Here is your open thread for Monday July 6th, 2009. You may post random links and off-topic discussions here. Also, if you have an idea or a topic you’d like to see covered in an article, please make it known.
Be sure to also check out the forums, and get your word in the user-driven discussions there!
johnnybigspenda » Jul 6, 2009 at 10:06 am
For those that like to poke fun of the NAR… here is a nice compilation of Yun’s predictions over the past 3 years. (see link for a chart that shows the corresponding market values)…. OUCH… not many people still have a job after that kind of track record..
http://seekingalpha.com/article/147174-narcasting-the-future-of-u-s-housing-prices-july-2009
12/11/2006 Prediction: 6.40 million units.
Lereah “Most of the correction in home prices is behind us.”
1/10/2007 Prediction: 6.42 million units.
Lereah “The good news is that the steady improvement in sales will support price appreciation moving forward.”
2/7/2007 Prediction: 6.44 million units.
Lereah “After reaching what appears to be the bottom in the fourth quarter of 2006, we expect existing-home sales to gradually rise all this year and well into 2008.”
3/13/2007 Prediction: 6.42 million units.
Lereah “Although existing-home sales will be marginally reduced due to subprime lending restrictions, they should be gradually rising this year and next.”
4/11/2007 Prediction: 6.34 million units.
Lereah “Tighter lending standards will dampen home sales a bit, but by less than a couple of percentage points from initial projections.”
4/30/2007 Lereah Leaves NAR for Move.com
5/9/2007 Prediction: 6.29 million units.
Yun “Housing activity this year will be somewhat lower than in earlier forecasts.”
6/6/2007 Prediction: 6.18 million units.
Yun “Home sales will probably fluctuate in a narrow range in the short run, but gradually trend upward with improving activity by the end of the year.”
7/11/2007 Prediction: 6.11 million units.
Yun “Home prices are expected to recover in 2008 with existing-home sales picking up late this year.”
8/8/2007 Prediction: 6.04 million units.
Yun “With the population growing, the demand for homes isn’t going away – it’s just being delayed.”
9/11/2007 Prediction: 5.92 million units.
Yun “Patient buyers in most areas who do their homework will recognize that housing remains a good long-term investment.”
10/10/2007 Prediction: 5.78 million units.
Yun “The speculative excesses have been removed from the market and home sales are returning to fundamentally healthy levels, while prices remain near record highs, reflecting favorable mortgage rates and positive job gains.”
11/13/2007 Prediction: 5.5 million units.
Yun “In some ways, the extended real estate boom from 2001 to 2005 created unrealistic expectations that housing is a short-term high-yield investment… 2007 will be the fifth best year for housing on record”
12/10/2007 Prediction: 5.67 million units in 2007, 5.7 million units in 2008.
Yun “The broad trend over the coming year will be a gradual rise in existing-home sales, but because sales are exceptionally low in the final months of 2007, total sales for 2008 will be only modestly higher than 2007.”
ACTUAL: 5.652 million existing units sold in 2007
01/08/2008 Prediction: 5.66 million units in 2007, 5.7 million units in 2008.
Yun “A meaningful recovery in existing-home sales could occur as early as this spring, or it may be further delayed toward late 2008.”
02/07/2008 Prediction: 5.38 million units full year.
Yun “Where builders have cut construction sharply, and in most areas with improving affordability conditions, we’ll generally see moderately higher home prices.”
03/06/2008 Prediction: 5.38 million units full year.
Yun “Significant price declines in some local markets have sharply and quickly improved local affordability conditions, and are inducing buyers to return to the marketplace”
04/08/2008 Prediction: 5.39 million units full year.
Yun “Exceptionally weak home sales related to jumbo loans problems will depress home prices in the first half of the year, but steady liquidity improvements in the conforming jumbo-loan market will help prices recover in the second half of the year”
05/08/2008 Prediction: 5.39 million units full year.
Yun “Although more than half of local markets are expected to see price growth this year, the aggregate existing-home price will decline 2.4 percent in 2008, driven by a relatively few markets that are very oversupplied”
06/09/2008 Prediction 5.4 million units full year.
Yun “We’re seeing healthy price gains in moderately priced areas like Erie, Pa., and Corpus Christi, Texas, and double-digit gains in others”
07/08/2008 Prediction 5.31 million units full year.
