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Home Price To Increase?

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April 22, 2008 – Comments (6)

Caps players have become very well educated about how over valued homebuilder's still are because of Floridabuilder's posts.

People will likely be misled about the strength of builders over the next few months.  Today Big Picture referenced a WSJ article.  He predicts average house prices will go up over the next few months and has a great graph at the bottom that shows non-seasonally adjusted home sale prices.  The difference on the graph is far more than I'd have expected.

 

Mish has a post on pensions.  I've stated a few times that I expect people's pensions that they believe they have in fact do not exist.  I certainly don't expect to get what my pensions says it will pay.  On a side note I mentioned this to another teacher and that Ontario's Teacher's Pension fund is short 12.7% on funding.  I was corrected that it is one of the richest pension fund and there won't be a problem.  I talk about this and no one believes their pension that they "paid for" will not deliver. 

Anyway, pretty much any surplus in pension funds has been wiped out this past quarter.  This article mentions pension might "use derivatives such as interest rate swaps in their portfolio," and that just makes me think, "egad, isn't that what the school districts that now have huge problems to meet current budget did?"

And, then in Mish's post also uses Buffett's quote on how corporations are cheating pension funds with an expectation of an 8% return.  It isn't going to happen. 

 

6 Comments – Post Your Own

#1) On April 22, 2008 at 10:39 AM, EverydayInvestor (< 20) wrote:

Dwot -- Barry said that home sales will increase. Prices will continue to tank.

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#2) On April 22, 2008 at 12:07 PM, mandrake66 (93.76) wrote:

You have become very fond of the word 'egads' recently. I am still working on whether this has merit as a technical indicator. I don't have enough data points yet. If it does work, I will call it the DEI (dwot egads indicator).

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#3) On April 22, 2008 at 12:21 PM, mandrake66 (93.76) wrote:

I forgot the ';)'

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#4) On April 22, 2008 at 12:22 PM, floridabuilder2 (99.26) wrote:

I haven't heard one new home builder say prices were going up... and lets be clear... the homebuilders are the leading indicators not existing... the new homebuilders led the price increases going up and they led the price decreases going down... its that simple

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#5) On April 24, 2008 at 12:33 AM, dwot (64.18) wrote:

Oh, read that one wrong, was in a rush, like the one I read and posted wrong on this morning...

Yeah, mandrake, egad and ekkkkk.

FB, I've been told I read the article wrong, sales up, not prices. 

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#6) On May 05, 2008 at 11:46 AM, klemenv (99.75) wrote:

They are using 5 observations. That is statistical meaningless analysis!  I wonder, what is their 95% confidence level?

For example, anybody could predict that prices will go up by 4.82562% with 95% confidence level of -15% .. +20%. 

In my blog are two posts regarding Case-Schiller index, where I have used SAS ETS package to model it. And SAS is taking care of trend, seasonal adjustments, etc.

Results are not pretty.

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