Bits Bucket for September 21, 2012

decline in U.S. life expectancy

This brings up two points often discussed on this blog. When people point out the top 10 “happiest” and healthiest countries in the world are Denmark, Sweden, Norway, Netherlands, Canada, Austria etc. - most all social democracies and all with universal health-care some say it’s because they’re small and white. Well here we have a large portion of whites dying earlier in America - and many because their health-care stinks. Just saying “my private health-care is great” doesn’t mean anything statistically. Statistically US health- care ranks well below America’s in many statistics and America spends about 50-60% more per person.

So poor American white’s life expectancy is declining rapidly while poor black and Hispanic’s life expectancy is rising. So much for the exceptionalism of being white and of the US health-care system. But I’m sure Romney cares a lot about these people.

Life expectancy is shrinking for some Americans NewYorkTimes 9/20/12

For generations of Americans, it was a given that children would live longer than their parents. But there is mounting evidence that this trend has reversed itself for the country’s least-educated whites…

….The reasons for the decline remain unclear, but researchers offered possible explanations, including a spike in prescription drug overdoses among young whites, higher rates of smoking among less educated white women, rising obesity and a steady increase in the number of the least educated Americans who lack health insurance.

The steepest declines were for white women without a high school diploma, who lost five years of life between 1990 and 2008…..life expectancy for black women without a high school diploma had surpassed that of white women of the same education level, the study found.

White men lacking a high school diploma lost three years of life. Life expectancy for both blacks and Hispanics of the same education level rose, the data showed.

“We’re used to looking at groups and complaining that their mortality rates haven’t improved fast enough, but to actually go backward is deeply troubling,”

The five-year decline for white women rivals the seven-year drop for Russian men in the years after the collapse of the Soviet Union…

…The latest estimate shows life expectancy for white women without a high school diploma was 73.5 years, compared with 83.9 years for white women with a college degree or more. For white men, the gap was even bigger: 67.5 years for the least educated white men compared with 80.4 for those with a college degree or better.

“There’s this enormous issue of why,”

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Tiny Apartments Set for Approval: Today the Board of Supervisors will...

× Like us and you'll find top breaking news in your Facebook newsfeed. Sign up for our daily email newsletter and get top stories and breaking news delivered to your inbox. Tuesday, September 25, 2012, by Alex Bevk

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[Sand and Sales] 2Q 2012 Palm Beach Report

Posted by Jonathan Miller - Tuesday, July 31, 2012, 9:18 PM

We published our inaugural report on the Palm Beach, Florida sales market for 2Q 2012.   This is part of an evolving market report series I’ve been writing for Douglas Elliman since 1994.

Key Points

Palm Beach, Florida

-Condo sales were up sharply over year ago levels while single family sales slipped over the same period.
-Condo median sales price showed large increase as single family median sale price fell below year ago levels.
-Days on market fell from year ago levels for both condos, single family and luxury properties.
-North End sales edged higher as prices declined.
-South End sales were up sharply over year ago levels while median sales price edged higher.

Here’s an excerpt from the report:

CONDO/TOWNHOUSE Median sales price was $470,000, up 16% from $405,000 in the same period last year. Average sales price and average price per square foot increased 11.9% and 2.7% respectively over the same period. There were 119 sales this quarter, 22.7% more than in the prior year quarter…

SINGLE FAMILY There were 39 sales in the second quarter, 11.4% below the 44-sale total in the prior year quarter. The time to sell a property fell by more than two months over the same period. Days on market averaged 250 days, 67 days faster than 317 days in the same period last year…

You can build your own custom data tables on the market – now updated with 2Q 12 data. We’ll be adding a chart library for this market area soon!

The Elliman Report: 2Q 2012 Palm Beach [Miller Samuel]
The Elliman Report: 2Q 2012 Palm Beach [Douglas Elliman]
Aggregated Custom Market Data Tables [Miller Samuel]

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[More Sales] 2Q 2012 Hamptons & North Fork Report

Posted by Jonathan Miller - Friday, July 27, 2012, 10:36 AM

We published our report on the Hamptons & North Fork sales market for 2Q 2012.   This is part of an evolving market report series I’ve been writing for Douglas Elliman since 1994.

Key Points

Hamptons & North Fork

-Sales jumped above year ago levels reaching the second highest spring market total in 6 years.
-Median sales price slipped from year ago levels, although average sales price was at 3rd highest level since credit crunch began in 2008.
-Most sales over $5M since credit crunch began – tied with 4Q 2010.
-Listing inventory edged above year ago levels.

