Redux: No, Existing Home Sales were not good

Its March, and that means its time for our favorite annual mainstream media math mess up: The February Existing Home Sales errata.

As previously discussed, Home Sales are highly seasonal. Anyone with kids tries to avoid disrupting their school year when possible. And so, the ideal time to move into a new town (and school district) is prior to the start of the new school year in September. That factor, along with other annual holiday activity, explains the annual rhythm of the existing home sales.

January is the worst month of the year for sales. From that low point, sales improve gradually for each of the next 6 months. They plateau over July and August, and then began heading down until December. This occurs year after year.

For those people who actually want to understand the state of the Housing market, you have two options that avoid the cyclical seasonality: 1) You use year over year data. This removes the seasonal patterns by  comparing January to January, June to June, etc. And 2) Compare non seasonably adjusted monthly data over the course of multiple years.

Since the market peaked in 2005, we have been in a strong downtrend. Prices have fallen about 27% nationally, and units sales are off about 30% from the highs of over 7 million annual sales in 20056.

There was one bright spot in the Housing data: Housing is now falling at a decelerating level. While year over year prices are still dropping double digits, unit sales are falling at a slower pace. Housing sales are getting worse, just not quite as quickly. The second derivative improvement suggests that we may be nearing a point where the unit sales may stop dropping. But that does not mean we are at a bottom yet, and it certainly does not imply a turnaround is at hand.

Let’s take a quick look at two mainstream articles that have gotten this wrong: Today’s Investor Business Daily, and last years Wall Street Journal.

IBD:

Sales of previously owned homes unexpectedly rebounded in February from January’s record low, the latest evidence that housing — and the overall economy — may finally be hitting a bottom.

I count 3 major errors in that sentence: “unexpectedly,” “housing may finally be hitting a bottom” and “the overall economy [may finally be hitting a bottom}”

The data does not show that Housing is hitting a bottom, it only shows that it is falling at a slower pace. Just because the parachute has deployed does not mean you are on terra firma.

As to the overall economy bottoming, not only is there no evidence of that, but the leading indicators (ECRI, LEI, etc) all suggest the opposite: The economy is likely to get worse before it gets better. IBD is proferring an opinion, not facts  — and its an unsupported opinion at that.

Last, here’s why the word “unexpectedly” is wrong: The people who follow housing closely expected an increase in February. It happens every year, as the chart I showed yesterday revealed. And the March data will improve over February data, and April over March, and May over April and June over May. That is the seasonal pattern, and it is only unexpected by those people who are unfamiliar with the data, and simply do not know better.

This especially applies to the NAR, who have been not just wrong, but wildly wrong the entire way down.

Let me also point out that the economists on “Wall Street who expected a dip” are the same folks that did not understand the credit driven housing boom, missed the peak in sales and prices, and failed to see the housing collapse. They have been generally clueless about the entire economy for the past 5 years. That they were surprised by the same data they have consistently misunderstood and misinterpreted should be unexpected by no one at this point.

Last year, the WSJ had a front page article that got the seasonal data totally wrong: Wave of Foreclosures Drives Prices Lower, Lures Buyers:

A glut of foreclosed homes of historic proportions is starting to drive down U.S. home prices faster as lenders put more properties on the market and buyers show signs of interest . . . On Monday, new data suggested that pressures like these are starting to drive prices low enough to attract some buyers back into the market. Sales of previously occupied homes jumped 2.9% in February from the month before, the National Association of Realtors said, the first increase since July.

