Matrix Blog

Archive for May, 2008

[Housing On Fire] Blogoshere Hose-Down, Heaven Can Wait Edition

May 30, 2008 | 12:01 am | inmanlogo |

Periodically, I like to round-up some of my favorite recent blog posts or articles that are housing market/credit/economy related. It’s journalism heaven: housing provides an endless supply of stuff to write about and this week was no exception.


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[In The Media] Lawline Clip for 5-22-08

May 29, 2008 | 3:47 pm | delogo | Public |

Back in March, I was invited back to do another appearance on Lawline TV. I had the pleasure of appearing with Jacky Teplitsky of Prudential Douglas Elliman. Alan Schnurman has been hosting this show for nearly 30 years I believe. He’s good interviewer and apparently a very successful real estate investor.

This interview was done before I had compiled my Q1 08 stats but it wouldn’t have changed the content of my presentation.

View the clip (There is no direct link to the interview so look for “The Impact of Economic Downturn on the Real Estate Market”)


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[Trulia Snapshot] Visualizing Listing Shots Are, Well, A Snap

May 29, 2008 | 1:00 pm | trulialogo |

Trulia launches yet another innovation today called Trulia Snapshot that further shows that they are the leaders in capturing and managing listing information for consumers. (disclosure: I am on their industry advisory panel)

Its one of a number of innovations they have released that deals specifically with the visual representation of data.

Trulia Snapshot is a tool that allows you to browse properties listed for sale on Trulia in a very different way. The photos are placed over a map of the local you are interested in and you can view by most to least expensive, oldest to newest, etc.

My favorite feature is being able to see where the specific listing sits within the housing stock available for sale.

Very cool.


[CSI Stats] Fun With Charts: Its All About Inventory

May 29, 2008 | 11:13 am | nytlogo |

The New York Times business section has some sort of chart mojo going on. They have been creating some interactive charts for a while now that are simply amazing.

In this weekend’s article (sorry, I’ve been out – see previous post), In Housing, the Strong Turn Weak Vikas Bijaj, with contribution by Christine Haughney, layout out the state of housing across the US using the CSI numbers. (I contributed the Manhattan stats) The numbers were striking. In markets that have been doing well are showing weakness.

Click here for the interactive charts for each of the 20 markets covered using actual or cpi-adjusted numbers matched against the aggregate. Please look at Las Vegas and Phoenix.

And some pretty telling charts. Take a look at inventory.



LOL becomes ROTFLOL ;-) becomes :-@EIK becomes Eat In Kitchen

May 29, 2008 | 9:50 am | nytlogo |

I’ve been AWOL since Monday. Got out of the hospital. Ouch! In for the same reason I went in 1997 and 2003, which coincidentally were the same years the Marlins won the World Series. I got the opportunity to mention this to the current owner a few years ago for a chuckle. The Marlins are in first place right now and then I go to the hospital. Coincidence? Don’t bet on it. They’re a lock.

Source: Wikipedia

So this emoticon thing, we think we’re pretty clever and original. It’s a language created in a growing world of Instant Message, Twitter, Text Message, etc. The emoticons in this post header are from 1881.

Abbreviations have a way of expanding (remember when MacDonald’s only served hamburgers?), creating the need for something simpler to replace it. I have talked lot about abbreviations used in property listings in newspaper advertising, where a language of real estate abbreviations evolved incentivised by pay per word pricing which is becoming more diluted as classified listings move online.

There is an awesome article in William Saffire’s column On Language in NYT Magazine last weekend called Emoticons: The seamy side of semiotics where he makes the case that language is in the third stage of compression.

  1. Three centuries ago, we were fed the short’nin’ bread of contraction; won’t, don’t, I’m, you’re made the apostrophe the king of cant, which caused a 19th-century lexicographer to denounce writers “carrying contraction to such an excess as to make their writings unintelligible to all but the initiated.”