Here’s an excerpt from the report:

…The Hamptons and North Fork housing markets were characterized as having their most active spring markets in six years, but both with weaker price levels and modest upticks in listing inventory and marketing time. There were more sales in the second quarter spring market than there have been in any second quarter throughout the past six years. The second quarter total was 676 sales, 9.2% more than 619 sales in the prior year quarter. This total was sharply above the prior quarter result of 381 sales, an unusually light number, given the mild winter and early spring selling season, which suggests a timing issue at play. Listing inventory was 2,452, 5.3% above 2,329 in the same period last year. As a result, the monthly absorption rate was 10.9 months, faster than 11.3 months in the prior year quarter as well as the 12.9-month sixyear average…

You can build your own custom data tables on the market – now updated with 2Q 12 data. You can browse our chart library for the latest – updated for 2Q 2012.

The Elliman Report: 2Q 2012 Hamptons & North Fork Sales [Miller Samuel]
The Elliman Report: 2Q 2012 Hamptons & North Fork [Prudential Douglas Elliman]
Market Chart Library [Miller Samuel]
Aggregated Custom Market Data Tables [Miller Samuel]

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The Chicago Fed National Activity Index: August 2012

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[WSJ] The Crazy 8: Comparing Results of National Home Price Indices

Posted by Jonathan Miller - Saturday, June 9, 2012, 1:18 PM

Matthew Strozier over at WSJ with Column Five (a large producer of infographics) presented an interesting side by side of 8 national housing indices.

All but one index shows a year over year decline in housing. Trulia’s new Price Monitor by Jed Kolko would be a great addition once the year-over-year history is established. It was also interesting that NAR’s Existing Home Sales was omitted (I’m not advocating).

Beyond the obvious price decline, my takeaways were:

US indices are general in sync on the year-over-year. Our confusion in the monthly barrage of housing metric releases is that most push the month-over month.With the proliferation of these indices, data subscriptions must be getting cheaper. There are a few more out there as well.Of the indices presented, their data collection and methodologies vary significantly (where disclosed) yet their results were consistent perhaps suggesting the 7 for 8 result is coincidence as opposed to an aggregated trend.Sales prices are not something we should be obsessed with as an indicator of market health (think Las Vegas, mid decade). I’d much prefer seeing more attention paid to sales trends since they are a pre-cursor to price trends if you are trying to reasonably answer the question: Has the US housing market hit bottom?

It is interesting and my rough understanding that most of these indices were created and run by economists, scientists or data wonks, many for Wall Street purposes with virtually no real estate types. That’s obviously fine until you consider what is said in barrage of monthly press releases for some, citing things that are not empirically measured in their respective reports, i.e. weather, inventory, etc. that create further confusion.

I’d love to see a side by side comparison of the lag time from the point of “meeting of the minds” between buyer and seller for each index. The significant lag time reflected in this index genre is a practical one due to the massive scale of information, but I think it would give consumers (who were generally not the intended users of any of these indices at the time they were created) a better sense of reliability for each.

National housing indices provide useful tools for setting government economic policy but the consumer’s obsession with the idea of a national housing market and it’s relevance to their local markets is, well, crazy.

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How Does the Fed Help My House, My Mortgage?

For those of you who expected to wake up to a 30-year fixed rate mortgage below 3 percent, you may as well go back to sleep.

Yes, rates moved down, 0.125 percent, according to several sources, but that was not as low as some had predicted. Remember, we hit the low of 3.49 percent in July, but then we jumped back into the mid to high threes. (Read More: Fed Pulls Trigger, to Buy Mortgages in Effort to Lower Rates.)

“Short term, people who are thinking about moving really need to lock in,” says Craig Strent of Maryland-based Apex Home Loans. He is concerned that the strong consumer sentiment number that came in today could cause the Federal Reserve to pull back on its buying in the future. “When this thing turns, it’s going to be fast. Just pulling back a little sends a message,” adds Strent.

But others argue that the housing market is still on such shaky ground that that’s unlikely to happen. Mortgage applications to purchase a home have declined five of the last six months, according to Diane Swonk of Mesirow Financial.

“I think that this will be a trillion dollar commitment from the Fed,” said Swonk on CNBC’s "Squawk on the Street." “Home values appreciating, that’s something very important in this economy getting more legs and moving forward more rapidly.” (You can watch the interview here.)

