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Housing rebound webinar 09-01-2015

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HiddenLevers updated Housing Scenario and War Room slides.

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Housing rebound webinar 09-01-2015

  1. 1. Housing Rebound Over? 01 September 2015 War Room
  2. 2. HiddenLevers War Room Open Q + A Macro Coaching Archived webinars CE Credit Idea Generation Presentation deck Product UpdatesScenario Updates
  3. 3. Market Update US Housing Analytics Scenario: US Housing Rebound Housing Rebound Over?
  4. 4. HiddenLevers MARKET UPDATE
  5. 5. Fischer + Fed undeterred on rate hike Market Update sources: HiddenLevers, Economist, MarketWatch, 1 3 Oil goes sub 40 usd 2 3.7% US GDP upward revision 2.3%
  6. 6. CHINA 2015: Global Index Comparison 4 -38% -10% sources: HiddenLevers
  7. 7. CHINA 2015: HiddenLevers quite helpful Research + Content + Functionality
  8. 8. HiddenLevers US HOUSING ANALYTICS
  9. 9. TRENDS: Household formation + Affordability sources: HiddenLevers, Bloomberg, FRED, WSJ Households Up. Prices Rising. Affordability Falling.
  10. 10. ANALYTICS: Housing Starts sources: HiddenLevers, WSJ, Goldman Sachs, Forbes, Economist Boom-bust cycle in home construction. No homeostasis. Changes in housing starts predict direction of unemployment rate some 12-18 months out. average 1.46M average peak 2M We are: 60% below peak 20% below average average low 870k
  11. 11. ANALYTICS: Home Prices sources: HiddenLevers 50 years of housing prices increasing Great Depression WWII 2x low of Great Depression
  12. 12. ANALYTICS: Impact of Rate Hikes sources: HiddenLevers Theory Interest rates move inverse to US home prices. Reasoning because higher interest rates mean a higher mortgage payment. Reality Interest rates follow or lag US home prices. (Fed playing catchup?) 2003-06 rally 2007-12 crash
  13. 13. ANALYTICS: Impact of USD sources: HiddenLevers, The Australian China #1 foreign investor in US + Australian property markets Ditching Yuan for US Housing
  14. 14. HiddenLevers SCENARIO: US HOUSING REBOUND
  15. 15. Key Lever Change Downside Scenario Change Scenario Update Back to Long Term NormsDouble Dip Bad Ugly US Home Prices Buh-Bye HOME SALES HOME PRICES HOUSING STARTS+$
  16. 16. GOOD: New Highs source: HiddenLevers, Bloomberg, demand for US housing, from US + outsiders alike housing starts still at lows momentum bigger than rate hike win win for foreigners catchup after builder timeout labor need rises, so too inflation
  17. 17. NEUTRAL: Rate Hike Interruption 13% from highs in home prices housing rebound slows due to Fed raising rates source: HiddenLevers, CNBC, WSJ, may correct in time, not price affordability double whammy rising borrowing costs – duh! rate hike NO rate hike
  18. 18. UGLY: Double Dip negative wealth effect source: HiddenLevers, Economist, only occurs with US recession China Recession --> US Crash --> Housing Downturn insolvent Chinese home buyers weighs on unemployment housing in everything bubble
  19. 19. Scenario: US Housing Rebound home prices 135 -25% home prices 175 -3% home prices 210 +17% key lever Housing starts still have a lot of room to run, and demand not abating, both foreign + domestic. The fed action won’t kill the housing market momentum completely, but should arrest its upward trajectory. China recession would drag the first world into recession and the US would not escape. Housing prices and unemployment would suffer. Good New Highs Neutral Rate Hike Interruption Ugly Double Dip
  20. 20. US Housing Rebound – Take Aways rate hikes lag housing market Housing recovery is still young housing market crash unlikely without external meltdown Housing Starts are an excellent leading indicator
  21. 21. Risk Profile Improved Stress Test modal Product Update Scenario Library ability to print Scenarios HiddenLevers Blog coming soon global securities coverage

HiddenLevers updated Housing Scenario and War Room slides.

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