Posts filed under “Data Analysis”

Gaming the Data: Realtors Fudging the Numbers

As if the NAR data wasn’t gamed, massaged and otherwise manipulated by the reportage of local realtors themselves: It turns out to be even worse than I imagined.

From a South Florida paper, we learn that local realtors are refusing to submit ALL THE DATA to their regional Board of Realtors, because doing so would dilute the nicer parts of town with lower-priced and worse-performing neighbors:

"The Naples Area Board of Realtors has long wanted to report that city’s results undiluted by lower-priced and worse-performing neighbors.

In fact, for the past few months, the board has refused to submit its sales and price numbers to the Florida Association of Realtors for its comprehensive monthly reports.

Marla Martin, an FAR spokeswoman, said the Naples board — representing the wealthiest median home sales prices in Florida — had raised issues with the state association relating to the presentation of the board’s sales and price data."

Can’t have those crappy neighborhoods affecting our overall sales data, can we?

Statistics published in the trade association’s "Sarasota Realtor" magazine had this footnote: Data may "include some listings in Manatee, Englewood, Venice and other areas." For shame . . .

THis  is merely one of the many different ways that Realtors have been playing with their data: First, a slow selling house can get pulled off of Multiple Listing, and then relisted with a different MLS number and at a lower price. That makes the overall time-to-sell appear much better than it really is. The mulligan can take months or even years of time-on-the-market-to-sell.

This game also improves the "Percentage of asking price recieved" number. A $600k house that sold for $450k is 75% of ask, versus the same home relisted and asking $500k — and getting the same $450k; that’s selling for 90% of asking price.

Of course, all of this is irrelevant to the rising tide of Foreclosures:  while several private and state efforts have been made to reduce the increases, the bottom line is that there are presently millions of homes occupied by people who cannot afford them. Changing an ARM to a 30 year fixed isn’t going to alter that.

And, as the nearby chart reveals, its not just "Sub-prime" mortgages — "Alt A"s are seeing a nice spike in late payments (60 days overdue) and defaults too . . .


Realtor groups may quit statewide reports
Herald-Tribune, June 26. 2007 4:49AM

Subprime: Point to Where It Hurts
Steps to Modify Loans And Avert Foreclosures Has Investors Clashing
WSJ, June 29, 2007; Page C1

Category: Data Analysis, Economy, Real Estate

CDO Hedge Funds = Enron ?

Category: Credit, Data Analysis, Derivatives, Finance, Hedge Funds, Markets, Psychology

Sub-Prime Housing Problems Limited to Just 7 States

Category: Data Analysis, Psychology, Real Estate

Who Owns Troublesome CDO/CMOs?

Category: Data Analysis, Derivatives, Financial Press, Hedge Funds, Real Estate

Housing Deterioration Continues

"The housing market
has continued to deteriorate throughout the second quarter" and "the
supply of new and existing homes has continued to increase, resulting
in declining home prices across our markets.

As Lennar looks into the third quarter and the
rest of the year, it continues to see weak, and perhaps deteriorating,
market conditions’ and expects a third-quarter loss."

-Lennar President/CEO Stuart Miller



Case Shiller Home Price Index, Year-over-year price changes
Source: S&P


As the chart above shows, the S&P/Case-Shiller House Price Index fell the most it has in 6 years. Dropping 2.1% y/o/y, this is the index’ 4th consecutive down month. Home prices are still up 26.5% from 3 years ago, and 8.8% from 2 yrs ago.

CNN/Money reports that "While sales picked up from the early part of the year, they tumbled
15.8 percent from May 2006 – marking the 18th straight month of
year-over-year declines."

This index differs from the pricing data from the Office of Fed’l Housing Enterprise Oversight (OFHEO) in that it includes the homes in all price ranges — OFHEO pricing data only covers "conforming mortgages" which doesn’t include most of the upper end of the housing market.

Meanwhile, Home Inventory continues to rise: The WSJ reported the number of homes on the market "increased 5% in May, adding to a glut
in many parts of the country and threatening to push prices lower as
the housing market keeps tumbling."

This amounts to a 15 year high of home inventory. And, all this inventory is not going away anytime soon. At current sales levels, the annualized housing sales rate has slipped below 6 million — 5.99 — a four-year low.


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Category: Data Analysis, Economy, Real Estate

LEIs: Is the Economy Poised to Expand?

Category: Data Analysis, Economy, Employment, Psychology

Most Over/UnderValued U.S. Housing Markets

Yesterday, we learned that the NAHB Housing Market Index, a gauge of home-builder confidence, declined to its lowest reading since the 1991 recession:


Source: NAHB, Wells Fargo

Given the high inventory still around, its no surprise that all three components of index dropped: Single-family Home Sales fell to 29 (from 31); Traffic of Prospective Buyers droped to 21 from 22; Expected Sales for the next Six Months declined to 39 from 41.

The last time the HMI was this low was in the throes of the 1990-91 recession.

Rather than spend much time on this well-covered report, I want to draw your attention to a little followed report on Home Valuation. I stumbled across this extremely informative analysis, filled with great
info-porn maps (below) from Global Insight and National City

It looks at the regions of the country which have had the greatest home price appreciation and, by their measures, are the most overvalued.

First the good news: less homes are overvalued today than in 2005, when the study found 45% of all homes 23% of homes were overvalued by 45%.

Today, 14% of homes for sale are still overvalued — but by only 25%:


The following shows where the overvalued/undervalued homes are located:


That decrease in overvaluation comes as no surprise: The huge overhang of inventory = price decreases (see  below).

Thus, many of the over-valued regions are becoming a little less overvalued.

But, depsite the hopes of the bottom-callers, there is still a ways to go.


Full Study: House Prices in America – Q1 2007
A Global Insight / National City Corporation, June 2007

2006 Q1 PDF:


additional graphs, and a summary of the report, after the jump

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Category: Data Analysis, Economy, Real Estate

Delving Deeper into the Inflation Issue

Category: Data Analysis, Federal Reserve, Fixed Income/Interest Rates, Inflation

There’s No Inflation — Except for Necessities

Category: Data Analysis, Federal Reserve, Inflation

A Tale of 2 Inflation Rates

Category: Data Analysis, Economy, Federal Reserve, Fixed Income/Interest Rates, Inflation, Psychology