So say mortgage rates could dip lower than the latest record, perhaps to around 3.25 percent. How does that help me? Does it boost my home price? (Read More: Will Fed's Mortgage Buying Juice the Housing Recovery?)

On the one hand, lower mortgage rates give potential buyers more purchasing power. “A 0.125 percent drop in rates adds 1.5 percent to your maximum purchase price (given all the other fees),” according to Dan Green at Waterstone Mortgage. “Assuming a mortgage payment of $1500, that’s the difference between $404,800 and $411,000-ish.” So that is how much more house you can buy. If people can buy more house, then perhaps home prices will rise.

But as we’ve noted so many times before, the great low rate doesn’t mean anything if you can’t qualify, if you don’t have the down payment or credit scores to get it.

“Instead, the underlying improvement in housing demand is still very reliant on cash buyers and investors,” notes Paul Diggle of Capital Economics, who does not believe mortgage rates will fall dramatically. “Admittedly, low bond yields and savings rates more generally are probably playing a part in the strength of investor demand for housing.”

Lower rates could cause a boost in refinances, but so many have already refied at record low rates that it would take a pretty large drop to lure more in, given the fees and hassle involved. And of course negative equity keeps millions of potential refinancers out of the game. The government’s refinance program for underwater borrowers (HARP) has helped over half a million borrowers get lower rates since the beginning of this year, but unless you have a Fannie Mae or Freddie Mac [FNMA  Loading...      ()   ] backed loan, you’re not eligible.

There is a push by Democrats in Congress to expand the government’s refi program, and lower mortgage rates could help more Republicans come on board, but that is unlikely to happen before election day. (Read More: Wealthiest Counties Rake In Government-Backed Mortgages)

“To ensure as many voters as possible can benefit from this, we believe there will be another push to enact HARP expansion legislation during the lame duck session that will start after the election,” says Jaret Seiberg of Guggenheim Partners. “Lower mortgage rates only matter if people can refinance and plow that extra cash into the economy. Given that as many as a quarter of borrowers may be underwater, the HARP is the way to translate the Federal Reserve’s effort into economic stimulus.”

It is hard to say now just how low rates will go and just who will be able to benefit from lower mortgage rates. In today’s tricky housing recovery, so dependent on investors and so sensitive to a still-swollen pipeline of foreclosed properties and delinquent loans, mortgage rates are just one piece of the recovery puzzle.

Sector Watch - Nation's Biggest Mortgage Lenders:

Questions?  Comments?  document.write("");document.write("RealtyCheck"+"@"+"cnbc.com");document.write('');And follow me on Twitter @Diana_Olick

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[The Housing Helix Podcast] Barry Ritholtz Part 2

Posted by Jonathan Miller - Sunday, September 23, 2012, 6:36 PM

[Subscribe to The Housing Helix Podcast for free on iTunes]

Here’s part 2 of my conversation with Barry Ritholtz. If you missed it, listen to part 1 first.

Don’t forget to check out Barry’s Big Picture Conference on October 10th. With the terrific speaker list it promises to be a great event.

Here is the 2nd part of a 2 part conversation (listen to part 1 here):

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Real Estate Sold: Top Three Residential Property Sales For the Past Seven Days

× Like us and you'll find top breaking news in your Facebook newsfeed. Sign up for our daily email newsletter and get top stories and breaking news delivered to your inbox. Tuesday, September 25, 2012, by Sally Kuchar

Listed for: $1,850,000
Received: $1,975,000!
Size: 3-bed, 3-bath, 2,953 sq. ft. single-family home
Location: 1410 Jefferson Street, Marina
The skinny: This home made its first appearance on the market in 30 years. It's location is highly desirable because of its close proximity to the Marina Green and St. Francis Yacht Club.

Listed for: $2,475,000
Received: $2,475,000
Size: 3-bed, 3.5-bath, single-family home
Location: 131 3rd Ave, Lake
The skinny: Possibly our favorite listing description of the year goes to the this property, as it's pretty ridiculous. Our favorite line is "With the excitement of a child & the curiosity of a cat you wander hither & yon falling more in love with every step you take!" Tone it down, Debi DiCello of Alain Pinel Realtors.

