June 06, 2007

Hmmm... It's tough, but can anyone see the housing bubble (and crash)?






Damn that Phoenix chart is ESPECIALLY funny. The Detroit one is the saddest. And Tampa and Miami are great examples of falling off a cliff.

I love charts and graphs. But damn, the NAR and ramen eaters must hate these.

61 comments:

Agent #777 said...

How can you say we are in a housing bubble? Charlotte is nearing an all-time high!!

Anonymous said...

We've only just begun

Anonymous said...

Colorado Springs isn't big enough to qualify for a chart but we were down 14%yoy in March, 15%yoy in April and 18%yoy in May. One of the local realtrolls thought this was a good thing that would cleanse the market of speculating. Well most of the speculators are probably gone. Unfortunately they were the only people dumb enough to buy.

Anonymous said...

You ignorant sluts. Before we can call a crash I'll have to analyze the data, plotting the variance and standard deviation to obtain the margin of error, then recalibrate the Framistan coefficent and I'll get back to you then.

Honestly, how can people without a Ph.d in economics possibly understand this?

mendoman said...

I just talked to family in Northern Cal and guess what houss are selling. And guess where 3 of the 4 are moving to.... Oregon. Glad I bought years ago and have a renter paying it off for me.

Paul E. Math said...

Hmm... I don't know. Something seems fishy about all these charts. Like, why do they all seem to be trending downwards, you know? What's up with that? It almost makes it seem as though home prices are declining - I'm not saying, I'm just saying. Even Cleveland, where they never really experienced significant rises, it looks like it's declining, according to the chart - how can that be?

I, I gotta go - I gotta talk to Suzanne.

Anonymous said...

Here in Atlanta the talk is that we're (of course) different than everywhere else. The crash is only happening in Miami and Phoenix and other bubble cities. We're immune because well we just are, the "experts" said so therefore it must be true. So go ahead and put down that $100K deposit on a $500K 1 bedroom condo in Buckhead, nothing to worry about in the A-T-L.

What the doofuses don't get is that thousands of people moved here and bought homes from Florida during the boom. They sold their shitbox for $500K in Miami and bought a $400K McMansion here. They also bought an Escalade and a boat and a 75" plasma and all the furniture for that 4500 sq ft monstrosity. That party is over. No more funny money coming to town anymore. In a city with a median income of $42K, who the hell will anyone afford that $400K home now that toxic loans are bye bye? Add in the just mind numbing foreclosure rate around here and I can't see how anyone can look at the situation and not see disaster up ahead.

I started tracking 14 homes on zipreality in March. Of those 14, 1 sold. Of the 13 left, 7 have lowered the price, one of them from $625K to $595K to $545K.

But it's different here.

Anonymous said...

You ignorant sluts. Before we can call a crash I'll have to analyze the data, plotting the variance and standard deviation to obtain the margin of error, then recalibrate the Framistan coefficent and I'll get back to you then.

Honestly, how can people without a Ph.d in economics possibly understand this?

----------

STFU!

SPECTRE of Deflation said...

FUGLY, and thanks Keith because a picture(s) is really worth a thousand words. What a train wreck, and we have barely left the station.

Big Cheese said...

Hey Keith,

Are these numbers adjusted for inflation and US dollar devaluation?

Anonymous said...

HA! I'm moving to Charlotte to get in while it's still going up!!!

What's NASCAR by the way???

Anonymous said...

I can't believe Detroit was in 10% appreciation range in the 90s. It's fucking DETROIT people, you'd have to be insane to want to live there.

Agent #777 said...

I think Orlando area median has fared pretty well so far (down 4-5%) but here is a little extra point:

I have an approx. 3 mile x 3 mile square search mapped out around my previous house. In Aug 2005, there were 9 active MLS listings in the search. The last time I checked it maybe 10 days ago, there were 184, with 73 sold YTD. At that pace, that is about a 1 year supply. And this is a popular middle class area, with sought after schools.

Anonymous said...

Do you think that means that PHX will correct the fastest since it had the most rapid runup?

Anonymous said...