No, the 2.9% was nothing special. It was the regular February increase from January.

~~~

What is so amazing about this is that we see the same errors every year. And given how wildly wrong the usual pundits have been on this issue, one would hope the MSM would be a touch more circumspect.

>

Previously:
Existing Home Sales, Non Seasonally Adjusted, Explained (March 25th, 2008)
http://www.ritholtz.com/blog/2008/03/existing-home-sales-non-seasonally-adjusted-explained/

NAR’s Existing Home Sales & Prices (November 2006)
http://www.ritholtz.com/blog/2006/11/nars-existing-home-sales-prices/

NAR Housing Market “Bottoms” (January 2008)
http://www.ritholtz.com/blog/2008/01/pending-home-sales-index-nar-housing-market-bottoms/

Sources:
Existing Homes Surprise: Sales Turn Up, Prices Firm
BRAD KELLY
IBD, Posted 3/23/2009
http://www.investors.com/editorial/IBDArticles.asp?artsec=16&issue=20090323

Wave of Foreclosures Drives Prices Lower, Lures Buyers
Oversupply Triggers Lenders’ Fast Sales; Mr. English Bids
JAMES R. HAGERTY and KRIS HUDSON
WSJ March 25, 2008; Page A1
http://online.wsj.com/article/SB120640573882561087.html

Category: Data Analysis, Markets, Real Estate

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

50 Responses to “The Annual Existing Home Sales MSM Errata”

  1. dead hobo says:

    Every time there’s a little good news about housing, you just go out of your skull trying to prove it’s really bad news. Can’t you just say, “not bad”?

  2. ottovbvs says:

    Without buying into the NAR’s spin or the MSM’s euphoria it surely possible to realize that in a market as large and diverse as the US that there are signs the property collapse is either bottoming or slowing depending on the market. It’s a very nuanced picture. I frequently nudge BR to say what’s happening where he lives on LI where I suspect in pricing terms for sure and probably volume too it has essentially bottomed….No another boom is not around the corner, but it’s a relative improvement and most things are relative.

  3. McMia says:

    But BR, don’t you realize it’s national confidence month, when everyone from Vikram Pandit to Barack Obama and all the establishment con men in between come out and say everything is bright and shiny and looking up and pretty soon we will all have our ponies back?

    C’mon BR, get with the program. Just tap your heels together three times and say: No Dow like 15000, No DOW like 15000, No DOW like 15000,……

    Look, dead hobo wants it to be con-month all the time…

  4. VennData says:

    Ok, but besides that IDB is constantly is hit with the “unexpected,” housing’s not finally be hitting a bottom, the overall economy’s not hitting a bottom, Lawrence Yun and the NAR have been wildly wrong,
    economists on “Wall Street who expected a dip” are the same folks that did not understand the credit driven housing boom, missed the peak in sales and prices, and failed to see the housing collapse…

    …what have the Romans ever done for us?

  5. call me ahab says:

    BR Says:

    “January is the worst month of the year for sales. From that low point, sales improve gradually for each of the next 6 months.”

    exactly- when they said surprise increase it made me laugh- the Spring market starts in February and always has- for it to be a true surprise, sales from February would have had to go down from January- a highly unlikely occurrence.

  6. Stuart says:

    Unless those working at the IBD and WSJ are completely incompetent, possible but doubtful, I have to conclude that they are not only aware of these trends but purposefully chose to print a very wrong and slanted report. This is further confirms why I had cancelled subscriptions to them last year. Just the fact Ma’am. Thanks BR for keeping them honest.

  7. “…one would hope the MSM would be a touch more circumspect.”

    while I appreciate the savoir-faire of such a statement..

    VD, above, is asking the right Q:

    the MSM’s ‘job’ isn’t to reflect *Reality, it’s there to promote the chosen version of it.

    those that miss that distinction, get jobbed..

    http://www.thefreedictionary.com/savoir-faire
    http://www.thefreedictionary.com/jobbed
    yes, def. #9

  8. Alex says:

    And newspapers wonder why…oh why…their day seems to be over. Subscribing to even a free newspaper has an implicit cost, which is the time it takes to read its contents. If the content is not informative, I can think of about 1,000 things that are a better use of my time.

    I don’t think its the “paper” model that is broken with newspapers. The content has been dumbed down or co-opted by the advertisers to such an extent that its worse than useless. This serial stupidity is a prime example.

  9. E says:

    Another thing to contemplate is the year-over-year comparison in mortgage interest rates. The drop in prices and sales came in spite of lower interest rates, indicating that the downward trend continues to be strong.

    dead hobo and ottovbvs enjoy being contrarians here. I doubt they are out there scooping up foreclosures.

  10. E says:

    Mark, the MSM’s job is to deliver eyeballs to advertisers. That’s it, that’s the list.

  11. dead hobo says:

    McMia Said:
    March 24th, 2009 at 7:55 am

    But BR, don’t you realize it’s national confidence month …

    Look, dead hobo wants it to be con-month all the time…

    reply:
    ——————-
    No, what I do is commonly called ‘Thinking”. Anyone who sees black and white, always, is locked into a losing position. If you have trouble finding a path to where you want to go, then you will always stay where you are. Especially if you refuse to move until your path is turned into a well lighted super highway and you expect to be allowed to lead the pack. Where I live, housing did pretty well last month.

    Sorry, but good news is what it is.

    The only people who don’t make mistakes are the people who don’t do anything. BTW, The path I see might lead to recovering all losses this year and making a profit. And I’m talking about the entire portfolio. And all it will take is range trading over the rest of the year. And to do that I need a clear vision NOT clouded by repetitive mantras about the good or bad.

  12. E,

    no question, but that point, alone, is usually lost on most peep.

    if one couples w/ Alex’s statement, it begins to become clearer..also, Stuart gets to the meat of it–these ‘people’ are not incompetent, or stoopid, they’re Hacks/Presstitutes, willing to do trix 4 $..

  13. tranchefoot says:

    Second derivative = 0 may simply mean we have reached terminal velocity. The next stage could be “splatt”.

  14. rktbrkr says:

    The slowing decline in housing units and prices was also due to the various foreclosure moritoria by a few large banks.

  15. ottovbvs says:

    dead hobo Says:
    March 24th, 2009 at 8:28 am

    ……Right on hobo…..what seems to be popular wisdom here is almost a mirror image of the inane Kudlow, Lereah, Cramer spin of 18 months ago on the upside…..except it’s all to the downside……No one as far as I can see is saying this is the start of a monster rally but as a straw man it’s being presented as such by the negativoes….. Viz:

    ” But BR, don’t you realize it’s national confidence month, when everyone from Vikram Pandit to Barack Obama and all the establishment con men in between come out and say everything is bright and shiny and looking up and pretty soon we will all have our ponies back? ”

    …..Interesting your property market is on the uptick…..doesn’t surprise me because it’s very nuanced…These guys need to take note of one of Keynes’ most famous aphorisms:

    “When circumstances change, my opinions change”

  16. rootless_cosmopolitan says:

    “Last, here’s why the word “unexpectedly” is wrong: The people who follow housing closely expected an increase in February. It happens every year, as the chart I showed yesterday revealed. And the March data will improve over February data, and April over March, and May over April and June over May. That is the seasonal pattern, and it is only unexpected by those people who are unfamiliar with the data, and simply do not know better.”

    Barry, according to my understanding, the good news was supposed to be that “the seasonally adjusted annual rate” shows an increase from January to February. Thus, your objection at this point, it always gets better from January to February, is not valid, since the seasonal cycle has been taken into account already. Existing home sales increased from January to February after adjusting to the seasonal cycle. There are other points you can make, like the data are unrevised and month-to-month data are very noisy, so that the rise might not be statistically significant. But not this one.

    BTW: I looked at the NAR website: http://www.realtor.org/rmodaily.nsf/pages/News2009032301

    My impression is the news there are phrased with more caution than the spin in the media has been.

    rc

  17. ottovbvs says:

    E Says:
    March 24th, 2009 at 8:21 am
    “dead hobo and ottovbvs enjoy being contrarians here. I doubt they are out there scooping up foreclosures”

    ……..Well you see there aren’t actually many foreclosures in CT……I looked at a list about two weeks ago and it’s thin pickings…..82% of foreclosures are concentrated in six states

  18. whskyjack says:

    The reports I read yesterday said the numbers were seasonally adjusted, So they took into account your point and still found an increase.
    Right?
