Wednesday, May 27, 2009

Salt Lake Board of Realtors April Report

Reproduced from a report prepared by the Salt Lake Board of Realtors. It looks like the link will go dead soon, thus the reproduction.

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Salt Lake County Sales Activity Trend Report
Report Date: Monday, May 25, 2009
Time Period: April 1, 2009 through April 30, 2009
Area(s): 101, 102, 103, 104, 105, 106, 107, 108, 109, 110, 111

Price Class Single Family Home Sales Condo Sales * New Listings
2 Brm
or Less
3 Brm 4 Brm
or More
$0 - $49,9990101011
$50,000 - $74,999000033
$75,000 - $99,9993126429
$100,000 - $119,999397191448
$120,000 - $139,9997168311599
$140,000 - $159,999611304724157
$160,000 - $179,9991122296225231
$180,000 - $199,999735297112189
$200,000 - $219,99943438768175
$220,000 - $239,99912341655176
$240,000 - $259,99911829489131
$260,000 - $279,99921232461144
$280,000 - $299,9992101931299
$300,000 - $349,99902058785159
$350,000 - $399,9990844521121
$400,000 - $449,999041923163
$450,000 - $499,999001212062
$500,000 - $749,9991231340116
$750,000 or Over0088099
Total Units482264367101292,112
Average Price$179,315$223,802$299,656$267,375$174,456$310,578
Dollar Volume$8,607,130$50,579,335$130,650,076$189,836,541$22,504,939$655,941,783
*Figures in the "New Listings" column are based upon the listing priceof each property. All other data is based upon property's selling price.

Days on Market
1 - 30261
31 - 60153
61 - 90113
91 - 12087
121 or Over208
Days on Market is calculated by counting the days between the Listing Date and the Contract Date (the date the home goes under contract).
Financing Type
Lease Option1
Selling Financing9
Utah Housing1

This information is deemed to be reliable, however WFRMLS does not guarantee accuracy.
This report generator ©1999 Wasatch Front Regional MLS.

Housing Inventory

Utah State government enacted the Home Run program in March, which offers $6000 to buyers of newly constructed homes, in an attempt to draw down the inventory. How's that working out?

According to Jack Healy of the NY Times, nationwide sales are up but inventory is up even more:
The National Association of Realtors reported that the inventory of unsold houses, townhouses and condominiums rose to 3.97 million in April, the highest level since November. At the current rate of sales, it would take 10.2 months to exhaust those unsold properties.
The Deseret News has nothing on the NAR report. Lesley Mitchell of the Salt Lake Tribune reports that Utah home prices are depreciating, but has nothing on inventory.

Unfortunately the Salt Lake Board's statistical reports don't show inventory numbers either. But the monthly report* for April shows 839 units sold, with 2,112 new units listed. I think it's safe to assume that Home Run has struck out, and that if the State Legislature really wants to draw down inventory, they need to expand the program to include existing homes, as a way to draw additional buyers into the market.

(* I'm not sure that link will continue to work. I'll see if I can post a copy of the document.)

(UPDATE 6/15: Yup, the April report got replaced with the May report. It'd be nice if the Salt Lake Board would post archived copies of the report.)

Shurtleff Officially Runs

Reports Reid Wilson and Aaron Blake in The Hill. They point out Bennett isn't quite as vulnerable as Chris Cannon:
Even a Shurtleff campaign poll leaked to The Salt Lake Tribune on Tuesday showed Bennett with a 71 percent favorable rating among delegates to the nominating convention. Among those delegates, Bennett holds a 38-31 lead.
I'm hoping that the challenge alone will do some good, forcing Bennett to reevaluate his career.

Housing Investment

Brett Arends has an interesting article in the WSJ on long-term home values:
Since 1987, when the Case-Shiller index of 10 major cities begins, it's risen from an index value of 63 to 151. Annual return: Just 4.1% a year. During that period, according to the Bureau of Labor Statistics, consumer prices rose by 3% a year. Net result: Home prices produced a real return of just 1.15% a year over inflation over that time.
I use 4% to do my personal long-term financial planning. I didn't have any specific reason for that number, the local newspaper suggested the ROI had been 6% for my area and I wanted to be conservative. Maybe I wasn't conservative enough.

Tuesday, May 26, 2009

Wind Dependability

Randall Parker at Futurepundit does some heavy lifting on the North American Reliability Corporation (NERC) 2009 Summer Reliability Assessment:
...on page 52 of the PDF file I espy mention how in the US Midwest in one one grid region at peak demand time (hot summer afternoon) the worst case they've seen with wind generation was only 2% of nameplate capacity. That's pretty bad.
That's just one region, and it's probably a worst-case scenario, but...ouch.

(h/t Instapundit)

Thursday, May 21, 2009

Oh Please Oh Please Oh Please

Robert Gehrke of the Salt Lake Tribune reports:
In his third term in the Senate, Bob Bennett finds himself in unfamiliar and unfriendly waters, roiled by public frustration with Washington and with at least two sharks circling, believing the Republican senator might be vulnerable.
YES! Sen. Bennett needs to realize he hasn't represented his constituents very well. He needs to recognize that the health care legislation he's sponsoring runs counter to conservative values. He champions earmarks and rejects accountability. Having sold out to the financial industry, he supported TARP before he opposed it.

Time for him to go.