I hate to keep banging the drum (well actually I rather like it) but please to notice that "most charts really begin to ramp up during 1997. True there are exceptions like LV which was basically flat-lined until much later and towns with regional challenges like Denver and perma-depressed towns like Detroit.

By and large though across 3,000 miles and 270 million people collectively as a country it seems a certain "catalyst" took place in right... around... 1997? Now just what could THAT be? Hmm?

DinOR

Anonymous said...

Despite the only glaring conclusion that these graphs indicate I'm sure the realtwhore REIC trolls will be in DENIAL and post some trite/lame comments.

Anonymous said...

How many sold in Las Vegas in 2004 and bought in Charlotte?

Marky Mark

Osman said...

Well, I don't understand them. Are they % change in median home value? What's the data source? And most importantly, the scales are different in a significant way. Denver (my region) is on a scale of 0-20. Chicago, a scale of 0-12. Phoenix? 0-60.

You can make minor changes look like a massive swing if you adjust the scale. In any case, at a quick glance it supports the regional nature of the bubble.

Pass the Ramen.

Anonymous said...

Hate to sound stupid, but what are these graphs of (number/% of sales, avg house price,etc.) just curious the graphs are not labeled

Anonymous said...

yeh but look at the texas charts.... i was thinking that this stuff is going to hit texas too. all the mortgage babes are running around saying no way.........but i tend to think that what goes around comes around....

Erick said...

I like your effort but to add credibility to your graphs, can we standardize the graphs to have the same scale on the x & y as well as label the axis? The year (x) axis is obvious but what is "y"? Cans of beer?

devestment said...


Annon. said...
You ignorant sluts. Before we can call a crash I'll have to analyze the data, plotting the variance and standard deviation to obtain the margin of error, then recalibrate the Framistan coefficent and I'll get back to you then.

Honestly, how can people without a Ph.d in economics possibly understand this?



Devestment responds...
I think it is the same for a political figure who is insulated from real day to day issues impacting the common man who is expected to serve people who are not. All the education in the world won’t change the price someone is willing to pay for an asset. Oh and Ph.D should look like this, “Ph.D”. I assume you are a realtroll who does not have one.

Anonymous said...

Seattle is bubble prooooooooof

Aaron Weber said...

What's the Y-axis label on these? Looks like a percentage change in something, but ... in median price? in number of sales?

Anonymous said...

How can someone with a "Phd" call me an ignorant slut?!?

Anonymous said...

Is that chart saying that Boston peaked in 2001? Hmmmm...

Anonymous said...

The reason that Charlotte is booming is because everyone who sold at the right time in SW Florida took their money and bought in North Carolina. So, NC is just behind everyone else on the bubble chart. Their time will come!

Anonymous said...

Actually these are mostly showing just zero appreciation (e.g. they are holding onto their gains.) Only in a couple markets are there actual declines, per the charts.

Anonymous said...

A crash!!!!!!!!!!!!

Agent #777 said...

About "Mr Ph.d"...

It is amazing the number of people who come here that don't get sarcasm. He is trying to make a funny - I would have thought that the "Framistan coefficent" would have given that away.

robert said...

http://biz.yahoo.com/seekingalpha/
070604/37282_id.html

Scroll down to the bottom for an explanation of the charts.

Mort said...

Keith lets troll comments like "you ignorant sluts" through but deletes mine. He can dish it out, but he can't take it.

Anonymous said...

On the way to negative - there is zero...

die broker scum!

Anonymous said...

Realtors Cut 2007 Forecast Again

June 6, 2007 11:07 a.m.

WASHINGTON -- The National Association of Realtors again lowered its U.S. housing market forecast for this year, saying the market remains "soft."

Anonymous said...

These charts prove what exactly...1/2 the cities are still well into positive price appreciation.

keith said...

We're just getting started folks. For the "but it's only dropped a bit so far", you got one part right

"So far"

Manias are fun on the way up. Panics are a bear on the way down.

Leverage is fun on the way up. Leverage will kill you on the way down.

Home Equity Lines of Credit (HELOC's) were fun on the way up. HELOCS that you now have to pay back suck on the way down.