Yun “Interestingly, there have been reports of multiple bidding after the large price cuts, so it is possible that most of the price declines have already occurred in those markets.”
08/08/2008 Prediction 5.51 million units full year.
Gaylord “buyers [will] get into the market to take advantage of the unprecedented drop in home prices in many areas, as well as a wide selection of inventory, to make an investment in their future,”
09/09/2008 Prediction 5.01 million units full year.
Yun “Nationally, home sales are stable now but are expected to increase in coming quarters.”
10/08/2008 Prediction 5.04 million units full year.
Yun “What we’re seeing is the momentum of people taking advantage of low home prices…”
11/07/2008 Prediction 5.02 million units full year.
Yun “…we’re still in a broad period of stabilization”
12/09/2008 Prediction 4.96 million units full year.
Yun “Given the critical role of housing in an economic recovery, we’re confident sufficient (government) stimulus will be offered to bring more buyers to the market,”
ACTUAL: 4.912 million existing units sold in 2008
1/06/2009 Prediction 4.90 million units in 2008, 5.224 million units 2009.
Yun “With a proper real-estate focused (government) stimulus measure, home sales could rise more than expected, by more than 10 percent…”
2/02/2009 Prediction 4.912 million units in 2008, 5.116 million units 2009.
Yun “Forecasting is a hazardous sport at times. With so many pieces of the puzzle now moving in opposite directions, the crystal ball reading has become even cloudier.”
3/02/2009 Prediction 4.927 million units.
Yun “One thing is for sure. The economy will not be able to recover in a sustainable way without home price stabilization.”
4/06/2009 Prediction 4.964 million units.
Yun “The key to housing stabilization is whether or not there are sufficient buyers of foreclosed homes.”
5/05/2009 Prediction 4.968 million units.
Yun “We need several months of sustained growth to demonstrate a recovery in housing.”
6/05/2009 Prediction 4.982 million units.
Yun “Just like war, nothing goes as planned…”
7/01/2009 Prediction 4.885 million units.
Yun “Pending home sales… quite a respectable jump…”
Kary L. Krismer » Jul 6, 2009 at 11:51 am
Well the numbers are out. King County came in at 1655 sales and 395,000 median.
Sniglet » Jul 6, 2009 at 12:55 pm
http://lansner.freedomblogging.com/2009/07/06/house-draws-135-offers/28485/
The fact that there are SO many people out there hoping to be bottom feeders simply re-affirms my belief that the real-estate price declines are far from over. When we hit “bottom” bidding wars will be completely inconceivable.
It is also noteworthy that this home only sold for a 35% discount of it’s peak price (in one of the bubbliest regions of the nation, no less). At the bottom even “good” neighbourhoods should be seeing upwards of 50% price declines from peak (with average neighbourhoods seeing over 80% declines).
Tyler » Jul 6, 2009 at 2:01 pm
Anyone know what P/OS zoning means for this property?
http://gis.clark.wa.gov/gishome/Property/?action=ACCOUNT&account=212821000#
Thanks in advance.
Lake Hills Renter » Jul 6, 2009 at 2:47 pm
“NARcasting”. I like that.
Sniglet » Jul 7, 2009 at 12:08 pm
http://healdsburgbubble.blogspot.com/2009/07/derelict-foreclosure-ruins-neighborhood.html
Here is yet more evidence of the growing shadow inventory of foreclosed properties. I continue to believe that many lenders just don’t want to have to take more write-downs on their books, and would rather allow a loan to go delinquent indefinitely than to recognize the loss.
Take a look at the comments to this post. A lot of people know of cases where banks haven’t evicted long-term delinquent home-owners.
By the way, the lender still hasn’t foreclosed on my sister who has been delinquent on her Florida home for almost 2 years.
patient » Jul 7, 2009 at 1:21 pm
Seems like we are heading for the “double-dip” on Wall street.
S-Crow » Jul 7, 2009 at 1:36 pm
Frontier Bank hits new low today. Lot of volume. 89cents/share.
