tag:blogger.com,1999:blog-6616959642391988608.post576702205770649695..comments2024-03-28T00:18:25.641-07:00Comments on Calafia Beach Pundit: Housing is bottomingScott Grannishttp://www.blogger.com/profile/14028519647946868684noreply@blogger.comBlogger22125tag:blogger.com,1999:blog-6616959642391988608.post-88220276434524939632009-04-08T15:32:00.000-07:002009-04-08T15:32:00.000-07:00Ok, let's call it quits. If you see lumber contrac...Ok, let's call it quits. If you see lumber contracts backwardated, while my Bloomberg screen is showing them contangoed as of the close today, we must be living in separate universes.Scott Grannishttps://www.blogger.com/profile/14028519647946868684noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-61071842088534743312009-04-08T14:59:00.000-07:002009-04-08T14:59:00.000-07:00I welcome your constructive suggestionsWhat the he...<I>I welcome your constructive suggestions</I><BR/><BR/>What the hell did I do. You posted some spread charts completely divorced from any sense of reality and made a conclusion which was summarily dismissed based on linked evidence which you did not refute, other than argument from authority or some other bull.<BR/><BR/>Listen, if you don't understand contango and backwardation in commodity stilettoheelshttps://www.blogger.com/profile/02197109693659933012noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-77418292553858286262009-04-08T14:01:00.000-07:002009-04-08T14:01:00.000-07:00heels: If the bulk of So. Calif. real estate sales...heels: If the bulk of So. Calif. real estate sales are distressed sales, is that not a good reason to suspect that prices may be at or close to their lows? It is almost axiomatic that when the majority of people are motivated sellers, prices are indeed at distressed levels.<BR/><BR/>Everyone can see the stats and the prices and the policies. But there is no science which tells you how to Scott Grannishttps://www.blogger.com/profile/14028519647946868684noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-42692727817429965312009-04-08T13:55:00.000-07:002009-04-08T13:55:00.000-07:00heels: I try very hard to base my arguments on fac...heels: I try very hard to base my arguments on facts and logic, and to avoid ad hominem attacks. The near-absence of nasty comments on this forum may reflect that. If you would look more closely at your own CME reference, you would see that, as Pat notes, lumber prices (per the front month contract) are up about one-third from their lows earlier this year. In my view that counts as "rebounding Scott Grannishttps://www.blogger.com/profile/14028519647946868684noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-681869091354843132009-04-08T13:45:00.000-07:002009-04-08T13:45:00.000-07:00As a backup to your observation lumber prices have...<I>As a backup to your observation lumber prices have rebounded quite strongly.</I><BR/><BR/>Huh, why aren't people called out on their <A HREF="http://www.nahb.org/generic.aspx?genericContentID=527" REL="nofollow">bull</A> in this forum? Lumber prices have declined, Pat.<BR/><BR/>Ooops, I get it now. Supplicants at the feet of the Calafia <A HREF="http://en.wikipedia.org/wiki/The_Glass_Bead_Gamestilettoheelshttps://www.blogger.com/profile/02197109693659933012noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-53953776172552812632009-04-08T13:11:00.000-07:002009-04-08T13:11:00.000-07:00The best current news is found in the real-time pr...The best current news is found in the real-time prices of things like currencies, commodities, spreads, the yield curve, and equities.<BR/><BR/>Housing starts have collapsed forom 2.2 million units per year in 2005 to less than 0.5 million units currently. That goes an awful long way to addressing the excess inventory. We could quibble about decimal points, but surely the bulk of the excess Scott Grannishttps://www.blogger.com/profile/14028519647946868684noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-9426888358253368482009-04-08T12:51:00.000-07:002009-04-08T12:51:00.000-07:00A fourth quarter 2008 statistic is very old news b...<I>A fourth quarter 2008 statistic is very old news by now. In any event, my hunch is that most of the bad news has been priced</I><BR/><BR/>Of course a Q4.08 stat is old news. Do you have any current news?<BR/><BR/>I'm surprised that you have not responded with green shoots on the demand curve when the supply curve is barren. <BR/><BR/>The supply curve is a function of net household formation + stilettoheelshttps://www.blogger.com/profile/02197109693659933012noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-80580997925559476732009-04-07T18:52:00.000-07:002009-04-07T18:52:00.000-07:00Thanks Scott,I suspect it's even worse in the San ...Thanks Scott,<BR/>I suspect it's even worse in the San Joaquin Valley. But I also think that what you implied is right. The most distressed parts of the country are the areas that will rebound first.Mark A. Sadowskihttps://www.blogger.com/profile/13147923641894915172noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-81239778431677886942009-04-07T18:51:00.000-07:002009-04-07T18:51:00.000-07:00As a backup to your observation lumber prices have...As a backup to your observation lumber prices have rebounded quite strongly.Unknownhttps://www.blogger.com/profile/00213857108241659338noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-20395053828918149762009-04-07T18:32:00.000-07:002009-04-07T18:32:00.000-07:00The Inland Empire (approximately everything that i...The Inland Empire (approximately everything that is 30-60 miles east of Los Angeles) has really been clobbered. The overbuilding was mind boggling. The price declines in the past year or two have been spectacular. But homes are selling, and their are bidding wars on foreclosed homes. Many prices are down about 50% from their highs of 3-4 years ago, and are back to the levels of 2001-2002. I don'tScott Grannishttps://www.blogger.com/profile/14028519647946868684noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-63448290815223134552009-04-07T18:29:00.000-07:002009-04-07T18:29:00.000-07:00heels: as you note, there are lots of awful-lookin...heels: as you note, there are lots of awful-looking datapoints out there on the housing market. The question for investors and potential buyers, however, is whether all that bad news has already been priced into the market or not. Also, I would note that some of those series have fairly long lags built into them. A fourth quarter 2008 statistic is very old news by now. In any event, my hunch is Scott Grannishttps://www.blogger.com/profile/14028519647946868684noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-33846593649860447812009-04-07T18:10:00.000-07:002009-04-07T18:10:00.000-07:00Scott,I've been looking at local unemployment rate...Scott,<BR/>I've been looking at local unemployment rates lately. I could not help but notice your reference to the Inland Empire.