[powayseller]

jg is right. The OFHEO index is more reliable, since it tracks sales and refis of the same SFR over time, and goes back to 1976. I have NAR data that far back, and SFR and OFHEO move together perfectly. I expect the 12/01/06 OFHEO release of Q3 06, to be down significantly. New home sales median jumps all over the place, and that is the reason the median jumps around so much. Dataquick calculates the median as the weighted median of new homes/condos, resale condo, resale SFR.

The median does not track the price change of each home, but shows the mix of homes sold that month. I would be shocked if the value of a particular home fluctuated over time. Home prices move steadily up, or down, but the median can be all over the map, depending on the types of homes sold that month.

So if the median is up 5%, that does not mean your home is worth 5% more that month. Each home is still falling in value, and it will continue to do so, as long as months supply is above 8.

[powayseller]

Median prices do NOT climb in a straight line.

these are median prices for San Diego detached homes for 2003, a hot year for real estate, beginining in January. Read across.
$410,250 $447,500 $449,000 $443,750 $474,750 $500,250 $466,000 $457,000 $460,000 $445,000 $440,000 $454,750

Notice the drop from June’s $500K to July’s $466K, and Aug 457K. Then back up to $460K in Oct, down to $445K in Nov.

If you want to be whiplashed, check out the prices of new home in the last year (read across). That median is all over the place.
$520,250 $527,750 $539,500 $435,000 $468,500 $475,000 $495,500 $424,000 $422,000 $425,000 $395,250 $413,500

We need to keep in mind that the median reflects the mix of homes sold, and not the value of any individual home. If last month, more buyers purchased bigger homes than smaller homes, then the median will be up, even though the value of each home sold is at 2004 or 2003 levels.

In my opinion, the best indicator is available on DEC 1, when OFHEO releases its Q3 2006 index. I am expecting a big decline. The OFHEO is the most accurate measure of home prices. Nothing else even comes close. The only limitation is that the OFHEO index is published quarterly and lags by 4 months, so today the latest number available is Q2 2006 median prices.

OFHEO’s index tracks the price of the SAME SFR, refinanced and purchased with a conventional loan, and it tracks the exotic loan financed homes amazingly well.

[powayseller]

PD, Why do you hate me for bringing up these opinions?

A terrorist is anyone who kills masses of innocent civilians. History is full of them, and we always thought we were better, but are we? Today’s terrorist list includes Hussein, Osama bin Laden, and Bush (and his military leaders). If we had finished the job in Afghanistan, and stayed out of Iraq, we wouldn’t even have this conversation.

[powayseller]

“Dr. Marc Faber says living expenses have been increasing much faster than the core rate and that domestic and global numbers are rigged to the benefit of the powers that be. Plus how high could gold sore? Dr. Doom expects US hyperinflation to bring $10,000 per ounce gold and that could be just the beginning. In fact, American’s could see the gold price climb to $1,000,000 per ounce if the dollar demise follows the pathway of all previous fiat currencies.” – goldseek.com

[powayseller]

PD, thanks for your reply to how you feel about free speech. Earlier, you wrote, “Powayseller wants us to stick our head in the sand like an ostrich while muttering about peace and love. Meanwhile, our a**es would be waving in the air, the perfect target for our next butt kicking. Take your Bush and anti-America hate somewhere else.”

With such strong words, I got the impression you preferred I did not voice my opinions. Whether the government locks me up, or you ask me to go somewhere else, is only a matter of degree. Both are attempts to silence my opinion, and both are anti-American.

If you wish to have an exchange of ideas, or simply choose to go away yourself (instead of asking me to go away), then you are a true patriot.

juice, I agree with everything you say. If democracy is a goal, should we invade every country that is not a democracy?

I also think the Iraqis are too strung out on their rigid religions to get along. Saddam Hussein may have been a tyrant, but he knew the primitive tribesmen of Iraq could not handle a democracy. He kept order in Iraq.

Bush’s advisors knew the country would fall into civil war if Hussein, the only person who kept a semblance of order, was removed. Only we, the people, did not know. But don’t cover up for Bush, because unlike us, he had full acess to Middle East experts and intelligence.

I also think it’s important to admit when a mistake was made. Let’s see if we will spend as many billions digging into Bush’s deception of Iraq, as we spent digging into Clinton’s sexual escapades.

[powayseller]

Just another perspective, from a former So Cal mortgage broker, from his post today,

“It is going to be interesting to see what happens when 18-25% of the 9 trillion dollars of outstanding mortgages adjusts in 1 year.” That’s right, the outstanding mortgages in the US is $9 trillion, and $1.5 trillion is set to adjust next year.

