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Visualizing The Distribution Of New Home Sales By Pricing Bucket
The earlier post citing Rosenberg's claim that there were no new homes sales in July in the $750,000+ bucket has generated quite a controversy. It appears some are stuck up on the Census Bureau definition's of footnote Z (Table 2 of the linked excel sheet) which is the designator for home sales for June and July, defined loosely as "Less than 500 units or less than 0.5 percent." Since this is an open ended range, and could indicate 0 just as easily as 500, we leave it up to our readers' imagination to draw their conclusion which end of the range is correct. However, what is without question, is that as of July, the combined proportion of new homes sold in the over $400,000 range, is the lowest it has been in a year. For the first time since July 2009, the houses costing $399,999 or under as a percentage of total has crossed 90%. And like the claim that the quality of the New York Times journalists is the best in the world, there is just no debating that (unless of course one wishes to brand all the data emanating from within the bowels of the government's data machine as questionable at best).
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Too late. I already fanned the flames of the fire. And sorry about the controversy.
Off with his head! ... oh wait ...
I think you meant, off with his hedge! Zero hedge for you! oh right, you're already here.
I was watching Tim Burton's "Alice in Wonderland" with the kids a few days ago, so I was channeling the Red Queen.
How dare you live a full and happy life involved with your children and family when the rest of the country is reenacting those old Tiddy Bowl commercials. At the very least, you should have spent your family quality time in the Mall spending money you don't have.
I thought you were a Patriot courgar_w? Shame shame on you. :>)
Reminds me of the classic George Carlin routine on consumption - "we're out buying shit we don't need with money we don't have." Truly a genius.
I can only imagine what he would be saying today - so much more material to work from.
My only redemption is that there were undoubtedly a hundred product placements in the movie. Not that I am susceptible to anything as low-brow as that.
Excuse me now, I have to complete this online transaction for the Vorpal Blade food-o-matic processor with red and white LED readout and 65 settings from "diced" to "frabjous". Only $179.99. I might get one for my wife, too.
They are throwing in a free Jabber wok if I order now. Not sure what that is, but I suddenly like it.
You sound like a daytrader...
The problem is qualifying for a loan of that size. In March I sold a home for 150k that I got no offers on it at 175k, because the buyer was prequalified for that amount. I thought it was a gift at 175, but had no bid for 30 days and we wanted to move that house before the tax credit expired. The only houses that were selling in that market were under 150k according to our realtor, she was right. The buyer used an fha loan and put no money down...
Well look at it this way, that will be the most expensive tax credit that buyer ever got. Just wait to the house is worth 10X less. Sure makes that tax credit a "gift" doesn't it. (sarcasm)
hehehehehehe...
March 2010....FHA loan...150k....no money down....
oh stop, no more comfy chair!! Stop!! No more tickly feather!!!
Stop!!!
HAhahahahahahahahahaha...
+1000
Bottom line is the Census data sucks. There are better sources.
It could equally be 0 or 500 - that's true but it is besides the point. Rosie shaded the truth when he said "zero" and he is being taken to task for it appropriately. Even using 499 new homes @ +$750K in July would have been worth noting. His credibility is lessened by this, and that will be to his detriment.
I can tell you there were at least 600, and likely closer to 700 when all the numbers are in.
The Census New Home Sales survey has a frighteningly small sample size, which is why making any sort of absolute proclamations based on their data is folly.
0.5%? I'm all in! dow 60000 bitchez!
Smart folks know high-mid range RE prices will fall further and are waiting to buy.
Only the very wealthy and the DDD (Death, Divorce, Disaster) crowd are buying things over USD 1 million now.
My guess is that a bucket size under 500 is "essentially zero" because they know they have that much slop in the reporting. Remember, even these hard numbers are just estimates in the end, subject to revision at any time.
It's worse than that, volumes are so low right now that on a month-to-month seasonally adjusted change basis, the percent error usually exceeds the delta. In other words, they usually do not know if they actually went up or down. Your only hope with the data is to look at the non-seasonally adjusted data yourself and rely on a trend series of year over year changes, or a manually calculated rolling 12 months, year to date aggregate, etc.
Oh. God. Then why are we even having this discussion?!? No, rather why are they even collecting this data and reporting it as real? How big is their budget for this activity? Is any of this crapola backing policy?
Statistics. It's not just for geeks anymore.
Forgot to mention they don't take into account contract cancellations either, heh.
Because the Ponzi is entirely dependent upon willing suckers continuing to line up for loans and then "working" to earn money to pay off those loans so they can take new ones. So manipulated data is created (often out of thin air) to convince average Joe that all this isn't a colossal waste of their time and maybe even detrimental to their health.
If that conclusion is ever reached by a significant portion of the masses, the system collapses under it's own weight. But of course, you knew that already. I was just answering your rhetorical question. :>)
That's one of the best posts I've ever read. It's so true; and I'm beginning to think that we're entering phase next where "a significant portion of the masses" is reaching the same conclusion. Whooo, that's scary!
It was a rhetorical ploy.
This is how we make progress -- one ploy at a time. It is evil, but a good kind of evil.
