Matrix Blog

Coverage of the weak dollar as it relates to real estate is now front and center. A page 1 story in the New York Times yesterday Dollar Remains at Low Ebb laid it all out.

Until a few years ago, my family and I would go skiing over Christmas break every year to either Mont Tremblant or Mt Orford in Canada. It felt free (and cold) because the exchange rate made the cost about 1/2 that of going to Vermont. With 4 sons, 3 of whom are teenagers, the food costs alone were staggering (important note: Kentucky Fried Chicken (KFC) in Quebec is known as PFK.)

Now, the exchange rate between US and Canadian dollars are at parity. The exchange rate with the British Pound is two to one and the Euro is 41% higher than parity.

On Wednesday, I posted (after a 2 month hiatus) my Three Cents Worth column on Curbed which specifically addressed the weak dollar. Because of my Curbed chart, I was interviewed on the WNYC’s The Brian Lehrer Show yesterday. The segment was called: Following Up: Are Foreigners Propping up House Prices? Note: The interview starts at the 3 minute mark.

Also on Friday, a portion of the text of my radio interview on BBC News Worldwide was published on their web site in Investors see Manhattan as a safe haven. Here’s the web page and the audio version. From some of the commentary made by the other guests, you can hear the front line observations and confusions about the impact of the weak dollar.

Will we ever get change back from our dollar?

Tags: Three Cents Worth, Television, 3CW, Canadian Housing Market, Radio

1 Comment

With the credit market turmoil, I have begun to wonder whether I am seeing red and gravitating towards all things red. In real estate parlance, this could mean the real estate market is HOT or the real estate market represents DANGER.

Red is a color that represents an extreme.

The other day, I got the second issue of Portfolio magazine, which is a terrific new Conde Nast publication and has a great interactive web site. The covers alone are worth the purchase price. There have been a few articles that cover real estate topics. The one I really enjoyed was called Little House on the Red Prairie by John Cassidy.

The US is the largest debtor in the world with $10.7 trillion on $13.6 trillion economy (hey that’s 79% financing, sort of). Once the Fed started raising rates in June 2004, in the first of 17 consecutive increases, there was an expectation that housing would cool. But some of the highest appreciation rates for appreciation rates occured after this point.

Since the middle of 2004, the Fed has taken the federal funds rate—what it charges banks on overnight lending—from 1 percent to 5.25 percent. Nor mally, such a dramatic shift would prompt a sell-off in long-dated Treasury bonds and a rise in long-term interest rates. This time, that didn’t happen. Thanks to all those central banks stocking up on paper issued by Uncle Sam, the interest rate on 10-year and 30-year Treasurys, rather than jumping to 7 percent—which might have been predicted based on past experience—stayed closer to 5 percent.

The author suggests that China’s investment in low-yield treasuries helps keep access to US markets and technology. Low mortgage rates fueled the burst in home price appreciation of 2003-2005.

And then of course, there is the little red paper clip…

In today’s New York Times, there was a very entertaining article about how Kyle MacDonald was able to trade a red paper clip for a house in: Trading Up From Red Paper Clip to White Picket Fence. This lead to a book deal along the way.

Of course that’s a simplistic version of the story. Basically he posts an announcement on Craigslist and the trades keep growing in scale. Public relations followed and a town in Canada opted to give him a house. Not a full proof way to get into real estate, but its certainly different and creative.

It was a dull day in Montreal, two summers past. The young MacDonald, his fair girlfriend toiling at her labors, was Lying About the House in their minuscule apartment, thinking about What a Drag It Is to Pay Rent and how nice it would be to Own Your Own Place and Stuff Like That when a thought occurred. What if he could trade a red paper clip for a house? Not in one swap but in a bunch of swaps, as in the game Bigger and Better, which he did play when he was but a youth.

Here’s an ABC News segment…

This story should probably be a staple (sorry) of everyone’s news reading today.

Tags: Canada, China, Canadian Housing Market

1 Comment

This week has been a whirlwind for me personally so my quantity of posts has been less than stellar.

I had been retained as a real estate expert for the prosecution (US Government) in media baron Conrad Black‘s federal trial, going on now in Chicago. I testified in Chicago on Tuesday.

