Saturday, April 30, 2005

Housing Statistics From Mother Jones

Mother Jones has a list of statistics on homeowners; here's a sample.

"The National Association of Home Builders’ 'showcase home' for 2005 is 5,950 sq. ft. That’s 15% bigger than last year’s model."

"1 in 5 new homes is larger than 3,000 sq. ft.—the size at which it becomes unmanageable to clean without hired help."

"Only 2.7% of San Francisco’s teachers, 5.7% of its cops, and 4.2% of its nurses can afford to buy a home there."

"1 in 4 Californians are considering moving out of state to reduce their housing costs."

"Since 2001, the number of Americans who have bought second homes has increased by 24%."

11 Comments:

At 8:49 AM, Anonymous David Cooper said...

When does this madness end? I have been trying to short the homebuilders with no satisfaction. We are know this is a bubble but the problem is we don't know when its going to end . Any thoughts??

P. S. This is a fantastic blog!!!!!

 
At 9:14 AM, Blogger Ben Jones said...

David,
Shorting the HB's is pretty dangerous. I have watched them everyday for months and they have a committed group of longs. The volatility is increasing, though, a sign of a turn. I am working on some interviews dealing with the timing issue, so check back and thanks for commenting.

 
At 9:17 AM, Blogger goleta said...

Any theory that can pinpoint when a market will crash worths more than one nobel prize in economics. Several years ago, there was an article on Scientific American about famous theories on market crash and all I remember now is even though long term trend is easy to predict, no theories have been able to predict a crash with desirable precision.

 
At 9:48 AM, Blogger John Law said...

those houses are getting bigger right in time for a possible secular bull market in commodities.

imagine barely being able to make your mortgage payment and seeing your heating(or cooling) bills rise?

 
At 11:59 AM, Anonymous Anonymous said...

Friends of a friend, a retired couple, built themselves a 7000 sq ft home. Now they shut off part of the house in the winter because they bills are so outrageous. American's sense of entitlement is astounding.

 
At 12:48 PM, Anonymous Anonymous said...

I dread to think what the maintenance on those large homes will be in 5-10 years. If the mortgage and energy bills don't financially drown anyone stuck with a large home, the maintenance costs will (roof, windows, paint, etc)! In the upper Midwest and Northeast winter is hard on housing. Kids are hard on house interiors.

 
At 2:03 PM, Blogger Van Housing Blogger said...

Hi Goleta,

you're right - predicting the timing of a crash is very hard. It's hard because psychology holds up a bubble, not fundamentals. (That's why it's a bubble . . .)

I know how to relate fundamentals to prices, but I don't know enough about psychology to hazard any guesses.

Note that Robert Shiller in all of his media appearances never predicts *when* the bubble will burst. He just says that it will.

On Piggington's San Diego website, he has a quote from the Economist magazine that says something like "Two things about bubbles: 1) they always last much longer than you possibly expect them too. 2) They always eventually end."

vhb

 
At 3:03 PM, Blogger John Law said...

speaking of maintenance costs, there is no way there are enough skilled builders to build all those houses. some of them have to be shoddy.

 
At 8:20 PM, Anonymous David Cooper said...

I agree estimating the timing of the crash of the bubble is difficult but if we don't try and figure out the timing this becomes just an academic exercise on our part. I think every poster here believes that there is a bubble, my goal is to try and make money on it and not just avoid it. The property I own really isn't tradeable(my wife wouldn't let me sell our home and I need my other property for my business). We all have some anectdotal evidence of a turn but what is going to be the thing that breaks this bubble wide open? I don't need to call the top but I need to make sure I am least on the train when it leaves the station???? Any and all thoughts would be appreciated! Thank you!

 
At 8:29 PM, Anonymous Anonymous said...

My philosophy of investing:

Better to get out too soon than too late!

 
At 9:24 PM, Blogger Ben Jones said...

David,
Look for my post on Monday regarding mortgage origination/Fannie Mae that may show the train has already left the station. Good luck.

 

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