me all, but there’s a Fellinesque pairing – Larry+Ann. Then again maybe not given their shared political leanings.
Finance girl – those are the regional breakdowns readily available. Obviously Montana, Idaho, Wyoming, et.al. are different but not a large part of the game. Think the Western market is dominated by the high-growth areas and population centers. I’d suppose if somebody wanted to track it down state level data might be available.
The CalculatedRisk blog seems to pull up that kinda of detail from time-to-time, for what it’s worth.
BR, I’ve got to disagree with you on Miami Vice. How did the cop sent over to check out the merchandise during the big exchange survive the shootout, let alone thrive by shooting half the bad guys in the back?!? A little far-fetched… and why did Michael Mann, ‘father of the just rained streets’ to make everything look cool, go dry in the film? Where were the signature shots of the gals in their bikini bottoms which punctuated the opening intro for the run of the tv show? Miami Vice 2 looks like a long shot…
Mr. Beach, just because homes are 10% cheaper doesn’t mean they’re suddenly affordable after a 100% runup. If housing “cracks” we could be in a recession. Median wages drop and prices have to drop even lower to re-attach to fundamentals.
Mr. Beach asked:
Scenario: Housing cracks. Consumption slows more than expected by the Fed. Lowers rates.
Then what: do people jump in again and buy? Does the housing party restart where it left off?
I know the conventional Wall Street bet is that lower rates will solve all the housing industry’s woes. I don’t buy it as I think negative psychology, slumping employment and other problems could easily offset the impact of lower rates unless rates get DRASTICALLY lower pretty quick.
Another interesting thing I’ve discussed on my blog — the past several weeks (believe the running count is 8 now), interest rates have generally been falling. However, so has the mortgage bankers association’s purchase mortgage application index. This is completely abnormal — the two series tend to track each other pretty closely for obvious reasons.
Will we start hearing “pushing on a string” talk at some point? That’s what I’m wondering about. Read more if you’re interested at …
http://interestrateroundup.blogspot.com/