I had the pleasure of intereacting with really sharp and energetic DOJ attorneys and FBI agents.

Obviously, I can provide no specific comments about the case, but it was a terrific experience (not even factoring in the US Department of Justice cafeteria food). I have performed court testimony in many different matters over the years but this trial was one of the highlights of my professional career. My testimony was widely covered in the media (see links below).

Normally I wouldn’t even bring this sort of event up, but I was struck by the fact that there has been so little coverage of the trial in New York, that I was surprised by the amount of media presence in the courtroom.

Here’s an excerpt from the Chicago Tribune:

Miller’s testimony bolstered the government’s charge that Black, Hollinger International’s former chairman and chief executive, received a sweetheart deal for the apartment, defrauding shareholders of millions of dollars. The apartment sale, prosecutors allege, was part of a scheme involving Black and four former executives to steal $84 million from Hollinger International, now called Sun-Times Media Group Inc.

Summary of some of the coverage:

Expert says New York apartment worth $8.5 million [Chicago Tribune]
Jury sees Black taking boxes [Chicago Sun-Times]
Prosecution drops one charge against Black [Globe and Mail – Canada]
Lord Black breaks a habit and stays silent in defence [The Times – UK]
Price for apartment low [The Province – Canada]

Ok, back to work.

Tags: Canada, Canadian Housing Market

1 Comment

The 4Q 2006 Manhattan Market Overview that my appraisal firm, [Miller Samuel](https://www.millersamuel.com), authors for [Prudential Douglas Elliman](http://www.prudentialelliman.com), was released for publication today. In order to include the entire quarter for the study, I spent the good part of the New Years weekend while away on vacation in a Starbucks crunching and analyzing while drinking too many vanilla skim lattes. Thats why the pretty version of the report [will be available in a few days](https://www.millersamuel.com/reports) rather at the point of release to the media.

The raw numbers were released and my summary of their interpretation were provided to the media for the coverage today. The actual [data](https://www.millersamuel.com/data) and [charts](https://www.millersamuel.com/charts) will be available soon online. I tend focus only on the data collection, verification and analysis until the media publishes the findings.

Each quarter I place links to articles about our market report for a few days after publication for perspective (plus I am obessed with making lists) to make it easy to compare how each media outlet (big and small media, blogs) presents the exact same set of data.

This article list is presented in no particular order, 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.