Sniglet » Jul 7, 2009 at 1:55 pm
As bearish as I am, I actually think this market dip might just be a head-fake, and that the bear-market rally will roar back to life this summer after the Dow drops into the mid 7000s. I wouldn’t even be surprised to see the Dow up in the 10,000 area before the bear really grips us again this winter or in 2010.
I expect to continue to see real-estate stats get better and better for a few more months at least, which is all just part of the bear rally.
Ira Sacharoff » Jul 7, 2009 at 2:26 pm
RE: Tyler @ 4 –
My best guess is:
Preservation/Open Space
patient » Jul 7, 2009 at 2:49 pm
RE: Sniglet @ 9 – So you believe in “triple dip”? I think mid 7000s qualifies as a double dip and then you predict another dip at the end of the year. How low do you think that dip will be?
Sniglet » Jul 7, 2009 at 3:12 pm
Actually, I predict a quadruple or quintuple “dip”. When this rally ends (late in 2009 or first half of 2010), I wouldn’t be surprised to see the Dow drop to the lower 5000s before the next significant rally, which could see the Dow rise into the 7000s before it crashes into the 4000s.
Eventually, I expect to the see the Dow in the sub 2000 range before the REAL bottom, but that will be after several near-term bottoms and nose-bleed rallies, over a number of years.
The 1930s were was an incredibly volatile period for stocks (many of the biggest gains and drops on percentage terms occured in the 1930s), and I think we are headed to a very similar period.
Tyler » Jul 7, 2009 at 3:23 pm
RE: Ira Sacharoff @ 10 –
Thanks Ira!
Herman » Jul 8, 2009 at 1:00 am
RE: Sniglet @ 12 – I’m thinking that the Dow will bottom out in the teens. But it may get as low as 1.
Cheap South » Jul 8, 2009 at 4:04 am
Tim:
Short NPR piece this morning on Seattle’s commercial RE during Morning Edition at about 5:40AM and 7:40AM. (came right after a piece on the speculation of a second 787 line moving to South or North Carolina).
Kary L. Krismer » Jul 8, 2009 at 7:32 am
RE: Cheap South @ 15 – After Boeing discovers what it’s like to work directly with workers in S.C. that plant is more likely to move up here than a 2nd 787 plant is likely to open in S.C.
This is more of an end to outsourcing than anything. Rather obviously it’s failed. It was rather poorly implemented in any event. For it to have worked you’d need two companies making each part, each having the capacity to supply 100%.
David Losh » Jul 8, 2009 at 7:51 am
RE: Sniglet @ 12 –
I think the Dow will settle in at about 6000. There are dollars in the stock market. Those dollars need to be some place. The difference between now and the great depression is that there are pension funds, insurance funds, retirement funds, and investor funds that generate fees for doing something. No matter what, the stock market is doing something.
Another thing is that the global economy needs everything. We have a McDonald’s on every corner on earth, but we could have products with substance. A NAPA store or Schuck’s would be a good thing the world needs, today. Water Purification systems, plumbing, construction, contracting tools, food, dollar stores, a lot of distribution types of businesses the United States corporations could advance globally have been set aside in favor of these obscene paper profits.
The profits have been made. There are real dollars looking for investment opportunity. Managers want to show those huge profits to get those massive bonuses. There is nothing sexy about a Sears selling washing machines. In time, as the economy continues to contract, I think any return on investment will be better than none. Slow growth is in our future and it will have to happen globally.
Acerun » Jul 8, 2009 at 8:04 am
RE: Kary L. Krismer @ 16 –
I am sure that GM and Chrysler wish they had left the unions a long time ago. Boeing would create huge cost savings leaving this place. I don’t see why anyone would think are not leaving. When the executives leave Washington, everything is fair game.
Kary L. Krismer » Jul 8, 2009 at 8:05 am
RE: Acerun @ 18 – And I bet Mercedes wishes they’d never started building cars in the SE United States. If Boeing’s reliability becomes as bad as theirs, we’ll have planes fall from the sky on a weekly basis.
Acerun » Jul 8, 2009 at 8:18 am
How about Toyota, Nissan and BMW?
Blue collar workers are equally as incompetent in Washington or Alabama or South Carolina.
They just cost much less in the South.
