[ltokuda]

In all seriousness, the properties banks are holding are imminently going on the market. Most have already been on the market as short sales, go off, then back on very shortly after the bank takes possession. They need to be considered as inventory.

jpinpb, I think you're confusing "future inventory" with "inventory".  "Future inventory" is useful information when you're trying to forecast the market.  People should definitely be aware of it.  But you shouldn't use "future inventory" to calculate the "months of supply" because "months of supply" has a very specific definition.  Changing the definition of a well known term will confuse people rather than enlighten them.

[ltokuda]

In all seriousness, the properties banks are holding are imminently going on the market. Most have already been on the market as short sales, go off, then back on very shortly after the bank takes possession. They need to be considered as inventory.

jpinpb, I think you're confusing "future inventory" with "inventory".  "Future inventory" is useful information when you're trying to forecast the market.  People should definitely be aware of it.  But you shouldn't use "future inventory" to calculate the "months of supply" because "months of supply" has a very specific definition.  Changing the definition of a well known term will confuse people rather than enlighten them.

[ltokuda]

If you are going to include shadow inventory, why not go all the way and include all houses in existence ? The average person moves every 5-7 years, so they will eventually be on the market. Even those who think they can hold out forever cannot. They can't hold on forever because they will eventually die, unleashing these houses on the market. Add these to the potential foreclosures and you get about 34 years of inventory in San Diego county. So, the real potential inventory is much larger than these predictions.

FSD, I think you're underestimating the real potential inventory.  Remember that home builders are always building new homes.  The more demand there is, the more home builders will build.  So the real potential inventory is essentially infinite!

 

[ltokuda]

If you are going to include shadow inventory, why not go all the way and include all houses in existence ? The average person moves every 5-7 years, so they will eventually be on the market. Even those who think they can hold out forever cannot. They can't hold on forever because they will eventually die, unleashing these houses on the market. Add these to the potential foreclosures and you get about 34 years of inventory in San Diego county. So, the real potential inventory is much larger than these predictions.

FSD, I think you're underestimating the real potential inventory.  Remember that home builders are always building new homes.  The more demand there is, the more home builders will build.  So the real potential inventory is essentially infinite!

 

[ltokuda]

If you are going to include shadow inventory, why not go all the way and include all houses in existence ? The average person moves every 5-7 years, so they will eventually be on the market. Even those who think they can hold out forever cannot. They can't hold on forever because they will eventually die, unleashing these houses on the market. Add these to the potential foreclosures and you get about 34 years of inventory in San Diego county. So, the real potential inventory is much larger than these predictions.

FSD, I think you're underestimating the real potential inventory.  Remember that home builders are always building new homes.  The more demand there is, the more home builders will build.  So the real potential inventory is essentially infinite!

 

[ltokuda]

If you are going to include shadow inventory, why not go all the way and include all houses in existence ? The average person moves every 5-7 years, so they will eventually be on the market. Even those who think they can hold out forever cannot. They can't hold on forever because they will eventually die, unleashing these houses on the market. Add these to the potential foreclosures and you get about 34 years of inventory in San Diego county. So, the real potential inventory is much larger than these predictions.

FSD, I think you're underestimating the real potential inventory.  Remember that home builders are always building new homes.  The more demand there is, the more home builders will build.  So the real potential inventory is essentially infinite!

 

[ltokuda]

If you are going to include shadow inventory, why not go all the way and include all houses in existence ? The average person moves every 5-7 years, so they will eventually be on the market. Even those who think they can hold out forever cannot. They can't hold on forever because they will eventually die, unleashing these houses on the market. Add these to the potential foreclosures and you get about 34 years of inventory in San Diego county. So, the real potential inventory is much larger than these predictions.

FSD, I think you're underestimating the real potential inventory.  Remember that home builders are always building new homes.  The more demand there is, the more home builders will build.  So the real potential inventory is essentially infinite!

 

[ltokuda]

Mr. Mortgage, welcome to Piggington’s. Thank you for doing all this research and sharing the data with us. While the data does paint a very dire picture, I don’t think you should be using the phrase “4.25 year supply”. The problem is that “supply” has a specific definition. In your analysis, you are changing the definition of the term “supply” from its conventional definition to your own definition. That’s why there’s such a big difference between what the media reports and what you have calculated. So by telling people that there is a “4.25 year supply” of housing, you’re effectively misleading them. People will think you’re talking about the standard definition of “supply” when, in fact, you are not.