[Home Prices Fall Just a Bit; Brokers See ‘Soft Landing’ [NYT]](http://www.nytimes.com/2007/01/03/nyregion/03housing.html)
[Manhattan real estate cools off [CNN/Money]](http://money.cnn.com/2007/01/02/real_estate/Manhattan_housing_market_drops/index.htm?section=money_latest)
[Real estate still strong [NY Daily News]](http://www.nydailynews.com/business/story/485161p-408471c.html)
[NYC APTS PRICED TO SELL: STUDY [NY Post]](http://www.nypost.com/seven/01032007/business/nyc_apts_priced_to_sell__study_business_braden_keil.htm)
[Apartments up at least 5% in Manhattan [Newsday]](http://www.newsday.com/business/ny-bzapar5037785jan03,0,4471241.story?coll=ny-business-print)
[Manhattan Apartment Prices Rise 3.2%, Sidestep U.S. Declines [Bloomberg]](http://www.bloomberg.com/apps/news?pid=20601087&sid=al26rXGuKKNY&refer=home)
[Reports Contradict Predictions of Apartment Market Slump [NY Sun]](http://www.nysun.com/pf.php?id=45996)
[Manhattan apartment downturn short-lived: report [Reuters]](http://today.reuters.com/news/articlenews.aspx?type=businessNews&storyID=2007-01-03T065344Z_01_N02353836_RTRUKOC_0_US-APARTMENTS-NEW-YORK.xml&WTmodLoc=NewsHome-C3-businessNews-2)
[Brokerages Turn in Homework for the Semester [Curbed]](http://www.curbed.com/archives/2007/01/03/brokerages_turn_in_homework_for_the_semester.php#more)
[Brokerages: Market is stable [The Real Deal]](http://www.therealdeal.net/tools/print_article.php?article_num=/breaking_news/2007/01/03/1167844685.php&article_name=Brokerages%3A+Market+is+stable)
[A Look Back in 2007! Manhattan Is Still an Islan [NYO-The Lab]](http://nyobserver.com/20070108/20070108_Tom_Acitelli_finance_thelab.asp)
[Reports show real estate slowdown [AM New York]](http://www.amny.com/news/local/newyork/am-realestate01013,0,5101712.story)
[Average Manhattan apt: $1.2M [Metro]](http://ny.metro.us/metro/local/article/Average_Manhattan_apt_12M/6389.html)
[Home is where B’klyn bucks are, reports show [NY Daily News]](http://www.nydailynews.com/business/story/485159p-408456c.html)
[Market for Manhattan Apts. Strong [Chicago Tribune]](http://www.chicagotribune.com/business/sns-ap-manhattan-apartments,0,6411490.story?coll=chi-business-hed)
[Market for Manhattan apartments remained strong in 2006 [Boston Herald]](http://business.bostonherald.com/realestateNews/view.bg?articleid=175094)
[Real Estate Bubble Slowly Deflating, Not Bursting [Gothamist]](http://www.gothamist.com/archives/2007/01/03/real_estate_bub_1.php)
[Market for Manhattan Apts. Strong [Tuscaloosa News]](http://www.tuscaloosanews.com/apps/pbcs.dll/article?AID=/20070103/APA/701030519)
[Manhattan apartments go for an average $1.14-million (U.S.) [Globe and Mail, Canada]](http://www.theglobeandmail.com/servlet/story/RTGAM.20070103.wmanhattan0103/BNStory/Business/home)
[Market for Manhattan apartments remained strong in 2006 despite national dip, analysts say [San Diego Union Tribune]](http://www.signonsandiego.com/news/business/20070103-0250-manhattanapartments.html)
[Market for Manhattan Apts. Strong [Sun-Sentinel]](http://www.sun-sentinel.com/business/local/sns-ap-manhattan-apartments,0,2093084.story?coll=sfla-business-headlines)
[Manhattan apartment downturn short-lived: report [WaPo]](http://www.washingtonpost.com/wp-dyn/content/article/2007/01/03/AR2007010300076.html)
[Manhattan apartment downturn short-lived: report [MSN Money]](http://news.moneycentral.msn.com/provider/providerarticle.aspx?feed=OBR&Date=20070103&ID=6310131)
[Manhattan apartment downturn short-lived: report [KPLC-TV/Lake Charles, LA]](http://www.kplctv.com/Global/story.asp?S=5883509&nav=0nqx)
[Manhattan apartment downturn short-lived: report [Reuters Canada]](http://ca.today.reuters.com/news/newsArticle.aspx?type=businessNews&storyID=2007-01-03T065404Z_01_N02353836_RTRIDST_0_BUSINESS-APARTMENTS-NEW-YORK-COL.XML)
[Market for Manhattan apartments remained strong in 2006 despite national dip, analysts say [IHT]](http://www.iht.com/articles/ap/2007/01/03/business/NA_FIN_US_Manhattan_Apartments.php)
[Mean Manhattan apt. price up to $1.1M [ABC]](http://abclocal.go.com/wabc/story?section=business_week&id=4902826)
[Healthy Year for Manhattan Real Estate Market [RISMedia]](http://www.rismedia.com/wp/2007-01-03/healthy-year-for-manhattan-real-estate-market/)
[NYC Apartment Market Prices Up with Inventory Growth Dropping Sharply [Earthtimes]](http://www.earthtimes.org/articles/show/news_press_release,39849.shtml)
[NYC Apartment Market Prices Up with Inventory Growth Dropping Sharply [Yahoo Business]](http://biz.yahoo.com/prnews/070103/nyw105.html?.v=81)
[Reuters Canada Business Summary [Globe and Mail]](http://www.globeinvestor.com/servlet/story/ROC.20070103.2007-01-03T160612Z_01_N03404162_RTRIDST_0_BUSINESS-SUMMARY/GIStory/)
[Manhattan real estate prices still rising in Q4 [Inman – Subsc]](http://www.inman.com/printer.aspx?ID=60870)
[Manhattan real estate market remains strong [Courier News (NJ)]](http://www.c-n.com/apps/pbcs.dll/article?AID=/20070103/FRONT01/70103008)

