Hey, I was really close—-if you ignore the fact I got the direction wrong! :-)

Correlated but independent.

If you’re not familiar with Durden’s take on things I can see how you might see that as a bit of a stretch. But there is a growing cynicism toward all reporting entities and the usefulness of any data reported. After all, of what use is bad or intentionally distorted data when the goal is to improve the decision making process? What’s the saying- “garbage in, garbage out?”

The case he cites involving the CAR is particularly egregious. By their own admission the erroneous process had been in play for “a year or more.” And a revision from 89% growth down to 6.5% is beyond laughable. How would you feel if, as a potential home buyer, you’d been using that data to make the largest purchase decision of your life?

What I don’t see is how anyone, (except maybe a Realtor?), could even begin to defend or minimize such action.

14months ago I pondered what the 2008 vintage RMBS pools would look like:

http://www.raincityguide.com/2008/02/02/pondering-the-2008-rmbs-vintage/

Here’s what you’re looking for from CR:

http://www.calculatedriskblog.com/2009/03/rising-epd-on-fha-loans.html

Yes, UW guidelines will continue to tighten until defaults start to level off. The other thing that’s happening is for people who are high risk, banks are adding on to the interest rate, which is a GOOD idea and will continue to have a downward effect on home values.

Remember, FHA is still only 3.5% down. With home values continuing their downward trend, a certain percentage of FHA WILL default every month.

Expect a bailout of the FHA mortage insurance fund. It can’t handle this level of defaults.

You can’t trust the inventory stats, you can’t trust the pending sales stats (for reasons we’ve discussed previously), and you can’t even trust the actual sale price stats.

Clearly there are lots of games being played with data these days.

Tuesday, June 30, 2009
May San Diego Home Sales Increase Revised From 89% to 6.5%

Posted by Tyler Durden at 4:57 PM

More and more economic data manipulation is coming to the fore, none of which as blatantly obvious as the California housing market. Some of it is palatable, but when home sales in San Diego get revised from 89% to 6.5% due to a “data glitch”, it is no wonder that increasingly more Americans realize every single day they are being blatantly lied to by an Administration whose sole purpose in life is to give out 10 pair of rose-colored glasses to every possible voter in the next election. For the most recent take on this the WSJ chimes in:

The California Association of Realtors expects to make sharp downward revisions in its recent monthly reports of soaring home sales in the San Diego area, Robert Kleinhenz, deputy chief economist of the trade group, said in an interview. Those revisions will mean modest downward revisions in statewide sales, he added.

The revisions are likely to be announced in late July, when the Realtor group reports home sales for June. The problem resulted from a glitch in data from a multiple-listing service in San Diego, Mr. Kleinhenz said. He said a change in computer systems used there resulted in incorrect data being sent to the Realtor association over the past year or so.

If this theory holds water (i.e. that recent mortgages are defaulting faster than ever), then perhaps we need to see far tighter lending requirements.

U-Haul 26′ one-way Los Angeles to Austin $2151 Aug 1st pick-up
U-Haul 26′ one-way Austin to Los Angeles $678 Aug 1st pick-up

So I checked a couple more:

Pickup austin, tx, Drop off Seattle, WA: $1052
Pickup Seattle, WA, Drop off Austin, TX $2136

Pickup San Diego, CA Drop off Seattle, WA $1086
Pickup Seattle, WA, Drop off San Diego, CA $826

“The future ain’t what it used to be”

Since it’s a 3 month average, I’ll go with down .223%.

(That’s how much the 3 month moving average of the NWMLS numbers were down for April.)

Hey, I was really close—-if you ignore the fact I got the direction wrong! :-)

Edit: Which deejayoh apparently missed. ;-)

April was .235% over March.

Since it’s a 3 month average, I’ll go with down .223%.

(That’s how much the 3 month moving average of the NWMLS numbers were down for April.)

I think you might be off by .002%, just eyeballing it.

When the low end of the market picked up, in NWMLS raw sales data like NWMLS the median gets pulled down directly. For CSI, it just means that there are more sales pairs from the low end of the market. The sales pairs are still going to show the price change on individual houses.

I recall Shiller explaining that the reason the CSI was lower than the OFHEO was that CSI was including more foreclosures. But yes, where they put their cutoff will affect their results.

My earlier prediction of 0% left out the other difference of CSI from NWMLS, which is people buying a larger house or better neighborhood for that same price. Even with the NWMLS nearly flat, that could be happening because of the slow sales at the upper end. So maybe down 0.223% is the right number.

Second, I don’t really see how it’s possible for something to not be affected by the mix. The types of properties selling now are a lot different than 2 years ago. How could C-S not be affected by that.

It’s a gauge of market health and just as imperfect as any other gauge of market health–just in different ways.

Besides, the value of reducing energy consumption by 30% in a place like Arizona or Montana is going to be a lot higher than Washington state, but the cost will be about the same. So a 30% improvement in Arizona will pay back quickly, whereas it will never pay back after interest costs in Washington.

Since it’s a 3 month average, I’ll go with down .223%.

(That’s how much the 3 month moving average of the NWMLS numbers were down for April.)

There are a couple of important differences between CSI and average sales. CSI weights shorter sales pairs more heavily, so that means there will be greater weight to distress sales bought near the peak. That would put CSI lower. But the NWMLS number is susceptible to a shift in the mix, which CSI is not, and the pickup in the market at the low end brings the median sales price down. That would put the CSI higher. The latter effect is the greater, so if NWMLS is .223% then I will bump that to 0%.

Homebuyers Beware. Trying to save up for a new home? You may have to save up a little longer for your purchase. The Democrats’ bill would dramatically increase new home costs by mandating California’s expensive new building codes for the entire nation. Immediately upon enactment, the Democrats’ bill would demand a 30 percent increase in energy efficiency for new construction. A couple of years later, the Democrats’ bill would require an additional 50 percent improvement. These numbers were chosen with no concern for cost to consumers or feasibility in implementation.

Homebuilders Beware. The Democrats’ bill imposes new mandatory regulations and civil penalties for homebuilders. If your state refuses to accept the stringent and costly California building codes, the federal government may assess penalties. And don’t get too comfortable with the new mandatory regulations because the Democrats’ bill allows for “consensus-based” codes to supplant those outlined in the bill. So, as soon as you’ve invested your hard-earned money to comply with the bill’s mandates, the rug could get pulled from underneath you. Translation? You’ll pony up more and more money.

Home Sellers Beware. Having a hard time selling your home? Here’s one more hurdle to jump: all homes sales are conditioned upon an energy audit and a new energy rating assessment and energy labeling program for your home that’s outlined in the Democrats’ bill. And if you thought you could improve your property with a fresh coat of paint and some granite counters? Think again! Now your home will be subjected to a new energy rating assessment and energy labeling program that will penalize you for older windows, original fixtures, and dated appliances. So the Democrats’ bill would bring down the value of your home!

http://surkanstance.blogspot.com/2009/06/i-come-to-praise-ben-bernanke.html

never had a problem with dreamhost.

(That’s how much the 3 month moving average of the NWMLS numbers were down for April.)

Last year saw a slight (0.72%) MOM increase from March to April, so if this year is just flat, the YOY drop will bump up to 17.0%.