The Housing Bubble

Oh, the housing slowdown will have little affect on the economy ??? NOT!
I am quite bearish on the HB stocks & short since Dec ‘05 The little 30% rally since June indicates that Wall Street
has not lost its MOJO yet… This continues to prove to me that the market conditions are sh!t and continue to
deteriorate. When the big clods get together at night little shorty gets SCREWED.

From the WSJ 10/27/06
Housing Decline Sparks Slowdown In Construction Store, Mall Demand Drops As Fewer Homes Are Built;
Weighing Economic Risks
By ALEX FRANGOS
October 27, 2006; Page A1

The unexpectedly rapid decline of the nation’s housing market will mean an overall drop in construction
spending next year, with spillover effects in areas such as job growth and real-estate development.
In a closely watched report expected to be released today, McGraw-Hill Construction will forecast the
first decline in overall construction spending since 1991. The company says the value of new construction
will decline 1% in 2007 to $668 billion, compared with an expected rise of 1% for 2006 and a 12%
increase in 2005. McGraw-Hill said the anticipated decline was due mostly to a 5% fall in construction
of single-family homes. But the overall drop also reflects a 3% slide in construction of stores and
shopping centers, a component closely tied to population growth and home-building trends.

“Single-family housing has fallen more steeply than what we had anticipated and the correction
is taking place faster,” says Robert Murray, vice president at McGraw-Hill Construction, a unit
of McGraw-Hill Cos. The industry “no longer has single-family housing to bolster total construction.”

The construction industry accounts for almost a tenth of economic activity, and its contraction could have
a ripple effect through the economy as it is a major buyer of finished products and generator of jobs.
Local governments’ ability to raise revenue through development fees and taxes, especially in fast-growing
parts of the country, could suffer as well.

The McGraw-Hill forecast comes on the heels of a report yesterday by the Census Bureau showing
that home builders have had to slash prices to sell homes. Although new-home sales for September
rose 5.3% to a seasonally adjusted annual rate of 1.075 million, the median price fell to $217,100
from $240,400 a year earlier. That was the lowest price in two years and the biggest year-over-year
decline since December 1970.

I’d like to see the $ volume of IO ARMs by year or quarter, especially those with 100% LTV. Prices have continued to rise here in central Va., and I found out why when I looked at a sample of purchase loans recorded this month. I was shocked that 33% are IOs, and another 4% are ARMS with a 30-year term but 40 and 50-year amortizations. The average rate on all ARMs is higher than the average fixed rate, with most ARMs starting at over 7%, up to 10.4%. I’ve been reading this blog for 1.5 years, but seeing first-hand that IOs are still growing like a malignancy made me very concerned for the economy.

How about a discussion of effective negotiating tactics in a buyer’s market, especially in light of the “stubborn buyer” phenomenon?

Should we unioinize, form our own political party and take our message to every town across the U.S.?

Should there be any recourse for statements made will clearly be proven wildly wrong? By using words like “probably” “likely” “could be”, these figureheads are intentionally giving themselves a ‘way out’ come judgement day.

In my mind, if you’re lying, you’re lying. These people are in a position to hurt people. Buying now could financially cripple anyone for life, let alone an unsuspecting and un-real estate-educated couple that only reads the main pages quotes.

Thoughts?

From CNN: “The U.S. economy grew at a slower than expected 1.6 percent, weakest in three years.”

Now how is this possible?? Caterpillar showed amazing earnings and my neighbor just put in Granite Counter Tops. I’m baffled.

http://www.orlandosentinel.com/business/orl-asececon27102706oct27,0,5832687.story?coll=orl-home-headlines

Any surprises in this week’s housing data?

Perhaps those who lose construction jobs in the housing bust can move to the border to put up our $1.2 billion, 700 mile national fence.

Ben, can we please have a topic on Casey?

http://www.iamfacingcoreclosure.com

I’d like a topic on money supply. We always post that the Fed is inflating away our dollars like mad and, indeed, we have seen charts posted that show estimated M3 to be exponential over the last few years. However, when I look at the M1 and M2 numbers from the Fed I see only modest growth in demand and savings accounts. Could it be that M3, which includes deposits and forms of credit not in banks, is only exponential because of all the derivative and credit obligation products? And that what we perceive as an exponential increase in money supply really has nothing to do with the Fed “printing” more money? I’d like the collective minds here to explore this.