Radio and TV clips

[January 8, 2007] [The Real Deal](http://www.therealdeal.net/directv/video.php)
[January 7, 2007] [WABC-TV](https://www.millersamuel.com/press/view.php?V=1168307231kbBEe)
[January 3, 2007] [Bloomberg TV](https://www.millersamuel.com/press/view.php?V=1167880431qujzH)
[January 3, 2007] [WABC-TV](http://abclocal.go.com/wabc/story?section=business_week&id=4902826)
[January 3, 2007] [WABC-TV](https://www.millersamuel.com/press/view.php?V=1168307452vcbrt)
[January 3, 2007] [WABC-TV](https://www.millersamuel.com/press/view.php?V=1168308209JANDe)
[January 3, 2007] [WNBC-TV](https://www.millersamuel.com/press/view.php?V=1168308390NBqFe)
[January 3, 2007] [Bloomberg TV](https://www.millersamuel.com/press/view.php?V=1168309192JsokM)
[January 3, 2007] [Bloomberg TV](https://www.millersamuel.com/press/view.php?V=1168309483edgkl)
[January 3, 2007] [Bloomberg TV](https://www.millersamuel.com/press/view.php?V=1168309595WpPsy)

[January 3, 2007] [Bloomberg Radio](https://www.millersamuel.com/press/view.php?V=1168310345woRLC)
[January 3, 2007] [Bloomberg Radio](https://www.millersamuel.com/press/view.php?V=1168311084mbOMv)
[January 3, 2007] [Bloomberg Radio](https://www.millersamuel.com/press/view.php?V=1168311365hRHhl)

Tags: New York Observer, Canadian Housing Market, Radio

2 Comments

Remember the Point:Counterpoint routine on [Saturday Night Live](http://www.saturday-night-live.com/snl/castsbyseason/1975_1985.html)? It can be summed up by the quote: [Jane, you ignorant slut!](http://snltranscripts.jt.org/78/78eupdate.phtml)

I can’t help but think how out of sync Fed Chairman Ben Bernanke is with former Fed Chairman Alan Greenspan. Or is the former chairman out of sync with the current chairman? I am not really who is ignorant recognizing that both men are extremely smart. The photo of each precisely measures how important the housing market is as it relates to the economy.

[October 7, 2006: Greenspan says…](http://www.marketwatch.com/news/story/story.aspx?guid=9789227891EA405BBB45167819F5DD8F&siteid=mktw&dist=nbi)

Former Federal Reserve Chairman Alan Greenspan said that last week’s rise in weekly mortgage applications could signal that the “worst may well be over” for the U.S. housing industry, according to a report of a speech Greenspan gave in Canada on Friday.

Sounds like the the worst is over…

[October 5, 2006: Bernanke says…](http://www.nytimes.com/2006/10/05/business/05fed.html?_r=1&ref=business&oref=slogin)

There is currently a substantial correction going on in the housing market,” Mr. Bernanke said. The decline in residential housing construction is one of the “major drags that is causing the economy to slow.

Or more pain is yet to come…

It would seem to me that the Greenspan era was a legacy of rapid asset appreciation (stocks and real estate) followed by asset corrections so I am not so sure why there remains so much concern placed on what Greenspan thinks. To his credit, Greenspan has been careful not to steal Bernanke’s thunder.

I think it comes down to public relations. Greenspan never stumbled in his public relations (not policy) during his tenure to my recollection. However, Bernanke has not been consistent as he relates his economic message on housing to the public.

The recent Bernanke speech felt more harsh than what he previously relayed so I am not sure whether to rely on the message. I hope Bernanke figures out a clear message soon. Greenspan is still sounding pretty good to the hopeful.

Tags: Alan Greenspan, Ben Bernanke, Canadian Housing Market

1 Comment

A [Bloomberg](http://quote.bloomberg.com/apps/news?pid=20601109&sid=aNPqW48FI4aw) and [AP story](http://www.forbes.com/entrepreneurs/feeds/ap/2006/09/03/ap2990692.html) on London housing prices exemplifies how fascinated we are with rankings when it comes to housing no matter where we live. CBRE compared upper end London housing prices to my most recently completed [Manhattan Market Overview in the 2Q](https://www.millersamuel.com/reports) and were found to about 20% more expensive (1,200 pounds vs. 1,000 pounds).

