tag:blogger.com,1999:blog-6616959642391988608.post4601576910552934521..comments2024-03-28T00:18:25.641-07:00Comments on Calafia Beach Pundit: Housing price stabilityScott Grannishttp://www.blogger.com/profile/14028519647946868684noreply@blogger.comBlogger6125tag:blogger.com,1999:blog-6616959642391988608.post-48067020606118818262010-10-26T18:41:56.767-07:002010-10-26T18:41:56.767-07:00John: Holding cash in a deflation would be a winni...John: Holding cash in a deflation would be a winning strategy, all other things being equal, but so far it has been a huge loser (zero returns on cash vs. very strong returns on almost everything else). One rationale for holding cash of course has been the fear of deflation. But so far it has not materialized. Plus, you might need some serious deflation (e.gl., 5-10% per year) before cash would Scott Grannishttps://www.blogger.com/profile/14028519647946868684noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-88668313300019369392010-10-26T18:34:37.975-07:002010-10-26T18:34:37.975-07:00Regarding that "mountain of cash" left o...Regarding that "mountain of cash" left on the table or languishing because "risk takers" can't handle the "uncertainty," wouldn't those sitting on cash benefit from deflation? Vindicate their decision to "park it?"<br /><br />I remember my dad, who was around during the Great Depression saying, "when the shit hits the fan, cash is king."Johnhttps://www.blogger.com/profile/06365403570563730880noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-13101224353881797902010-10-26T14:57:33.216-07:002010-10-26T14:57:33.216-07:00Amherst Securities says that there are 11.6 millio...<a href="http://www.politico.com/static/PPM170_101006_amherst.html" rel="nofollow">Amherst Securities</a> says that there are 11.6 million homes at risk of liquidation.<br /><br />Your inventory argument is factually weak. <a href="http://www.realestatesmarttalk.com/distressed-housing/feds-dudley-3-million-excess-vacant-housing-units/" rel="nofollow">Dudley at NYFed</a> says that "excess&marmicohttps://www.blogger.com/profile/08277071086056574486noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-82246535015106255672010-10-26T13:42:24.257-07:002010-10-26T13:42:24.257-07:00Scott:
On the case-shiller you are right. Howeve...Scott:<br /><br />On the case-shiller you are right. However, don't forget that it represents the 3 month weighted average for June, July and August. You are probably right that if house price are not as low as they will, the downward trend is closer to the end than to the beginning. <br /><br />The question is with inventory at very high levels, household formation at very low levels, andFrozen in the Northhttps://www.blogger.com/profile/04901959687094626879noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-68457269308295137872010-10-26T13:30:32.723-07:002010-10-26T13:30:32.723-07:00It is my understanding that the Case Shiller data ...It is my understanding that the Case Shiller data represents a weighted repeat sales index, and thus is not the mean of all housing prices nor reflective of the median home price. <br /><br />The personal income data I'm referring to come from BEA, and reflect total personal income.Scott Grannishttps://www.blogger.com/profile/14028519647946868684noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-41824780843960153052010-10-26T13:20:36.112-07:002010-10-26T13:20:36.112-07:00The median is different than the mean. I think you...The median is different than the mean. I think you use the mean for both your real estate price and income growth, both of which are skewed by the high end market. <br /><br />Can you clarify? What's your central tendency?Johnhttps://www.blogger.com/profile/06365403570563730880noreply@blogger.com