<BR/><BR/>I know this is a little off topic but it seems to me that the San Joaquin Valley has suffered much more than the country in general. I've never been to California and I was wondering what your reflections might be with respect to my observation.Mark A. Sadowskihttps://www.blogger.com/profile/13147923641894915172noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-92198733108310061062009-04-07T09:43:00.000-07:002009-04-07T09:43:00.000-07:00Sorry I messed up the link:www.erictyson.comSorry I messed up the link:<BR/><BR/><A>www.erictyson.com</A>PFCThttps://www.blogger.com/profile/16830994338746980873noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-16867839359301080972009-04-07T09:40:00.000-07:002009-04-07T09:40:00.000-07:00RobYou need more balance in your reading...BP has ...Rob<BR/><BR/>You need more balance in your reading...BP has a horrible long-term track record and Roubini <BR/>has made many mistakes.<BR/><BR/>Check out the Guru Watch section at <A HREF="www.erictyson.com" REL="nofollow">Eric Tyson's website</A>PFCThttps://www.blogger.com/profile/16830994338746980873noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-19113278520480134942009-04-07T09:33:00.000-07:002009-04-07T09:33:00.000-07:00Sure, Scott. That's why the stress tests for the t...Sure, Scott. That's why the stress tests for the too big to fail banks baseline case (not adverse case) is a <A HREF="http://www.alston.com/financialmarketscrisisblog/blog.aspx?entry=1556" REL="nofollow">14% decline</A> in the Case Shiller-10 index in 2009.<BR/><BR/>Sure Scott, that's why new homebuilders have <A HREF="http://www.icis.com/Articles/2009/03/25/9203310/stilettoheelshttps://www.blogger.com/profile/02197109693659933012noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-58788450244532046682009-04-07T08:45:00.000-07:002009-04-07T08:45:00.000-07:00It pays to sit on the sidelines and watch the pund...It pays to sit on the sidelines and watch the pundits play tennis while prices keep declining, albeit at a decreasing rate.Public Libraryhttps://www.blogger.com/profile/00017383928897945054noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-71540920201318091322009-04-07T07:53:00.000-07:002009-04-07T07:53:00.000-07:00Sorry to be off-topic and I won't make a habit of ...Sorry to be off-topic and I won't make a habit of it. But further to my recent question, Scott, about Mish Shedlock's view, I wondered what you make of some of the other bloggers that I read, eg The Big Picture, The Market Ticker, Calculated Risk, Naked Capitalism, Nouriel Roubini ... It's just that you have been so much more upbeat than all these others. Even Paul Krugman seems very wary ...Robhttps://www.blogger.com/profile/16062180895899998738noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-76608181999088915412009-04-07T03:52:00.000-07:002009-04-07T03:52:00.000-07:00Good points Mark, and of course one should check l...Good points Mark, and of course one should check local market conditions carefully. My main point is that the housing market has had well over three years to make an adjustment. Bad press has been in people's face for years. It's hard to imagine so much bad news for such a long time. I know that some markets are already experiencing bidding wars for foreclosed properities (Inland Empire, CA). Scott Grannishttps://www.blogger.com/profile/14028519647946868684noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-3408262001315994792009-04-06T19:41:00.000-07:002009-04-06T19:41:00.000-07:00Good points, Mark Sadowski. But in a world in whi...Good points, Mark Sadowski. But in a world in which prices invariably rise over time due to inflation, the fact that a technical loss in inflation adjusted dollars occurs does not matter so long as nominal real estate prices increase. If I borrow $500,000 to buy a $550,000 home and prices rise 20% but that 20% rise does not keep pace with inflation, I have still made a significant profit based Billhttps://www.blogger.com/profile/05145490918994594519noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-67037835573933762592009-04-06T16:09:00.000-07:002009-04-06T16:09:00.000-07:00Sales are rising but prices are still plummeting n...Sales are rising but prices are still plummeting nationally. Foreclosure sales now account for nearly half the market and although this will drive up sales numbers it will continue to drive down prices especially as prime ARMs start resetting on a massive scale in 2010-2011.<BR/><BR/>As housing prices in certain parts of the country drop to a level close to building cost (such as Las Vegas and Mark A. Sadowskihttps://www.blogger.com/profile/13147923641894915172noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-66851146883054507452009-04-06T15:39:00.000-07:002009-04-06T15:39:00.000-07:00No problem here, we need to spread the word. Once ...No problem here, we need to spread the word. Once the market realizes that home prices are no longer falling it will be incredibly bullish. A bottom in home prices is basically a necessary condition for a financial market recovery.Scott Grannishttps://www.blogger.com/profile/14028519647946868684noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-5612808258179226392009-04-06T15:34:00.000-07:002009-04-06T15:34:00.000-07:00Scott,This is a great article, I have been saying ...Scott,<BR/><BR/>This is a great article, I have been saying the same thing. If you look at the facts people will see. I have been a broken record for the last month or so. Priceing is starting to level out, inventory is going to stabalize, and interest rates can not stay as low as they are forever. Especially now, think about it 4.7%!!! wow.... <BR/><BR/>I liked it so much I am going to post it Anonymousnoreply@blogger.com