Comments on: Pending Home Sales Index, NAR Housing Market “Bottoms” http://www.ritholtz.com/blog/2008/01/pending-home-sales-index-nar-housing-market-bottoms/ Macro Perspective on the Capital Markets, Economy, Geopolitics, Technology, and Digital Media Sat, 21 Nov 2009 16:08:57 -0500 http://wordpress.org/?v=2.8.5 hourly 1 By: Yet Another Greenspan Housing Bottom Call | The Big Picture http://www.ritholtz.com/blog/2008/01/pending-home-sales-index-nar-housing-market-bottoms/comment-page-1/#comment-171004 Yet Another Greenspan Housing Bottom Call | The Big Picture Wed, 13 May 2009 11:20:21 +0000 http://thebigpicture.dev.wilder.ca/blog/2008/01/08/pending-home-sales-index-nar-housing-market-bottoms/#comment-171004 [...] 2005 declaration, made 5 months after Hosuign prices had topped out, was typical of the reality denial we saw from the NAR over the entire housing cycle. They continuously got it wrong, spinning all data, good or bad, in a [...] [...] 2005 declaration, made 5 months after Hosuign prices had topped out, was typical of the reality denial we saw from the NAR over the entire housing cycle. They continuously got it wrong, spinning all data, good or bad, in a [...]

]]> By: Doug http://www.ritholtz.com/blog/2008/01/pending-home-sales-index-nar-housing-market-bottoms/comment-page-1/#comment-63606 Doug Fri, 22 Feb 2008 16:59:43 +0000 http://thebigpicture.dev.wilder.ca/blog/2008/01/08/pending-home-sales-index-nar-housing-market-bottoms/#comment-63606 Housing remains quite expensive relative to "intrinsic" value. I suspect that the decline in house prices will continue until the opposite is true. Buyers have no incentive to enter the market (and even as price and intrinsic value converge, the possibility of purchasing later at a lower price turns out to be a very significant incentive to wait). The "big picture" question as I see it is will the effect of retiring boomers, confronted with lower income and falling asset prices and savings, together with credit contraction from excessive leverage and weakened financial institutions lead to a significant decline in overall economic activity and even deflation. This contraction seems eerily similar to that in Japan from 1989-2004. Even today, stock indices are 60% below peak. Housing remains quite expensive relative to “intrinsic” value. I suspect that the decline in house prices will continue until the opposite is true. Buyers have no incentive to enter the market (and even as price and intrinsic value converge, the possibility of purchasing later at a lower price turns out to be a very significant incentive to wait).

The “big picture” question as I see it is will the effect of retiring boomers, confronted with lower income and falling asset prices and savings, together with credit contraction from excessive leverage and weakened financial institutions lead to a significant decline in overall economic activity and even deflation.

This contraction seems eerily similar to that in Japan from 1989-2004. Even today, stock indices are 60% below peak.

]]> By: Charlotte Real Estate - Terry McDonald http://www.ritholtz.com/blog/2008/01/pending-home-sales-index-nar-housing-market-bottoms/comment-page-1/#comment-63605 Charlotte Real Estate - Terry McDonald Wed, 09 Jan 2008 19:03:36 +0000 http://thebigpicture.dev.wilder.ca/blog/2008/01/08/pending-home-sales-index-nar-housing-market-bottoms/#comment-63605 The best market numbers now seem to be coming from Radar Logic, the new firm working with the WSJ. They have real leading and trailing indicators, condominium market numbers, and they watch 25 MSA's. You should know that NAR has been useless to the Agents it pretends to serve as well. I've cut and pasted their quote to our office bulletin board, we need to all welcome them to the "reality-based" community... it would be funny if not so... The best market numbers now seem to be coming from Radar Logic, the new firm working with the WSJ. They have real leading and trailing indicators, condominium market numbers, and they watch 25 MSA’s.
You should know that NAR has been useless to the Agents it pretends to serve as well. I’ve cut and pasted their quote to our office bulletin board, we need to all welcome them to the “reality-based” community… it would be funny if not so…

]]> By: Vermont Trader.. http://www.ritholtz.com/blog/2008/01/pending-home-sales-index-nar-housing-market-bottoms/comment-page-1/#comment-63604 Vermont Trader.. Tue, 08 Jan 2008 18:38:01 +0000 http://thebigpicture.dev.wilder.ca/blog/2008/01/08/pending-home-sales-index-nar-housing-market-bottoms/#comment-63604 Well, sales will go back up again someday. Investors will buy houses when they can be rented to people at a nice profit without taking future capital gains into account. Markets tend to overshoot going up and down so I suspect there will be some nice investments oportunities with fat cash flows in a few years. The house across the street from me is for sale and its price needs to drop about 40% before it would be worth the hassle vs. buying a bond. Well, sales will go back up again someday.

Investors will buy houses when they can be rented to people at a nice profit without taking future capital gains into account. Markets tend to overshoot going up and down so I suspect there will be some nice investments oportunities with fat cash flows in a few years.

The house across the street from me is for sale and its price needs to drop about 40% before it would be worth the hassle vs. buying a bond.

