Matrix Blog


[Housing On Fire] Blogoshere Hose-Down

April 14, 2008 | 12:01 am |

Periodically, I like to round-up some of my favorite recent blog posts that are housing market/credit/economy related. There’s a lot of passion and great commentary out there, you just have to light a fire to find it (sorry). Of course, I throw in random stuff as well.

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[List-o-links] 3-31-08 Credit Crunch Update

March 31, 2008 | 12:01 am | |

The Crunch bar has always been one of my favorites but it never seemed to last as long as I wanted it to and no matter how hard I tried, I always ended up with some of it on my hands.

This candy bar has a taste we can’t seem to get rid of.

[Matrix Zeppelin] a hefty profit, take your family out to dinner, Prolonging, rather deal with higher interest rates, greed and dishonesty, cliches, They are the worst, “fix” value, staight out liar, muck up the works

March 3, 2008 | 12:01 am | |

Well, the Matrix Zeppelin needed repairs, but the turmoil in the credit markets made it difficult to get a loan to make the repairs. But with the stimulus plan rebate check on its way, I decided to put the repairs on my credit card. Here’s a selection of recent comments on Matrix, whose readers cut to the chase:

  • Eliminate AMC’s and their high pressure tactics. They muck up the works mostly, get the instructions wrong, order 1004’s for condo units, forget to give you a unit number, or sales contract, contact phone numbers, etc etc.

  • Who has been a lender for 15 years is just a straight out liar. Terry comments that he or she has not yet to find an appraiser who will fix value. That means that he or she has tried, therefore the problem does exist. I believe Terry is just mad because now he or she will not be able to control a appraiser or appraisal value on a property. I have had on numerous occasions mortgage people call to see if I would push value. I never did and never will.

  • I’ve been a table funding correspondent lender for 15 years and I’ve yet to find an appraiser who will “fix” value for me. Your premise that mortgage brokers are pushing appraisers to set value, in my opinion, means the appraiser is the one to blame, not the mortgage broker. Certainly, there are “crooks” in every aspect of every business. Maybe you should get rid of them and not penalize those that have never had an issue following the lending guidelines.

  • Unless there is a minimum appraisal fee then I see more problems coming from this then good. How is the government going to order an appraisal? What would be different from whats going on with AMC’s now? They are the worst of the worst in terms of pressure and poor training. Somebody better clarify this quick because there is no such thing as a disinterested business

  • When we start to see lots of job listings for asset managers and work-out professionals on et al we’ll know this thing is getting understood and we’re there. Until then we hang in

  • There’s been a paradigm shift in cliches

  • the banks lent 100%+ on the appraised value of the home without looking at ANY supporting documentation. The model is flawed because it does not account for greed and dishonesty.

  • As a buyer, I’d rather deal with higher interest rates and less innovative financial products along with a lower house price. My property taxes will be lower, and I can always refinance if interest rates drop in the future.

  • What’s the point if they’re just going to default a few years later due to ARM resets? Note that I’m not even talking about the abuse from liar loans. If the conforming limits varied by region years ago, I would not have a problem with that. However, introducing this right now (and temporarily at that) will have the effect of prolonging the housing crisis more than necessary.

  • Jon Stewart summed up the “too little too late” observation on the Daily Show last night with the following (paraphrased) quip: “Look, we know your house is in foreclosure … and you lost your job … and you don’t have health coverage. But listen, here’s $400. Take your family out to dinner at a nice restaurant and try to forget we destroyed your economy.”

  • This video makes it seem like all the people who got mortgages needed to refinance or had rate adjustments. While in fact most people never needed to refinance nor did they have rate adjustments. Additionally, of those people that needed to get out of their sub-prime mortgages, a large portion were able to sell their property, which appreciated enough to yield them a hefty profit.

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[List-o-links] 3-2-08 From The Tank: Housing Needs To Adapt, Improvise and Overcome

March 2, 2008 | 9:52 pm | |

On a WWII binge, having watched Saving Private Ryan, Band of Brothers, Letters From Iwo Jima, Flags of our Fathers and Heartbreak Ridge within the past month, it was time to bring out The Tank.

As Clint Eastwood said in Heartbreak Ridge, adapt, improvise and overcome…

Here’s a collection of recent articles I enjoyed but didn’t have the ahem firepower to blog.