While thats interesting, its not the reason for this post.

[Look at the extent of the coverage [Google]](http://news.google.com/news?hl=en&ned=us&ie=UTF-8&q=%22miller+samuel%22+manhattan+london&scoring=d).

As of this morning, the story was picked up by 147 newspapers. Except for markets like [Shanghai](http://news.google.com/news/url?sa=t&ct=us/6-0&fp=44fd0812269c4e52&ei=XE79RPm9MrLsafT92KYE&url=http%3A//www.shanghaidaily.com/art/2006/09/04/290913/Cost_of_London_luxury_goes_through_the_roof__experts_say.htm&cid=0), [Taiwan](http://www.chinapost.com.tw/business/detail.asp?ID=89607&GRP=E), Canada, Australia and a few major US markets and national publications, the vast majority of the coverage was in mountain, midwestern or southern states. Most of these markets did not see appreciation rates as high as the US coasts did. These markets include locations such as Alabama, North Dakota, Arkansas, Wyoming, Montana, Nebraska and Wisconsin among others.

Apparently big numbers, either real estate prices or appreciation, still sell newspapers.

Tags: London, Forbes, China, Canadian Housing Market

Comments Off on The US Relieved That New Yorkers Can Breath Easier: London Is More Expensive

It looks like there has been extra butter and syrup applied to the international housing market this year (ok, this was the last pancake reference, I promise). It is amazing how much the housing markets outside the US have seen significant appreciation over the past year.

When considering the impetus for the recent US housing boom and the current slow down, this certainly makes for a strong argument that the cause and effect was not just about the US economy since the US has behaved as much as many other countries has. So perhaps we don’t need to be quite so zeroed in on Bernanke and the Fed and perhaps look toward other factors such as the trade deficit and the weakness of the dollar.

Here’s a sample of recent news links:

• [Canada [CBC]](http://www.cbc.ca/cp/business/060510/b0510116.html)

• [El Salvador [WaPo]](http://www.washingtonpost.com/wp-dyn/content/article/2006/05/13/AR2006051300879.html)

• [India [India Telegraph]](http://www.telegraphindia.com/1060515/asp/business/story_6224431.asp)

• [Australia [National Nine]](http://news.ninemsn.com.au/article.aspx?id=98867)

• [New Zealand [Stuff]](http://www.stuff.co.nz/stuff/0,2106,3661712a13,00.html)

• [Norway [Norway Post]](http://www.norwaypost.no/cgi-bin/norwaypost/imaker?id=24057)

• [China [China Daily]](http://www.chinadaily.com.cn/bizchina/2006-04/21/content_573478.htm)

• [Pakistan [Daily Times]](http://www.dailytimes.com.pk/default.asp?page=2006%5C04%5C28%5Cstory_28-4-2006_pg11_1)

• [Moscow [Moscow Times]](http://www.themoscowtimes.com/stories/2006/04/18/045.html)

• [UK [Telegraph]](http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2006/05/14/ccecag14.xml&menuId=242&sSheet=/money/2006/05/14/ixcoms.html)

• [Ireland [Irish Examiner]](http://www.irishexaminer.com/irishexaminer/pages/story.aspx-qqqg=business-qqqm=business-qqqa=business-qqqid=3318-qqqx=1.asp)

Have I left any countries out that have seen significant growth?

Tags: Canada, Ben Bernanke, China, Canadian Housing Market

Comments Off on Links: International HOusing Prices [IHOP], Not Flat As A Pancake

With the housing market not seeing the returns of the past few years, investors have been looking at alternatives for a while now. Wall Street is seeing green with the DJIA moving close to a record high. However, some investors are seeing gold [in the red-hot commodities market](http://ca.today.reuters.com/news/newsArticle.aspx?type=businessNews&storyID=2006-05-13T134023Z_01_N12191757_RTRIDST_0_BUSINESS-COLUMN-CANADA-MARKETS-COL.XML) or just [plain gold [WaPo]](http://www.washingtonpost.com/wp-dyn/content/article/2006/05/13/AR2006051300191.html), which acts both as a [safe-haven asset [theStreet.com]](http://www.thestreet.com/_yahoo/markets/commodities/10281739.html?cm_ven=YAHOO&cm_cat=FREE&cm_ite=NA) against geopolitical uncertainty and as an inflation hedge against rising energy prices.