  2. Then came the period of portmanteau terms, named after the French suitcase with hinged compartments: chuckle and snort blended into chortle; breakfast and lunch fused into brunch; and, in our time, broadcast and the World Wide Web morphed into webcast (still capitalized as “Webcast” by the New York Times copy czar).

  3. Electronic communication has whisked us into a third phase of compression: the Age of Shortspeak. As we listen and watch replays of multicasts to suit our scheduling convenience, those above-mentioned interminable, bor-r-ing four-second pauses are edited out. Humanizing uh, er, ah, um moments of meaningless vamping are pitilessly erased; even the dramatist’s “pregnant pause” has been digitally aborted.

In other words, intro a new “short” way to communicate. It evolves. Repeat.

I know people who use IM who are not good at communicating emotional nuance and some that are. This all boils down to the constant change and evolution of language. Some people are good at adapting and some aren’t.

Arrrgh

P^{)



[The Ethicist] Money Drunk Sun = Lying On Mortgage Application?

May 23, 2008 | 11:44 am | nytlogo |

For many years my wife and I have read and enjoyed Randy Cohen’s “The Ethicist” column in the New York Times. For the life of me, I can’t believe some of the questions.

Even better, the New York Times now has The Ethicist as a podcast, with a new version released every Friday. I pack my iPhone with podcasts and this column is one of my regulars.

This week, I was self-consciously chuckling on the quiet commuter train ride in. It seems that someone was torn by whether or not to lie on their mortgage application.

So much for the differences between right and wrong. It is Memorial Day weekend and we want rays of sunshine!

If you listen to it from now until next Thursday, you can simply click “play” directly off the NYT Podcast page. Look for “The Ethicist for 05/23/2008

or download the MP3



[Achooo!] Proving Once Again That Real Estate Is Global, Not Local

May 23, 2008 | 9:54 am |

Ok, not really.

Last month I did an interview on BBC Radio and the producer said the interview was based on the old adage that “when America sneezes, the world catches a cold.”

There was a pretty interesting article in The Economist, which has been a housing bear since 2003, called Structural cracks: The pain in Spain falls mainly on Mr Drains

Other than trying to get the inner meaning of the title, the chart clearly shows that the countries on the list are performing differently or are in different phases of their respective cycles.

So in a global sense, housing is local after all?

It is, but there are a heck of a lot of local markets that comprise the global housing market.

Some locales that stood out to me:

Singapore and Hong Kong are doing well lately while Japan and Germany are not.

Both Spain and Ireland have parallels with the American housing market, where the inventory of unsold homes has hit a 20-year high, according to Capital Economics. There the pace of price decline, as measured by the S&P/Case-Shiller indices, has been accelerating.

Monetary policy is changing across the globe, weakening buying power like it is in the US. Because (insert tired phrase here:) when America sneezes, the world catches a cold.

Or something along those lines…

If house-price weakness does spread more widely, there may be important economic consequences. There is plenty of debate about the size of the “wealth effect” of higher property prices on consumer demand. But it will hardly help that fuel and food prices are soaring at the very moment when the value of bricks and mortar looks about to sag.


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[Curbed] Three Cents Worth: Manhattan Ebb & Flow

May 22, 2008 | 2:08 pm | curbed | Charts |

Had to dust off my chart tools and re-visit Three Cents Worth, my erratic semi-regular but too infrequent posts on Curbed. This week I go tidal on listings and sales.

Click to view post.

Check out previous Three Cents Worth posts.


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[Bailing Out The Housing Ship] Pirate Economics And Democracy

May 22, 2008 | 11:07 am | nytlogo |

Pirates of several hundred years ago have been getting a lot of attention of late via the 3 Johnny Depp/Disney movies.

Well, apparently pirates formed some of the first petri dishes of modern economics and democracy according to a new book “The Invisible Hook: The Hidden Economics of Pirates” written by an economics professor at George Mason (hat tip to Freakonomics).

