Friday, September 16, 2011

Fragmented Housing Market


The above chart is a state-by-state breakdown of home-equity ownership, courtesy of Deutsche Bank research. I think that this graph is powerful; it offers some flavor on the fragmented national housing market. This speaks volumes to the point of tangency which the housing market has arguably reached…

Some observations:
  • It is difficult to talk about housing from a national perspective given the dramatic differences in state demographics and sub-stratified marketplaces.
  • There is no clear trend or difference between states within the 50-99% home equity range; only a small (but still insignificant trend) with the 25-50% equity makeup.
  • What your eyes want to gravitate towards is the penetrating blue ‘negative equity’ slice. Alarming, no? This goes back to the point I made in an earlier blog where I challenged the reader to think whether we are riding a trend or at a transitioning point…
  • These statistics are like when political persons have to reveal their own net worth: very subjective still. How does this graph account for refinancing and in cases where home equity is tapped? Can’t tell from this, too many moving pieces-parts.
Still, this is pretty interesting. More to come, stick around…