Bull Market - Nov 13, 2007 thru Jan 18, 2008 - Page 5

Hyper, i'll give you another example.

Next months numbers on housing, from last year will they be up or down?

I'll bet you 100 to 1 (Every dollar you bet i'll put up $100.00) that Novembers numbers this year will be way down from last Novembers numbers.

Of course, you won't take that bet because there is no way the housing market is going to recover that quickly. Impossible.

However, I also am willing to bet you 1 to 1 that Novembers numbers will be up, just like Septembers were up and just like Octobers will be up, because as ive said, we've hit bottom in the housing market and are on our way back up.

What is going to buoy the housing market for awhile is foreign buyers. With the dollar as low as it is it will be like when the Japanese were buying up Hawaii... That will be the new panic. Realtors are already seeing an increase in foreign interest in US real estate. Just a small point I thought should be brought up

Here in NY we have lots of people from Ireland and Europe in general buying up houses. I know a guy that does general contracting for them.

Not sure if that's good or bad but hey, at least they are buying.

So where are they putting their money Chan? They are not just going to sit on cash it will be invested somewhere....
I think the low volume points to the fact that alot of investors are sitting on their cash waiting for the market to stabilize. Putting it into safe investment options til then...
So the question is when will we know when the market turns or will we merely look back at the charts as usual and say it turned at point X? At that point wonder why we didn't get back in....
On a side note I know what my friend over at Morgan Stanley is saying and my investment manager is saying I just want your take on it....
As they say charts are great at showing what already happened.....

The astute reader might have noticed that Chan did not specify what "overvalued" calls he sold today.

What is more logical, that a big push was made in August to close deals (robbing september of sales and making it lower than it should have been), or that we are stabilizing.

I'll leave the graphs for your interpretation.






In this series of graphs, you tell me which one is better. (the difference is at August and September.)






And here we are again at the latest data for Existing home sales. We saw an increasing decline for September as well. I'll bet you that October gives a slight increase as well since September was an absolutely horrible month. But as we can see from the graphs above, that doesn't change the trend. Home sales are going to be flat to down with decreasing prices, hardly a bottom. More like a slow bleed.

I love your sources: HousingDoom. Very funny.

Notice anything about those charts? They don't even begin to address what I said. They do not address the quoted article or the news contained in that article.

Have you noticed headlines over the last year about housing starts? For at least a year housing starts have been declining. That means fewer houses are being built, fewer houses being built means few home sales. Get it?

Also, I have no idea why you decided to focus on Tucson. What's Tucson have to do with the rest of the country?

I'll repeat again what ive been saying. We're at bottom and turning the ship around. Ships don't turn on a dime but this ship will turn around. Yes, we will see stories telling us that we are way down from this time last year and those same stories will blunt the good news (Just as the aforementioned article does) but it won't change the facts.

The housing market is done correcting.

I just have to at the bold, that makes no sense. Who cares what we are building, we have RECORD inventory. You aren't even addressing that. Your argument seems to consist of the fact that even though we have a shit ton of empty new homes for sale, because we are building less, we are selling less. That is just dumb (really not trying to be rude). Second of all, who cares what the source of the graphs is, they report NAR figures, so are you laughing at the NAR?

here are some more graphs for you to laugh at, hint, these are from the census bureau figures, laugh at the pain of these:

http://bp0.blogger.com/_pMscxxELHEg/...HomeQ32007.jpg

http://bp0.blogger.com/_pMscxxELHEg/...pplyQ32007.jpg

http://bp0.blogger.com/_pMscxxELHEg/...ns%2BAug07.jpg

Under your assumption we are having less sales because of reduced building. It would seem to me that sales have absolutely ZERO to do with that since we have high inventory. Care to debate against that?

Cancellations are a BIG problem and the census bureau doesn't revise its figures if a home that was to be sold was then canceled on (if already built).

Yep..rule #1 is the bull market goes on well beyond what seems rational.
But unless the big players are supporting it, the end result is unavoidable.
Thusfar the big guns have not supported the 14k levels but that could all change, anything goes when there is that much money at stake and that many millions of emotions and opinions at work on 1 auction.

ETFC E Trade

Not laughing at the NAR. There are lies, damned lies and then there are statistics. Certainly you've heard that? So i'm laughing at your source graphs, who decide to show statistics to support the theme of their website, HousingDoom. What would they do if there were statistics that didn't support them?

You seem to think that the debate we are having here is over whether or not the housing market has gone down over the past year.

