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GLG News by this Author

When Does a Market Bottom?

June 25, 2009

Analysis of:HOUSING INVENTORY INCREASE EXPECTED | www.lvrj.com

The determination of when a market bottoms is based upon the resurgence of a "free selling market" when sellers are not forced to sell and buyers are not buying because of subsidies, tax bonuses and all sorts of market stimulus. Reaching a decision that buyers are now in the market buying forced sales, short sales and foreclosures in record numbers does not signal a return to a free selling market until all of the short sales, foreclosures and government inducements to buy are not causing the sales. Much of this activity is fueled by speculators who will disappear from the buying market and resurface when the market prices rise then they become sellers which is a signal that a resurgent market is present but not the only signal.

Mr. Wood makes assumptions regarding residential constructionwithout facts

June 11, 2009

Analysis of:Construction Spending in the U.S. Unexpectedly Climbs | www.bloomberg.com

“Residential construction may be bottoming,” said Steven Wood, President of Insight Economics LLC in Danville, California. However, Mr. Wood provided no basis for his opinion. In fact he moved on to "public" construction" in the next sentence. Making statements without supporting the opinion is rather misleading or purposely misleading.

Real Estate Market Projections Based Upon First Time Buyers and Short Sales is Irrelevant

June 5, 2009

Analysis of:Digesting This Week's Housing Data | www.realestateeconomywatch.com

Any report that portrays a global resurgence of the USA real estate is irrelevant if the projection cites that the path to recovery has begun as almost all data is related to first time buyers with incentives, short sales, builder discounts and foreclosed properties as all of these types of sales are not a present in a stable resurgent marketplace. First time buyer will disappear one the incentives and available properties diminish. A report on the resurgence of the market must be based upon sustainable market events not short term stimulus with events reported in only the lower priced real estate. Any resurgence must include sales that occur across the board in all price ranges.

The sale of distressed properties is a short market and not a solution to the Real Estate Market problems

June 4, 2009

Analysis of:Home prices slide 14% | money.cnn.com

The stimulus of 1st time buyers and speculators in the foreclosed properties is simply a short term stimulus and doesn't begin a return of the housing market which has not been addressed in a serious manner. The new home and resale market above $350.000 in the Lehigh Valley Pennsylvania market place is not even a glimmer of 2007 and the market for homes in the $500,000 is almost absent of sales even though home prices continue to be reduced in the hopes of a sale. The missing ingredient to a market resurgence is "buyer confidence" which continually is eroded by government deficit spending and will get worse as interest rates rise as a result of government intervention to permit financing of the deficit which will further deepen the market the problems as social agendas trump the return of a strong economy.

Mortgage application jump meaningless in resurgence of the home market.

March 16, 2009

Analysis of:Mortgage applications jump 11% | money.cnn.com

The 11% increase was fueled by first time buyers and the refinancing of performing mortgages. It is a fact that first time buyers are in the marketplace taking advantage of market incentives so are home owners with good credit refinancing existing mortgages. So what does the 11% jump signify? My opinion  is that this jump does not directly help the lagging home market. The article is touting Mr. Oboma's programs as the reason for this activity but it's another allusion without significant clarity to directly point to a change in the lagging home market or even justify Mr. Oboma's programs just cheerleading without a score.

Has D. R. Horton reported the losses related to land transactions

February 26, 2009

Analysis of:D. R. Horton reports loss, beats estimates | money.cnn.com

D.TR. Horton divested itself of potentially billions of dollars in acquired land and  land under contract pending entitlement approvals. The direct land sales to other entities are of record but the questions that should be asked are; has DR Horton reported contingent liabilities related to their canceled and defaulted land contracts, are these type land contracts being carried on the book with regards to development and entitlement processing costs and lastly are there contingent liabilities that are not being reported or contingency funds being established. I believe these questions must be asked and answers provided to determine if D.R. Horton's reporting is accurate. Maybe this situation has been reported or maybe it wasn't. I ask these questions due to a personal experience with D.R. Horton regarding a land contract.

The market bottom will continue until Buyer confidence is renewed.

February 17, 2009

Analysis of:Home prices fall at record pace | money.cnn.com

The artical is important as it measures price falls and increases that occurred beginning with "Black Wednesday" in october 1987 through 1998 as we began to move out of the late 1990's bank failures and the RTC. However, the bottom is not here and may not be reached until late 2009 or 2010 provided the recession has passed.

Manhattan's soft rental market will continue its decline

February 16, 2009

Analysis of:A Month Free? Rents Are Falling Fast | www.nytimes.com

Manhattans rental decline was easily forecast by the increase of more affordable rents in New Jersey's Gold Coast which migration of tenants is historical beining with "Black Wednesday" the collapse of the bond market in October 1987 and the followinbg recession.

Small and medium builders are responsible for the largest share of housing in America

September 19, 2008

Analysis of:Fast Track 2008: Still on Their Rails | www.builderonline.com

Since 2000 the National Home Builders have mounted an assault on the small and medium builders of America entering their markets in mass increasing land prices to the point that the local builders could not be competitors and they either moved to adjacent markets or became custom home builders and filled the gap left open by the Nationals. In my central markets of Eastern PA and New Jersey very few small and medium builders have no standing inventory and are building homes at a lower pace  but surviving while the Nationals are now in a massive exodus from these markets.

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