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Posts Tagged ‘Zillow’

Housing Market Double Dip Surprises Economists – Just as Original Crash Did

Courtesy of Trader Mark at Fund My Mutual Fund

The same economists shocked by the original housing crash (prices can’t go up forever?), now appear to be in the fetal position as the much too obvious second leg of the downturn has arrived.  While I do have an economist degree, living in the locale experiencing a 1 state Depression [Jan 27, 2011: Metro Detroit Home Prices Back to 1994 Levels...Before Accounting for Inflation]  had me much more negative than those who live in the ivory towers of Manhattan or D.C..  I wrote a few years ago about a few articles that also opened my eyes to what was going on out there in the rest of the country. [May 30, 2005 - Fortune: Riding the Boom] [Sep 11, 2006: Option ARMs - Nightmare Mortgages]  Hence in late 07, I showed with simple math why we were in for a doozy of a drop in the housing market.  [Dec 6, 2007: What Should Median Housing Prices be Today?]

As you can see from the mid/late 1970s to 2001/2002 the ratio was consistent in a tight range between 2.6x to 3.0x. Essentially this means the median home price in this country was 2.6x – 3.0x median household income. And it’s been right around 2.8x for most of that time. That’s 30 years….

Then in 2002+, we had innovation…. great innovation… and 1% interest rates. Easy money. No mortgage regulation. Happy times. And crazy housing prices that detached from reality. In 2006 at the height of ‘innovation’ (where were these politicians 1 year ago? seriously), the ratio went "off" the chart, it appears 4.0x. After the ‘correction’ we’ve had, that ratio has fallen all the way to…. 3.8x.

In July 2006 at the height of insanity the median price of a home was $230,200

It has already fallen in less than a year (October 2006) to $207,800

Pain over, correction done – time to party. Right? Wrong.

What are median incomes nowadays? As of 2006 the median household income was $48,201.

$48,201 x 2.8 ratio


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Housing Headed For Another Leg Down; Stabilization Misunderstood

Housing Headed For Another Leg Down; Stabilization Misunderstood

Courtesy of Mish

New house with for sale sign

With pent-up housing demand headed for exhaustion, if not well past exhaustion already thanks to $10,000 tax credits for new buyers, the housing recovery is about to reverse.

Please consider Reversal of Fortune.

One in five housing markets entered a second leg of home price declines in late 2009, after showing price increases for nearly half of last year, according to a report released Wednesday by Zillow.com, a real-estate Web site.

In 29 of the 143 markets tracked by the site — including Boston, Atlanta and San Diego — prices flattened or began to decrease again in the second part of last year, after five or more months of consecutive monthly increases, according to the site’s fourth quarter real-estate market report.

Home prices in another 29 markets, including Los Angeles and New York, increased each month throughout the fourth quarter. But the rate of increase slowed from November to December in 21 markets, according to the data.

Nationwide, home values fell 5% in the fourth quarter compared with the fourth quarter a year earlier. Values fell 0.5% from the third quarter of 2009.

"While we have seen strong stabilization in home values during 2009, there are clear signs that they will turn more negative in the near-term," said Stan Humphries, Zillow’s chief economist, in a news release.

"What we saw in mid-2009 was a brief respite from a larger market correction that has not yet run its course," he said.

Still, Humphries said markets that see a "double dip" in values before reaching a bottom won’t see a return "to the magnitude of depreciation seen earlier." Instead, the drop will look like a "modest aftershock" of the initial drop in prices. In this scenario, a "double dip" is defined as two periods of sustained declines separated by a brief stabilization or recovery, according to the release.

Stabilization Misunderstood

It’s important not to make too much of stabilization. If you throw enough money at something, prices are bound to stabilize, at least for a while. However, eventually the pool of pent-up demand is exhausted, much like the pool of original fools was exhausted.

Christ raising the


The shadow supply of homes is through the roof, rental prices are dropping, and there is no


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Home Values: Confusion Reigns

Zillow reports on the actual changes in home values, as well as the perception/misperception of changes, in different regions over the last year.  (My yellow highlighting) – Ilene

Confusion Reigns as Home Values Fluctuate Regionally; Northeastern Homeowners Overly Cynical About Home Values, But Western Homeowners Are Too Confident

ZillowHomeowners Across the Country Predict a Full Recovery in Next Six Months, According to Zillow(R) Q3 Homeowner Confidence Survey

SEATTLE, Nov. 18 /PRNewswire/ — Homeowner confidence was all over the map in the third quarter, as home values in some parts of the country stabilized while other areas saw continuing declines. Homeowners in the Northeast were the most cynical about their own homes’ values over the past 12 months, although the region posted the highest percentage of homes increasing in value during that same time period, according to the Zillow Q3 Homeowner Confidence Survey(1) and the Zillow Q3 Real Estate Market Reports.