Kary L. Krismer » Jul 8, 2009 at 9:25 am
RE: Acerun @ 20 – I’m not sure BMW has high quality any more either, although it’s not as dismal as MB. Of the companies mentioned, I think only Mercedes, BMW and VW may be in SC. With the possible exception of BMW, none of them make particularly reliable cars. Maybe it’s the German engineering, maybe it’s the workers.
patient » Jul 8, 2009 at 10:11 am
Quality is mostly a result of qualiy control. Efficiency is mostly a result of the work force. If it takes you twice the time to reach the quality in a low cost location that a double cost location achieves it doesn’t make sense to move. Most companies takes the plunge with the conviction that efficiency problems are temporary at low cost sites and that the longterm savings potential is huge. For manufacturing I think it’s the right thinking but not for engineering/r&d where innovation and culture is key.
Acerun » Jul 8, 2009 at 10:19 am
By patient @ 22:
I had to laugh, thinking of Windows Vista, Starbucks VIA or Washington Mutual’s ground breaking use of option adjustable rate mortgages.
patient » Jul 8, 2009 at 10:26 am
RE: @ – That said, I drive a new upper end BMW built in Germany and I would stop buying BMWs the day I can’t get one that is German built. For me it’s just an assurance that I’ll get similar quality to what I’m used to. I don’t think buyers of planes care much where in the US the plane is built but another country could be more of an issue for some.
patient » Jul 8, 2009 at 10:32 am
RE: Acerun @ 23 – Touche
Softwarengineer » Jul 8, 2009 at 10:39 am
RE: Acerun @ 23 –
THEY WANT TO REPLACE ALL THE TECHNICAL WORKFORCE AND ANYTHING BUT PAY CURRENT/LEGAL AMERICAN ENGINEERS/SCIENTISTS/TECNICALS DECENT WAGES
The 767 was developed in Seattle in the late 70s and almost the entire workforce was local/legal kids from the local community colleges; working with a 30% crop of experienced and inexperienced engineers. The development effort was a rousing success and the technicals easily hired from local America made good pay too.
But God forbid we pay technicals more than business majors or other BA skills. No, we need to insource slave technicals and drive the wages down. They’d rather lay off the current force and replace them with insource labor, than pay them fairly?
God forbid we pay teachers in our public high schools like 50% more pay to teach math and science with Bachelors of Science degrees….nope, arts degrees must get the same pay say the teachers’ unions.
God forbid we use our own legal workforce of technicals, pay them fairly and develop high quality products on schedule; not this subpar tripe coming from outsourced/insourced companies lately [i.e., VISTA O/S and the 787, etc, etc].
Even the CEO of General Electric agrees with me on one point: we’ll never solve the American economic mess if we don’t retake our manufacturing base back. New technology won’t help, by the time its developed [10 years from now] we’ll be a banana republic and all the manufacturing will be outsourced anyway [we'll be back to square one]. Nope, we need to retake the old technology manufacturing [cars, computers, TVs, etc] now!
See the proof:
http://www.washingtonpost.com/wp-dyn/content/article/2009/07/08/AR2009070800030.html
anony » Jul 8, 2009 at 10:59 am
In general, smarter people tend to live outside of confederate states. Also, engineers and management tend to get dumber over time proportional to how far away they are from the products they are designing or managing. (See Chicago’s management of the 787 program for a good example). We will see how this works out.
jon » Jul 8, 2009 at 11:18 am
By anony @ 26:
The US automakers are pretty well co-located, but high labor costs still ran them into the ground.
Fact is, a lot of engineering goes on in this country while the manufacturing is done in lower cost areas. It takes a few years to build up experience and quality, but it happens eventually.
Softwarengineer » Jul 8, 2009 at 11:38 am
RE: anony @ 26 –
BESIDES “DONCHA KNOW”; WHAT PROOF DO YOU HAVE FOR YOUR ALLEGATIONS?
I have the World Economic Forum’s top ten technological innovation countries rankings [America was #7 in 2007, definitely not an outsider yet]….countries in Europe that control their environment [population growth] took almost all the top ten slots. I don’t believe Boeing or M/S will insource/outsource with Europe’s tech talent though….they’re too cheap. They go to the overpopulated cheap countries that scored subpar on the latest global tech innovation rankings.
Why take up a difficult tech field in college today [even a two year degree], when the plan is to outsource/insource American slave labor techs?