Housing Starts
“A memory is what is left when something happens and does not completely unhappen.” – Edward de Bono
Back in college (circa 1986), I was hired one summer by a small market research firm in Ohio to do research on housing starts. Even though I was a marketing major and had just completed a Statistics and Research Methods course the previous semester, I didn’t quite get the point of what I was doing or the firm’s fascination with housing starts.
As defined by Wikipedia, “Housing Starts are an important indicator of the state of the economy. Housing Starts are the number of privately owned new homes (technically housing units) that have been started over some period.”
Roger was the owner of the firm… his look was a cross between John Malkovich and Ed Harris. No reason to bring this up other than to provide a visual. He was bald and had this obsessive way of constantly rubbing his head, making it seem as if there was something sexual about this repetitive motion. Perhaps it was my 19-year-old hormones raging and I was just transferring my pent up eroticism on his nervous quirk. That was my one big memory about this job that summer.
I remember little if anything about the housing research except that Roger had this idea for a side business. He wanted to publish a newsletter (this was pre-Internet) that provided research on housing starts for people that managed their own stock portfolio. Roger had a marketing firm, but his first love was managing his money. It’s a given that he probably became a day trader after it was enabled by the Internet. But back then, he had to call in his trades to his stockbroker. And he was on the phone a lot.
He said there were many people like him that would pay money for this research (meaning all the monthly stats available on housing starts) if it came in a consumable form like a 2-page newsletter for a yearly subscription fee of $49.99. It seemed like a good idea but it never got off the ground. The project fizzled after I went back to school that fall.
But I always think of Roger when I read about housing starts. Friday was no exception. Vikas Bajaj wrote in The New York Times, “New housing starts fell sharply in December and building permits fell to their lowest level since May, the government reported yesterday, reflecting a slowing in the housing market from a peak last summer.”
“The Commerce Department said the number of homes that builders began constructing last month fell 8.9 percent, to an annual pace of 1.93 million. The number of permits issued dropped 4.4 percent, to a pace of 2.07 million.”
“Housing sales dipped and inventories rose through the last several months of 2005 after a booming spring and summer. Several large home builders have said they are offering promotions to sell properties that were previously attracting multiple offers.”
“Home prices, however, have not fallen from comparable levels a year earlier and few economists expect them to do so, in large part because mortgage rates still remain near historic lows. Analysts caution that housing data becomes less reliable at the end and beginning of the year because sales trail off significantly in the winter. The state of the market will become far clearer in the spring and summer months when most home sales occur.”
Today, in the LA Times, Gayle Pollard-Terry wrote specifically about the Southern California real estate market. “San Diego is the market, not just in California but nationwide, that is being watched the closest. Prices have gone up there further than anybody anticipated, using the job numbers, the income numbers and the migration numbers. We’re watching very carefully to see how it plays out in the cycle, with an eye that what’s going on in San Diego is applicable to the rest of the region.”
“As for the rest of Southern California, between now and summer, we’re going to see a continuation of the trends we’re seeing today: somewhat lower sales levels, lower rates of appreciation. The market is going to reach its apex sometime between now and summer. The big question: Does this cycle play itself out with a crash or with a so-called soft landing?” And of course, how will this impact the overall economy?
In its Reuters version of Friday’s story, the LA Times stated that new jobless claims fell to a six-year low. “Analysts said the figures showed moderate economic growth that was unlikely to deter the Federal Reserve from raising interest rates again in late January, despite mounting evidence of a slower housing market.”
Interest rates still rising, housing starts still slowing… maybe Roger was on to something. I’m sure if he peddled the information today, it would be published in blog form and he would still be thinking of ways to monetize this information. I’m sure he’s keeping some college kid busy back in Ohio... and the head rubbing lives on.
Back in college (circa 1986), I was hired one summer by a small market research firm in Ohio to do research on housing starts. Even though I was a marketing major and had just completed a Statistics and Research Methods course the previous semester, I didn’t quite get the point of what I was doing or the firm’s fascination with housing starts.
As defined by Wikipedia, “Housing Starts are an important indicator of the state of the economy. Housing Starts are the number of privately owned new homes (technically housing units) that have been started over some period.”
Roger was the owner of the firm… his look was a cross between John Malkovich and Ed Harris. No reason to bring this up other than to provide a visual. He was bald and had this obsessive way of constantly rubbing his head, making it seem as if there was something sexual about this repetitive motion. Perhaps it was my 19-year-old hormones raging and I was just transferring my pent up eroticism on his nervous quirk. That was my one big memory about this job that summer.
I remember little if anything about the housing research except that Roger had this idea for a side business. He wanted to publish a newsletter (this was pre-Internet) that provided research on housing starts for people that managed their own stock portfolio. Roger had a marketing firm, but his first love was managing his money. It’s a given that he probably became a day trader after it was enabled by the Internet. But back then, he had to call in his trades to his stockbroker. And he was on the phone a lot.
He said there were many people like him that would pay money for this research (meaning all the monthly stats available on housing starts) if it came in a consumable form like a 2-page newsletter for a yearly subscription fee of $49.99. It seemed like a good idea but it never got off the ground. The project fizzled after I went back to school that fall.
But I always think of Roger when I read about housing starts. Friday was no exception. Vikas Bajaj wrote in The New York Times, “New housing starts fell sharply in December and building permits fell to their lowest level since May, the government reported yesterday, reflecting a slowing in the housing market from a peak last summer.”
“The Commerce Department said the number of homes that builders began constructing last month fell 8.9 percent, to an annual pace of 1.93 million. The number of permits issued dropped 4.4 percent, to a pace of 2.07 million.”
“Housing sales dipped and inventories rose through the last several months of 2005 after a booming spring and summer. Several large home builders have said they are offering promotions to sell properties that were previously attracting multiple offers.”
“Home prices, however, have not fallen from comparable levels a year earlier and few economists expect them to do so, in large part because mortgage rates still remain near historic lows. Analysts caution that housing data becomes less reliable at the end and beginning of the year because sales trail off significantly in the winter. The state of the market will become far clearer in the spring and summer months when most home sales occur.”
Today, in the LA Times, Gayle Pollard-Terry wrote specifically about the Southern California real estate market. “San Diego is the market, not just in California but nationwide, that is being watched the closest. Prices have gone up there further than anybody anticipated, using the job numbers, the income numbers and the migration numbers. We’re watching very carefully to see how it plays out in the cycle, with an eye that what’s going on in San Diego is applicable to the rest of the region.”
“As for the rest of Southern California, between now and summer, we’re going to see a continuation of the trends we’re seeing today: somewhat lower sales levels, lower rates of appreciation. The market is going to reach its apex sometime between now and summer. The big question: Does this cycle play itself out with a crash or with a so-called soft landing?” And of course, how will this impact the overall economy?
In its Reuters version of Friday’s story, the LA Times stated that new jobless claims fell to a six-year low. “Analysts said the figures showed moderate economic growth that was unlikely to deter the Federal Reserve from raising interest rates again in late January, despite mounting evidence of a slower housing market.”
Interest rates still rising, housing starts still slowing… maybe Roger was on to something. I’m sure if he peddled the information today, it would be published in blog form and he would still be thinking of ways to monetize this information. I’m sure he’s keeping some college kid busy back in Ohio... and the head rubbing lives on.
posted by Nina Smith at 7:18 AM
Links to this post:
Create a Link
<< Home