Wednesday, September 26, 2007

A History of Home Values

Posted by TraderMark at 5:53 PM TweetThis
Wow. Sometimes a picture is worth a thousand words. (click pic to enlarge)

Grabbed this from SeekingAlpha



Long affordability

Posted by TraderMark at 5:53 PM Comments (6) | Edit This Post | Create A New Post

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6 comments:

Hexdek16 said...

....and they say the "Housing Crisis" is over.......(ROTFL).

The chart sure puts a perspective on it, overall.

September 26, 2007 10:37 PM  
TraderMark said...

Yep. Well essentially it comes down to affordability. While there are rent controls in San Fran, I don't think the rest of the major urban centers have a way to get normal people into housing. The short term solution was exotic mortgages but you see how that is turning out. When people need to be putting 50-60% of take home into the housing payment, that just doesn't work. Hence, "Sale of the Century" stuff.

Also in some markets i.e. Las Vegas 1 out of every 4 homes was bought not by a homeowner but instead 'investor' so it was just a way to try to get dollars, and the home values made no sense in relation to rents.

What I love best is you can see exactly when it pushed out of historical range. Just went the equity markets hot money (NASDAQ) was tanking - so the bubble moved from NASDAQ stocks into real estate. Now Ben will be pushing it somewhere else since we are not allowed by constitution to have a recession anymore ;)

September 27, 2007 9:50 AM  
Eric J. Fox said...

I found a scary chart about housing the other day also. It is here:

http://marketprognosticator.blogspot.com/2007/09/scary-chart-of-day.html

September 27, 2007 11:17 AM  
TraderMark said...

Yep I saw something similar

It's all about affordability. It's just not there in major western/eastern/southern markets - midwest seems ok but there are other structural employment issues plaguing parts of that area...

September 27, 2007 11:32 AM  
msb said...

From KB Home earnings report:

"The oversupply of unsold new and resale homes and downward pressure on new home values has worsened in many of our markets. At this time, we see no signs that the housing market is stabilizing and believe it will be some time before a recovery begins." - CEO Jeffrey Mezger

For August the median home sale price fell 7.5%, reported sales are down 8.3% for the month and down 21.1% year-over-year.

"We don't think we hit a bottom until the end of '08 and then we have some period of time to work our way back up again" - Fannie Mae CEO Daniel Mudd.

September 27, 2007 12:00 PM  
TraderMark said...

Wait! The Hovnanian CEO has been calling a bottom each of the past 3 quarters?? lol

It scares me that I was ever long HOV back in the day (oh 2005 I miss you) now when I see the ostrich head in sand behavior of this guy. At least Lennar, KB and Toll Bros seem like they understand its dire out there.

I agree with the timing - probably a bottom in about a year, and then probably a new supply/demand equilibrium (i.e. flat) for a while after that - no huge spike off a bottom save for "new exotic loans and a thirst for risk by hedge funds with very short memories) Let's pray that doesn't happen - this way policeman and teachers can actually buy homes in northern VA or San Diego. What a concept.

September 27, 2007 12:22 PM  

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