The bad news about homebuilders is constant. It is almost a drum beat. Yet the prices of the homebuilder stocks rise day after day. Sometimes an HB who just disclosed poor results will drop a bit but the next day it goes up.

What gives? Let’s have a full discussion of this phenomenon. Is the government manipulating the stock market in order to attract votes in the upcoming election? If so, how is it done? If not, what is going on?

Instead of people saying they don’t believe the government would do such a thing let’s explore what is actually happening.

I would like to hear about places that haven’t seen a drop in prices yet AND why that is (jobs, city enhancement projects, new roads planned or being built, colleges planned, etc).

Sorry for the long post, but this could be a good topic.

In late 2005 (November) a local SoCal Realtor posted this information to refute the housing bubble fears. I believe it is a good snapshot of what was being said in support of the mania and a great topic to discuss this weekend.

“YOU MUST READ THIS TO UNDERSTAND WHERE WE TRULY ARE AT IN THIS ORANGE COUNTY MARKET

Orange County Real Estate 2006 Economic Report…

Why the Housing Bubble is Bogus!….

Updated on October 31st - 2005…

The following is the outline Gary Watts is using in his current talk on the housing market. It shows why demand for housing continues to remain strong while supply is shrinking. It explains why the forecasting of housing declines by the pundits are wrong, once again, and why real estate values throughout most of California should continue to grow at a 15% appreciation rate. If your wondering how often Gary has been right, here is his record for the 21st Century.

Year ….Pundits …Gary …..Actual

2000 ….8.0% ……12.5% …13.0%

2001 ….7.7% ……12.0% …10.1%

2002 ….2.8% ……10.0% …16.8%

2003 ….2.0% ……15.0% …19.1%

2004 …-2.7% ……25.0% …24.8%

2005 …-7.4% ……15.0% …16.1% as of August 2005

His record has been very good and it goes back to 1989 when he told the real estate industry that their Party was Over and real estate would turn downward for at least 5 years losing close to 30% in value! He became known as Dr. Doom & Gloom and Scary Gary - until his 1996 forecast. It was then that he said the downturn was over and we would be in for another great run-up in real estate values that may last 10 years or longer!

And now, his current talk to the real estate industry . . . “Why the Housing Bubble is Bogus!”

I. Historical View of Bubbles

A. The last nationwide bust of home prices occurred in the late 1930s!

1. In the past 30 years, the Federal Deposit Insurance Corporation counted 63 home-price run-ups in various cities but only 9 of these ended in a bust - all being regional! 86% of the time, the run-ups in city home prices did not end in a bust

2. In the past 25 years, the FDIC says there were 54 instances of regional housing booms (Defined as 30% or more in appreciation - happening in 3 or fewer years)

3. During the same 25 years, the FDIC found that a “bust” occurred only 21 times (Defined as a 15% decline or more and happening over a 5 year period)
62% of the time, regional booms do not end in a regional bust!

4. A joint study by both Columbia University and the Wharton School of Business found that the bubble is a myth! The growth in housing prices of 46 single-family markets over 25 years is due to basic economic fundamentals, strong incomes and low interest rates!

5. In the past 30 years, there were only 9 years when home prices did not keep pace with inflation - those years were in the early 1980s and again in the early 1990s.

Since 1970, the median home price in the U.S. has never gone negative!

B. California Housing Bust of 1990 - 1996 was caused by a huge decline in aerospace and defense jobs.

1. In the mid 1980s, President Regan proposed a Star Wars defense project. California was receiving 1/3 of all defense contracts with 40% of that total going to northern California and almost 60% going to southern California!

a. The builders began large housing developments to meet the employment demands and built these tracts based upon the economy of construction

2. November 9, 1989 - the Berlin Wall came down, ending both the Communist regime in the Soviet Union and the Stars Wars program. The major defense contractors, followed by the smaller sub-contractors, began massive lay-offs.

Southern California lost 750,000 jobs in 3 years!

3. The builders’ supply of empty and unfinished housing rose significantly; developmental land sat vacant; foreclosures began. By the end of the decline, many properties lost 30% of their value!

II. The 21st Century . . . and “Bubble Talk”

A. In the latter part of 2001, the forecasts for 2002 began with predictions of a “burst in 2002″ and significant declines in housing prices.

1. The impacts of the dot com burst were still lingering then the terrorist attacks hit the U.S., leading to major disruptions in the economy and hurting employment. Additionally, we began fighting a war in Afghanistan!