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[List-o-links] 1-27-08 Subprime Cuts: Pets At Risk, Concedes Failures, Presidential, Greenspan

January 28, 2008 | 12:01 am | |

After consuming a 7 ounce steak during at a celebratory dinner with my wife on our 24th wedding anniversary, I was inspired to bring back this Subprime post series (I know, I lead a pretty pathetic life). Subprime, as a topic, has come back strong in recent weeks. Once rationalized just to be the smoking gun, its now clearly more than that.

And that steak was great…

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[List-o-links] 7-9-07 From The Tank: Trying To Make It To 2012

July 9, 2007 | 12:00 am | |

Its been a while since we fired up the Tank, with stories or ideas that didn’t quite make it into Matrix for one reason or another over the past month (ok, mainly because I was frozen with anticipation over the impending iPhone release).

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[List-o-links] 6-29-07 Subprime Cuts: iPhones Used To Get Past Subprime Disconnect

June 29, 2007 | 12:32 pm | |

Ok, not really but its a great way to present both subjects, which dominate the news right now. I was inspired by a colleague of mine who favors graph paper style shirts, and who suggested I address how the subprime mortgage implosion can be resolved through use of iPhones.

But try not to read between the lines.


[List-o-links] 5-14-07 Subprime Cuts: Boiler Room, Bailout, Toll, FICO & IPO

May 15, 2007 | 9:18 am | Public |

With a bunch of USDA acronyms like FICO and IPO, 4-letter builder names and Boiler Room sales pitches, this cow has chewed more CUD than it can swallow.

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[Matrix Zeppelin] Negative carry, when they crashed, risque calender, 212, buyers quibble, explain to the bank, WAY more, Repeat sales, slippage, derivatives

April 6, 2007 | 8:57 am | |

Well, the Matrix Zeppelin has been in storage lately, its owners trying to figure out whether to rent or buy a garage for it. In the meantime, Matrix readers have been busy trying to touch up their photos of the market, trying to decide whether it looks better or worse than before:

  • We’re all familiar with the rapid escalation of home prices over the last 10 years. For most Americans, their homes have been the best and in many cases the only investment that they have made in their entire lives. Some have gone so far as to invest in several homes and have endured ‘negative carry’ on the cash flow in anticipation of leveraged capital gains a few years down the road. But where does it stop? Can housing continue to increase at twice the Consumer Price Index for the next 10 years?

  • According to Steven Roach, the dot com stocks only made up about 6% of the markets when they crashed, but sub-primes made up about 10% of last years real estate market.

  • As a Realtor and a professional photo retoucher/photographer, I would NEVER alter a photograph in such a way that it could be perceived as misrepresentation. I am very careful about such things. In the past I have adjusted the color, contrast, brightness etc. (say if I took the image on a cloudy day). I have removed trash cans from front yards, laundry and toys from bedroom floors, even a risque calender or two from office walls…but never ever have I given the impression that the house was in better repair, the yard was more manicured or the neighborhood was more desireable. We have to be very careful about doing anything that could come back and get us later.

  • I live and work in 10021 and would hate to see any changes. It’s not status (I swear)it’s just that as I age (mature?) I find myself less and less tolerant of these kinds of upheaval. My home and office phones are 212 (I rule!) but my cell has gone from a 646 to the foreign sounding 347. An agent I work with, an otherwise fine gentleman, has a 212 cell number. he is hated office wide for this.

  • As a broker when dealing with condos i use the square footage given in the offering plan and then say approximately. Reasoning being the offering plan to me is the official number and as you said everyone else who comes in to measure will get a different number. When buyers quibble my response is that all square footage is not the same or more clearly 1000 sf in one property will seem larger than 1000 sf in another. It comes down to usable space, how the space presents etc and then, what are you buying square footage or a home?

  • Whenever I appraise a condo, I always measure. Most times the official measurement is very close. I presume this is because the architect has to certify the plans…Nonetheless, I generally use the official measurement when doing the sales comparison approach. Why? Because that is what the typical buyer will consider. But I always include both measurements and explain to the bank the reason for the discrepancy (e.g., they included exterior walls, different method).

  • You fail to realize that “homeownership” can only continue if employment does. What it sounds like you’re really saying is “I have a job and a house so I don’t care about other people.” Having higher employment is WAY more important for this country than high home “ownership.” People can always rent a place to live, but it’s more important that they be able to eat and clothe themselves than buy a house.

  • Repeat sales method takes each sale and compares the price paid versus its prior sale and then you combine the change in aggregate over a specific period – shiller apparently adjusts or factors for changes in the house – ie an extension. I’m not sure how this is done and it won’t consider an extensive renovation, for example nor does this index consider foreclosures or new development (its the first time sold so there is no repeat).