Tuesday, May 19, 2009

Housing Starts Fall Again

Martin Crutsinger of AP reports:
A modest rebound in single-family home construction in April raised hopes Tuesday that the three-year slide in housing could be bottoming. But with the supply of unsold homes bulging, foreclosures rising and prices falling, no broad recovery is expected until next spring at the earliest.
You know, it's funny: we saw articles yesterday (Bloomberg) reporting that Q1 housing starts would rise, and this would provide further evidence the recession has bottomed out. But today's crop of articles make little mention of recession.

Nor should they. This little episode shows two areas where reporters need to do a better job:
1. Stop giving so much emphasis to predictions, especially in a volatile climate like the current financial crisis and recession.
2. Separate fact (housing starts gained/fell) from analysis (the economy has therefore recovered/bottomed out/worsened).

UPDATE: Lucia Mutikani of Reuters reports (emphasis mine):
New U.S. housing starts and permits dropped to record lows in April, while retail sales fell last week, according to reports on Tuesday that tempered optimism the nation's recession was drawing to a close.
Here's how she led yesterday's article, predicting good housing start news:
U.S. homebuilder sentiment jumped to its highest level in eight months in May, a private survey showed on Monday, supporting views that the three-year housing slump might be close to an end.
So Monday she thinks the recession will end soon, based on a prediction of increased housing starts. The next day, the prediction turns out (somewhat) inaccurate, and...she tempers her optimism.

Check out this graf from today's article, near the middle:
Analysts said that while the decline in starts suggests the recession has yet to run its course, it should help the housing market work through a huge stock of unsold existing homes and lay the foundation for a recovery from a three-year slump.

"This is essentially a good thing. It means supply will eventually come back in line with demand. Home builders have adopted an appropriate risk aversion stance," said Joseph Brusuelas, an economist at Moody's in West Chester, Pennsylvania.
Why didn't she report this yesterday? As long as there's a "huge stock of unsold existing homes", who in their right mind thinks housing starts are going to significantly improve?

Also missing from today's or yesterday's article is any acknowledgment of the impending wave of foreclosures due to hit the market this month or next.

Thursday, May 14, 2009

Treasury to Regulate Derivatives

Good, someone needs to regulate them. Anne Flaherty of AP reports Pres. Obama wants Treasury to take the job. This was a major flaw in 1999's Gramm-Leach-Bliley Act, which partially repealed 1933's Glass-Steagal Act. The Glass-Steagal part was fine, removing the barrier between retail and investment banks. Turning the Fed into a "superregulator" overseeing all financial transactions was also a good move. But explicitly exempting security swaps and their derivatives was a very, very bad move. Equally bad was the decision to leave out tighter mortgage standards.

Sen. Gramm and Pres. Clinton have defended GLB, saying it didn't have anything to do with the current financial crisis. They're wrong. By refusing to restrict lending standards, and by refusing to regulate credit default swaps and their derivatives, the stage was set for both the biggest financial boom in recent memory and also the biggest disaster.

So regulation is overdue. But there are some questions to ask before proceeding. First, why Treasury? Why not the Fed? Second, how will this affect securitization? Much of the financial world depends on securitization: slow it down and you slow down global finances. (BTW, I'm not saying that's necessarily bad.)

Third, do we really need to regulate all derivatives? The melt-down sprang almost exclusively from consumer loan derivatives (the notorious credit default swaps and CDO's). I haven't heard that other derivative types (commodities, equities) have caused nearly as much of a problem.

(h/t Insta, who doesn't like the thought of Geithner being in charge of this.)

Wednesday, May 6, 2009

Couldn't Happen to a Better Guy

Senate strips Sen. Specter of committee seniority.

Wonder what this does to his election prospects.

Update: John Hinderaker says and asks the same thing, only better and earlier.

More: WaPo reports Specter could recover his seniority next year after midterm elections, but there are no guarantees, and Specter's office isn't responding to questions.

I predict Specter will still win reelection. He's a master survivor, he'll find some way to spin the controversy. He'll be a model Democrat and will continue to send the bacon home to PA.

And Senate Majority Leader Reid comes out the clear winner: he's got a filibuster-proof majority and a former Republican as an indentured servant. Will Pennsylvanians really accept that? I wouldn't, but conclusive medical tests have proven I'm weird that way.

Tuesday, May 5, 2009

Increase Target Elevation

Brooks Barnes of the NY Times reports:
A lack of hit movies is starting to hit home at the Walt Disney Company...

The normal ups and downs of the volatile movie business account for some of the decline. Last year’s results were buoyed by juggernauts like “Enchanted” and “Hannah Montana/Miley Cyrus: Best of Both Worlds Concert Tour” and “National Treasure 2: Book of Secrets.”
Enchanted is a fine movie, but "juggernaut"? Along with Hannah Montana and National Treasure? Ugh. If Disney makes better movies, it'll be because they've actually elevated their sights, not because they've made more over-marketed, underwritten duds like Hannah Montana and National Treasure.

Also interesting to note Barnes didn't mention Wall-E, Disney's real 2008 blockbuster. Oh, and as for the "normal ups and downs", I predict Disney will be just fine after Up is released this month. Hmm, I wonder if Disney is considering promoting John Lasseter to head all their movies, not just animation.

Rangel Is Rich

AP reports Pres. Obama wants to eliminate tax deferrals for overseas profits. Not sure, but if it goes through I believe the U.S. would be the only developed nation with such a law.

Meanwhile, Rep. Charlie Rangel had this to say about the proposal:
For too long, our tax laws have rewarded companies that invest and keep their money overseas and turned a blind eye to the use of tax havens by the wealthy.
This from the same dude that put his money in the Dominican Republic, and didn't even pay taxes on it there, let alone in the U.S.