Allow me to end that conversation right now. I conceed. The housing market has been coming down, in some places, since 2005. You won't hear me making the argument that housing hasn't gone down over the past year or two. So why are you trying to argue against me on that since I havn't made that argument?

Of course I care to debate that with you. Why else would I bring it up? High inventory isn't the only factor to consider in housing sales data. My house was up for sale for some time (Over 6 months, closer to 9 months I think) and it didn't get listed anywhere accept Craig's list for most of that time.

There is a big difference in selling homes between folks like myself on Craigs List and new homes where they are offering all sorts of goodies to move into that new home.

This should just be common sense. If you have 1 million new homes for sale and 1 million old homes for sale the new homes will have more advertisement and be more appealing to folks shopping for homes. Therefore you'll have a lot more homes selling out there because of the home builders pushing to sell their homes.

Not only that, but there are groups out there who invest in these new homes by making a certain number of purchases before the first nail is hammered into the wood. For example, when we bought our home in 2003 we bought the last one they had for sale. It was the 3rd or 4th stage of selling. Had we gotten in in stage 1 or prior, we could have saved about $20,000.00. Those folks who bought early were able to flip their houses at a profit right when it was built.

You can't do that with older homes that have already been built.

Another thing that is important is that new home builders are only in the business to sell those homes and make a profit. Whereas when my parents put their home up for sale and it didn't sell, they shrugged their shoulders and decided not to move. Big difference.

So yeah, I do care to debate against your assertion that because we have a lot of homes for sale, it doesn't matter that new home builders aren't building as much. It does matter, a great deal.

Cancellations are a big problem if its a new home builder because they have to sell their home. My parents don't have to sell there home. A whole bunch of people saw the run up in home prices (like my parents) and thought to themselves, "Heck, we'll take out our equity and move somewhere cheaper, cuz we're retired". When it didn't happen, nothing changed and no one was hurt.

I notice though that you havn't bothered to address my initial point about that article. You've ignored it completely.

It tried to give us bad news (Kind of like using statistics to tell lies) about the housing market because gee whiz, the housing market has been coming down for the last year.

But the content of the article was good news. Things went up in September. Things will go up in October too and November, because we've hit bottom. But the numbers compared to last year, when things were still high and coming down, will be bad.

Why?

Because we don't come back up that quickly. Get it?

Care to argue against that?

I will debate on that. Right now we have data up through September. September was LOWER than August's original numbers, but once they revised August we were higher than the LOWER revised numbers. To say we are rebounding because we are higher than lower revised numbers seems foolish to me. But, as I said before, we are going to be flat to down, there is no doubt about it.

Furthermore, the statistics that are used on those graphs ARE COMMON STATISTICS USED BY THE NAR. New home sales and existing home sales are normal statistics, you can't lie on those since we are using NAR published numbers that EVERY major news agency uses. Hell the NAR uses these numbers as punch lines, you are really stretching to try and discredit the graphs. I think if you visited the site you would see that it is well run and not full of OMG the world is doomed, bankruptcy!

And yet we aren't seeing that, hmmm.

I do concede that the media tries to get the headline and portray everything as negative (It's the end of the world!!!), but again we are comparing revised low August numbers to September numbers that are a SMIDGEN above them.

Either way, if we see stability through November sales then I think we're pretty safe from a big smash down. The reason I say November is because of the recent turmoil and because there has to be enough time to actually say we've stabilized. One bump up does not signal a reversal or a bottom, just like stocks.

I have not tried to descredit any graphs. Ive disagreed with the implied interpretation of the graphs.

The conversation, or so I thought, revolved around a media report which said two things:

1) September 07 was way down from September 06
2) September was expected to be down 1% by the "experts" but instead was up a "smidgen" as you call it.

My point was pretty simple. We all know that over the previous year (And more) the housing market has come down off its highs. Therefore, comparing last September to this September is a sorta, "Duh" moment. There's no possible, conceivable, sane way that the market could get back to September 06 levels. Just as there is no possible way for October to be anywhere near 06 levels. We all know that, we've come down over the past 12 months.

So putting out headlines and comparing those two is really quite silly. It doesn't tell us anything other than what everyone already knows.

Instead, what gives us information is, are we still going down, or we flattening out, or are we coming back up?

Your position is flat to more down. My position is flat to back up.

Also, either way, comparing numbers from last year to this November won't tell us anything about the direction of the market. Instead, it will just tell us where we've been and we already know that.