[pencilneck]

I don’t know anything about him, but I like how Campbell lists the 1994 buy signal that turned out to be a questionable call.

Because our market is so credit dependent, my favorite housing forecast is the national debt service ratio. The data only goes back to 1980, but it has a good correlation with local real estate with a 2-4 year lead. I would never just use one data source to make a decision as large as purchasing a home, but this is my favorite.

Economagic has the best chart on this data, but I was unable to link it. Google “debt service ratio” for a variety of nice charts.

[pencilneck]

Just my 2 cents regarding the question “whats taking so long?”

a 10% drop in the price of median homes and a 30% drop in sales, year over year, is a huge and fast drop in a market that is perceived to be so stable. Housing market busts historically take place over years rather than months. Personally, I’m amazed at how fast market sentiment is changing.

[pencilneck]

Just my 2 cents regarding the question “whats taking so long?”

a 10% drop in the price of median homes and a 30% drop in sales, year over year, is a huge and fast drop in a market that is perceived to be so stable. Housing market busts historically take place over years rather than months. Personally, I’m amazed at how fast market sentiment is changing.

[pencilneck]

Great chart!

While I agree with most people here that that 94-96 was the trough of the last real estate market cycle, 88-89 was very close (if not exactly) the previous top. Thus I disagree with the statements that the chart is merely showing gains from the previous bottom, as it shows quite a bit of the previous top.

[pencilneck]

If this is a dead cat bounce, which I think it is, the bounce happens to be right on long term support according to this long term look at the House Builders index as seen on this CNN Finance page. (Sorry for the long link)

http://money.cnn.com/quote/chart/chart.html?pg=ch&symb=nasdaq&time=10yr&compidx=aaaaa%7E0&comp=&ma=0&maval=60&freq=1dy&type=2&uf=0&lf=1&ind_compind=hom%7E171546

To make a prediction, this rally will break down again next year.

[pencilneck]

Although, to play devil’s advocate to myself, perhaps your friend was taking a larger than regional view, such as a national view or global view of the market.

Even still, I doubt this is the case.

[pencilneck]

untrue

http://rereport.com/sdc/main_sc.html

[pencilneck]

A similar cottage close to the one I currently live in sold last year (at the peak) for $600,000. The cottage I rent is larger and in a nicer neighborhood with a bigger yard. I pay $900 (includes a gardener and water bill).

[pencilneck]

I found the Second article featured on he front page regarding condos. Not a pretty headline:

http://www.signonsandiego.com/uniontrib/20060924/news_1n24finance.html

Financial picture gloomy for those holding properties

By Mike Freeman
STAFF WRITER

September 24, 2006

When The Heights in Carmel Valley converted from apartments to condominiums last year, the owners renovated 150 of the 225 units, thinking they’d sell fast.

It hasn’t turned out that way. The Heights has sold just 80 condos, according to county deed records filed through August. Only 18 of those sold in 2006. At that pace, it could take three more years for The Heights to sell completely.

[pencilneck]

Chris J, I’m an avid reader of your site and your commentary, and have been waiting for an oppurtunity to say thanks. So thank you!

I have been meaning to ask what service you use to get your data/charts?

[pencilneck]

This chart also shows that the current real estate boom as starting in 1997. This seems to contradict the theory that the current housing boom was created by investors fleeing the stock market.

It does, however, add strength to the argument that the booms (bubbles) in the stock market and the housing markets were created by the same loosening of the credit markets. The housing market had a more sluggish response to the stimulus.

Great chart. Thanks for posting svferris!

[pencilneck]

Its actually Talk of the Nation, and the discussion will be the end of the housing boom.

[pencilneck]

Great call, UTC! I was wondering if that was someone who read Piggington’s.

These Day’s at 11:00 am will also be real estate related, sorry I can’t recall the exact topic.

Just fyi to all of those KPBS listeners out there.

[pencilneck]

Daniel,

You’re right on about that quote. I thought he had advocated ARMS, but in re-reading the speech while he does not uniquivically advocate variable rate mortgages, Greesnpan does seem to imply that these are the best option for consumers

For example:

“American consumers might benefit if lenders provided greater mortgage product alternatives to the traditional fixed-rate mortgage. To the degree that households are driven by fears of payment shocks but are willing to manage their own interest rate risks, the traditional fixed-rate mortgage may be an expensive method of financing a home.”

But you’re absolutely right that the media made a frenzy over the implication of his statements rather than paying much heed to the message itself.

[pencilneck]

Wasn’t it just 2004 or so that Alan Greenspan was urging Americans to use variable rate mortgages? This seems minor in comparison…

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