2. When 2002 came to a close, real estate had gone up 7.8% in the U.S., while home prices rose 14.6% in California. Northern California home prices rose 15.6%; Central Valley prices were up 13%; southern California prices rose 19.3% and Orange County prices rose 16.8%.

B. The Housing Bubble talk became more heated in the forecasts for 2003, with the introduction of the idea that supposedly higher interest rates would cause our over-priced real estate to finally burst.

1. Since we were heading towards a war in Iraq, it was thought that the resulting bigger deficits would mean rapidly rising interest rates, which would hurt homeowners with adjustable rates.

2. As 2003 came to a close, rates declined and real estate prices continued to rise, with the U.S. going up 8.1% and California going up an amazing 19.4%. Northern California cooled by rising only 11.5% (dot com bust), while the Central Valley and southern California were up 20% and 21.9% respectively. Orange County went up 19.1%.

C. With 2004 just around the corner, other forecasters began jumping onto the bandwagon with negative forecasts for housing price declines of 2.7% to 10% per year for the next 2 years.

1. According to these forecasts, because we were in a war with Iraq, interest rates were definitely going to rise. One forecaster said “the California economy is rolling along on a false sense of wealth”. The affordability index was dropping, and the predictions were that buyers would have trouble qualifying for loans and the bubble would burst.

2. 2004 . . . interest rates did not rise: they actually fell. Real estate went up 10.4% in the U.S. and up 20.9% in California. Northern California prices rose 18 %; the Central Valley gained strength at 19.3% and southern California was up 22.5%. The big winner was Orange County, where real estate went up 24.8%!

D. At the end of 2004, the “experts” knew the real estate bubble “burst” was going to hit hard next year, with home prices dropping 8% to 15%. Why? Because interest rates would reach 8%.

1. With the affordability index reaching record lows and the price of oil doubling, they thought adjustable and interest-only loans would hurt buyers and create foreclosures.

2. Year to date for 2005, rates are lower than a year ago and U.S. housing is up 15.8%. These lower rates added 8.7% to a buyer’s purchasing power. California has gone up 18.1%. The big winner this year was the Central Valley, skyrocketing 29.6%. Northern California is up 16 %, while southern California has risen 17.0%. Here in Orange County, resale homes

and condos have gone up 16.0% and 20.1%, respectively.

III. Forecasts for 2006

A. The pundits are at it once again with their 2006 forecasts, which are not pretty! They are predicting

an increase in interest rates due to the volatility in oil prices, the protracted war in Iraq and the

costs of Hurricanes Katrina and Rita.

1. They now claim that housing prices should decline 7% to 10%. Some are reporting that

California real estate is over-valued by 40 to 45% and that a major recession will occur in 2007!

2. One local university wrote this past June (regarding their 2006 forecast for real estate):

“We understand why this forecast might be met with cat-calls. Our inability to

accurately forecast housing prices the past several years does not leave us with

In the real world of human knowledge, to be wrong by such a large percentage, for such a long

period of time is taken as an indication you don’t have a good grasp on what you are estimating!

(tweaking a quote from Michael Crichton’s fictional novel: State of Fear)

a whole lot of credibility”.

B. What the forecasters should NOT be looking at: 1st - Affordability Index

1. This index assumes a buyer has no equity down payment and is putting down 20% to buy.

In the U.S., you would need an income of $50,650 to afford the median priced home of $220,000, which would limit the ability to purchase a home to only 45.9% of the population.

2. In California, only 16% would be able to buy, provided they have an income of $125,670.

In southern California, family income falls short by $67,000 to buy a median priced home.

Only 11% can afford a home in OC with an income of $164,220. It gets worse in Sonoma,

Santa Barbara and Napa at 7%, and San Francisco at 4%. Only 1% can qualify in Santa Cruz. In the past 5 years, California residential equity has gone up by $1 Trillion! In that time, Orange County residential property prices have gone up 118%!

3. Today’s buyers have equity and, with lower interest rates, their mortgage costs are lower than they were in the early ’80s when they represented 30% of household income. Today, mortgage costs only average 17.5% of household income!

Sellers received a net of $220,240 from the sale of their home - an all time high! Repeat buyers’ down payments average $119,000, while 1st time buyers have average down payments of $47,000!