I realize that part of your analysis deals with questioning how “supply” should be calculated. Should we include shadow inventory, etc? However, suppose you did come up with an acceptable definition. What would that tell us? By itself, it wouldn’t tell us anything because we have nothing to reference it against. You can’t compare your calculated value of “supply” to the standard value since it would be like comparing apples and oranges. You would need a lot of historical data to calculate historical values of your “supply” in order to draw any real conclusion. If you were to do this and, essentially, create your own metric, its possible that some interesting patterns may emerge. I just wouldn’t call your new metric “supply”.

I think the data you present does say a lot about the market and does point to grim future in real estate. I think this data is extremely valuable for doing forecasts and analysis. In the short term, I would suggest focusing more on this.

If you decide to continue working on creating a new metric and it provides some interesting results, then you should definitely share that as well. I’m sure the piggies would be happy to review it. Right now, I don’t think its ready for mass distribution.

[ltokuda]

Mr. Mortgage, welcome to Piggington’s. Thank you for doing all this research and sharing the data with us. While the data does paint a very dire picture, I don’t think you should be using the phrase “4.25 year supply”. The problem is that “supply” has a specific definition. In your analysis, you are changing the definition of the term “supply” from its conventional definition to your own definition. That’s why there’s such a big difference between what the media reports and what you have calculated. So by telling people that there is a “4.25 year supply” of housing, you’re effectively misleading them. People will think you’re talking about the standard definition of “supply” when, in fact, you are not.

I realize that part of your analysis deals with questioning how “supply” should be calculated. Should we include shadow inventory, etc? However, suppose you did come up with an acceptable definition. What would that tell us? By itself, it wouldn’t tell us anything because we have nothing to reference it against. You can’t compare your calculated value of “supply” to the standard value since it would be like comparing apples and oranges. You would need a lot of historical data to calculate historical values of your “supply” in order to draw any real conclusion. If you were to do this and, essentially, create your own metric, its possible that some interesting patterns may emerge. I just wouldn’t call your new metric “supply”.

I think the data you present does say a lot about the market and does point to grim future in real estate. I think this data is extremely valuable for doing forecasts and analysis. In the short term, I would suggest focusing more on this.

If you decide to continue working on creating a new metric and it provides some interesting results, then you should definitely share that as well. I’m sure the piggies would be happy to review it. Right now, I don’t think its ready for mass distribution.

[ltokuda]

Mr. Mortgage, welcome to Piggington’s. Thank you for doing all this research and sharing the data with us. While the data does paint a very dire picture, I don’t think you should be using the phrase “4.25 year supply”. The problem is that “supply” has a specific definition. In your analysis, you are changing the definition of the term “supply” from its conventional definition to your own definition. That’s why there’s such a big difference between what the media reports and what you have calculated. So by telling people that there is a “4.25 year supply” of housing, you’re effectively misleading them. People will think you’re talking about the standard definition of “supply” when, in fact, you are not.

I realize that part of your analysis deals with questioning how “supply” should be calculated. Should we include shadow inventory, etc? However, suppose you did come up with an acceptable definition. What would that tell us? By itself, it wouldn’t tell us anything because we have nothing to reference it against. You can’t compare your calculated value of “supply” to the standard value since it would be like comparing apples and oranges. You would need a lot of historical data to calculate historical values of your “supply” in order to draw any real conclusion. If you were to do this and, essentially, create your own metric, its possible that some interesting patterns may emerge. I just wouldn’t call your new metric “supply”.

I think the data you present does say a lot about the market and does point to grim future in real estate. I think this data is extremely valuable for doing forecasts and analysis. In the short term, I would suggest focusing more on this.

If you decide to continue working on creating a new metric and it provides some interesting results, then you should definitely share that as well. I’m sure the piggies would be happy to review it. Right now, I don’t think its ready for mass distribution.