Anytime you doubt this housing market is going off a cliff next year, come back to that little fact. Then, remember the new lending guidelines released today (?), which will eliminate the loans that allowed 70% of purchases in San Diego, and about 20% nationwide. Even if sales doubled today, it wouldn’t matter, because prices are still falling and the big time bombs are set and ticking.

[powayseller]

Ease up on santeeman. I accidentally made 2 threads yesterday (topic: pigginton timing out, slow page loads), because the piggington server timed out and I got the error message, “www.piggington.com could not be found. please check the name and try again.” I didn’t realize the thread was created though, so I hit submit again. Voila, two threads. Maybe this happened to santeeman.

Santeeman, getting whacked around here is par for the course. No moderator + a laissez faire host = anything goes.

[powayseller]

juice, everything you said is so true. You are right. We were lied to by the President, who told us that Saddam Hussein was a thread to our national security. Democratic investigations will reveal that Bush knew WMDs did not exist, and that his advisors knew our war in Iraq would cause the civil war we now see.

JJGittes, excellent quotes.

PD, Your writing sounds almost like a dictatorship, where people are condemned for voicing their opinion and disagreeing with the politicans. I wonder, how do you feel about free speech?

[powayseller]

I haven’t looked at this data yet, but I suspect that big reductions by builders brought in some new buyers last month. If so, we should see the largest sales increase in the new home sales category. The trend in sales is still down, as we read in Bob C’s report.

[powayseller]

PD, you are right that the Democrats have no answer either. Bush made a huge error in entering Iraq, and the intelligence at his dispoal, including his own father, predicted that civil war would result. Bush wouldn’t listen. Now, it is hard to fix this mistake. I don’t know what can be done now. I’m sure the Democrats are real worried, since they are expected to solve this difficult problem. Bush created a bad situation. He should have finished the job in Afghanistan, instead of cutting tail in Afghanistan.

PD, why do you think that people should not speak out against our politicians if they disagree? We should never impeach anyone? You think that anyone who disagrees with you should be silenced, or go away? Where would they go? Another forum, or another country? I can be friends with people who disagree with me, as long as they can be respectful toward me. Can you?

I’d like to hear your response to the quotes by der Spiegel, Lancet, Doctors without Borders, and how you will convince Europe and the rest of the world that this war is worthwhile for our national interest. It is the rest of the world that you must convince.

[powayseller]

The excess death claim comes from the Lancet, one of the most respected medical journals in the world.

“A study published by the Lancet says the risk of death by violence for civilians in Iraq is now 58 times higher than before the US-led invasion.”

If you disagree, please link a study which shows Iraq is safer now. Doctors Without Borders, UNICEF, NATO, IMF… surely someone can vouch for this war?

I just checked Doctors Without Borders website. They are a non-political humanitarian organization run by volunteers and donations. “according to the United Nations, more than 400 specialized doctors have left Iraq since hostilities began in 2003. Furthermore, hundreds of other doctors have been killed. This is why, for example, the General Surgical Hospital of Baghdad currently has only one orthopedic surgeon. The threats against doctors also affect their patients as well, since this type of surgery requires an average hospital stay of three weeks—three weeks during which the patients are at the mercy of revenge operations by the various armed militias.”

Anyone who is defending this war, should first read some first-hand accounts of how much worse off Iraq is today than before Bush sent our troops over there.

In this Sept 2006 article, A Health Care System Overwhelmed, an Iraqi orthopedic surgeon describes the situation.

“September 2006
Iraq: A health care system overwhelmed

Dr. Bassam is an Iraqi physician specializing in orthopedic surgery, who took part in the launch of this project. He now lives with his family in Baghdad, and is a member of the partner team working with MSF. He explains the current situation of the Iraqi health care system, and talks about his collaboration with MSF:

How would you describe the health care system in Iraq today?

The level of medicine has deteriorated considerably in Iraq. It had already dropped after the Gulf War, but it has really gotten worse in the past few years. Before the war, a lot of patients came to Iraq for surgery, from Syria, Jordan, and elsewhere. It wasn’t expensive, and there were a lot of specialists. And medical care here had a good reputation. The situation deteriorated after the Gulf War, but got even worse after 2003. Now, security issues have top priority for the few existing financial resources, and medical needs are forced to take a back seat. This morning, dozens of people were killed in Fallujah. Yesterday it was Baghdad. And that’s not counting the wounded, who add to the long list of emergency cases packing the hospitals. Every day brings a new batch of dead and wounded1. In this context, patients simply cannot receive proper treatment from an increasingly overwhelmed health care system. Some are forced to sell their car, or even their house, to get certain kinds of care in the few hospitals able to provide it.

Which areas of medicine are primarily affected by the situation?