    I read the numbers as being not as horrendous as the previous month as one would expect where interest rates are down and large numbers of forclosed properties are going for firesale prices. Nothing to pop champaign corks about.

    Jack

  19. Marcus Aurelius says:

    The big story isn’t about housing prices and sales any more (pricing is declining, and sales will remain flat YOY). I don’t care what the Fed, the Treasury, the Chinese, or Gus (the local loan-shark) do with freeing-up credit – the value of the underlying asset is gone, and no one who cares about their money will refi an asset that has lost up to 40% of it’s value.

    The big story is commercial RE defaults, CC defaults, unemployment, and to a lesser degree (and only because it’s becoming tedious) Alt-A and Option ARM mortgages, .

    Everybody’s reacting to the new PPPIP as if it will somehow magically revive the larger economy. It won’t, because it does not address the reality of our situation. What it will do is crush the majority, in favor of the entrenched banking interests.

    This KoolAid is different (it’s cherry – the old KolAid was grape).

  20. otto,

    re: JMK

    John Maynard Keynes: When the facts change, I change my mind. What do you do, sir?

    Keynes may be the man of the moment but take care when you’re using this phrase. Samuel Brittan is among those who believe that Keynes never said it, dismissing it as a ‘banal misattribution.’ The phrase in question, Brittan insists, was probably, “When I change my mind I say so, what do you do?”

    http://timesonline.typepad.com/comment/2009/03/10-things-that.html

    you need some fresh tripe..

    and, these factoids: “Well you see there aren’t actually many foreclosures in CT……I looked at a list about two weeks ago and it’s thin pickings…..82% of foreclosures are concentrated in six states”

    do not rebut his, E’s, assertion..you may care to polish your rhetoric, one of the keys, to being a good disinfo agent, is not to be so bloody obvious..
    http://www.thefreedictionary.com/rhetoric

  21. Marcus Aurelius says:

    Forclosures in CT are up between 61 and 67% (in 2007)

    http://query.nytimes.com/gst/fullpage.html?res=9504E5DF1F31F93BA25750C0A9619C8B63

    In fact, a year ago, CT foreclosures were 8th in the nation (I’ll try to find more current rankings).

    http://www.ctforeclosure.net/blog/connecticut-8th-highest-foreclosure-rate-in-the-nation/

    CONNECTICUT FORECLOSURE ACTIVITY UP 85 PERCENT IN 2008

    http://web1.realtytrac.com/ContentManagement/Library.aspx?ChannelID=13&ItemID=5735

  22. ottovbvs says:

    Marcus Aurelius Says:

    March 24th, 2009 at 9:31 am
    The big story isn’t about housing prices and sales any more (pricing is declining, and sales will remain flat YOY). I don’t care what the Fed, the Treasury, the Chinese, or Gus (the local loan-shark) do with freeing-up credit – the value of the underlying asset is gone, and no one who cares about their money will refi an asset that has lost up to 40% of it’s value.

    …..Relative to what?…I bought my house in 1998…..according the 2008 assessment which I’m appealing it has tripled in value since 1999….And even I think it’s only fallen back about 20% in the past couple of years….I’m just refi at 4.5% and they are falling over to do it….It’s a not very different story with another property I own in another state….. you and too many will persist in treating the whole of the US as if it were Corona or Orlando…. It’s not!

  23. ottovbvs says:

    Mark E Hoffer Says:
    March 24th, 2009 at 9:36 am

    ……There are times when the phrase “Get a life” springs to mind

  24. Marcus Aurelius says:

    otto:

    Why is it always about you? Oh yeah – as otto goes, so goes the nation.

  25. krice2001 says:

    I think McMia is right that it’s “confidence month”. There seems to be a theme that it’s a lack of confidence that’s the major problem with the economy. It couldn’t be, of course, the higher unemployment rate, stock price (401k) declines, home price depreciation, and the world-wide economic slowdown. Granted, confidence plays a role but as BR I think has said, when the economy really improves, confidence will improve with it.

    Part of what gets me is that when the media is willing to publish fiction (cherry picked statistics) about something like home sales and home starts, it just confuses people. People need to have accurate reporting (as best as possible) because they need to make the most rational choices for themselves and it’s tough enough with real data. When someone like the National Assoc. of Realtors publishes what would have to be called, lies, month after month and year after year and it’s easily refuted, why does the media insist on actually printing it without any context?

  26. ottovbvs says:

    Marcus Aurelius Says:
    March 24th, 2009 at 9:57 am