4. Last year in California, we sold 33,107 million dollar homes. This year, we will easily exceed 40,000! Here is a list of the top 10 median prices by zip code in California:

(1) Atherton ————— $2,496,533
(2) Santa Barbara ——- $2,176,251
(3) Rancho Santa Fe — $2,144,254
(4) Newport Beach —– $2,046,577
(5) Ross ——————- $1,910,263
(6) Santa Monica ——- $1,749,834
(7) Beverly Hills ——— $1,582,886
(8) Diablo —————— $1,452,500
(9) Belvedere Tiburon — $1,421,336
(10) Los Altos ———— $1,392,522

C. What the forecasters should NOT be looking at: 2nd - Rising Interest Rates

1. Huge employment gains are causing a gushing of money into the Treasury; funding requirements were reduced by $59 billion for the July/September time period.

2. There is a global savings glut that has translated into heavy competition to lock in long term yields. Foreigners purchased $71 billion of T-Bills in the last quarter. Pension funds, insurance companies and public/private corporations are all trying to off-set retirement obligations. We also have 78 million baby-boomers looking towards retirement and converting IRAs, 401Ks, Roth, Sep IRA and other retirement accounts into income funds..

3. Add to this a the fact that excess manpower and machinery are being reduced in most industries and you can begin to understand why the core index is 2.2% vs. 1.9% a year ago.

Even with all the oil price surges, the consumer price index is at 3.6% - well below the 4.2% historical average.

4. This helps explain why mortgage payments are now 8% less (in the U.S.) than they were in 1989, and .02% less (adjusted for inflation), than they were in California. Fixed rate loans are at 5.71% vs. 5.83% a year ago. Adjustable rate loans were 4.0% a year ago; today, They are only 4.45%.

5. Even if interest rates were to rise, it would not affect most homeowners. Here’s what the Mortgage Bankers Association tells us about home loans in America:

a. 35% own their home outright - so no interest rate problem there;

50% have fixed rate loans - many refinancing to lower rates with fewer years;

15% have adjustable rate/ interest - 8% of those being high wealth income earners.

Therefore: Only 7% of all mortgages are rate sensitive!

For housing prices to decline, a majority of households would need to have adjustable rate loans that were exceeding 8.5%!

b. Another way to look at this is to note that, out of $7.3 trillion in mortgages, only $83 billion are adjustable or interest-only loans!

c. Today, 1/8 of homeowners spend 50% of household income on housing, while 1/3 spend just 30%.

6. The media only talks about the explosion in housing debt. Homeowners’ equity growth in the 1st quarter of 2005 was up over $300 billion in the U.S. Today, we have $16.6 Trillion in household value vs. only $7.3 Trillion in mortgage debt.

This is a 57% equity position - a fairly large buffer against price declines!

7. This also explains why foreclosures are going through a 9-year decline and are at a record low. The U.S. foreclosure rate is 1.0% - the lowest in 25 years. “Expensive” California is at .17%- the lowest in the nation! Through August of 2005, 33,868 homes were sold in Orange County in 2005, and only 81 of those were foreclosure sales!

IV. Looking at Reality- Demand vs. Supply. You cannot have a housing bubble when demand exceeds supply!

A. Demand for Housing - Current housing boom has lasted 13 to 15 years!

1. In 1990, 2.9 million existing homes were sold in the U.S. Today, existing homes sales are on track to reach7.29 million. In California, repeat buyers make up 2/3 of the market.

Demand for existing homes has grown 114% - while supply has fallen 4%!

2. The new home market (inventory relative to pace of sales) is near its lowest level.

New home sales would have to drop by over 33% for over a year to reach equilibrium.

New home demand is up 143% - with only a 23% increase in supply!

3. Last year, California developers built 210,000 units (homes/condos/apartments). This was a near record, yet still fell 40,000 to 50,000 units short of the demand. Half of this shortfall occurs in southern California!

4. The State population growth rate is 1.6%, with 600,000 more people added last year. Over the past 3 years in southern California, the population has increased by 1.1 million!

5. Four of the 10 fastest growing areas in the U.S. are located in California. The #2 spot goes to the Riverside-San Bernardino-Ontario area - up 15.7%. Stockton is #4 at 14.4%, and the # 8 is the Sacramento-Roseville area up 11.5%. Bakersfield is #10 with a 10.7% growth rate.

6. In the next 10 to 15 years, 3.5 million more people will reside in southern California. That is the current population size of Orange County!