Listed for: $5,400,000
Received: $7,350,000!
Size: 6-bed, 7.5-bath, single-family home
Location: 2430 Vallejo Street, Pacific Heights
The skinny: An absolutely stunning brown shingled home. The home features a remodeled kitchen and family room. There's an elevator to all four levels. There are three decks, and some of them overlook the gardens that were designed by Thomas Church.

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PM Linkage: Fleet Week is Coming; Dolores Park Shenanigans; Why We Love the Fog; More!

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Tiny Living: Today the San Francisco Board of...

× Like us and you'll find top breaking news in your Facebook newsfeed. Sign up for our daily email newsletter and get top stories and breaking news delivered to your inbox. Tuesday, September 25, 2012, by Sarah Firshein

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Bits Bucket for September 22, 2012

“So it seemed like a good thing in August when sales of the $40,000 car set a monthly record of 2,800.”

“It costs $60,000 to $75,000 to build a Volt,”

Posted: 9:20 a.m. Saturday, Sept. 22, 2012

GM offers big discounts to boost Volt sales

By TOM KRISHER

The Associated Press

DETROIT —
General Motors rolled out the Chevrolet Volt two years ago with lofty sales goals and the promise of a new technology that someday would help end America’s dependence on oil.

So it seemed like a good thing in August when sales of the $40,000 car set a monthly record of 2,800. But a closer look shows that things aren’t what they seem for the cutting-edge car.

Sales rose mostly because of discounts of almost $10,000, or 25 percent of the Volt’s sticker price, according to figures from TrueCar.com, an auto pricing website. Other pricing services gave similar numbers, and dealers confirmed that steeply discounted Volts are selling better than a few months ago.

GM’s discounts on the Volt are more than four times the industry’s per-vehicle average, according to TrueCar estimates. Edmunds.com and J.D. Power and Associates say they’re about three times the average. Discounts include low-interest financing, cash discounts to buyers, sales bonuses to dealers, and subsidized leases.

GM executives have conceded from the start that they were losing money on the Volt, and that was before the big discounts.

Now the losses could be even higher. It costs $60,000 to $75,000 to build a Volt, including development, manufacturing and raw materials, estimates Sandy Munro, president of Munro & Associates, a Troy, Mich., a company that analyzes vehicle production expenses for automakers. Much of the cost comes from an expensive combination of two power systems — electric and gasoline. With a sticker price of $40,000, minus the $10,000 the company pays in incentives, GM gets roughly $30,000 for every Volt. So it could be losing at least $30,000 per car.

“It certainly wasn’t a rousing success,” Carter Driscoll, senior analyst for CapStone Investments who follows electric cars, says of the Volt.

GM confirmed there are incentives on the Volt and that the company loses money on the car. But the automaker declined to give figures for the discounts or the losses. The figures exclude a federal tax credit that goes to buyers.

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Low Housing Inventory Is NOT A Sign of Housing Recovery

Posted by Jonathan Miller - Monday, July 9, 2012, 10:49 AM

I wrote “The Decline In Inventory Right Now is NOT a Good Sign” back in February, but there has been a more refined discussion about low inventory recently. Back then my orientation was more about the “robo-signing” scandal causing a drop in distressed listings as servicers held back supply – as well as the lack of confidence by sellers over whether they can achieve their price.

Stan Humphries, chief economist of Zillow has been a guest on my podcast and penned a great piece about it a few weeks ago called “The Connection Between Negative Equity, Inventory Shortage and Increasing Home Values: Why the Bottom Won’t Be as Boring as We Expected” tackling the impact of negative equity on inventory.

CoreLogic reported (via Nick Timiraos/WSJ) that the supply of homes for sale declines as negative equity increases.

David Rosenberg, chief economist as Gluskin-Sheff, and whom I had the pleasure of meeting with for dinner a few months ago, presented a great series of charts in his newsletter (via ZeroHedge).

It basically presents the idea that “upside-downers” ie those with negative equity, can’t list their homes for sale because they don’t have equity (or enough equity) for the next one.

Here’s the most compelling excerpt:

According to data cited by the USA Today, the supply backlog where over half of homeowners are “upside down” on their mortgage is at 4.7 months’; in areas where “upside down” borrowers make up less than 10% of the market, the listed inventory is closer to 8.3 months’ supply.

In other words, in markets with unusually tight inventory, prices are being “goosed” higher, not because the housing market is improving, but because there are fewer houses in the game. Low mortgage rates are artificially creating excess demand, with those buyers fighting over the slim pickings of sellers who can actually sell.

