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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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Chart School

Vehicle Miles Traveled: Our Evolving Behavior

Courtesy of Doug Short.

The Department of Transportation's Federal Highway Commission has released the latest report on Traffic Volume Trends, data through February.

"Travel on all roads and streets changed by 2.8% (6.1 billion vehicle miles) for February 2015 as compared with February 2014." The less volatile 12-month moving average is up 0.20% month-over-month and 2.36% year-over-year. If we factor in population growth, the 12-month MA of the civilian population-adjusted data (age 16-and-over) is a smaller change, up 0.13% month-over-month and up only 1.23% year-over-year.

Here is a chart that illustrates this data series from its inception in 1971. It illustrates the "Moving 12-Month Total on ALL Roads," as the DOT terms it. The ...



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Phil's Favorites

Reader Question: Is the Minimum Wage Really a Maximum Wage?

Courtesy of Mish.

A reader asked me if I ever hired someone for the minimum wage. He also believes the minimum wage is really a maximum wage.

From Drew ...
Mish, I’m curious if you have ever had to actually pay someone minimum wage to work for you week in, week out, year after year?

I’ve signed plenty of paychecks myself, and honestly, I could never employ someone and pay the minimum wage knowing it was not enough for that person to live on, regardless of whether or not the “market” says I could hire them for that price. I have willingly paid more, and they always very much appreciated it, and I also felt like I got more effort since they knew I was paying them more. But I know that’s not how large corporations work.

I believe you would argue whether or not the minimum is enough on which to live is irrelevant a...



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OpTrader

Swing trading portfolio - week of April 27th, 2015

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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Zero Hedge

The Virtual Immunity Of The Well-Connected: Gen. Petraeus Edition

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

Submitted by Ray McGovern via Consortium News,

The leniency shown former CIA Director (and retired General) David Petraeus by the Justice Department in sparing him prison time for the serious crimes that he has committed puts him in the same preferential, immune-from-incarceration category as those running the financial institutions of Wall Street, where, incidentally, Petraeus now makes millions. By contrast, “lesser” folks – and particularly the brave men and women who disclose government crimes – get to serve time, even decades, in jail.

Petraeus i...



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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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Kimble Charting Solutions

King Dollar slipping below support, say Joe Friday

Courtesy of Chris Kimble.

CLICK ON CHART TO ENLARGE

King Dollar has been on a role since last summer, up over 20% in less than a year. When looking back on the US$, the rally has been rare and nearly historic. Majority of the rally took place inside the steep rising channel above. Over the past month the US$ might have put in a double top. Over the past few days, the US$ has slipped a little below rising support at red arrow above.

CLICK ON CHART TO ENLARGE

As you can see from the table abo...



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Digital Currencies

Why Bitcoin's male domination will be its downfall

Here's an interesting argument by Felix Salmon, although I think he is taking two correct observations and mistakenly attributing a cause-and-effect relationship to them: Bitcoin is going nowhere because women are not involved.

More likely, in my opinion, women are not involved in bitcoin because bitcoin is going nowhere (and they know it). Or maybe, simply, bitcoin is going nowhere and women are not involved. 

Why Bitcoin's male domination will be its downfall 

By Felix Salmon

Nathaniel Popper’s new book, Digital Gold, is as close as you can get to being the definitive account of the history of Bitcoin. As its subtitle proclaims, the book tells the story of the “misfits” (the first generation of hacker-l...



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Sabrient

Sector Detector: Earnings and GDP temporarily take investor spotlight off the Fed

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

Courtesy of Sabrient Systems and Gradient Analytics

As we get into the heart of earnings season and anticipate the GDP report for Q1, the investor spotlight has been taken off the Federal Reserve and timing of its first interest rate hike, at least temporarily. Even though Q1 economic growth will undoubtedly look weak, the future remains bright for the U.S economy – even though many multinationals will struggle with top-line growth due to the strong dollar – and any near-term selloff resulting from weak economic or earnings news should be bought yet again in expectation of better results for the balance of the year. High sector correlations remain a concern, reflectin...



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Promotions

Watch the Phil Davis Special on Money Talk on BNN TV!

Kim Parlee interviews Phil on Money Talk. Be sure to watch the replays if you missed the show live on Wednesday night (it was recorded on Monday). As usual, Phil provides an excellent program packed with macro analysis, important lessons and trading ideas. ~ Ilene

 

The replay is now available on BNN's website. For the three part series, click on the links below. 

Part 1 is here (discussing the macro outlook for the markets) Part 2 is here. (discussing our main trading strategies) Part 3 is here. (reviewing our pick of th...

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Market Shadows

Kimble Charts: South Korea's EWY

Kimble Charts: South Korea's EWY

By Ilene 

Chris Kimble likes the iShares MSCI South Korea Capped (EWY), but only if it breaks out of a pennant pattern. This South Korean equities ETF has underperformed the S&P 500 by 60% since 2011.

You're probably familiar with its largest holding, Samsung Electronics Co Ltd, and at least several other represented companies such as Hyundai Motor Co and Kia Motors Corp.

...



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Mapping The Market

S&P 500 Leverage and Hedges Options - Part 2

Courtesy of Jean-Luc Saillard.

In my last post (Part 1 of this article), I looked at alternative ETFs that could be used as hedges against the corrections that we have seen during that long 2 year bull run. Looking at the results, it seems that for short (less than a month) corrections, a VIX ETF like VXX could actually be a viable candidate to hedge or speculate on the way down. Another alternative ETF was TMF, a long Treasuries ETF which banks on the fact that when markets go down, money tends to pack into treasuries viewed as safe instruments. In some cases, TMF even outperformed the usual hedging instruments like leveraged ETFs. There could of course be other factors at play since some of 2014 corrections were related to geopolitical events which are certain...

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Pharmboy

2015 - Biotech Fever

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

PSW Members - well, what a year for biotechs!   The Biotech Index (IBB) is up a whopping 40%, beating the S&P hands down!  The healthcare sector has had a number of high flying IPOs, and beat the Tech Sector in total nubmer of IPOs in the past 12 months.  What could go wrong?

Phil has given his Secret Santa Inflation Hedges for 2015, and since I have been trying to keep my head above water between work, PSW, and baseball with my boys...it is time that something is put together for PSW on biotechs in 2015.

Cancer and fibrosis remain two of the hottest areas for VC backed biotechs to invest their monies.  A number of companies have gone IPO which have drugs/technologies that fight cancer, includin...



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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!




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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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