And buying at market peaks is just plain nasty.

Rent.

Rent now.

Rent before it's too late.

foxwoodlief said...

What does those charts mean? I don't see house prices here in Phoenix below 2000 price levels. I posted several examples of homes I've looked at over the past four months and none are bargains or even back to 2004 prices let alone 2000. The one house I saw this Sunday was $615,000, 2005-435,000 (not renovated) and 2000 $135,000. Sorry, those charts don't tell us anything. I'll believe the crash is here when I can buy a house for 2000 prices...or even from the early 90s but at the moment...

Anonymous said...

Anonymous said...
These charts prove what exactly...1/2 the cities are still well into positive price appreciation.

June 06, 2007 6:50 PM
-----------
Ummm, are you blind???!!!

13 are at zero or in negative appreciation

4 are slightly above zero, but with downward trends in pricing, i.e. on the way to going negative.

1 is positive and on a positive trend (Charlotte)

Anonymous said...

I'm sure the appreciation will simply "level off" and remain flat for the next 5 years before we start to see gains again. Yeah, right.

bought_high said...

The party of appreciation is over, but geez - learn how to read a chart. If the home appreciation went from 20% per yer to 2% per year, you would call it a crash?

Now I imagine there are going to be some negative numbers coming up - which is a crash. But until we see the percentage drops - these charts are merely showing a leveling off..

Anonymous said...

bought_high said...
The party of appreciation is over, but geez - learn how to read a chart. If the home appreciation went from 20% per yer to 2% per year, you would call it a crash?

Now I imagine there are going to be some negative numbers coming up - which is a crash. But until we see the percentage drops - these charts are merely showing a leveling off..

June 06, 2007 8:14 PM
-----------
Obviously you're "bought high" handle is referring to the fact that you "were high" when you executed the transaction. The charts clearly show downward trends in to depreciation/negative territory and not a mere leveling off.

Anonymous said...

Instead of doubling my money every 2 years like I did 2000-2005 I'll only make 2% a year. Oh No!! The horror of it all. How will I ever survive?

Renters not only can't do basic math they can't read a simple chart either. Going from 50% to 2% on the positive side is not a crash you dolts. What else would I expect from blue collar, uneductaed, union slobs afraid of immigrants and trade?

Go on send another $100 to Ron Paul suckers.

Anonymous said...

Anonymous said...
Instead of doubling my money every 2 years like I did 2000-2005 I'll only make 2% a year. Oh No!! The horror of it all. How will I ever survive?

Renters not only can't do basic math they can't read a simple chart either. Going from 50% to 2% on the positive side is not a crash you dolts. What else would I expect from blue collar, uneductaed, union slobs afraid of immigrants and trade?

Go on send another $100 to Ron Paul suckers.

June 06, 2007 9:07 PM
---------
1-"uneductaed" is spelled --uneducated--

2-No market had a 100% appreciation rate every 2 years from 2000-2005

3-A 2% annual appreciation rate after inflation is depreciation, i.e. a negative rate of appreciation.

4-I have no knowledge of the station of HP'ers in terms of their employ or education level. I do know that to be realtwhore only requires a one time state administered exam and has no substantive educational pre-requisites, i.e. one could be an idiot such as yourself and qualify as a realtwhore.

5-Many investments have a valuation based upon their future performance in terms of return on investment. Housing is a very capital intensive asset with substantial carrying costs relative to stocks. Thus as an investment, the massive drop in the rate of appreciation YOU QUOTE is a crash for that asset class.

5-You're a LOOOOOOOOOOSSSSSSSSEEERRRRRRRRRR

Anonymous said...

"uneductaed"

oh, the irony.

Mozo Maz said...

I'll add my 2¢ since I live in Charlotte. This town has a few areas that have done very well, doubling in 4 years just like the bubble towns. But large swaths of the city have seen the usual 4 to 5 percent YOY change. FWIW, I think most of east side Charlotte is stagnating, and turning into a third world barrio.

Rents are getting out of line with purchases in center city. You can easily rent a nice 2BR condo for $1000 in Dilworth that would cost $2000 a month to purchase.