The book caught me eye, arrgh, as someone who fancies the likes of (sorry, I digress) Talk Like A Pirate Day each September 19th as well as my friend Chris Miles’ site TalkLikeAPirateDay.com. The “founders of International Talk Like a Pirate Day acknowledge that there is, in people who love to say “Aargh,” a yearning for a certain kind of freedom.”

Aargh!

Presidential candidates, take note: Long before they made their way into the workings of modern government, the democratic tenets we hold so dear were used to great effect on pirate ships. Checks and balances. Social insurance. Freedom of expression.

The pirates who roamed the seas in the late 17th and early 18th centuries developed a floating civilization that, in terms of political philosophy, was well ahead of its time. The notion of checks and balances, in which each branch of government limits the other’s power, emerged in England in the Glorious Revolution of 1688. But by the 1670s, and likely before, pirates were developing democratic charters, establishing balance of power on their ships, and developing a nascent form of worker’s compensation: A lost limb entitled one to payment from the booty, more or less depending on whether it was a right arm, a left arm, or a leg.

Aside from walking the plank analogies, what the heck does this have to do with housing?

I’m getting to that.

If you think about it, one of the arguments against anything in the form of a bailout, is that we let the free markets decide (aka “Aargh”). Good honest hard working people should not be asked to foot the bill for other’s greed. I agree.

But all the “help” done so far is explicitly presented as anything but a “bailout” which is not true. That’s because any “fix” is essentially a bailout.

In a pure sense, the “anti-bailout” sentiment is based on the idea that people took advantage of the lending system to their own personal gain at other’s expense so they should suffer their free market fate.

If people broke laws, they should be punished. But what if they didn’t and gamed the system to its full advantage because there were no regulations or significant repercussions?

My entry into blogging in 2005 was born out of frustration that people around me were gaming the system “legally” (definitely not ethically) and seemingly nothing could be done about it or no one in government was willing to or understood what the problem was. Until now.

Which brings me to my point.

Free markets don’t work if there aren’t guidelines (remember that quote from Pirates of the Caribbean?). The problem with the lending environment of the past 5 years was the lack of appropriate regulation, oversight and enforcement. There was not a level playing field and risk could be shifted off to unwitting (misinformed, naive or stupid) investors.

In other words, it was a systemic problem.

Yet a business enterprise made up of the violent and lawless was clearly problematic: piracy required common action and mutual trust. And pirates couldn’t rely on a government to set the rules. Some think that “without government, where would we be?” Leeson says. “But what pirates really show is, no, it’s just common sense. You have an incentive to try to create rules to make society get along. And that’s just as important to pirates as it is to anybody else.”

Unless all parties have skin in the game, whether it is lenders, investors, borrowers, appraisers, mortgage brokers, mortgage bankers, investment banks, government, regulators, GSEs, ratings agencies, there is no financial democracy and we will have another systemic breakdown.

In other words, we need a workable regulatory structure.

The pirates were a lot more innovative than we probably give them credit for – you do need to lose an arm or a leg if you do something wrong.

Aye…

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[Seasonal Sensibility] Isn’t It Supposed To Get Better In The Spring?

May 21, 2008 | 12:20 am |

Housing markets are seasonal, blah, blah, blah, blah, blah.

Its May so we would expect the housing activity would be higher than it would be say in January. The weather is warmer, the birds are chirping, Lawrence is saying things are great. So whats the problem?

You need to compare the current housing market with the same period in the preceding year or years.

Is June better than December in terms of sales activity and price trends? How about May versus January?

Using this logic, these articles seem a little light.

Yet in markets like Sacramento County, median sales price is down 40% since August 2005. As Andrew Leonard in his column writes:

A 40 percent drop. If those are the kinds of numbers required to goose the market back into action, the entire economy still has a lot of pain coming.

However, I like the decline from peak comparisons, so disregard my argument for using seasonality. I am either hot or cold on it, depending on the weather.


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