  • Case-Shiller picks up foreclosure sales between the bank and the market, not the mortgagee and the lender. From the methodology paper: “… Although identified foreclosure transfers are excluded during the pairing process, subsequent sales by mortgage lenders of foreclosed properties are candidates to be included in repeat sale pairs.” New developments are not included because the methodology requires at least two recorded transactions prior to admmission into the index. Since Case-Shiller and OFHEO are repeat sales based indexes, there is “slippage” in the sense that untraded iventory is not absorbed in the indexes. (As correctly noted above.) If there was an appraisal method, then a value could be guess-timated. However, over the long run, all these properties will eventually transact and will then be accounted for in the indexes.

  • There is a Case-Shiller index that tracks national housing prices. The index symbol is SPCSUSA. It updates quarterly instead of monthly. It is being traded as a forward over-the-counter (OTC), not as a listed futures contract. The forward market for expiration February 2010 is -12% bid, -4.25% offered. The derivatives market views nationwide housing prices as expressed by this Case-Shiller index as substantially lower looking out three years.

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[Media Chain-Links => Post March Madness] 1Q 2007 Manhattan Market Overview

April 3, 2007 | 7:17 am | | Public |

My firm released the 1Q 2007 Manhattan Market Overview that we author for [Prudential Douglas Elliman]( today. Its pretty much consumed most of my time for the past week and I am glad it is finally out. The “pretty” version should be online by the end of the day.

Note: I am equally thrilled that I won my March Madness pool last night with a Florida win.

The numbers were released and my summary of their interpretation were provided to the media for the coverage today. The actual [data]( and [charts]( will be available later today as well.

A year ago, I began posting the links to the coverage of each report as they are released to see how each media outlet reports the market using the exact same data. I find it to be an interesting process.

This list of articles is presented basically when I found them. I also include some duplicate news feeds because I like to see what regions are interested in the story – I place those near the bottom because of the repetition. I’ll keep adding links through the end of the week.

The Link List

Market Strong for Apartments in Manhattan [NYT] April 3, 2007
Big Apple’s Housing Market Shines [] April 3, 2007
Manhattan home prices on the rise – again [CNN/Money] April 3, 2007
CITY HIGH RI$E [New York Post] April 3, 2007
Manhattan Apartment Prices Increase at Slower Pace [Bloomberg] April 3, 2007
Wall St dollars help NY buck U.S. housing decline [Reuters] April 3, 2007
Buoyant Manhattan Market Bucks National Housing Trend [New York Sun] April 3, 2007
No bubble in NYC apartment prices [New York Daily News] April 3, 2007
Manhattan Market Report: Sales Soar, Prices Nudge Up [Curbed] April 3, 2007
Residential market in bloom [The Real Deal] April 3, 2007
Manhattan Apartments Keep Selling [Gothamist] April 3, 2007
Manhattan home prices still rising [MSN Money] April 3, 2007
Wall St dollars help NY buck housing decline [Yahoo! News] April 3, 2007
Manhattan’s real estate market stays hot [amNew York] April 3, 2007
Big Apple Bucking National Housing Market Trends [All Headline News] April 3, 2007
Manhattan Residential Market Surges in 2007 [Commercial Property News] April 3, 2007
Quarterly Figures Defy Dour Predictions [New York Observer] April 4, 2007

Radio and TV clips

Manhattan Residential Market [Bloomberg TV] April 3, 2007
Manhattan Residential Market Surges in 2007 [Dow Jones TV] April 3, 2007
Manhattan Residential Market [Bloomberg TV] April 3, 2007
Manhattan Residential Market [WABC-TV] April 3, 2007
Manhattan Residential Market [WNYW-TV Fox 5] April 3, 2007
Manhattan Residential Market [NY 1] April 3, 2007
Manhattan Residential Market [NY 1] April 3, 2007

[Bloomberg Radio] April 4, 2007
[Bloomberg Radio] April 3, 2007

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[List-o-links] 4-2-07 Subprime Cuts: Turkey, Suing, Crimping

April 2, 2007 | 9:27 am | |

With enough here for two stomachs and my cow analogies running, well, thin, here’s a collection of some key prime mortgage stories of the week.

March Madness update: If Florida wins the championship tonight, I win the pool and my 8 year old comes in fourth!

but I digress…

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[List-o-links] 3-19-07 Subprime Cuts: Calling All Cows

March 19, 2007 | 12:01 am | | Public |

With the subprime cows relegated to dairy duty, here’s a collection of some key prime mortgage stories of the week.

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