Specialized procedures are very difficult to provide, particularly when they require sophisticated techniques. For example, when it comes to reconstructive surgery, congenital malformations, microsurgery, or neurosurgery, it’s almost impossible right now to get operated on in Iraq. All the more so, since many doctors have gone farther north, or left the country, looking for someplace safer. As a result, there are fewer and fewer specialists, and—on top of everything—they are being particularly targeted. Many of them were kidnapped after the war began in 2003. They are caught between a rock and a hard place. Either they work for the Iraqi health care system, and earn a salary that makes them targets of abduction and ransom demands, or they get jobs with foreign nongovernmental organizations, and risk being perceived as working for the Americans.

How do you keep working, in this context?

The task is especially hard when, in addition to the shortage of doctors and specialists, you have overcrowded hospitals, little adequate equipment, corruption, and the constant insecurity and curfew requirements restricting our practice. This is why, in partnership with MSF, we are trying to seek out patients waiting for reconstructive surgery. We offer them the chance to come to Jordan for treatment; we take care of their medical paperwork, their administrative paperwork, and the logistics of their transfer to Amman. In addition, we are making contact with various Iraqi hospitals, which will allow MSF to supply them regularly, depending on their needs. Security constraints, however, prevent us from taking action and publicizing the project in the way we would like. Indeed, MSF is considered to be a foreign organization, which exposes its collaborators to the risk of abduction, or worse. So we have to keep a low profile, as much for our safety as for that of the patients. This is why a huge amount of discretion is a must, in order for a project like this to succeed. On the other hand, we have an excellent network of doctors in Iraq, whom we know, and with whom we are in contact. I graduated in the 1980s, and others even before that. So we have many relationships in the country. But despite our respective experience, we are running into many difficulties.

What are the difficulties facing patients trying to go to Jordan?

Before the war, it was very easy for people in northern Iraq to get to the south. For example, if someone living in Ninawa wanted to get to Baghdad, 400 miles away, it would take him four hours of traveling. Today, the trip takes two or three times longer. Given the numerous checkpoints, the risk of being targeted, and the bombings, people are afraid to come to Baghdad; they prefer to treat themselves, and stay home. The second important point has to do with getting passports. They are very hard to get right now. For example, one of my colleagues, under direct threat in Iraq, had to flee the country and now works for MSF in Jordan. But his wife waited more than a month to get a passport. The third point has to do with the nature of the project, which is focused on three narrow areas: maxillofacial, orthopedic, and plastic surgery. There are so many patients needing other types of surgery, which we cannot provide in Amman.

1 According to a Pentagon report written at the request of the U.S. Congress and released on 1 September, in three months, the number of weekly attacks increased by 15 percent, and that of Iraqi victims—civilians and soldiers—by 51 percent.”

[powayseller]

Good thread. Very thought provoking.

FDIVX has a very good return in the last year. However, the other years don’t look so hot. This fund just had one good year after 5 mediocre years. 3 yr and 5 yr returns are 20.98 and 17.18%, giving us a little over 6% annually over 3 years, and 3.5% annually for the 5 year return.

There are funds which earn a high return, but typically that good fortune lasts for only one or two years. We never know ahead of time which fund will have that good fortune to outrun the pack. It’s impossible to know in advance which fund will earn 10% next year.

We can’t assume a 10% return on our money when we make calculations about alternate returns. I think 5% – 7% is more realistic, although even 7% is high in today’s bloated stock price environment.

[powayseller]

Love that example, esp. the 10% part 🙂 Where can I earn 10%? Sign me up!

[powayseller]

I’m not quite following you. I was going to post this chart , but the piggington server kept timing out in when I selected “add image”. (By the way, I get the timing out message frequently and a snail’s pace web page loading on every piggington page, does anyone else?) The second graph shows the dollar vs the euro since 1999.

gold, when did you sell the house? Are you saying that houses were more expensive only because the dollar is devalued?

[powayseller]

stopforeclosure, you’re a very good sport to ignore the name calling. We need your type of knowledge on this forum, so please stick around.

Do you have an office in San Diego?

In CA, the 2nd deed holder does have recourse and can go after the homeowner, right? Since most recent buyers have 80/20 or 90/10 loans, they would fall into the category of having to deal with a 2nd lien holder.

The law is different for mortgages that were used to purchase the home, vs. those used for refinance. I think most borrowers who purchased before 2000, refinanced after 2000, to take out cash or get a lower interest rate. Now they are refinancing at higher interest rates to get cash out. So the protection for the borrower is lost when he refinances.

What’s the law regarding forgiveness of debt; the borrower has to pay income tax to the IRS and state on the forgiven amount, at the full tax rate (not the lower capital gains rate).

Do you have an e-mail address? I could not get it off your website (got URL error message from contact us link).

[Author]

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