Abolish all taxes except...

...the property tax:In 1879, Henry George ... found it perverse that we tax productive activities like work and innovative investment while letting landowners grow rich simply because they scooped up property at the right time. In that spirit, George called for a “Single Tax” on the unimproved value of land. There’s a certain compelling logic to the Single Tax that stands the test of time. When you tax income, aren’t you punishing people for working...

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What Sort of Housing Style Do You Prefer?

Or? Or something completely different from the above two images?Please join in the discussion of 'What Sort of Housing Style Do You Prefe...

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Case Shiller Home Price Index Up Again For Washington Area

The Case Shiller Home Price Index was up for the second month in a row in the Washington, DC metropolitan. In May, it rose .67% on a seasonally adjusted basis. Is this the bottom for the DC area or will prices start declining again later in the year?Here is MarketWatch Article on today's number...

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Home prices: DC vs. California and Florida

Graph: Home prices in DC proper, vs. California and Florida.Home price data comes from the Federal Housing Finance Agency's House Price Index. Note that it only measures homes with conforming mortgages. (Homes with subprime mortgages are not counted.) Also note that the index is not adjusted for inflati...

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Local Housing Blogs

Below is a small list of some of the local Washington, DC - Baltimore Area Housing Blogs:Frankly Realty (Virginia) Northern Virginia Housing Bubble FalloutBaltimore Housing BubbleThese links are always on the right side of the Bubble Meter home pa...

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"We needed a recession"

Thoughts from Harvard economist Jeffrey Miron:By the end of 2005, it should have been apparent that the U.S. economy was fundamentally misaligned. We had significantly overinvested in housing and significantly underinvested in factories, plants, and equipment. In effect, we needed a recession: a period to readjust the balance between the different types of capital.More broadly, failure is an essential aspect of free markets. Failure shows capitalism...

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Monthly Home Price Changes Washington DC Metro Area

Click on image for larger viewPlease note that there was much discussion on this blog about the meaning of the increase in home prices in April 2009. This was the first monthly price increase since 2006. Looking at the larger picture, it still seems that monthly price decreases will resume later this year. The prices decreases are not yet over. Expect small monthly price decreases later this year. In my mind most areas of DC are likely to see another...

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On vacation

I'm gone for summer vacation for the next two weeks. I'll be back in the first week of August. I have scheduled a few short posts to appear while I'm out, but David says he'll blog while I'm gone.Here's my view for the next two weeks, assuming good weath...

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Where the foreclosures are

The darker the red, the more the foreclosures.Sour...

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Short sales are increasing

From The Washington Post:The number of short sales completed jumped 208 percent during the first quarter of this year compared with the same period in 2008, according to a report issued last month by the Office of Thrift Supervision and the Office of the Comptroller of the Currency, which regulate banks.Short sales could increase further as home prices continue to fall, leaving a growing number of borrowers owing more than their home is worth. Also, the Obama administration is implementing a program to pay lenders to accept less than the balance...

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Home builder brings back ARMs

Home builder Toll Brothers is bringing back the adjustable rate mortgage in order to sell homes:A farewell to ARMs? Not at Toll Brothers.The luxury home builder is enticing home buyers with an offer on a “hybrid” adjustable-rate mortgage that offers a 3.75% rate for seven years that converts to an annual adjustable rate after that, reports our colleague Dawn Wotapka at Dow Jones.Toll is bringing back a loan product that proliferated during the housing boom because it offered the prospect of lower monthly payments over the initial three-, five-,...

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Washington, DC in graphs

All these graphs are for DC proper, not the entire metro area.The Federal Housing Finance Agency's House Price Index for DC. Note that it only measures homes with conforming mortgages. Also note that the index is not adjusted for inflation.Washington, DC's homeownership rate. Notice it is below 50%.Washington, DC's unemployment rate. It is higher than the national average, while the entire DC metro area's unemployment rate is lower than the national...

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The most affordable places to live

Money magazine is out with its list of "Best Places to Live 2009".It also has a list of the most affordable places to live. (Think middle America.) And for those of you who really, really want to live in Arlington, Arlington is on the li...

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PMI Group: Expect more house price declines

This maps shows the risk of further house price declines for the country's metropolitan statistical areas. High risk is red; low risk is blue. Click on the image to see the full-sized version:The Wall Street Journal summarizes PMI Group's report:Nearly 85% of the country’s housing markets are facing an increased risk of home price declines over the next two years, and prices are likely to slide in half of the largest 50 U.S. markets through the beginning...

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Pending home sales are an unreliable indicator

The Wall Street Journal says not to trust pending home sales as an indicator of actual future sales.The National Association of Realtors is trumpeting a fourth consecutive monthly gain in their report of pending home sales. The index tracks the number of contracts signed on homes...In the past those contracts would give a pretty good indication of what existing home sales would look like when the NAR reports its [sales] numbers a few weeks later. These days the report’s reliability as an indicator is shakier. More pending sales appear to be falling...