Orange County’s housing demand is 15,000 (+) units per year but, in the last 12 months, only 4,159 single family residences and 3,917 condos/apartments were built.

7. This demand is coming in waves, the 1st wave being the baby boomers who are now in their early 40’s and late 50’s. They found a way to mix leisure with work and are not ready to fully retire - they have money and income and are still investing in real estate.

a. As investors, they average 47 years of age, have an average yearly income of $85,000 and were responsible for 23% of all sales last year.

b. As 2nd homes purchasers, they are approximately 55 years of age, are making $71,000 yearly and were responsible for 13% of all sales in 2004!

8. The 2nd wave of home buyers are predicted to grow at a rate of 1.17 million per year for the next 10 years. They are 1st time home buyers (median age 36). Those purchasing upscale properties have a median age of 45.

9. The 3rd wave of home buyers is the largest group. They are presently 23 to 33 years of age and will total 1.2 million new households per year for the next decade!

It’s happening all over the world! Residential real estate is up $30 trillion in 5 years!

Appreciation Prices as of June 2005 for the past 12 months

Country Price Appreciation: 1997-2004 Numbers for ‘05

Ireland 174% 11.1%

Spain 121% 15.5%

Britain 116% 5.5% (Jan-May of ‘05)

Australia 113% 1.1% (may be too low)

Netherlands 75% 11.3%

Sweden 67% 15.7%

France 59% 15.0%

Belgium 54% 8.2%

Italy 54% 10.8%

United States 53% 15.1%

New Zealand 47% 14.3%

Denmark 41% 5.0%

Canada 30% 7.3%

Switzerland 11% 2.1%

Germany -3% n/a

Japan -22% n/a

A. Demand for Housing (continued) - here come the immigrants!

9. The immigration of new buyers is largely due to the U.S. policy on family reunification.

In the U.S., 2/3 of all immigrants go to just 6 states. California is the #1 destination, receiving 22.4% of all immigrants.

Latinos are the fastest growing segment of the housing market!

a. Since 2000, 1.1 million more foreign immigrants have moved to California - which, for the first time, is a larger number than the number of migrants from other states!

b. Four of the top 11 counties attracting immigrants in the U.S. are in California!

Los Angeles is #1 - receiving 400,000, followed by Santa Clara (#5) and Alameda (#9).

Orange County ranks # 11, with 82,794 foreign immigrants arriving since 2000!

c. From 1980 to 2000, over 6.2 million minority households joined the ranks of middle-income earners and are purchasing housing. Those who arrived in the ’80s and ’90s with children now have children who are looking for a home!

d. These 2nd generation Americans now account for 15% of the population between 11 to 20 years of age. If history repeats itself, they will out-earn their parents and be an even greater source of housing demand.”

How about articles about agents who refuse to take lisitings from out of touch buyers who want to list for unrealistic prices.

Are auctions the real deal?

Is the crash stabilizing? Economists seem to differ on the answer, depending on whether the REIC pays their salaries.
———————————————————————————
CAPITOL REPORT
Has housing bottomed? Most economists say no
By Rex Nutting, MarketWatch
Last Update: 5:02 PM ET Oct 26, 2006
…
Is it true, as David Seiders, chief economist for the National Association of Home Builders, suggested, that the market “may be stabilizing”? Or as David Lereah, chief economist for the National Association of Realtors, put it a month ago: “We think the housing market has now hit bottom.”

The housing optimists are led by economists for two industry groups, so their views may be self-serving to some extent. But their ranks also include some of the more respected economists on Wall Street as well.
“The housing market shows signs of stabilizing, said Dean Maki and Julia Coronado, economists for Barclays Capital, who, like Greenspan, point to the flattened out of mortgage applications as a key indicator.
David Greenlaw, an economist for Morgan Stanley, is another optimist, relatively speaking: “While we certainly do not think the housing market recession is over, a variety of incoming data increasingly suggest that the worst of it occurred in the third quarter — and with little meaningful spillover into other sectors of the economy,” Greenlaw said.

While some economists saw a bottoming in last week’s data, the far-more-common reaction was like this from MFR economist Joshua Shapiro: “It is clear there remains a deep-seated pessimism on the part of home builders.”

Or this from Ian Shepherdson, chief economist for High Frequency Economics: “It isn’t over. It has barely begun.’