We're behind the curve, but it will even out at some point.

Adam said...

Generations of home buyers have heard the mantra, "a home is the most important investment you'll ever make". It's still true, but not for the reasons people have typicallly said.

In the past, the person repeating this truism was living back in the days when most people worked for a company that offered a pension plan (i.e. before 401k and IRA plans), and paying the monthly "nut" served as a sort of 'forced' savings plan. This was even before the days of HELOC, etc. But the idea was that putting the money into a mortgage DID give you a bit of a shield against needing to pay rent for the rest of your life...

Lately, though, this slogan was seemingly validated by the recent speculative "boom" and associated price run-up, where those incredible prices started a positive feed-back loop: people saw the appreciation and decided, "hey, I want to get a piece of THAT, TOO!!" Soon anyone who was on the sidelines decided they should buy, too, and anyone who owned one home decided to buy a vacation/rental property, too. The real lure though, was the rapid price appreciation.

Now we throw in Bush/Greenspan's Ponzinomic policies (1% interest rate, changes in capital gains taxes, etc) and all the stops were off: the climate encouraged speculative investments, and the conditions for a classic market run-up were created. The speculative game seemingly proved that buying houses was a 'can't miss' investment!

The problem is there's NEVER been a bubble that HASN'T eventually imploded, and this one is no different: what goes up MUST come down. There's no way around it.

It's ironic that Sir Isaac Newton, the physicist credited with discovering gravity (remember the falling apple?) didn't realize the same principle applies to asset bubbles! He lost a lot of money in a classic "South Seas" investment bubble, being seduced to invest more heavily after he realized early success. After the collapse, he was quoted as saying, "I could calculate the motions of heavenly bodies, but cannot calculate the madness of men."

But back to the subject, housing WAS a great investment from 1998-2006, but only IF you bought a house and sold it at the right time before the collapse!

No doubt, flippers made a TON of money in the price run-up IF they sold at peak, but the problem is the wreckage left in their wake has left devestating damage to our economy (with over-extended buyers facing foreclosure, or over-extended buyers who've committed so much of their resources to their homes, etc. Don't forget those over-inflated prices that essentially preclude TRUE homeownership for most first-time buyers, at least those not willing to resort to risky "toxic" mortgages).

So the old chest-nut, "your home is your most important investment" is now no more truthful, primarily because time your purchase at the wrong time and it'll be the BADDEST investment you wish you HADN'T made!! The downside of buying at the wrong time has NEVER been more devestating, since the bubble has NEVER been larger.

Most of the people who's opinion I respect on market timing seem to think we'll hit bottom by 2011/2012, but obviously things change. So until that time, save/invest your money (no use squandering it in a house now, only to watch your "equity" that you haven't even BUILT disappear!).

FWIW, no one here is a perma-bear or perma-bull, and the reality is a lot of us simply want to buy at a reasonable price: hence we've been side-lined for a few years now by market foolish, waiting for things to stabilize (and frankly, I thought the bubble would burst before 2006, but I was off by a year or two).

Since we're seemingly living in an age of sequential asset bubbles and government-sponsored Ponzi schemes (thanks GWB!), it's important to realize how important market TIMING is, and realize it's everyman for himself nowadays! Enter the market at a bad time is like commiting financial suicide....

Adam said...

Keith said:

Home Equity Lines of Credit (HELOC's) were fun on the way up. HELOCS that you now have to pay back suck on the way down.


I know you know this, but I just wanted to clarify something you stated above incorrectly.

Regardless of how much equity you have in your home, a HELOC is ALWAYS a loan. You ALWAYS have to pay back the loan amount, regardless if the equity is growing or shrinking.

Unlike what people think, HELOCs do not 'extract' equity, and you're not "getting at" your equity, etc.

Borrowers are simply taking out a bank loan that is SECURED by the property deed.

Worse part is that some borrowers will take out a HELOC or ri-fi, not realizing they've eliminated the homestead protections some State afford to 'home owners' in the event of filing bankruptcy. Hence, taking out a HELOC or re-fi might mean losing the house in the event of falling behind (foreclosing).