One in five (20 percent) Northeastern homeowners believes their own home gained value in the past 12 months, according to the survey. But in reality, 31 percent of homes in the region increased in value, according to the Zillow Q3 Real Estate Market Reports.

That translates to a Zillow Home Value Misperception Index(2) of -6, which means Northeastern homeowners believe values performed worse than they did in reality – a first in Homeowner Confidence Survey(3) history. A Misperception Index of 0 would mean homeowners’ perceptions were in line with reality.

Homeowners in the West were the least realistic in the country, with 28 percent believing their own homes’ values increased in the past 12 months. According to Zillow, 17 percent of homes in the region actually increased, resulting in a Misperception Index of 17.

The Midwest had a Misperception Index of 8, while the South had an Index of 15.

Nationally, 25 percent of homeowners believe their own home’s value increased in the last 12 months. In reality, 22 percent of U.S. homes gained value. But fewer than half (49 percent) believe their home’s value decreased over the past 12 months, while 72 percent actually decreased. That discrepancy between perception and reality resulted in a Misperception Index of 10.

U.S. homeowners were also more optimistic about the future of their own homes’ values than at any time in the past six quarters. Two in five (41 percent) say their own home’s value will increase in the next six months.…
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Help One Of Our Own PSW Members

"Hello PSW Members –

This is a non-trading topic, but I wanted to post it during trading hours so as many eyes can see it as possible.  Feel free to contact me directly at jennifersurovy@yahoo.com with any questions.

Last fall there was some discussion on the PSW board regarding setting up a YouCaring donation page for a PSW member, Shadowfax. Since then, we have been looking into ways to help get him additional medical services and to pay down his medical debts.  After following those leads, we are ready to move ahead with the YouCaring site. (Link is posted below.)  Any help you can give will be greatly appreciated; not only to help aid in his medical bill debt, but to also show what a great community this group is.

http://www.youcaring.com/medical-fundraiser/help-get-shadowfax-out-from-the-darkness-of-medical-bills-/126743

Thank you for you time!

 
 

Zero Hedge

Markets Explodes As Bank Of Japan Goes All-In-er; Increases QQE To JPY 80 Trillion

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

UPDATE: *NIKKEI 225 EXTENDS ADVANCE TO 5%

NKY is up 1000 points from FOMC

 

 

 

and what do u expect to happen to JGBs when Stocks rip 1000 points... yep they're rallying!

  • Yield on 10-yr govt bond declines 3.5 bps to 0.435%, while 20-yr yield also slides 3.5bps to 1.285%, both lowest since April 2013.
  • 5-yr yield f...


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Phil's Favorites

Looking for a Good Education at a Low Price, Perhaps Free? Head to Europe

Courtesy of Mish.

On June 7, 2014 I wrote Looking to Drastically Reduce College Costs? Study Abroad!

Yesterday, a writer for the Washington Post expressed the same opinion.

Please consider 7 countries where Americans can study at universities, in English, for free (or almost free). Since 1985, U.S. college costs have surged by about 500 percent, and tuition fees keep rising. In Germany, they've done the opposite.

The country's universities have been tuition-free since the beginning of October, when Lower Saxony became the last ...



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Chart School

Moving Averages: Month-End Preview

Courtesy of Doug Short.

Here is a preview of the monthly moving averages I track after the close of the last business day of the month. All three S&P 500 strategies are now signaling "invested" -- unchanged from last month. Two of the five of the Ivy Portfolio ETFs, the PowerShares DB Commodity Index Tracking (DBC and the Vanguard FTSE All-World ex-US ETF (VEU), are signal cash "cash" -- also unchanged from last month.

If a position is less than 2% from a signal, it is highlighted in yellow.


Note: My inclusion of the S&P 500 index updates is intended to illustrate a popular moving moving-average timing strategy. The index signals also give a general sense of how US equities are behaving. Howe...



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All About Trends

Mid-Day Update

Reminder: David is available to chat with Members, comments are found below each post.

Click here for the full report.




To learn more, sign up for David's free newsletter and receive the free report from All About Trends - "How To Outperform 90% Of Wall Street With Just $500 A Week." Tell David PSW sent you. - Ilene...

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Insider Scoop

Jennings Capital Downgrades Ballard Power Systems

Courtesy of Benzinga.

Related BLDP Lake View: Ballard Power Systems 'Making Progress' Morning Market Movers

Jennings Capital downgraded Ballard Power Systems Inc. (NASDAQ: BLDP) in a report issued Thursday from Buy to Hold and lowered its price target from $5 to $3.

Analyst Dev Bhangui noted that the company "reported Q3/14 results that were below our and consensus estimates. EPS were ($0.02) versus JCI and consensus of ($0.01). Revenue and gross margin m...