]]> By: The Dane http://www.ritholtz.com/blog/2008/01/pending-home-sales-index-nar-housing-market-bottoms/comment-page-1/#comment-63603 The Dane Tue, 08 Jan 2008 18:30:09 +0000 http://thebigpicture.dev.wilder.ca/blog/2008/01/08/pending-home-sales-index-nar-housing-market-bottoms/#comment-63603 Funny article, something else is also funny, in danish NAR means fool. NAR is living up to its name! Funny article, something else is also funny, in danish NAR means fool.

NAR is living up to its name!

]]> By: ken http://www.ritholtz.com/blog/2008/01/pending-home-sales-index-nar-housing-market-bottoms/comment-page-1/#comment-63601 ken Tue, 08 Jan 2008 18:04:57 +0000 http://thebigpicture.dev.wilder.ca/blog/2008/01/08/pending-home-sales-index-nar-housing-market-bottoms/#comment-63601 Barry your claim that a price drop of over 19% year over year is a sure fire indication that prices will fall further is pretty ignorant. I'll give you the benefit of the doubt and assume that you may not have meant what you actually said. You must know that short term price activity is a better indication of trend changes than is long term price activity. ~~~ <b>BR</b>: Ken, You are misunderstanding this discussion. That's a reference to the NAR methodology for using the PHSI. See the link above Barry your claim that a price drop of over 19% year over year is a sure fire indication that prices will fall further is pretty ignorant. I’ll give you the benefit of the doubt and assume that you may not have meant what you actually said.

You must know that short term price activity is a better indication of trend changes than is long term price activity.

~~~

BR: Ken,

You are misunderstanding this discussion. That’s a reference to the NAR methodology for using the PHSI.
See the link above

]]> By: Eric Davis http://www.ritholtz.com/blog/2008/01/pending-home-sales-index-nar-housing-market-bottoms/comment-page-1/#comment-63602 Eric Davis Tue, 08 Jan 2008 17:17:18 +0000 http://thebigpicture.dev.wilder.ca/blog/2008/01/08/pending-home-sales-index-nar-housing-market-bottoms/#comment-63602 That wasn't fairly footnoted... the whole Bill Gross Pimco "forcast" rant. is worth a read. http://www.pimco.com/LeftNav/Featured+Market+Commentary/IO/2008/IO+January+2008.htm That wasn’t fairly footnoted…
the whole Bill Gross Pimco “forcast” rant.
is worth a read.

http://www.pimco.com/LeftNav/Featured+Market+Commentary/IO/2008/IO+January+2008.htm

]]> By: Eric Davis http://www.ritholtz.com/blog/2008/01/pending-home-sales-index-nar-housing-market-bottoms/comment-page-1/#comment-63600 Eric Davis Tue, 08 Jan 2008 16:59:37 +0000 http://thebigpicture.dev.wilder.ca/blog/2008/01/08/pending-home-sales-index-nar-housing-market-bottoms/#comment-63600 http://www.housingwire.com/2008/01/08/pimcos-gross-warns-on-shadow-banking-system/ Investment grade and junk bond defaults may hit $500 billion of credit default swaps, triggering losses of $250 billion, ..... The unfairly “Ben Stein pilloried” Jan Hatzius of Goldman Sachs estimates that mortgage related losses of $200-400 billion alone might lead to a pullback of $2 trillion of aggregate lending http://www.housingwire.com/2008/01/08/pimcos-gross-warns-on-shadow-banking-system/

Investment grade and junk bond defaults may hit $500 billion of credit default swaps, triggering losses of $250 billion,
…..

The unfairly “Ben Stein pilloried” Jan Hatzius of Goldman Sachs estimates that mortgage related losses of $200-400 billion alone might lead to a pullback of $2 trillion of aggregate lending

]]> By: Eric Davis http://www.ritholtz.com/blog/2008/01/pending-home-sales-index-nar-housing-market-bottoms/comment-page-1/#comment-63599 Eric Davis Tue, 08 Jan 2008 16:31:24 +0000 http://thebigpicture.dev.wilder.ca/blog/2008/01/08/pending-home-sales-index-nar-housing-market-bottoms/#comment-63599 also OT: KBH has 2 years worth of housing lots, not including options on lots. also OT:

KBH has 2 years worth of housing lots, not including options on lots.

]]> By: michael schumacher http://www.ritholtz.com/blog/2008/01/pending-home-sales-index-nar-housing-market-bottoms/comment-page-1/#comment-63598 michael schumacher Tue, 08 Jan 2008 16:12:07 +0000 http://thebigpicture.dev.wilder.ca/blog/2008/01/08/pending-home-sales-index-nar-housing-market-bottoms/#comment-63598 OT: Moody's has been a busy boy today.......ironic that they cut the ratings on BSC tranches AFTER they know that Cayne is on his way out..... Ciao MS OT:

Moody’s has been a busy boy today…….ironic that they cut the ratings on BSC tranches AFTER they know that Cayne is on his way out…..

Ciao
MS

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