Morning Report: Dallas home prices and the lagging Northeast

Vital Statistics:


Last Change
S&P futures 2692.5 6
Eurostoxx index 358.13 0.76
Oil (WTI) 51.75 0.19
10 year government bond yield 3.06%
30 year fixed rate mortgage 4.89%


Stocks are higher this morning on as we await a speech from Jerome Powell. Bonds and MBS are flat.


Same store sales increased 7.7% last week according to Redbook. This would indicate that Black Friday was strong.


Consumer confidence from its multi-decade peak in October, driven by fears of of an economic slowdown. It is funny – the index asks people about their current state and then asks about their expectations for the future. The current state is at almost record highs while the future state is lower. This was the opposite for most of the Obama administration – the current state numbers were lousy, but people were optimistic for the future. Historically, consumer confidence was kind of an inverse gasoline price index, but the media is so heavily invested in talking down the “Orange Man Bad” economy that CNN damn near has an “impending recession” countdown monitor ticking in the lower right hand corner of the screen.


House prices rose 6.3% in the third quarter, according to the FHFA index. Prices were strongest in the Pacific Northwest / Mountain states. Prices were weakest in the Dakotas, Alaska, Louisiana, and Connecticut.


The Case-Shiller Home Price Index was flat MOM, and up 5.1% YOY. “Home prices plus data on house sales and construction confirm the slowdown in housing,” says David
M. Blitzer, Managing Director and Chairman of the Index Committee at S&P Dow Jones Indices.  “Sales of both new and existing single family homes peaked one year ago in November 2017. Sales of existing homes are down 9.3% from that peak. Housing starts are down 8.7% from November of last year. The National Association of Home Builders sentiment index dropped seven points to 60, its lowest level in two years. One factor contributing to the weaker housing market is the recent increase in mortgage rates. Currently the national average for a 30-year fixed rate loan is 4.9%, a full percentage
point higher than a year ago.”


Freddie Mac is out with their housing forecast for the next couple of years. Their view is that the market will adjust to the big slowdown we saw in 2018 and resume modest growth. That said, they see originations down slightly in 2019 and 2020, largely driven by a continued uptick in interest rates, but the worst of the decline is behind us. Purchases activity will increase, however the refi business will continue to decline. Interestingly, they see housing starts continue to lag historical levels despite the pent-up demand.


freddie outlook


The new 2019 conforming limits are out, and the new limit for SFR is 484,350, a 6.9% increase from 2018. Hi bal limits for SFR is 726,525. The multi-unit limits also increased by the same percentage.


Yesterday, I mentioned an article in the Wall Street Journal about the Dallas home market and how it is the “canary in the coal mine” for the US real estate market. Builders are beginning to have to offer discounts / amenities in order to attract buyers, who are becoming more cautious following a rise in real estate markets. The Dallas market is interesting because Texas is more restrictive in terms of cash-out refinances. Take a look at the charts below. Dallas is the grey line. You can see they largely missed out a lot of the torrid growth during the bust years, but prices held up during the bust (they barely fell). However, take a look at the chart on the right, which shows the relative performance of several MSAs following the quarter when the US in general bottomed (late 2011). Dallas has well outperformed the US, and their appreciation is comparable to Silicon Valley. The Dallas market does indeed look toppy, and probably has more in common with the high flyers than the rest of the US. The median house price to income ratio is Dallas is 6, versus 4.4 for the rest of the US. Note as well how poorly the NYC metro area is doing. Fairfield County, CT (Stamford / Bridgeport), North Jersey (Newark) and Westchester (NYC area) are all just barely off the bottom. They have barely participated in the rebound seen in the rest of the country.


36 Responses

    • These dumb bitches should tell their worthless husbands to prove their love for them by castrating themselves.

      To paraphrase Isaac Hayes in Repo Man, “There’s only one way to prove your [man] really loves you, if [he’ll] have your dog.”


    • My wife is a big time environmentalist, who unfortunately doesn’t do math. So talking about how the government is retroactively massaging data to fit the model doesn’t register.

      It is what it is. At least she doesn’t buy into the identity politics bullshit.


      • I’m assuming it never comes down to: “You have to love the environment as much as I do, or we’re through!!! Also, you have to read a lot of Karl Marx and agree that he’s BRILLIANT!”

        Couples can have different opinions on any range of subjects, including politics, even religion. It’s when one person’s obsession with an issue is out of control, and more important to them than their spouse or healthy relationships with other human beings, that you get “Trump is Ruining My Marriage!”


    • The first woman is describing her indoctrination into a cult, so of course she had to leave her husband when he didn’t want to join, too.