    …..Apparently your rather emotional brand of stoicism can’t function without personalizing everything….my practical experience is actually the experience of the other roughly 8000 homeowners in my town and therefore reasonably representative of what’s happening in one property market that bears no resemblance to the most extreme declines

  27. E says:

    Seriously, it would be useful to view the NAR monthly average sales price statistic denominated in monthly payments. In other words, factor in the monthly average mortgage rates. We know from the front side of the housing bubble that people made purchase decisions based on the monthly cost – shouldn’t we look at this metric on the downward side to determine when things are getting back to level?

    I’m sure someone out on the internets has already done this math, but I haven’t seen it in the obvious places (Calculated Risk, Big Picture, etc.)

  28. ottovbvs says:

    “I read the numbers as being not as horrendous as the previous month as one would expect where interest rates are down and large numbers of forclosed properties are going for firesale prices.”

    ……Actually interest rates have only fallen since the Fed program was announced about a week ago …they were actually on an uptick in the preceding forty days

  29. E says:

    otto,

    Almost all of the February home sales numbers are based on contracts offered and accepted at least 40 days ago.

  30. rootless_cosmopolitan says:

    “When someone like the National Assoc. of Realtors publishes what would have to be called, lies, month after month and year after year and it’s easily refuted, why does the media insist on actually printing it without any context?”

    Because the first purpose of the media is not to inform people, but to accumulate additional capital to the one invested into the media corporations and to provide a cash flow for the owners of the means of production/investors from their investment? And the mean for this purpose is to sell news and colored pictures. Accuracy is secondary.

    rc

  31. call me ahab says:

    @ otto-

    dude- please- rates are low regardless. The refinance conundrum is: those that can refinance will those that can’t will be foreclosed. There are no more loans that allow “no doc”, “stated income”, NINA, NINJA- those that bought a home with these products are out of luck and because they followed the herd and bought at the worst time with precarious financing such as “pick pay” and option ARM programs and with their homes worth less than what they owe . . . well you get the picture.

    @Marcus Aurelius Says:

    “and no one who cares about their money will refi an asset that has lost up to 40% of it’s value.”

    Marcus- they can’t refinance even if they want to. For example- you buy a house with 80% to 100% financing. The value goes down 30%. So if you bought a $400,000 house at 80% financing you owe $320,000. The problem is- the value is now $280,000. No bank want’s any part of that- the collateral is worth less that the amount to be refinanced. That is the problem. And even with all the new hocus pocus from the USG- they will still only all allow under the new “whatever it’s called” guaranteed refinance plan 105% financing- so it will only help a fraction of the people.

  32. Marcus Aurelius says:

    Ahab:

    Yes. That’s my point (maybe not clear, but the loan to asset value relationship was what I was trying to point out).

  33. JohnnyVee says:

    I agree that it may appear that housing prices are falling at a slower pace. But, if you look at the interest rate, i.e., 5% or 4%, its pretty scarry that housing prices are falling at all. If the mortgage rate was 8%, which is probably closer to the market rate than 5%, I don’t think that prices would be slowing to the downside.

  34. Mannwich says:

    @call me ahab: On a somewhat related note: we’re in the process of possibly replacing some windows (as I’ve mentioned), so I started looking into getting a $10K home equity line of credit from Wells. I was a bit taken aback by all of the due diligence they did (which is what they should have been doing all along, but I digress) for a measly $10K. They wanted the past couple years’ tax returns, year-end tax stubs, and other verifications (along with credit check), which was fine with me because we have all that but it left me wondering how others with not so solid credit score and income history could be approved for any credit if this is what they’re doing for only $10K. Alas, I eventually remembered that we had never closed our other paid off line from a few years ago and they had a better rate (5.99%) and much higher limit ($37K), so I cancelled my Wells app.

  35. ottovbvs says:

    call me ahab Says:
    March 24th, 2009 at 10:37 am