Without 'discussions' such as this the GOOGLE model would collapse. The ads surrounding this site and all the others are paying some people a gang of money to attract 'hits'.
We would have stopped believing government data decades ago without the benefit of the ultimate Con perpetuated to support that data. What Con is that? It's the "news" and information Con, pushed by the so-called free press and which bills itself as fiercely independent and the government watch dog that ultimately secures our "freedom". We're so busy pointing at the governmental/corporate/bankster corruption that we forget how completely the press has been corrupted as well.
Without a captured and compliant fawning corporate mass media, the average Joe would have recognized long ago that they were being pooch screwed by their own watch dog. Now everyone is so far into the deep end that strange bed fellows are being spawned. While average Joe no longer believes what he hears, regardless of the source, average Joe's very existence (meaning just in time deliveries of food and other basic necessities) is dependent upon the economic system continuing.
Thus we're all captured to some degree or another. Which makes us all susceptible to blackmail and extortion. That includes those of us on ZH who claim to be independent of the system. As long as 95% of the population is clinging to the system, the tidal wave released when they're finally swept away will also take us under. This is why we must work together or drown separately.
This, of course, excludes Mako, who lives on another planet and always talks about "you humans". Maybe he's God?
As you say, it is difficult to eliminate bias. Even with the best of intentions.
Bias is the difference between truth and what we expect to discover when we make a 'measurement' of the truth.
A 'measurement' of the truth is made by humans who can only measure relative to their construct of reality. That construct of reality is mainly defined by other biased measurements.
As an example, consider your reflection upon this biased report that purports that Palestinian children die more often than Israeli children. Are you incredulous or outraged, or simply unable to trust? What does this indicate about your bias?
http://www.ifamericansknew.org/media/secret.html
Media reports are a form of 'measuring' the truth.
What is reported may be an 'honest effort' at journalism by the journalist, but may still be biased. The commercial interests influence or even dominate the environment of the journalist and his editor and publisher.
Commercial interests follow the money. Ultimately, the money follows the money.
def. Media (te)
To get between an event and the people for the purpose of reporting on it.
Room for all sorts of shenanigans, as CD eloquently states.
My take: death, one per customer. Nobody dies more than anybody else. Collect now or collect later, it's all the same to the Grim Reaper. He gets paid per unit, not per hour.
Dr. Sandi-
We [edit: me/my unit 1990] put young lads into harms' way and the final injunction was always a) take care of each other and b) take as many of them with you as you can.
So yes, the collective perception is manipulative. But, since young kids under the leash are "our" young kids, we kinda' wanted to save them from any of the four horsemen until, like, they were going on 90 or so.
Mostly succeeded in the early trip, not so much in the later trips to the sandbox.
- Ned
So what %age of homes are sold +$750m in a 'normal' market? Look at the AUG-09 data - just as low...
However, I agree with the general premis, the RRE market is toast for the next few years no matter how you slice it. Supply glut, unavailable credit, additional supply coming online from boomers downsizing...
Over the last 5 years or so it's about 3.5% for resales and 4% of new homes. So far this year it is about 3% for both.
So not that different on a relative basis - indicative of the secular decline in housing sales overall, not simply a decline in high-end real estate...
Correct, and actually earlier in the year the higher end was doing a bit better because they buyers in those price brackets tend to have more financial resources (and equity) to make transactions happen, whereas the broader home buying populace is trapped by being underwater on their current mortgage.
Of interesting note, the public homebuilder doing the best at the moment is Toll Brothers, and they have a substantially higher price point than average.
....a tear down 3 doors from me just sold for $850K...it is a second home for the buyers....so there are the haves and the havenots....with an ever widening divide....as we become a third world country.
Article from the Wall Street Journal :
Companies such as Macerich Co., Vornado Realty Trust and Simon Property Group Inc. have recently stopped making mortgage payments to put pressure on lenders to restructure debts. In many cases they have walked away, sending keys to properties whose values had fallen far below the mortgage amounts, a process known as "jingle mail." These companies all have piles of cash to make the payments. They are simply opting to default because they believe it makes good business sense...
More landlords are expected to follow suit. Of the $1.4 trillion of commercial-real-estate debt coming due by the end of 2014, roughly 52% is attached to properties that are underwater, according to debt-analysis company Trepp LLC. And as the economic recovery sputters, owners of struggling properties are realizing a big property-value rebound isn't imminent.
Owners of commercial property have an easier time walking away than homeowners because commercial mortgages are typically nonrecourse. That means the biggest penalty for walking away is the forfeiture of assets and cash flow they may generate.
Read the full article here.
Jeez, and I feel guilty when I don't bring back a library book on time.
No surprise here. I'll bet FDIC data shows res/all loans shrinking in banking industry in Q2 as well. There is little financing available in the $750k range, so I would agree with the Rosenberg datapoint on sales. As one of my colleagues said earlier today:
"The GSEs and TBTFs have imposed poorly understood frictions on the mortgage market which are preventing those very same households from being able to exercise their contractual call option. The LLPAs and big bank profit margins are keeping mortgage rates to most performing borrowers 150 to 250bp above the 'mythical mortgage rate'"
Chris
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