[Upbeat bulls are clearly in the majority on Wall Street right now [WaPo]](http://www.washingtonpost.com/wp-dyn/content/article/2006/05/13/AR2006051300191.html), and truly negative bears are hard to find. But many stock traders and market analysts can identify reasons to be worried about the current state of affairs, and some are actively predicting at least a short downturn by the end of the year.

Gold futures, often a haven for “gold bugs” — investors concerned about inflation and geopolitical or stock market turmoil — rose above $700 in New York this week for the first time since 1980. Silver is at a 25-year high, and copper and platinum both set records in the week, though copper pulled back a bit by week’s end.

Perhaps we will start seeing [Gold Bubble Blogs](http://housingpanic.blogspot.com/2006/04/goldbugs-make-your-case-for-investing.html) fairly soon as the price continues to rise rapidly.

Tags: Canada, Canadian Housing Market

Comments Off on Investor Path: Stock Markets -> Housing -> Commodities -> Gold?

After the release of our 3rd quarter [Prudential Douglas Elliman Manhattan Market Overview](https://www.millersamuel.com/reports) last Tuesday to the media and [the frenzy of coverage](https://www.millersamuel.com/press) during the week as a result, the New York Times ran an excellent overview of the market story this weekend called [A Mixed Message [NYT].](http://www.nytimes.com/2005/10/09/realestate/09cov.html?pagewanted=print)

Since then, I have received many inquiries about the state of the market over the week from real estate brokers, wall street firms and lenders to interpret the statistics in the report that were played over and over in the media firestorm. Whats been fascinating about this whole experience is how much coverage was given to the average sales price statistic, which could not stand on its own without explanation. Hopefully I don’t sound too cynical but this stat was likely used because it showed the most negative result.

Here’s a quick list of the highlights of the current market that are most useful:

• The average price per square foot set an all-time record reaching $984 per square foot and rising 1.4% from the prior quarter. This is the telling statistic. The overall market increased this quarter, but not at the same torrid pace as before. The rate of appreciation has eased. In fact, since larger apartments generally sell for more on a per square foot basis than smaller apartments, one could make the argument that the shift in unit mix also tempered this indicator as well.
• There was a significant shift in the mix of apartments that were sold. The average sales price dropped 12.7% because the market share of entry-level apartments (studio and 1-bedrooms) spiked 5% and activity at the upper end dropped off.
  
• Entry-level sales surged because of concerns over modest increases in mortgage rates are expected. Of course, this has been the speculation since mid 2003 but this time, with rising fuel prices, comments from the Federal Reserve about housing, mortgage rates may actually rise.
  
• High end sales activity eased rather than prices dropped. The luxury market average sales price dropped 26% from last quarter because fewer sales at the upper end occurred. There were 17 sales at or above $10M in the 2nd quarter and only 4 sales at or above $10M tracked in the 3rd quarter. In fact, a high end broker contacted me to say there were 5 such sales this quarter, but didn’t realize that one of them closed in the prior quarter. Nevertheless, whether 4 or 5, the sales activity was well below 17 sales. This doesn’t indicate that prices collapsed, but that a shift in the mix of apartments that sold in the upper 10% of the market.
• Inventory did increase this quarter and was more heavily weighted with condos than co-ops. Since inventory came on at generally the same pace as the number of sales eased, inventory built up. This was attributable to seasonal considerations (thats a stretch) and bad economic news, rising gasoline prices, over saturation of bubble speak for the past 6 months and negative economic news relating to the 2 hurricanes.
  
• There are expectations of record Wall Street bonuses at yearend due to the solid year seen by investment bankers and a number of other sectors in the financial district. Historically, Wall Street bonus income has flowed through the real estate economy after the New Year.
  

Here are a handful of all the interviews I did which basically re-iterate most of these points.