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Sabrient

Sector Detector: Bullish conviction returns, but market likely to consolidate its V-bottom

Courtesy of Sabrient Systems and Gradient Analytics

Bulls showed renewed backbone last week and drew a line in the sand for the bears, buying with gusto into weakness as I suggested they would. After all, this was the buying opportunity they had been waiting for. As if on cue, the start of the World Series launched the rapid market reversal and recovery. However, there is little chance that the rally will go straight up. Volatility is back, and I would look for prices to consolidate at this level before making an attempt to go higher. I still question whether the S&P 500 will ultimately achieve a new high before year end.

In this weekly update, I give my view of the current market environment, offer a technical analysis of the S&P 500 chart, review our weekly fundamentals-based SectorCast rankings of the ten U.S. business sectors, and then o...



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OpTrader

Swing trading portfolio - week of October 27th, 2014

Reminder: OpTrader is available to chat with Members, comments are found below each post.

 

This post is for all our live virtual trade ideas and daily comments. Please click on "comments" below to follow our live discussion. All of our current  trades are listed in the spreadsheet below, with entry price (1/2 in and All in), and exit prices (1/3 out, 2/3 out, and All out).

We also indicate our stop, which is most of the time the "5 day moving average". All trades, unless indicated, are front-month ATM options. 

Please feel free to participate in the discussion and ask any questions you might have about this virtual portfolio, by clicking on the "comments" link right below.

To learn more about the swing trading virtual portfolio (strategy, performance, FAQ, etc.), please click here ...



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Stock World Weekly

Stock World Weekly

Newsletter writers are available to chat with Members regarding topics presented in SWW, comments are found below each post.

Here's the latest Stock World Weekly. Enjoy!

(As usual, use your PSW user name and password to sign in. You may also take a free trial.) 

 

#455292918 / gettyimages.com

 

...

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Market Shadows

Bill Ackman's Big Pharma Trade Is Making Wall Street A Super Awkward Place

 

#452525522 / gettyimages.com

Intro by Ilene

If you're following Valeant's proposed takeover (or merger) of Allergan and the lawsuit by Allergan against Valeant and notorious hedge fund manager William Ackman, for insider trading this is a must-read article. 

Linette Lopez describes the roles played by key Wall Street hedge fund owners--Jim Chanos, John Paulson, and Mason Morfit, a major shareholder in Valeant. Linette goes through the con...



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Option Review

LUV Options Active Ahead Of Earnings

There is lots of action in Southwest Airlines Co. November expiry call options today ahead of the air carrier’s third-quarter earnings report prior to the opening bell on Thursday. Among the large block trades initiated throughout the trading session, there appears to be at least one options market participant establishing a call spread in far out of the money options. It looks like the trader purchased a 4,000-lot Nov 37/39 call spread at a net premium of $0.40 apiece. The trade makes money if shares in Southwest rally 9.0% over the current price of $34.32 to exceed the effective breakeven point at $37.40, with maximum potential profits of $1.60 per contract available in the event that shares jump more than 13% to $39.00 by expiration. In September, the stock tou...



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Digital Currencies

Goodbye War On Drugs, Hello Libertarian Utopia. Dominic Frisby's Bitcoin: The Future of Money?

Courtesy of John Rubino.

Now that bitcoin has subsided from speculative bubble to functioning currency (see the price chart below), it’s safe for non-speculators to explore the whole “cryptocurrency” thing. So…is bitcoin or one of its growing list of competitors a useful addition to the average person’s array of bank accounts and credit cards — or is it a replacement for most of those things? And how does one make this transition?

With his usual excellent timing, London-based financial writer/actor/stand-up comic Dominic Frisby has just released Bitcoin: The Future of Money? in which he explains all this in terms most readers will have no tr...



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Pharmboy

Biotechs & Bubbles

Reminder: Pharmboy is available to chat with Members, comments are found below each post.

Well PSW Subscribers....I am still here, barely.  From my last post a few months ago to now, nothing has changed much, but there are a few bargins out there that as investors, should be put on the watch list (again) and if so desired....buy a small amount.

First, the media is on a tear against biotechs/pharma, ripping companies for their drug prices.  Gilead's HepC drug, Sovaldi, is priced at $84K for the 12-week treatment.  Pundits were screaming bloody murder that it was a total rip off, but when one investigates the other drugs out there, and the consequences of not taking Sovaldi vs. another drug combinations, then things become clearer.  For instance, Olysio (JNJ) is about $66,000 for a 12-week treatment, but is approved for fewer types of patients AND...



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Ilene is editor and affiliate program coordinator for PSW. She manages the site market shadows, archives, more. Contact Ilene to learn about our affiliate and content sharing programs.

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