Simple, but pertinent observations on housing

From Karl Smith

Lance Roberts says a bunch of stuff about housing. None of it matters.

The government programs, foreclosures, etc. It all means nothing.

Unless you think there will be a significant rise in homelessness the only thing that matters is formation vs. units.

If someone is for foreclosed on where do they go?

If someone short selling, where do they go?

If I am “waiting for a better” market to sell my house. What exactly am I waiting for? Presumably to buy yet another house or move into some rental.

You can’t look at for sale inventory and think that is telling you a lot because virtually every seller  – even REO – represents some buyer of either rental housing or an owner occupied home.

Only changes in formation matter for net demand


I liked this much better than his psychotic opinion a few posts later.  (Just because a person with the wrong framework cannot foresee the consequences of his beliefs and actions does not mean that a more skilful person with a better framework cannot foresee those consequences.  If insanity is doing the same thing again, and expecting a different result, our policymakers and associated hangers-on must truly be insane).  Of course once you are in the mess that Europe arrived at, no scenario is especially attractive in terms of what might go wrong.  But closing one’s eyes to the ultimate consequences of policy, and not considering what arriving in a mess says about the approach taken to reach that mess is according to my old-fashioned sensibility highly irresponsible.

Regular reader know my long standing policy advice that averting disaster for now – kicking the can down the road – is the essence of success. In part, I want to use this example to highlight why this makes sense.

There are more things on heaven and earth than are dreamt of by any policy maker, or blogger. Few people know how the medium and long term will actually unfold and I hope I am not waxing to Hanson-esque to say that arguments about the long term are really arguments about the arguers status.

If we actually want to help the world, we focus on details and that usually means the short term. Things we can see closely and understand the nuances of.  In short, we Stop Disaster.

One day we will lose and the world will come to an end. The apocalypse only has to win once. Our job is to make sure that that day, isn’t today.

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