Or this from Bart Malek of BMO Nesbitt Burns: “We have not yet seen the full fallout from the housing correction.” ”

http://tinyurl.com/yytdqq

Home prices may drop from record levels of overvaluation, but don’t worry — any such drops will be mild. And there is no bubble.
————————————————————————————
U.S. Home Prices May Fall
But Drops Will Be Mild
By Brian Blackstone
From The Wall Street Journal Online

U.S. housing prices may decline “a little” within the next year, but any such drop is likely to be mild and inconsistent with a bursting housing bubble, according to a paper written by a Federal Reserve economist.

Based on an analysis of housing futures and options and derivatives of housing-related company shares, “market participants expect home prices to decelerate sharply or actually decline a little within the next year,” wrote J. Benson Durham, an economist with the Fed’s monetary affairs division. However, the anticipated drop in prices “is mild compared to some estimates of the purported overvaluation of the housing market,” he added. The paper, dated September, was posted on the Fed’s Web site Thursday.

Rising Home Inventories
Track home inventories in 18 major metropolitan areas.

Mr. Durham cautioned that deep and liquid markets needed to signal future home-price trends don’t fully exist and that housing futures and options have only been trading on the Chicago Mercantile Exchange since May 22. Still, implied volatility on CME housing options are greater than the historical average, “which suggests that investors see more risks to home prices going forward,” he wrote. That higher uncertainty, however, is “generally inconsistent with the perception of a “bubble,’” he added.

http://www.realestatejournal.com/buysell/markettrends/20061023-blackstone.html?rejpartner=mktw

What I am concerned about is how we can get the message out faster to the masses. There is so much great content on this blog, but with the thousands of comments posted on this blog each week, it can take hours to get through. I propose a new weekly topic called Best of the Blog or the Executive Summary, etc. which could be the last post on Friday (or the first on Monday with a link to it on Friday), where we could post the best analysis or anti-spin of the week’s housing articles provided in the past weeks comments. This way a busy person could easily catch up over the weekend with what has happened. I also suggest we provide links to past articles, graphs and resources so that the newbie person can more easily digest and access all of the information that is coming out about the housing bubble. I would love to be able to email such a link to a busy friend or new acquaintance so they would not be overwhelmed with all of the information provided them on the general site to hook them in or get them in to the habit of at least looking at this summary post once a week.

I have benefitted so much from Ben’s blog and was persuaded not to buy back in January because of it. I think the best thing we could do as a web community is collect and capture the experience and brilliant analysis on this blog and package it for those with less experience and time. By doing so we could really make an even bigger impact in educating and starving the market of new buyers. It would help all of us get what we want (a good deal on a house) alot faster.

What do you say Ben?

-
Which political party is more likely to push for a taxpayer bailout for the “victims” of this debacle?

Ben,

as I understand things, you are a journalist.

The blog you have established has brought together a wealth of information and experience.

I think it’s now time to give out press releases on the information your blog generates.

So often we read rubbish reports in the press…… time to set the record straight mate.

Lets start a HBB press release process.

FWIW

Let’s have a discussion of NAR’s propaganda strategy over the last year or more, and what is coming next.

1-3 years ago: The mantra was “real estate always goes up”. Buy now or be priced out forever.

6 months ago: The mantra was “real estate never goes down”. Realtors were encouraging sellers to hold firm on prices, and even de-list their homes to wait for a turnaround, Fed lowering the overnight rate, etc.

This past month: Two mantras emerged. To buyers: “the market has given back some of the gains, buy now or miss the rebound”. To sellers, “Don’t be so greedy” (do as I say, not as I do – after all, our agents have bills to pay). Realtors have started complaining that sellers are unrealistic in their asking prices: “you’re not going to get the same price that your neighbor got 6 months ago, so settle for 2004 or 2005 prices”.

The last week or so: The mantra seems to “This is the blood in the streets that you’ve been waiting for. Now take advantage of it – buy!!” The media is saying that there has been a substantial “correction” in home prices — larger than a lot of us watchers are seeing on the ground (’reduced price!’ in the MLS is meaningless, and only same-house sales can paint an accurate picture of cost trends – I’d be happy even with $$/sq ft).

These messages are being fed in markets across the country. Rest assured the NAR spin machine is mapping out the next messages. Any predictions?

Suggested Topic:

Best “See-Through” Neighborhood

A phenom from the ’80’s when neighborhoods were so empty you could “see through” it. With all the spec neighborhoods in some markets, perhaps recognition for:

Most deserted
Highest priced
Largest number of houses