      I was really energized. The people I was meeting were so bright and interesting. The world opened up. I thought, Oh my God, I’ve got so much reading to do. Every week I was also going to [Missouri] Senator Roy Blunt’s office with a group of people. I took a class called Witnessing Whiteness and realized that racism is at the core of the problem of this country and that the only thing I can do is be an ally and show up and shut up. Geoffrey never went to one rally or meeting.

      I tried to introduce my husband to the messiah and teach him about the Return of the Comet that will usher in the New Age, but he was so backwards and stupid. He just didn’t get it.

      Then the second one:
      What’s funny is talking about the Trump election makes me more emotional than the end of my marriage.

      That’s because you’re describing being in a cult. Of course you don’t care about your spouse when YOU ARE LIVING THE RECEIVED LIVING TRUTH OF AN EXISTENTIAL BATTLE ON THE SIDE OF THE GODS!!!

      Or are a deluded addict living a fantasy life. Whichever.

      It’s down to the core of who we are. And I don’t have a problem with who I am.

      Which is, coincidentally, an entitled, selfish asshole, kind of like Trump. But good for her! Kick that supportive man the curb! Sure, he agrees with you but WANTS TO SPEND MORE TIME WITH YOU, THAT BASTARD! Doesn’t he know that quality relationships are built on HIGHLY EMOTIONAL, USUALLY INEFFECTIVE POLITICAL ACTIVISM?!?

      Which bleeds into why I’ve never thought, Maybe I should just stop all this and save my marriage.

      Absolutely. Do that guy a favor and get out of his life ASAP.

      Even after Debbie Ramirez came forward, he was like, “Do you still think he could change after college?” I was like, “No.” At each stage, he’s had to reassess his feelings. And at each stage we have yet another argument.

      Which kids of the self-serving, you-aren’t-allowed-to-have-your-own-thoughts-or-feelings, and facts-don’t-matter thing. Debbie Ramirez’s accusation were weak, but even if they weren’t, her husband who agrees with her about Trump and probably most everything still HAS HIS OWN THOUGHTS ABOUT THINGS!

      The women they are profiling as “Trump is ruining my marriage” are all sociopaths. These guys are wayyyy better off without these ladies.

      I’d sit on couch in living room and obsessively watch Rachel Maddow.

      Is the author actively trying to make these women seem unappealing, if not sociopathic? Cuz it kind of seems like she is.

      And this is the problem that is going to destroy our culture, if I’m going full Archie Bunker:

      I’ve been sexually assaulted and raped, but for a long time I didn’t identify in that way. I didn’t like the idea of seeing myself as a victim.

      Assault and abuse are bad things. Super bad things. But even worse is seeing yourself as a victim, wanting to see yourself as a victim, and arguing for your victimhood. Christ, we are doomed.

      My friends, a man and a woman, took the position that a man shouldn’t have his reputation ruined because of an allegation. I disagreed

      Which is crazy. Wanting people’s lives to be ruined because anyone opens their mouth and says something is nuts. That’s not an answer to abuse, and is in many ways an invitation to much worse abuse.

      My line is, cultural change is like a steamroller. It flattens distinctions, and some people will get hurt, and I’m okay with that.

      Which is the position I would expect a sociopath to take.

      I mean, I wrote to the man who assaulted me, the one who’s still in our lives. He said he didn’t remember, and that it turned his stomach to think I’d been carrying around this thought about him, but he fell short of accepting responsibility.

      Because he doesn’t remember it like that. She clearly doesn’t want to accept any responsibility for whatever happened, why should she be surprised that he doesn’t, either?

      But it also seems like I’ve set the stage so there’s eventually going to be a big reveal — and my husband better respond correctly.

      Uh huh. Romantic love is such a bad deal for dudes. Really, it’s to be avoided.

      Neither of us are very sophisticated in our knowledge or debate skills, but initially I tried very hard to discuss politics. One of big turning points with me was when Trump offended John McCain. That was a huge argument, and I felt very self-righteous. Also, as a therapist, I’m able to diagnose people using the DSM-5, the diagnostic manual for psychiatric disorders,

      Physician, heal thyself.

      And she was able to look past behavior and I was not.

      So, like a man, he is at least able to admit that the limitation is his.

      Craig wasn’t sure if he could do this. But I didn’t feel that way. It’s not that I don’t hold my beliefs, strongly in some cases, but Craig is more passionate about all of it.

      While I think hardcore partisans and ideologues are mostly cut from the same cloth, I can’t help but notice it’s the lefties in this story who are super emotional and just don’t think they can get over it. Also can’t help notice that the one couple working it out, with the liberal willing to reign it in a little for the relationship, it’s the dude that’s doing it. Coincidence? I think not!


