Economics

Fortunes Are Not Made on Shaky Intelligence – Conclusion
Written by Jonathan Smoke   
11.09.2007
As I said in yesterday’s post,
“The Fortune article looks for price falls in almost every one of the 54 markets studied. While I do see significant price risk in areas that saw great appreciation in the early part of this decade and in areas suffering economically (likely a result in changing and now more realistic view of future prices), the rest should be at worst static.”
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Fortunes Are Not Made on Shaky Intelligence – Part 2
Written by Jonathan Smoke   
11.08.2007
In yesterday’s post I started discussing the errors I saw in a recent Fortune article on real estate. I ended yesterday’s post questioning the “price-to-rent” ratio calculations and cited a couple academic papers that support the proper way to calculate home price ratios.

Even upon further reflection today, I’m still not sure if Fortune’s crude ratio reveals anything meaningful. Think about it this way: If we look at households as different segments, we find distinct differences in preferences towards housing. Preferences do vary by market, but in general some segments are more likely to rent and some are more likely to own.
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Fortunes Are Not Made on Shaky Intelligence
Written by Jonathan Smoke   
11.07.2007
As a housing geek, I am always on the lookout for new analysis and articles about housing trends and forecasts. Luckily since doom and gloom sells, it seems every major publication these days has at least one article focusing on real estate. So I wasn’t surprised when I picked up the latest issue (November 12, 2007) of Fortune and saw prominently highlighted on the top of the cover the housing-related feature: “Real estate: Buy, Sell or Hold?” But when I read the article, I was surprised to find some of the worst analysis I have seen to date on home prices and their likely direction in the future.
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Are the Case-Shiller Indices Representative of the Average Market?
Written by Jonathan Smoke   
10.30.2007
The S&P/Case-Shiller indices on home prices released today that covers home prices through August painted a continuing grim picture for existing home prices in the markets covered.

According to the Standard & Poor’s press release, the indices show further declines in the prices of existing single family homes across the United States, marking the 8th consecutive month of negative annual returns and the 21st consecutive month of decelerating returns.
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Rise in New Home Sales Not Surprising
Written by Jonathan Smoke   
10.25.2007

The Commerce Department released the preliminary new home sales data for September today along with revisions to the previously reported August sales.

New home sales in September increased 4.8% to a seasonally adjusted annual rate of 770,000 from a revised 735,000 in August. Previously the August rate of sales had been reported as 795,000.
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