That, my friends, is NOT a housing recovery.

More visuals:

The Decline In Inventory Right Now is NOT a Good Sign [Matrix]
David Rosenberg Explains The Housing “Recovery” [Zero Hedge]
The Connection Between Negative Equity, Inventory Shortage and Increasing Home Values: Why the Bottom Won’t Be as Boring as We Expected [Zillow Real Estate Research]
Why Aren’t There More Homes for Sale? [WSJ Developments Blog/Nick Timiraos]

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[Three Cents Worth DC #194] DC’s Housing Market Turns The Tide; Good News For Sellers

Posted by Jonathan Miller - Monday, June 11, 2012, 11:01 AM

It’s time to share my Three Cents Worth (3CW) on Curbed DC, at the intersection of neighborhood and real estate in the nation’s capitol. And I’m simply here to take measurements.

Read today’s 3CW post on @CurbedDC:

Here’s my chart version of the May 2012 report published by RBI/MRIS. They’ve got terrific data and when Curbed DC asked me to go old school and bring back the charts so the trends would be easier to understand, I gladly obliged. I called up my inner Three Cents Worth days in DC…

[click to expand]

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[Three Cents Worth NY #210] Manhattan Housing Talks Like a Pirate

Posted by Jonathan Miller - Wednesday, September 19, 2012, 5:03 PM

It’s time to share my Three Cents Worth (3CW) on Curbed NY, at the intersection of neighborhood and real estate in the capital of the world…and I’m simply here to take measurements.

Read this week’s 3CW column on @CurbedNY:

…Out of respect for International Talk Like A Pirate Day I thought I’d comment on housing metrics that would provide seaworthy analogies to prepare us for the next round of Manhattan housing market reports (i.e. our 3Q 2012 market reports we’ll be publishing with Douglas Elliman) in less than two weeks when the quarter ends. For this edition of 3CW I matched up Manhattan co-op/condo absorption rates and the year-over-year change in median sales price of the last decade. Absorption covers sales and listing trends and prices cover, well, you know what they cover. For the purposes of my analysis I define absorption as the number of months it would take to sell all active inventory at the current pace of sales…

[click to read column]

Curbed NY : Three Cents Worth Archive
Curbed DC : Three Cents Worth Archive
Curbed Miami : Three Cents Worth Archive

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Extended Unemployment: Initial, Continued and Extended Unemployment Claims September 13 2012

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Reading Rates: MBA Application Survey – September 12 2012

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[Breaking News] CNN Gives Housing Followers Heart Attack, Case Shiller Up 1.2% YOY

Posted by Jonathan Miller - Tuesday, September 25, 2012, 12:01 PM

[click to open report]

I like this index chart from the report (2nd chart presented in their report) better than the more commonly used % based chart (1st chart presented in their report) because it provides better context. The recent trend is clearly a small see-saw but still sliding in general. I’m not a fan of the CS index for its 5-7 month lag but since it’s some sort of gold standard for housing, it’s important to point out that this clearly shows housing remains tepid at best.

But more importantly…

Shortly after the S&P/Case Shiller report was released this morning at 9:00am, I got the following CNN Breaking News email at 9:15am:

Home prices in 20 major U.S. cities rise to highest level in nine years, according to a new report.

I just about had a heart attack, wondering how I could be so far off in my assessment of the housing market. However I opened the report and the numbers didn’t show that kind of gain.

At 10:21am I received a followup email from CNN Breaking News:

Correction: Home prices rose in July to their 2003 level, but remain lower than the peak in 2006. CNN’s previous alert erroneously stated that home prices had risen to the highest level in nine years.

Not to single CNN out since this has happened at ABC, Breitbart and Fox.

Speed comes at a price: Accuracy.

Similar phenomenon in the appraisal business. The absurd speed demanded by retail banks and AMCs of their appraisers even after the “lessons learned” in this credit crunch, attracts the wrong kind of appraiser. Speed still trumps accuracy.

Home Prices Increase Again in July 2012 [S&P/Case Shiller]

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Pending Home Sales: August 2012

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Celebrity Real Estate: The New York Observer dug up...

× Like us and you'll find top breaking news in your Facebook newsfeed. Sign up for our daily email newsletter and get top stories and breaking news delivered to your inbox. Wednesday, September 26, 2012, by Amy Schellenbaum

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