      • These women better not have sons, because they are going to hate their guts once they become older teenagers and see the bullshit going on around them.

        Liked by 1 person

        • Some of their are old enough to have adult children. If they do, I expect their adult children are say: “Look, she’s doing you a favor. Let her go. Enjoy the rest of your life. Mom’s a nut. You’ll be better off.”


      • Uh huh. Romantic love is such a bad deal for dudes. Really, it’s to be avoided.

        I’ve said this for years. It’s a suckers bet for a man.


        • I don’t see any sign that it does that much for most women, either. It’s typically a suckers bet for everyone involved. About 5 or 10% win the lottery, and the person they fell for romantically is their perfect counterpoint in reality. Maybe a little less. For most the post-infatuation run of the relationship lands somewhere between “barely tolerable” to “oh my god someone please shoot me now”.


    • Also, the headline is inaccurate. Trump isn’t ruining these people’s marriages, it’s the obsessive political activism of the lefties in those marriages that are actually, actively ruining them.


      • i think it’s telling what these people do for a living.
        who has the time to be that worked up. those without real jobs.

        Liked by 1 person

        • Yup. I bet deconstruction would either indicate: A: they live almost entirely off their spouse or B: they get a lot of money from mom/dad/inheritance or C: they have a cushy not-real-job that came from being married to their husband or who their parents are/were.


  1. Reuters headline just went across:

    Bank of England Governor Carney says are job is not to hope for the best but prepare for the worst.

    You would think Reuters writers wouldn’t make this sort of mistake, but…

    Liked by 1 person

  2. There goes Trump again trying to take credit for an Obama administration policy.


  3. Heh.


  4. Vox figures out that when women stop working, they make less than men who work full time.

    This of course is gender discrimination.

    Liked by 1 person

    • People who take a break from the workforce for whatever reason – unemployment, child rearing, sabbatical – will earn less when they return to the work force than they would have if they stayed.

      It doesn’t matter whether that person is male or female. It is about the gap in employment.

      Liked by 1 person

      • There are three factors: gaps in employment (if you stop working, you make less money, while not working and when you return to the work force), career choices (not every career track pays the same, man or woman, and “working the network/negotiation”. In the areas where negotiation determines your pay package, you get what you strategize/network/and negotiate for. Men tend to take more risks and are less likely to take “no” for an answer than women.

        No doubt there is some discrimination in some categories, but its statistically insignificant. Most of the pay gap is due to differences in behavior and lifestyle choices.


    • and of course, it’s societal pressure that “forces” women to stay home.
      As if most women would be cool with it if dad stayed home and ran the household according to his standards. right.


      • I know a lot of guys who wish their wives would get a job. I don’t know of a soul who wishes their wives would quit their jobs.

        IMO that “societal pressure” comes 100% from other women, not the husbands. Competitive mothering is a thing.

        Liked by 1 person

        • I want my wife to quit her job. But she doesn’t like it and it’s not going to be compatible with the next year of her needing to get into shape after hip surgery. Which means lots of emotional drama at the workplace, most of which is verbally expressed at home. I know more about her manager and co-workers than I know about any of mine. 😉

          At the same time, I wish she worked the network more. When you’re 50+ and are looking for a niche job that pays a little and works for your schedule, physical limitations, etc, you’re way better off if you have a network to mine for opportunities, rather than answering want-ads.

          Liked by 1 person

        • The drama that women have over work and their coworkers never ceases to amaze me.

          Liked by 1 person

        • Unless you are entry-level the Indeed ads are almost completely useless unless you game the hell out of the system with keywords and make your resume look like you are 30.

          Liked by 1 person

        • The drama that women have over work and their coworkers never ceases to amaze me.

          It’s universal. I go to work, occasionally get irritated, then go home, whatever dumbass pissed me off pretty much forgotten. And it doesn’t happen that much because if I can possibly avoid it, I don’t emotionally engage with people in the workplace, and I’m frequently ignorant of workplace drama.

          And that ignorance has had no demonstrable negative impact that I can tell.


  5. Interesting piece:


    • The simplest answer might be that Manafort had nothing to give Mueller, so didn’t. If there were no crimes committed re “Russian Collusion” by Manafort or Trump then there would be no need to end the Defense Agreeent, right?


    • “Criminal defense norms”. WTF are these norms? Why am I hearing about “norms” all the time? Is that a way of saying, “no laws are broken and they aren’t actually doing anything unusual or bad, really, but we don’t like it so we’re suddenly applying this selective ‘norms’ standard to everything”?


Be kind, show respect, and all will be right with the world.

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: