Archive for January, 2010SPECIAL EDITION: Cirios Trends — A Decade in FluxIn this SPECIAL EDITION, check out: The State of the Markets: A Decade in Flux 10 years that were anything but boring.. Home Prices: A Much Needed Breather After a historic rise, an equally historic fall. Getting Back on Track: Are We There Yet? Many believe the bottom in housing has come and gone. Are [...] The State of the Markets: A Decade in FluxThis post first appeared in the SPECIAL EDITION: Cirios Trends: A Decade in Flux The books are officially closed on a decade which will be remembered for an historic real estate boom in the United States that busted in spectacular fashion, nearly taking the entire world financial system down with it. Of course, the real [...] Home Prices: A Much Needed BreatherThis post first appeared in the SPECIAL EDITION: Cirios Trends: A Decade in Flux << PREVIOUS Life is always so much clearer in hindsight. The graph below shows the US Median Home Price (blue line, as measured by the 6-month moving average of the Median Price, admittedly as arbitrary a metric as any other) graphed [...] Getting Back on Track: Are We There Yet?This post first appeared in the SPECIAL EDITION: Cirios Trends: A Decade in Flux << PREVIOUS We wrote back in June of 2008: “The Holy Grail de jour of financial market prognostication is predicting the bottom in housing. It’s a fool’s errand, however.” Identifying the low point in any asset class is an effort best [...] Recovery: How Long Did it Take Last Time?This post first appeared in the SPECIAL EDITION: Cirios Trends: A Decade in Flux << PREVIOUS The aforementioned warning about historical analogues notwithstanding, let’s take a look at how the housing market recovered the last time there was a persistent decline in home prices. As an aside, one of the most challenging aspects of analyzing [...] Inflation: What is it Good For?This post first appeared in the SPECIAL EDITION: Cirios Trends: A Decade in Flux << PREVIOUS At the heart of some of the most contentious debates in the otherwise drab world of macroeconomic theory is that of inflation (yes, there are in fact contentious debates about macroeconomic theory). To wit, economics can’t even agree on [...] Inflation and Home Prices: Is the Romance Over?This post first appeared in the SPECIAL EDITION: Cirios Trends: A Decade in Flux << PREVIOUS A cursory look at the long term trends for inflation and home prices reveal strikingly similar patterns. Until, that is, right around 2003 (see dotted line below). (click to enlarge image) In the wake of the short recession caused [...] Home Prices vs. Mortgage Rates: Let’s DanceThis post first appeared in the SPECIAL EDITION: Cirios Trends: A Decade in Flux << PREVIOUS It stands to reason that falling interest rates leads to higher home prices. After all, for every one percent drop in mortgage rates, buyers can afford around 10% more house. Against that backdrop, the chart below makes sense: After [...] Do High Mortgage Rates Kill Home Prices?This post first appeared in the SPECIAL EDITION: Cirios Trends: A Decade in Flux << PREVIOUS Given the widespread expectation for future inflation, and as an extension higher interest rates to combat rising prices, the question above is the most common one we hear from home buyers and real estate investors alike. To try and [...] All Bubbles Burst, EventuallyThis post first appeared in the SPECIAL EDITION: Cirios Trends: A Decade in Flux << PREVIOUS The belief that the Federal Reserve kept interest rates too low, for too long, is one which is now nearly universally held. Well, outside the Fed, that is. Here’s a smattering of quotes which show how the view of [...] A Tale of Two Markets: Underneath the DataThis post first appeared in the SPECIAL EDITION: Cirios Trends: A Decade in Flux << PREVIOUS Since we just spent the last ten pages laboriously scratching the surface of complex macroeconomic trends with a few over-simplified charts, we will now analyze every single US housing market by looking at sales data in two cities. As [...] What is Value?This post first appeared in the SPECIAL EDITION: Cirios Trends: A Decade in Flux << PREVIOUS Whew. After all that intense discussion of economics, home prices and interest rates, we would like to finish up this special edition of Cirios Trends with a bit of levity. Photo by Roy Delgado. Please do not hesitate to [...] |