HOUSINGNEWS REPORT
PERSISTENT HOME PRICE APPRECIATION PRESSURES MARKET ORTHODOXIES
HOME PURCHASE DOWN PAYMENTS HISTORICALLY
At the same time, Paulson says the government figure “does not include retail volume from third-party sellers on Amazon.com and eBay.com. When these figures are included, the measure increases to $504 billion. After correcting for double-counting the ratio of eCommerce to adjusted U.S. retail sales is 18 percent – or double the often-cited statistic.” If Paulson is right and the retail numbers are off-base then what about other data? If the Fed is changing the federal funds rate up or down on the basis of incorrect numbers then the potential to harm the economy – including the housing sector – is significant. “As the Internet has been massively transformative to our economy, industries, and human behavior,” says Paulson, “it is hard to have confidence that historical cause-and-affect relationships continue at the same weight. Additionally, the U.S. has entered an unprecedented period of income bifurcation and demographic change. Given that this is unprecedented, there isn’t empirical evidence to study.” “As we see it,” said Fannie Mae Chief Economist Doug Duncan in January, “the traditional view of a trade-off between employment and inflation lacks solid empirical support in recent decades, and aggressive monetary policy to ward off a potentially overheating economy may do more harm than good. Managing a ‘soft
MEDIAN DOWN PAYMENT
MEDIAN DOWN PAYMENT PCT
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$0
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“As the Internet has been massively transformative to our economy, industries, and human behavior, it is hard to have confidence that historical cause-and-affect relationships continue at the same weight. Additionally, the U.S. has entered an unprecedented period of income bifurcation and demographic change. Given that this is unprecedented, there isn’t empirical evidence to study.”
THOMAS PAULSON FOUNDER, INFLECTION CAPITAL MANAGEMENT
have taken place recently, something one would not expect in a growing economy where consumer spending should be up. The usual explanation is that local retailers are losing out to online competitors, but according to the Census Bureau e-commerce retail transactions only represent 9 percent of total sales. How can there be so much retail disruption with so little market share for online sites?
The answer, says Thomas Paulson, the principal and founder of Inflection Capital Management, is that the government estimate is based on old assumptions. “The 9 percent number,” says Paulson, “includes several large categories that are not relevant to this class of retail such as autos, gas and fuel sales, grocery sales, and restaurants and bar sales.”
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FEBRUARY 2018 | ATTOM DATA SOLUTIONS
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