House Price Comparisons

Just sayin'...

Over at vancouvercondo.info is a constant stream of listings and sales data from commenters for the Greater Vancouver area. The listings growth is robust, as is the level of sales. We are on track to bust records for April listings and sales in recent memory. What will happen to prices, specifically the benchmark and house price index?

According to mohican's months of inventory to price change correlation analysis, the benchmark price will not start substantially falling until sales slow or active listings continue to increase at breakneck speed. Below is the half-over-half prices changes and 3 month moving average of months of inventory (i.e. active listings at month-end divided by sales from the month) on a time and scatter plot. (I extrapolated expected April MOI on the time plot.) This series provides the best correlation of the data. I've also included the scatter plot on semilog which allows the low MOI data to be better resolved.


Although not immediately obvious from the graphs, assuming the rate of sales does slow, a meaningful price drop from current levels is unlikely to materialize until sometime in the summer. If sales remain robust it is unlikely prices will drop unless active listings significantly increase. It's worth asking who is selling, or trying to sell. That listings are increasing fast may be a harbinger for lower sales going forward.

Given there appears to be an integral component to listings growth, it is unlikely listings growth will slow until sometime in the summer. Hat tip to PaulB for the hourly numbers. This one's for you and the inventory junkies. Subliminal message at 1:05.

Intrade Odds Above 50% for Reps to Control House

Intrade odds for the Republicans to control the House of Representatives after 2010 Congressional Elections: 50.3%.

Paulson Now Turns Bullish on Housing and Economy

MARKETWATCH -- "John Paulson, the hedge fund manager famous for betting against mortgage securities, is now bullish on the U.S. housing market and the economy.

During a conference call with investors Wednesday, Paulson said he was concerned earlier this year about a potential double-dip recession. "I'm not concerned about that at all today," he said. It's more likely there could be a V-shaped recovery, Paulson continued.

House prices have stabilized and could climb 8% to 10% nationwide in 2011, Paulson said. Corporate earnings are coming in ahead of expectations, the stock market is stronger and there's a "vibrant" credit market. With the "final leg" of a rising housing market, "the outlook for 2011 could be very strong," Paulson said."

HT: Mike LaFaive

The Unsustainable Unionacracy of California

From "The Beholden State: How public-sector unions broke California," by Steve Malanga in the City Journal:

"The public sector unions’ political triumphs have molded a California in which government workers thrive at the expense of a struggling private sector. The state’s public school teachers are the highest-paid in the nation. Its prison guards can easily earn six-figure salaries. State workers routinely retire at 55 with pensions higher than their base pay for most of their working life. Meanwhile, what was once the most prosperous state now suffers from an unemployment rate far steeper than the nation’s and a flood of firms and jobs escaping high taxes and stifling regulations (see nearby chart). This toxic combination—high public-sector employee costs and sagging economic fortunes—has produced recurring budget crises in Sacramento and in virtually every municipality in the state."

"How public employees became members of the elite class in a declining California offers a cautionary tale to the rest of the country, where the same process is happening in slower motion. The story starts half a century ago, when California public workers won bargaining rights and quickly learned how to elect their own bosses—that is, sympathetic politicians who would grant them outsize pay and benefits in exchange for their support. Over time, the unions have turned the state’s politics completely in their favor. The result: unaffordable benefits for civil servants; fiscal chaos in Sacramento and in cities and towns across the state; and angry taxpayers finally confronting the unionized masters of California’s unsustainable government."

CA Defaults Drop 40.2% in 2010:QI from Last Year

"Lending institutions started formal foreclosure proceedings on fewer California homes last quarter. It is unclear how much of the drop can be attributed to shifts in market conditions, and how much is because of changing policies, a real estate information service reported.

A total of 81,054 Notices of Default were recorded at county recorder offices during the January-to-March period. That was down 4.2% from 84,568 for the prior quarter, and down 40.2% from 135,431 in first-quarter 2009, according to San Diego-based MDA DataQuick."

25 Reasons the Bull Market Recovery is Real

James Altucher in today's NY Post "Rally Believing It":

"The data suggest that the economy is starting to surge upward. Here are 25 statistics and anecdotes that suggest that the strength in the economy is real:

1. Average hourly wages are $18.90, up from $18.52 a year ago. (Before employers hire full-time, they get their workers to work overtime, resulting in higher pay).

2. Aggregate weekly hours worked is the highest it's been since June 2009 -- again, suggesting overtime. Only so much overtime can be worked before hiring begins.

3. Industrial production index up 9 months in a row after plummeting 13 percent from December 2007 to June 2009.

4. Retail sales up 10 percent year over year.

5. GDP last quarter showed 5.9 percent annual growth.

6. Initial unemployment claims have gone from a peak of 643,000 in April 2009 to 480,000 now.

7. The Greek debt crisis seems to be ending without major fallout in the form of other nations defaulting.

8. Home-improvement-related retail sales were up 3.1 percent, suggesting consumers are putting money back into their homes again.

9. Railroad traffic, a sign of interest in commodities, is up 16 percent, the highest since the recession began.

10. Rail shipments of metals were strongest as manufacturers are rebuilding inventories.

11. JPMorgan Chase and Bank of America both announced loan delinquencies were decreasing. JPMorgan also announced plans to hire 9000, their biggest hiring spree since the recession began.

12. UPS profits were 20 percent higher than expected as US shipments saw their first year-over-year increase since 2007.

13. Economists estimate that China's GDP grew by 11 percent last quarter, the most in 3 years.

14. Singapore posted GDP growth of 9 percent last quarter and South Korea had the largest unemployment rate drop in over a decade.

15. A sharp increase in M&A activity where the acquirers are using cash rather than stock to buy companies (showing confidence in their businesses).

16. Target, Kohls, TJX and Aeropostale all increased earnings guidance for the next quarter, showing retail strength across the board.

17. Auto sales are spiking. March annualized auto sales showed a 15 percent gain over February.

18. ISM non-manufacturing index (showing the strength of non-manufacturing indexes) had the highest percent increase in five years.

19. The National Association of Realtors said that pending sales of existing homes jumped 8.2 percent over last month.

20. Employers added 162,000 jobs in March, the biggest gain in four years.

21. Ford reported the best monthly sales in 25 years.

22. The government has made money on its Troubled Asset Relief Program bailouts of Citigroup, Goldman Sachs, American Express, JPMorgan, Morgan Stanley, and almost every other bank they lent to.

23. Consumer spending had its fastest increase in three years last month.

24. Intel, a barometer of the entire tech sector, saw its earnings quadruple from a year ago and said its earnings were the best ever for that period. They also reported record results for the chips used in mobile devices and said corporate tech spending was growing across the US.

25. Despite growth and low interest rates, inflation is almost non-existent with the CPI coming in at 0.1 percent last month."

Advanced Degrees: 139 Women for Every 100 Men

The graph above is based on college degree data that were released today by the Census Bureau, showing college degrees for the age group 25-29 years old. According to the press release:

"The U.S. Census Bureau reported today more women than men are expected to occupy professions such as doctors, lawyers and college professors as they represent approximately 58 percent of young adults, age 25 to 29, who hold an advanced degree."

In other words, 139 women in the 25-29 year old group hold an advanced degree for every 100 men in that age group, and women dominate men for all advanced degrees: Master's, Professional (MD, DDS and JD), and Doctor's (Ph.D.).

Note: These are actual numbers based on actual data and empirical evidence about gender differences, in contrast to Equal Pay Day.