    ……..with due respect Ahab I don’t think you know an awful lot about the R/E market…..you keep quoting examples that are based on the dynamics of the worst markets in the country and the most egregious mortgage abuses…..Case Schiller says values have fallen by about 27% nationally which means some may have fallen by 40% but others have fallen by 15% or less…..I’ve dabbled in R/E over the years and believe me making money in it depends on what you buy places at and I can assure you from my own researches plus talking to a couple of guys I know in a couple of other cities who incredibly good at this…..much better than me ……. there are not thousands of foreclosed properties selling for 20c on the dollar in anything other than a handful of states where the sub prime and foreclosure problems are concentrated….

  36. call me ahab says:

    Mannwich Says:

    “I eventually remembered that we had never closed our other paid off line from a few years ago and they had a better rate (5.99%) and much higher limit ($37K), so I cancelled my Wells app.”

    smart move

  37. ottovbvs says:

    Mannwich Says:
    March 24th, 2009 at 10:43 am

    ……I’m glad were speaking again…..I do agree with you about the greatly heightened level of scrutiny taking place…..I had to shlep a ton of stuff over to my mortgage broker yesterday and he’s known me for years…..it’s called a liquidity crisis which is what Summers was calling it correctly in my view…..All the lending institutions have massively tightened standards…..another buddy of mine owns an engineering co in the rocky mountains and he’s having a hell of a job getting his revolving credit lines renewed…..this is what shortage of liquidity looks like on main street.

  38. call me ahab says:

    @ otto-

    Well . . . I don’t know- it’s only my profession . . . but hey . . . maybe I am just one dumb mofo who shouldn’t be commenting . . . I will sho’ try to do better. As for 20c on the dollar- who said that? Not me. My example was a 30% loss in value- not untypical for surrounding counties in Washington DC such as Prince William and Loudoun County in Virginia. But hey . . . what do I know.

  39. ottovbvs says:

    JohnnyVee Says:

    March 24th, 2009 at 10:41 am
    ….the mortgage rate on anything other than jumbos hasn’t been at 8% for over 25 years….and a month ago a thirty year fixed was in the high fives

  40. ottovbvs says:

    call me ahab Says:
    March 24th, 2009 at 11:04 am

    sorry….to be fair I thought you were basing you eg on the DC hinterlands where prices have fallen by around 25-30%….but my point is it’s not universal across the country….and not everyone in these homes in between DC and Richmond has to refinance in the present climate because……Are prices still dropping like a stone in this region?

  41. ottovbvs says:

    call me ahab Says:
    March 24th, 2009 at 11:04 am

    ……As an addendum to that one of my sources is in Baltimore…not far from DC and he tells me prices have definitely bottomed….volume is down but the market is not dead by any means…..so are prices still falling precipitously in the DC hinterlands.

  42. Mannwich says:

    @otto: But why is there a “shortage of liquidity” on Main Street? Is it because too many solvent entities don’t want to borrow? Or is it because too many of us are buried up to our eyeballs in debt? That’s a solvency issue, is it not?

    Correct me if I’m wrong because I know you’re the smartest guy in the room here, but haven’t the banks had plenty of “liquidity” thrown at it by the Feds since TARP I? If so, then what are they doing with those funds? How can that be a “liquidity crisis” if they’re using much of the money to recapitalize themselves and sit on the money waiting for better qualified lending opportunities (e.g. parking it treasuries)?

    It’s clearly a solvency issue on Main Street and clearly was one in the banks until all of the funny money and to-big-to fail guarantees arrived from Washington.

  43. call me ahab says:

    @otto-

    dude – I have thick skin- never an apology needed for any comment. No- to answer your question- prices have leveled off- worst is over for this area as far as depreciation. Not saying it’s all sunny skies by any means- it will be a slow market for some time.

    Also- I responded to you comment on another thread- can’t remember the title- but you were saying something to the effect that I was “all for” the Soviet destruction of Berlin . . . hmm . . . not sure if that was quite what I was saying. . .

  44. ottovbvs says:

    Mannwich Says:
    March 24th, 2009 at 11:18 am

    Mannwich old man…..there are still loads of businessses and individuals out there who want to borrow….sure they the banks had loads of liquidity thrown at them but they are still being stingy with the dough as a million pieces of commentary will tell you….Hence Geithner’s latest gambit

