Real Estate Supply

[Smiling JOe]

Now that I start looking into the numbers even deeper it gets even more confusing... Nov 05 data (from FAR) shows Existing Home Sales at 322 for FWB MSA...

Then when the give the Nov 06 data at 154 Existing Home Sales they magically drop (revise???) the compared Nov 05 Existing Home Sales to 245...

If they used the originally quoted 322 sales that they gave last year it would actually be a sales decline of 52% yoy not the stated 37% sales decline.....

I guess we can conclude from this that the NAR's statistics are crap

Perhaps the data would be better understood if they actually used the ECAR or Bay Co numbers and not the Ft Walton or PC numbers. I doubt the area of 30A is included in either, so the numbers will vary, depending on what areas are included.

 

[SHELLY]

I guess we can conclude from this that the NAR's statistics are crap

Ding...Ding...Ding! You get to select a large stuffed animal from the top shelf!



.

 

[SHELLY]

Shelly, I do not profess to understand economics as well as you at all, but I am curious how you think that a drop in the Fed rate would cause hyper-inflation and send the dollar straight to he!!?
I was always under the understanding that the drop in the value of the dollar had more to do with with a drop in foreign investment in part because of the tax implications and the difficulty for foreigners due to the Patriot Act and one other Bush induced Act.

Lowering the fed funds target rate (the rate that banks charge each other) carries over into the interest rates banks charge consumers to borrow money.
The "cheaper" the money is to borrow =
the more folks want to borrow =
the more money floods into the system =
more money chasing fewer goods =
creating increased demand for a decreasing supply =
increasing prices for the few goods available = INFLATION.

It shouldn't be a surprise to many that we are experiencing smoldering inflation at this very moment (or haven't you notice the price increase in your grocery or utility bill in the last year or so). Presently, the economy and jobs are <supposedly> doin' swell--in that scenario, if the fed drops the rates, money will flood the market and really fire up inflation (which the Fed says is its number one concern).

Foreign money will find it's way to a country that will pay the highest interest rates. The RE investor wants/needs cheap money to leverage their habit and foreign saver wants to get the most return for their savings. If foreigners don't like the rate the US is paying, they'll take their money elsewhere. Any news item that "suggests" that the Fed might even "think" about dropping interest rates (increasing unemployment rates, decreasing productivity, etc.) has sent the dollar lower. The dollar has already weakened on the news that some countries, like the United Arab Emirates (the 3rd largest oil producer in OPEC) is converting some of its reserves from US dollars to Euro; additionally, some oil-producing countries are mulling over pricing their oil in Euro vs. the US$ which will cause further weakening. If the US attempts to drop interest rates on a weakening dollar, it will send holders of the US currency screaming for the exits causing the dollar to plunge even further.

Since foreigners hold 52% of the US debt, the Fed will think twice about ruffling their feathers, lest they do a dollar dump and become reluctant to buy our debt in the future. Raising interest rates will make the US debt more attractive to foreign savers while at the same time, keeping a lid on inflation. I believe any fed target rate going forward into next year will be an increase--the US would have to be in hurting status (or economic meltdown) if the Fed sees a reason to decrease the rates at this juncture--and no, saving "Joe Presale-Condo" doesn't constitute an economic meltdown. IMO

.

 

[Mango]

Thanks Shelly for your opinion on the above matter.
I still feel the use of the word hyper-inflation is too strong. When was the last time the US experienced hyper-inflation?

 

[redfisher]

Foreign money will find it's way to a country that will pay the highest interest rates. Any news item that "suggests" that the Fed might even "think" about dropping interest rates (increasing unemployment rates, decreasing productivity, etc.) has sent the dollar lower.

Somewhat Wrong


If the US attempts to drop interest rates on a weakening dollar, it will send holders of the US currency screaming for the exits causing the dollar to plunge even further.

Wrong


Since foreigners hold 52% of the US debt, the Fed will think twice about ruffling their feathers, lest they do a dollar dump and become reluctant to buy our debt in the future. Raising interest rates will make the US debt more attractive to foreign savers while at the same time, keeping a lid on inflation. I believe any fed target rate going forward into next year will be an increase

Wrong


--the US would have to be in hurting status (or economic meltdown) if the Fed sees a reason to decrease the rates at this juncture

I thought an Economic Meltdown Was Eminent...


These are the same tired arguments from two years ago (decades ago for that matter) that were going to send us into depression because Alan Greenspan couldn't get it right and now "Ben" won't get it right either...$100/oil, deficit too high, tax cuts won't work, Social Security, corp. greed, country goin to hell in a handbasket, blah, blah, blah...The posts are there from a 04-05 for all too see...How many times to you have to be proven wrong before your arguments become embarrassing...

