tag:blogger.com,1999:blog-1227919517269937208.post6683272071354879098..comments2023-09-17T08:37:58.006-06:00Comments on The Good News Economist: More Bullish Signs for HousingEldon Masthttp://www.blogger.com/profile/15444008509086050220noreply@blogger.comBlogger5125tag:blogger.com,1999:blog-1227919517269937208.post-22905421371250220232010-09-22T14:21:32.379-06:002010-09-22T14:21:32.379-06:00Best leading indicator for the new home market is ...Best leading indicator for the new home market is lumber prices according to McClellan Financials. Since lumber prices seem to have resumed the uptrend we can expect higher new home starts for a year or so.Joehttps://www.blogger.com/profile/17141887720434208291noreply@blogger.comtag:blogger.com,1999:blog-1227919517269937208.post-77681001064491517542010-09-21T09:25:46.481-06:002010-09-21T09:25:46.481-06:00Aren't housing markets at about a year based o...Aren't housing markets at about a year based on August's buying levels? Wouldn't this mean that excess housing would be absorbed by 2011 instead of 2013?<br /><br />I'm not really sure about the housing market returning to pre-recession levels though. Many of the houses were bought on speculation.<br /><br />Even given this fact, houses still need to be made since the recession has caused a decreased amount of houses being built since noone was buying them. I expect the housing market to return to a stable build vs demand in 2011.<br /><br />I have to say that you were right over a year ago. I think I recall one of your articles stating that the recession was going to be finished by May 2009 or June. The body that announces recessions called it June 2009.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-1227919517269937208.post-40373828680065925172010-09-21T07:50:14.720-06:002010-09-21T07:50:14.720-06:00Why did you post a 9 month old paper, Eldon?
Just...Why did you post a 9 month old paper, Eldon?<br /><br />Just for some intellectual rigour and your edification:<br /><br />1. Housing starts this morning are 600k SAAR.<br /><br />2. Housing starts for 2010 will be 600k, not 700k.<br /><br />3. Wheaton's "excess" inventory was 1.147 million as of 2010Q2.<br /><br />4. Only 400k in household formation since Wheaton's paper was published.<br /><br />Okay, let's advance Wheaton's Figure 1 chart by 1 year. Maybe he is right, maybe he is not. I would take the under. The reason. His opening assumptions are poorly constructed.<br /><br />5. 2006Q1 inventory as a baseline is not justifiable. You need to look at trends not a specific date. The trend inventory was 20% less than his opening inventory.<br /><br />6. Although housing starts may be a proxy for residential investment's contributions to GDP, the actual BEA numbers are from construction put in place. As of 2010Q2 improvements are a higher percentage of GDP than new housing. So the relationship of starts to the residential component of GDP is not linear.<br /><br /><i>But remember when it comes to economics, the majority is always wrong.</i> Whatever. Bill Wheaton is one of your heroic minorities, I suppose. His 4 year forecast is off to a rocky start. I'll take the under on the next 3 years. You can place his pink circle on the zero line and his black square on the +10% line for 2010 and look forward to 2011 for the visage of the sleeping giant. Stopped clock and all that.marmicohttps://www.blogger.com/profile/08277071086056574486noreply@blogger.comtag:blogger.com,1999:blog-1227919517269937208.post-28944035928662389632010-09-21T03:30:11.107-06:002010-09-21T03:30:11.107-06:00Marmico,
General trends like Wheaton's are al...Marmico,<br /><br />General trends like Wheaton's are almost never exact with respect to dates. <br /><br />In fact his point becomes stronger the longer construction remains suppressed. As demand continues to grow, the upside effect will be greater the longer home building stays dormantEldon Masthttps://www.blogger.com/profile/15444008509086050220noreply@blogger.comtag:blogger.com,1999:blog-1227919517269937208.post-2906154081704898482010-09-19T15:05:30.596-06:002010-09-19T15:05:30.596-06:00The Wheaton paper was published 9 months ago. He m...The <a href="http://web.mit.edu/cre/research/pdf/wheaton-nechayev_sleeping-giant_12-29-09.pdf" rel="nofollow">Wheaton paper</a> was published 9 months ago. He may turn out to be right insofar as he advances his dates by 1 year. Stopped clock and all that. Residential investment will be negative in Q3 and cumulatively negative for the 4 quarters since the data in the paper.marmicohttps://www.blogger.com/profile/08277071086056574486noreply@blogger.com