Good article puts some perspective on the numbers this week - showing existing sales down, then new homes up... basically intent does not equal execution - keep that in mind dear reader
When an exiting home is resold it is not counted as sold until the title has been legally transferred, i.e., the Deed of Trust granted to the buyer. This is like a marriage for the new buyer. However, the same standard is NOT applied when a New Home, or New Hope, these days in places like California, is reported as “sold.” Unlike the buy of an existing home, the New Hope “buyer” is merely letting know his intention to date. Lot can happen between that intention and the altar.
How Many Ways Can We Mislead You?
Hopebuilders are members in good standing of Corporate Crooks of America. The number one requirement to join this band of brothers is the oath to put out reports that have at the minimum misleading headlines, but unusually data that does not exactly mean what it says, and to profit personally from such ploys by selling the company’s Scam at a much higher price than they would have been able to sell otherwise with totally honest reporting. The most successful Crooks among Hopebuilders, recently, have been the two Toll Brothers and the CFO of Toll Brothers.
December 01, 2005
New home sales report: How many ways can we mislead you?
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More on the House of Cards:
FIFTH STRAIT MONTH SPENDING MORE THAN EARNINGS....Good Grief!
AP-By MARTIN CRUTSINGER
December 1, 2005, Stated:
"Americans' personal savings, a percent of after-tax income, remained in negative territory in October at minus 0.7 percent, the fifth straight month that the savings rate has been in negative territory. This means that people have had to borrow or dip into savings to support their spending."
Do. not. trust. your. government. period.
there is no truthful news on inflation. When the fed changed their metric in the 1980's for housing to be rental cost, vs. ownership costs, they screwed the pooch (and us)
see http://quote.bloomberg.com/apps/news?pid=10000039&refer=columnist_baum&sid=aa49I53YXUPw
The source of the measurement error is the imputation of a rental value for owner-occupied homes. Conceptually, rental equivalence is a good way to measure the cost of housing consumption, which is what the CPI measures. The problem arises when a single survey of rental units is used to impute owner- occupied rents at a time when the characteristics of the two markets are grossly different.
The owner-occupied market is vibrant, with strong demand, fast absorption of new supply and low vacancy rates. The rental market is plagued by weak demand, slow absorption, and high and rising vacancy rates, which hit a 50-year high of 10.4 percent in the first quarter of 2004, according to the Census Bureau's American Housing Survey. That compares with a 1.7 percent vacancy rate in the owner-occupied market in the first quarter, little changed since 1997.
A little history is in order. Until the early 1980s, the Bureau of Labor Statistics calculated housing costs in the CPI from home prices, mortgage interest rates, property taxes, and insurance and maintenance costs.
Because a house is not just a home but also an investment, and because the CPI is a measure of consumption costs, the BLS abandoned the asset-price approach to housing costs in favor of an imputed rental value in 1983.
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