The Fed will lower in '07 during a moderate slowdown...Let the 10yr be your guide...5.25 to 4.4 on the thought of a harder landing...Now back to 4.7 because the slowdown is slowing...If you get 3.75 in the next 6 mos, you'll get a harder landing...If you hold 4.00 or better, things will moderate...Goldilocks...

 

[Mango]

Foreign money will find it's way to a country that will pay the highest interest rates. Any news item that "suggests" that the Fed might even "think" about dropping interest rates (increasing unemployment rates, decreasing productivity, etc.) has sent the dollar lower.

Somewhat Wrong


If the US attempts to drop interest rates on a weakening dollar, it will send holders of the US currency screaming for the exits causing the dollar to plunge even further.

Wrong


Since foreigners hold 52% of the US debt, the Fed will think twice about ruffling their feathers, lest they do a dollar dump and become reluctant to buy our debt in the future. Raising interest rates will make the US debt more attractive to foreign savers while at the same time, keeping a lid on inflation. I believe any fed target rate going forward into next year will be an increase

Wrong


--the US would have to be in hurting status (or economic meltdown) if the Fed sees a reason to decrease the rates at this juncture

I thought an Economic Meltdown Was Eminent...


These are the same tired arguments from two years ago (decades ago for that matter) that were going to send us into depression because Alan Greenspan couldn't get it right and now "Ben" won't get it right either...$100/oil, deficit too high, tax cuts won't work, Social Security, corp. greed, country goin to hell in a handbasket, blah, blah, blah...The posts are there from a 04-05 for all too see...How many times to you have to be proven wrong before your arguments become embarrassing...

The Fed will lower in '07 during a moderate slowdown...Let the 10yr be your guide...5.25 to 4.4 on the thought of a harder landing...Now back to 4.7 because the slowdown is slowing...If you get 3.75 in the next 6 mos, you'll get a harder landing...If you hold 4.00 or better, things will moderate...Goldilocks...

Redfisher, I am curious as to your opinion vs. a wrong answer to Shelly's reply?

 

[SHELLY]

Thanks Shelly for your opinion on the above matter.
I still feel the use of the word hyper-inflation is too strong. When was the last time the US experienced hyper-inflation?

OK, I'll agree that "hyper-inflation" may be a bit too strong, but since a large number of today's working population never have experienced a bout of inflation (as was the case in the 70's), it will certainly leave a mark.

The US has been experiencing inflation for some time, but the facts have been hidden by the government who've been re-engineering the Consumer Price Index over the years. (i.e., housing costs getting too high?--let's measure it using rental costs; steak prices getting too high--let's measure it using hamburger, no make that--Gaines Burgers). "Let's gauge inflation by taking out food and fuel--Americans don't care about that."

Since the 70's bout with inflation, China and Walmart have "happened" which have kept inflation in check while wages stagnated and higher-salaried manufacturing jobs morphed into low-pay service jobs. Additionally, anyone 18-years-old and up can now get thousands of dollars in credit if they can successfully fog a mirror (although there have been cases where cards have been issued to dead people)--as a result, excessive personal debt has also come on the scene since the 70's.

The US is leaning on China to let the Yuan float--China is telling the US it needs to get its citizens to change their materialistic ways and start saving their money (fat chance). It's a matter of who is going to blink first (keep in mind that China is a holder of a lot of US debt and the Americans like their bling).

We were far more prepared to sit through a bout of inflation in the 70's; take a look at the charts below--run your finger up from where we were in the 70's and look at where we are now....do you think today's over-leveraged citizens are prepared to face any type of inflationary cycle?


US HOUSEHOLD DEBT:

US SAVINGS RATE:

 

[redfisher]

Redfisher, I am curious as to your opinion vs. a wrong answer to Shelly's reply?

What are your questions?


Presently, the economy and jobs are <supposedly> doin' swell

And what about my "Imminent Economic Meltdown"...Shelly, where is it?

 

[Mango]

Redfisher, I was inferring that if you are going to state that Shelly is wrong on just about every point made, you should back it up with a reason why you feel her opinions are wrong, not just put wrong.
No one is saying you have to agree, but prove your case with a logical argument.

 

[redfisher]

Redfisher, I was inferring that if you are going to state that Shelly is wrong on just about every point made, you should back it up with a reason why you feel her opinions are wrong, not just put wrong.
No one is saying you have to agree, but prove your case with a logical argument.

Mango, as stated previously, these are arguments I have debated at length in past posts ad nauseum...They are not opinion based...(For example: WHEN the Fed lowers rates, the dollar will not collapse)...It frustrates me when I hear these blanket statements that show no financial competence...The world is full of believers and those who don't...Those who are successful and those who are envious of success...Its easy to believe when those that "don't" speak w/conviction...But its very dangerous...What do you believe? Red:roll: