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Thoughtful Comment Sparks Our Drive for More Serious Analysis Economics Written by Jonathan Smoke    06.20.2007 We enjoyed receiving a thoughtful message today from a user who has been following our review of the connection between jobs and house price appreciation: “Job growth, depending on how it is defined, often includes components that are transitory or temporary in nature. As such, it would not be expected to be the main driver of house price appreciation, which is shown by the low R-squared value (in either plot). A better driver would be more permanent in nature like a change in wealth, income, or earnings.... This item includes 1 comment Read more...

Silver Lining in the Week’s Negative News Economics Written by Jonathan Smoke    06.20.2007 The news so far this week has been decidedly negative in tone for housing. On Monday, the National Association of Home Builders/Wells Fargo Housing Market Index was released. The index, a gauge of builder confidence and expectations over the short term, was 28 and at its lowest level in over 16 years. “Builder confidence in June slid to its lowest level since February 1991 as concerns about subprime mortgage lending and rising prime mortgage rates soured the outlook for recovery.” No comments for this item Read more...   Jobs Are a Good Signal of Housing Market Health Economics Written by Jonathan Smoke    06.18.2007 As promised in Friday’s post, we pulled the data on all metropolitan statistical areas in the U.S., and it confirmed that job growth (or losses) are a good indicator of the future performance of housing at least as it relates to the home price appreciation. We used home appreciation between 2006 and 2005 and compared the results to job growth over the same period. As you can see from the chart below, the two measures are positively correlated, confirming our hypothesis and supporting the finding that job losses are the single biggest factor that drive declines in home price appreciation reported in The State of the Nation’s Housing 2007. No comments for this item Read more...   Beware of the Weak Job Markets Economics Written by Jonathan Smoke    06.15.2007 Continuing the post from June 13, we ran the numbers for job losses (i.e., negative job growth) over one year, comparing 2006 to 2005. Based on job losses being the single largest factor foretelling a decline in home prices, we found our worst performing markets in the country from a jobs perspective. Topping the list were New Orleans and Gulf Port-Biloxi, as their local economies reflect the damage from Katrina in 2005. The rest of the list is an interesting assortment of mostly smaller markets in the Midwest and South. No comments for this item Read more...   What Factors Signal Likely Home Price Declines? Economics Written by Jonathan Smoke    06.13.2007 Yesterday’s blog covered the likely downturn in remodeling forecasted by The State of the Nation’s Housing 2007 report. What precipitated this decline was the decline in home price appreciation we have been experiencing for the last year and may well experience for 1-2 years more, as excess supply is slowly absorbed by new households. The Harvard study also showed that a slow down in home price appreciation was a key part of the tipping point that started the overall slowdown in new and existing home sales. This item includes 1 comment Read more...   The Bell is Tolling for the Remodeling Business in 2007 and 2008 Economics Written by Jonathan Smoke    06.12.2007 In chapter 2 of The State of the Nation’s Housing 2007 report from the Joint Center for Housing Studies at Harvard University released on Monday, the state of the U.S. Housing Markets overall is reviewed, including existing housing, new home construction, rental and remodeling. The prognosis is not good for any of the markets. Existing and new home sales are projected to be down for two years as an estimated 500,000 in excess production is slowly absorbed. While this happens, home prices will at best stagnate but will likely fall in many markets. The rental market may also be impacted by further vacancies caused by affordability. No comments for this item Read more...   Didn’t We Tell You Affordability Was the Key Issue? Economics Written by Jonathan Smoke    06.12.2007 We aim to be on top of trends and key intelligence for our user community. Friday’s post turned out to be prescient as the Harvard Joint Center for Housing Studies released their 2007 State of the Nation’s Housing report. The key conclusion from their press release stated: No comments for this item Read more...

More... Affordability Should Be a Top Concern According to NAR, Prospects for 2007 Continue to Decline Which Part of the Bell Curve Is Best for the Success of a Market? In Search of Leading Indicators Taking a Cue from Stock Fund Managers Were New Home Buyers in a Funk in April? Second Round of Cuts at Pulte Drilling Into “National” Home Price Stories Which Way Are U.S. Home Sales Headed? Neither Supply Nor Demand Will Help the Average Builder This Year

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