This is a great mantra, unfortunately many of the posts in this thread either resort to name calling or improper analysis of the data (or a lack of understanding of statistics).
First off, calling anyone a liar is irresponsible. If you really think it was Mr. Gin’s intent to deceive the public, then provide proof. Otherwise, agree to disagree respectfully. Economic/market forecasting is extremely difficult, and countless professionals from the fed chairman to small business owners are humbled regulary. This does not mean that they are lying, deceitful, or overtly biased.
The previous post by “kristinejm”, discussing forecasting models is spot on. It is obvious that “powayseller” disagrees with Mr. Gin’s model, yet s/he proffers an alternative that relies on one data point:
“Sales prices are down 10-20% or MORE! My friend who’s a
realtor told me his buyer just got a house for $480K, that
the seller had paid $540K, so the seller had to bring
$60K to closing.”
A convincing anecdote, caps and exclamation point to backup the veracity. Any hot stock tips while were at it?
masayako proposes 2 “honest” questions:
Paraphrased, the first chastises Mr. Gin for not stating that prices will drop significantly, while saying prices in areas have dropped 15%. This is like an securities analyst stating the overall stock market will not decline significantly, while a critic challenges that by citing certain stocks or sectors are already down 10-15%. The overall market analysis is never going to be congruent with all sectors, and labeling someone a liar due to this is in very poor form. The question in itself is valid (i.e. Mr. Gin, how does your model account for significant pockets for weakness in the market, and will this eventually spread to all sectors, etc.).
The second multiple choice question is just asanine, and masayako’s analysis is very biased. To claim to not have called one a liar, but merely asked if one is a liar, yet offering the accused two alternatives (bias or ignorance) is a loaded question. Mr. masayako, I think its fair to ask, are you ignorant, uneducated, or both?
In this thread their is discussion of the median price data as “useless”, yet another member “JohnHokkanen” sites hard data regarding the dramatically increasing inventory & sales slowdown at the high-end of the market (an excellent post, with very reasonable conclusions). Since the median is derived from splitting the population at the midpoint, and inventory data at the high-end is much higher (and sales, presumably much lower), it would mean than more houses in the lower price ranges are selling, which would skew the median DOWN, not up.
Also, granularity of data is important. It is akin to stock market averages. If the Dow or SP500 is up, that gives a good approximation of the overall market, yet various sectors will have there on averages and medians that may be inverse of the overall market. This filters down to an individual stock, which is can vary wildly. A correlation can be made to the housing market. JohnHokkanen’s approach of housing “sector” analysis by neighborhood (or by condo vs. SFR, or what have you), is a great way to increase the granularity for decision making, yet, as he notes, the median is still a valid and useful overall indicator (especially when viewed in a longer timeframe). Also, another correlation to the equities markets can be noted in housing inventory to future housing prices, similar to the bid-ask on a security. The more inventory/supply at the ask, with a weakening bid signals declining prices in the future.
In essence there is alot of data, and numerous ways to intepret it. I think almost everyone on this board would agree that the hard data points to flat or decreasing market prices overall, the degree & timeline is up for debate, and no one on this thread, including Mr. Gin, said otherwise.
The botton line: Put up or shut up.
I assume that the posters on this board who are convinced that the overall SD market is in collapse are trading CME housing futures for windfall profits, since the “powayseller” quoted 10-20% price drops don’t match the modest (1-2%) decline in the August 06 contract (nor the 3% decline in the May 07 contracts…).
Note that these contracts are indexed to the Case-Shiller data, which is generally regarded as an accurate indicator of overall housing prices. I’ve appended the index values for San Diego since 2004:
January 2004 186.33
February 2004 189.89
March 2004 196.40
April 2004 203.64
May 2004 210.94
June 2004 218.18
July 2004 224.22
August 2004 227.67
September 2004 230.64
October 2004 232.28
November 2004 232.63
December 2004 233.08
January 2005 233.78
February 2005 235.64
March 2005 236.56
April 2005 239.58
May 2005 242.00
June 2005 245.35
July 2005 247.33
August 2005 248.45
September 2005 249.03
October 2005 249.79
November 2005 250.34
December 2005 248.55
January 2006 247.46
February 2006 247.89
March 2006 248.09
April 2006 249.35
May 2006 249.15
Note that the CME Aug06 contract is trading at ~247 and May07 at ~242 (1% & 3% declines from May06, respectively). I don’t believe I’ve seen this data on the site, so I may repost the futures information as a new thread.
With that said, the posters who feel so strongly about the unrealized housing market decline and the “lies” that are being spread, now have a great opportunity to profit. Hopefully they will focus their energies is such a constructive manner, vs. inane name calling.