  45. Mannwich says:

    @otto: Sure, these businesses and individuals may want to borrow but are they perceived to be a worthy credit risk by the banks? My guess there’s problem some that want to borrow but can’t for good reason and others like you mention who are good credit risks but can’t get access to credit because the banks are in survival mode and hoarding cash.

  46. ottovbvs says:

    call me ahab Says:

    March 24th, 2009 at 11:24 am
    @otto-

    dude – I have thick skin- never an apology needed for any comment. No- to answer your question- prices have leveled off- worst is over for this area as far as depreciation. Not saying it’s all sunny skies by any means- it will be a slow market for some time.

    …….so you basically agree with me the rot has stopped… lets assume ahab I bought a house in the burbs of dc in 1999…..I don’t have the stats but I’m going to bet from what I know about Baltimore that it at least doubled, probably +150%, in value between then and 2006 when it all went pop…..now it’s fallen back by 30% so I’m still in the money….and this is where the great mass of he market is….still in the money…..I don’t think another R/E is around the corner but it’s definitley bottomed in most places and there’s only one way to go from there……On Berlin I think you likened the cleansing experience there to one that might be enjoyed if our financial system collapsed….I just find your viewpoint very odd

  47. call me ahab says:

    ott0 Says:

    “lets assume . . . I bought a house in the burbs of dc in 1999…..am I’m still in the money….”

    Correct- if you bought in 1999 you should be ok as far as equity and should be ahead of the game. The onslaught from the unwashed masses trying to get into the housing game- let’s say from 2004 to 2007- not in such a good position.

    Otto Says:

    “I just find your viewpoint very odd”

    Let’s say refreshingly different. Also- here is my comment from the other thread.

    otto Says:

    “You for some totally bizarre reason which I’m unable to understand seem to think a complete collapse of the US financial financial system would be an improving experience (I think you thought the same about the siege of Berlin the other day) with no impact on the lives of most of it’s ordinary citizens”

    dude- you make me laugh. Let me enlighten you as to what we discussed the other day. My comparison was that the collapse of the financial system was not Armageddon and that Soviet tanks destroying the city of Berlin was. One involves death and physical destruction the other possible financial hardship and tough economic times. Using my incredible IQ and survival instinct- I’ll take the latter.

  48. ottovbvs says:

    call me ahab Says:
    March 24th, 2009 at 12:07 pm
    “The onslaught from the unwashed masses trying to get into the housing game- let’s say from 2004 to 2007- not in such a good position. ”

    …….but what % of the market do the unwashed masses in greater DC represent…. and even some of the unwashed are creditworthy…the issue is to what extent have the unwashed destabilized the market and for how long…hobo and I think you and BR and a few others overdo the doom and gloom….you’re simply overshooting on the downside as people over shot on the upside

    …..On Berlin where you bought beer a couple of years ago you said as I recall the siege wasn’t big deal because sixty years later the city had recovered and therefore the US would recover from a collapse of the financial system. My point was a collapse of the financial system would in fact be infinitely more far reaching and destructive than the siege of Berlin. Believe it or not the great depression did a lot more harm than the siege of Berlin.

  49. gordo365 says:

    Barry – you are right to be harsh.

    This type of reporting is the intellectual equivalent of saying “February was warmer than January – which confirms global warming.” Rubbish!

  50. R. Timm says:

    @ ottovbvs & Ahab- I live in the DC hinterlands, Ashburn to be exact. The bottom is definitely in for prices out here. The inventory of homes has declined markedly and is at the lowest point since 2005, the bubble peak. I bought in 9/2007 at $610k on a place that would have gone for ~$750k in 2005. Now they are going for ~$550k. I have 3 pairs of friends that are looking right now and anything that is priced well are mostly REOs or short sales and are getting multiple offers. I know a couple that has been outbid twice. With rates under 5% at my local credit union on a 30-yr fixed and some lucky 1st time buyers getting $8500 from uncle sam it is safe to say the deterioration is done. I don’t expect prices to shoot up for a few years when inflation finally kicks in from all of Ben’s helicopter drops.