[[Focus on Business (Canada)]](https://www.millersamuel.com/press/view.php?V=1128834935Lfglh)

[[Bloomberg Television]](https://www.millersamuel.com/press/view.php?V=1128828123SgtqR)

[[WCBS Channel 2]](https://www.millersamuel.com/press/view.php?V=1128827846FXTkC)

[[WNYC Radio (Brian Leher Show)]](https://www.millersamuel.com/press/view.php?V=1128832735BEaXG)

[[WNYC Radio]](https://www.millersamuel.com/press/view.php?V=1129058323KxZMP)

[[Bloomberg Radio]](https://www.millersamuel.com/press/view.php?V=1129058323KxZMP)

[[WCBS Radio]](https://www.millersamuel.com/press/view.php?V=1128827549vdTfM)

Tags: Hurricane, Wall Street Bonus, Canadian Housing Market, Radio

3 Comments

[A survey [WSJ]](http://online.wsj.com/article_print/0,,SB112795239565355293,00.html) by Royal Bank of Canada’s RBC Capital Markets unit of 1001 consumers found that most owners think their homes will continue to appreciate and the housing boom has not affected their spending patterns.

The results of this survey seems to indicate that consumer perceptions of their spending habits contradicts the Fed’s pronouncement that the consumer is driving the economy through extracting equity from their homes.

The sample was spread across geography, gender and income brackets, to make it representative of the general U.S. population. The survey’s margin of error was plus or minus 3%.

• Only 10% of homeowners polled said they believe that rising real-estate values had affected their spending.
  

• 85% of homeowners surveyed said they had experienced real-estate gains in the past three years
  

• 70% saw gains of more than 10% in the past three years
  

• 50% had extracted funds through home equity loans
  

• 60% expect home values to rise at least 5% annualy for the next 3 years.
  

• 3% expect home values to fall over the next 3 years.
  

• 60% said rising energy costs were causing them to reign in spending.
  

Tags: Canada, Canadian Housing Market

3 Comments

There has been a heated debate between the US and Canada over the tariffs being assigned to softwood imports into the US. [In 2002, the US implemented these tariffs, which are reportedly contrary to the NAFTA agreement. [Note: Sub.]](http://online.wsj.com/article/0,,SB112405775845612768,00.html?mod=opinion%5Fmain%5Freview%5Fand%5Foutlooks) [A 3-person arbitration board ruled that the US must refund over $5B in tariffs collected from imported Canadian softwood.](http://www.embassymag.ca/html/index.php?display=story&full_path=/2005/august/17/softwood/) The US lost the appeal on the ruling but still has refused to refund tariffs already levied.

There has been a lot of controversy surrounding the softwood tariff debate. Canada exports more than 50% of the lumber they produce to the US and the US will need more lumber as a result of Hurricane Katrina and the on-going housing boom. Look for rising prices for construction supplies as a result.
[[Casper Star Tribune]](http://www.casperstartribune.net/articles/2005/09/01/news/regional/39d023e2fb6ff2678725706f00709944.txt)
[[National Post]](http://www.canada.com/national/nationalpost/news/story.html?id=36668f15-cba3-40e3-82c3-fc962a79649d)
[[CBC]](http://www.cbc.ca/cp/business/050901/b0901100.html)

The housing boom has placed a significant pressure on the availability of lumber for construction. Wood exports from Canada are a significant source of lumber for the US and a major export of Canada.

In light of Hurricane Katrina’s extensive damages to the gulf area housing stock of Lousiana, Mississippi and Alabama, demand for construction supplies are expected to increase significantly and [at least one advocate for affordable housing wants the tariffs removed.](http://www.canada.com/businesscentre/story.html?id=f690301a-2651-4395-9816-d5132226a2e4)

Lets hope these two allies and neighbors can resolve their differences and get this crises resolved soon.

Tags: Hurricane, Canada, Hurricane Katrina, Canadian Housing Market

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Canadian housing prices are on the rise, but the underlying conditions do not suggest the threat of a bubble similar to that of the late 1980s, according to the Bank of Montreal.

I would hope Bank of Montreal (BOM) learned their lesson from the late 1980’s when they were active construction lenders in the New York market with what appeared to be loose underwriting standards.

BOM says the same things that economists are generally saying in the US: a modest rise in mortgage rates will temper demand but there are concerns about affordability.

Tags: Canada, Canadian Housing Market

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