[ltokuda]

Mr. Mortgage, welcome to Piggington’s. Thank you for doing all this research and sharing the data with us. While the data does paint a very dire picture, I don’t think you should be using the phrase “4.25 year supply”. The problem is that “supply” has a specific definition. In your analysis, you are changing the definition of the term “supply” from its conventional definition to your own definition. That’s why there’s such a big difference between what the media reports and what you have calculated. So by telling people that there is a “4.25 year supply” of housing, you’re effectively misleading them. People will think you’re talking about the standard definition of “supply” when, in fact, you are not.

I realize that part of your analysis deals with questioning how “supply” should be calculated. Should we include shadow inventory, etc? However, suppose you did come up with an acceptable definition. What would that tell us? By itself, it wouldn’t tell us anything because we have nothing to reference it against. You can’t compare your calculated value of “supply” to the standard value since it would be like comparing apples and oranges. You would need a lot of historical data to calculate historical values of your “supply” in order to draw any real conclusion. If you were to do this and, essentially, create your own metric, its possible that some interesting patterns may emerge. I just wouldn’t call your new metric “supply”.

I think the data you present does say a lot about the market and does point to grim future in real estate. I think this data is extremely valuable for doing forecasts and analysis. In the short term, I would suggest focusing more on this.

If you decide to continue working on creating a new metric and it provides some interesting results, then you should definitely share that as well. I’m sure the piggies would be happy to review it. Right now, I don’t think its ready for mass distribution.

[ltokuda]

Mr. Mortgage, welcome to Piggington’s. Thank you for doing all this research and sharing the data with us. While the data does paint a very dire picture, I don’t think you should be using the phrase “4.25 year supply”. The problem is that “supply” has a specific definition. In your analysis, you are changing the definition of the term “supply” from its conventional definition to your own definition. That’s why there’s such a big difference between what the media reports and what you have calculated. So by telling people that there is a “4.25 year supply” of housing, you’re effectively misleading them. People will think you’re talking about the standard definition of “supply” when, in fact, you are not.

I realize that part of your analysis deals with questioning how “supply” should be calculated. Should we include shadow inventory, etc? However, suppose you did come up with an acceptable definition. What would that tell us? By itself, it wouldn’t tell us anything because we have nothing to reference it against. You can’t compare your calculated value of “supply” to the standard value since it would be like comparing apples and oranges. You would need a lot of historical data to calculate historical values of your “supply” in order to draw any real conclusion. If you were to do this and, essentially, create your own metric, its possible that some interesting patterns may emerge. I just wouldn’t call your new metric “supply”.

I think the data you present does say a lot about the market and does point to grim future in real estate. I think this data is extremely valuable for doing forecasts and analysis. In the short term, I would suggest focusing more on this.

If you decide to continue working on creating a new metric and it provides some interesting results, then you should definitely share that as well. I’m sure the piggies would be happy to review it. Right now, I don’t think its ready for mass distribution.

[ltokuda]

How low could it go? Its possible that it could get low enough for you to (theoretically) put 5% down, rent it out, and break even on the cash flow (including repairs, vacancy, taxes, advertising, etc). But no one knows if that will happen.

What you do know is that you have the opportunity to own for the same price as renting. If you like the house, you have a stable job, you won’t be struggling to make the payments, and plan to live there for many years (say, 10 or more), then I see very little risk in buying it. Personally, I would go for it.

[ltokuda]

How low could it go? Its possible that it could get low enough for you to (theoretically) put 5% down, rent it out, and break even on the cash flow (including repairs, vacancy, taxes, advertising, etc). But no one knows if that will happen.

What you do know is that you have the opportunity to own for the same price as renting. If you like the house, you have a stable job, you won’t be struggling to make the payments, and plan to live there for many years (say, 10 or more), then I see very little risk in buying it. Personally, I would go for it.

[ltokuda]

How low could it go? Its possible that it could get low enough for you to (theoretically) put 5% down, rent it out, and break even on the cash flow (including repairs, vacancy, taxes, advertising, etc). But no one knows if that will happen.

What you do know is that you have the opportunity to own for the same price as renting. If you like the house, you have a stable job, you won’t be struggling to make the payments, and plan to live there for many years (say, 10 or more), then I see very little risk in buying it. Personally, I would go for it.

[Author]

Posts