Anonymous said...

it seems like non believers and the scoffing trolls, are becoming more silent as of late. truth must be setting in...

Anonymous said...

oh for crying out loud a typo does not equal uneducated. Uneducated is not knowing the difference between you're and your as is so often the case here. Or it's and its, there/they're/their.

That is a sign of no education, not a typo.

Anonymous said...

Now we throw in Bush/Greenspan's Ponzinomic policies (1% interest rate, changes in capital gains taxes, etc) and all the stops were off: the climate encouraged speculative investments, and the conditions for a classic market run-up were created. The speculative game seemingly proved that buying houses was a 'can't miss' investment!

-----------------------------------

The capital gains change of 2003 did not affect gains in real estate. The change that did - making $250K/$500K r/e profit tax free after 2 years - was passed in 1997 under guess who??

If you are going to spew left wing vitriol at least get the facts straight.

And how come none of you liberal Democrat filth ever blame Clinton for the .com bubble and bust? If Bush is responsible for the housing bubble Clinton is as responsible for the .bomb

Anonymous said...

Just look at the trendlines you morons. It's definitely headed into negative territory if not there already. On top of that, all those morons who bought overpriced homes were banking on massive appreciation to justify the high prices. Even if RE prices drop just 3%/yr for the next 5 years, those people will face huge losses if they have to sell.

- closing costs = $7000

- 3% loss/yr x 5 yrs ($500K home) = $70,600

- selling fees (4%) = $17200


That comes out to a $94,600 loss on only 3% annual losses for five years. That's on top of the loss to inflation and much higher cost to own.

kitchenstove said...

A house that appreciates 300% only has to go down 75% to be the price it was originally, before it appreciated. My city is on this chart, and I can already say for sure that housing prices here have dropped 25 - 30% from peak.

Anonymous said...

Looks like a great buying opportunity accross the aboard, diversify by purchasing a property in each one of these states and you will be on your way to wealthy street.

Anonymous said...

Anonymous said...

oh for crying out loud a typo does not equal uneducated. Uneducated is not knowing the difference between you're and your as is so often the case here. Or it's and its, there/they're/their.

That is a sign of no education, not a typo.

June 07, 2007 1:45 AM
-----------
or the difference between a bursting ponzi scheme and a normal/rational market, which is the case here:)!!

james dean said...


Anonymous said...

oh for crying out loud a typo does not equal uneducated. Uneducated is not knowing the difference between you're and your as is so often the case here. Or it's and its, there/they're/their.

That is a sign of no education, not a typo.


This is the dumbest comment ever - and I have seen this troll before. He will decide (from your error) that you are uneducated! Each person has their own erroneous idiosyncrasies that linger from childhood. Blogging does not need to be 100% correct, it is something snuck in during odd moments of the day (while working, ect) and without spellcheck. Look to the chat world and their excesses! This guy is obviously an uneducated idiot. I wonder if you have ever had your vocabulary tested. Mine in the 99th percentile. Hmm, maybe that's how I SHOULD JUDGE PEOPLE.

Anonymous said...

I agree with the Charlotte posts. Some places have doubled, some are the same. Charlotte is still overpriced compared to some cities. What concerns me is (like Phx/LV/Miami) Charlotte is full of recent buyers who have no jobs and still live in other parts of the country. Furthermore, it economy is based heavily in banking and contruction.

Anonymous said...

guy daley said...

I can't see it

Anonymous said...

Typo's???????

BFD

Anonymous said...

How many of you left wing loonies were blaming Clinton for the dotcomonics that destryoed trillions in wealth?

Anonymous said...

Anonymous said...
Typo's???????

BFD

June 07, 2007 4:22 PM


--------------------------------
You mean typos? Not knowing when to use an apostrophe is yet another sign of the lack of education here.

That is why you rent.

Anonymous said...

99th percentile in vocabulary according to whom? A website that tests your IQ perhaps? HA HA HA HA!! Only the most gullible rubes believe that shit. Oh and let me guess it only cost you $12 to find out you're a genius.

You renters are too much.