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WSJ: A double-dip in the Case-Shiller index may be coming

The Wall Street Journal warns that a decline in high-end home prices may cause a double-dip in the S&P/Case-Shiller Home Price Index:The pace of home price declines tracked by the S&P Case-Shiller home-price index slowed for the third straight month in April. But the bloodletting may not be over.Here’s why: If price declines accelerate for the mid-to-upper end of the housing market, then that could generate enough large declines in values—even among a small segment of the overall housing market—to push the index lower still.Prices at the...

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The recession is slowing household formation

The Washington Post points out the effect the recession is having on household formation:The number of people setting up their own households has fallen to some of the lowest levels in a generation, a trend that threatens to prolong the recession.Many people, young and old, who in more promising times would be out on their own, are finding themselves ... stuck at square one. ...The recession has wreaked havoc on all sorts of life plans. Tumbling stock prices have cut retirements short. Layoffs have forced middle-aged children to move in with mom....

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Will the California Budget Crisis Put Signifcant Downward Pressure on Housing Prices?

Please weigh ...

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Prime borrower delinquencies rising

This could cause higher-priced homes to fall more in value:Mortgage delinquencies show few signs of slowing down, according to data from an industry-wide coalition of mortgage investors and servicers.The number of mortgages that were 60 days or more late reached 5.65% in May, which makes for the highest level on record.... Foreclosure starts surged after pausing earlier this year as various states and lenders held back foreclosures through various moratoria. Some 257,000 homes entered the foreclosure process, up 5.7% from April and 34% from one...

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Apartment vacancies are rising and rents are falling

From BusinessWeek:Apartment vacancies in the second quarter rose to 7.5% — the highest percentage for that period in 22 years, according to today’s apartment market report from Reis.It seems that people are moving in with friends and family, or are finding roommates.Effective rents, which include concessions, fell 1.9% from a year earlier and 0.9% from the previous quart...

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How to hedge the value of your home

Robert Shiller has a new way to bet on housing prices:On June 30, MacroMarkets launched the first products that let investors make a pure directional bet on home prices. Called MacroShares, they trade on the New York Stock Exchange; their value is derived from changes in the Case-Shiller 10-city home-price index. If you expect home prices to rise, you'd buy the Up Metro Market (UMM); bears can buy the Down Metro Market (DMM). On the first day of...

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A look at key economic indicators

Here is a look a several important leading and coincident economic indicators. Leading indicators help forecast the future of the economy several months in advance. Coincident indicators reflect the current state of the economy. Leading Indicators The most reliable leading indicator is the slope of the Treasury yield curve. The slope is typically measured by the spread between the 10-year Treasury bond yield and the 3-month Treasury bill yield....

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Is the economic stimulus effective?

Back when President Obama was arguing for the fiscal stimulus package, his economic team created a graph forecasting the effects of the fiscal stimulus. The blue lines below show the expected unemployment rate with and without the fiscal stimulus. The maroon dots show the actual unemployment rate so far.The fact that the unemployment situation is substantially worse than expected didn't prevent President Obama from bragging back in late May that,...

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ADP Employment Survey graph

Here is Automatic Data Processing's measurement of the monthly job losses during the recession. Compare this with yesterday's graph of the government's job loss numbers.Unlike last month, ADP and the government are in close agreement this month. ADP says 473,000 job losses in June and the government says 467,000 job loss...

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Job losses jump

Job losses and the unemployment rate are key signs of economic decline or recovery. There is mixed news on the employment front. Job losses jumped unexpectedly, but the rate of increase in the unemployment rate slowed: The battered U.S. labor market took a step backwards last month as employers trimmed more jobs from their payrolls in June, according to a government report Thursday. There was a net loss of 467,000 jobs in June, compared with a revised...

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A Blast from the Past (2005)

Cheesy Ad from Mortgage Company. [October 2005]Powerpoint Slide from the California Assocation of Realtors [Fall 20...

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Sheila Bair tried to sell her home

From The Wall Street Journal:Sheila Bair, the chairman of the Federal Deposit Insurance Corp., takes her 14-room home in Amherst, Mass., off the market after cutting its sale price by $100,000. She had originally listed it for $795,000 in April. Ms. Bair and her husband, Scott P. Cooper, bought the 1860s house in 2002 for $355,000. The home has five bedrooms, new roofing and a counter-current basement pool.Since both Sheila Bair and Tim Geithner...

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Americans unenthusiastic about financial benefits of homeownership

This news is actually about a week old, but I've been slow:The long-held belief (some call it a myth) that homeownership is a sure-fire ticket to building wealth and equity might be changing, according to a recent survey from the National Foundation for Credit Counseling.Nearly half of those surveyed no longer think owning a home is a realistic tool to build wealth.Consider it a by-product of the housing crisis, as millions of Americans face plunging home values leaving many stuck with a house worth less than the mortgage. ...“It appears that whether...

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