Does The RE Industry Influence The OC Register?
This blog was contacted by OC Registers’ Jon Lansner regarding that writers’ objectivity on Orange County, CA real estate. Here’s what Mr. Lansner wrote. “I’m trying to figure how to tell people on your blog that I operate under ZERO pressure from my bosses or the real-estate crowd to produce an even-handed discussion of the housing market.”
I proposed that I would put up this post for readers to submit questions directly to him and I will select the best four or five and send them over tonight. He agreed. Tomorrow, when Mr. Lansner replies, I will post his answers. Please keep your questions on topic.
He will also field questions on his outlook for the Orange County property market, so this is your chance; Ask Jon Lansner!
Now this is going to be good. After weeks of the same old stuff, this blog now has something to really get fired up about. Let’s get some good questions folks………can’t wait ’till tomorrow!!
I do not know what angle this writer speaks to in his articles. Perhaps his tack is already pro-RE and he wants to convey that he does this on his own… vs being pressured by his boss.
Oops, I meant this to go under exhedra’s comment at 10:36am
My Question for Mr.Lansner. If you are presently a homeowner, will you sell now, at the peak of the market, become a renter, and buy back in later?
Mr. Lansner appears to be saying that he is under no pressure to produce an even-handed discussion. Some mistake, surely? Or perhaps he is subtly implying that he is, in fact, under pressure to skew the discussion one way or the other.
I have no questions but I would like to make a comment.
Having worked at three major newspapers in either advertising or production, every newspaper I’ve worked for has had a firewall between editorial and advertising.
Advertisers cannot dictate what the newspapers will pubish because newspapers are supposed to publish “news.” Likewise, editors won’t back off from bad news stories just because it might aggravate an advertiser. That’s not the editors problem. It’s up to the Advertising department to sell ads and it’s up to editorial department to write news. The two departments have nothing to do with each other.
Occasionally advertising departments will put together special supplements (like the Saturday Real Estate Section) that are comprised of ads and editorial. Usually those editorials are written by staff members who only write “fluff” news, not hard news stories. (At the LA Times, they were called “Special Section writers” and they only wrote advertising/fluff stories for special sections.)
The only concession I have ever seen for advertisers consists of stuff like this: 1) Major airline has a plane crash, newspapers will pull airline ads for that date *if possible*; and 2) newspaper has 1/2 page story about how ice cream is bad for your health running right over 1/2 page advertisement for ice cream. *If* someone in production catches it, they will move the ad to a different page because the story would be bad for the advertiser and the advertiser could ask for a credit on that advertisement.
Newspapers exist for the benefit of their readers, not their advertisers.
All of that is true, but there’s the pragmatic reality of “playing for the team.” I once worked at a corporation famous for its heavy-handed treatment of competitors. Another employee posted a comment to an internal mailing list about hacking the hardware sold by said company and installing alternative software.
The guy had 2 senior employees in his office within 5 minutes, “asking” him to withdraw the post. He didn’t do it, citing freedom of speech/choice, but was it something that helped his career?
Many businesses out there are run for legitimate and straightforward reasons, others are run to “maximize profit for the shareholders” no matter how slimy the ethics get.
Ahem,
http://www.thirdworldtraveler.com/Media_control_propaganda/Fear_Favor_Newsroom.html
This might be a “lefty” source but the info is good. This is a good paragraph to start from:
Journalists, on the whole, understand these pressures all too well. A survey of media workers by four industry labor unions (Media Professionals and Their Industry, 7/20/04) found respondents concerned about “pressure from advertisers trying to shape coverage” as well as “outside control of editorial policy.” In May, the Pew Research Center for the People & the Press released a survey of media professionals that found reporters concerned about how bottom-line pressures were affecting news quality and integrity. In their summary of the report, Bill Kovach, Tom Rosensteil and Amy Mitchell wrote that journalists “report more cases of advertisers and owners breaching the independence of the newsroom.”
Advertisers work hard to create the appearance of a wall, but, as outsiders (like us bloggers for instance) can plainly see, and as some insiders have come to accept, there is no wall at all…
Your bottom line is flawed. Newspapers do not make the majority of their money from selling individual papers at $0.25 per. They make the vast majority of their money from advertisers. Keeping circulation high is important only insofar as it keeps the advertising price at a premium. This dynamic leads to more “sensational” stories, full-color runs, and other circulation-promoting tactics. It does not promote hard “news” and certainly not “analysis.” Only a very few publications adhere to anything resembling high journalistic standards for “news” anymore and almost nobody publishes negative or “scary” news because that turns readers off and drops circulation, hence advertising revenues decline. Besides, advertisers clearly don’t want to be associated with “negative” press of any sort. They want to be associated with “feel-good” stories.
Your economic analysis of how newspapers make money is correct — without the circulation, the advertisers wouldn’t pay the bucks to run ads. This still doesn’t mean that advertisers get to dictate what is going to run in the editorial section of the newspaper.
Newspapers are complicated businesses. The minute you start letting an advertiser tell you what kind of news you can/should be running, next they will be insisting that they have every right to have the placement in the paper that they want — and everyone would want to run on page 3 (actually, they would insist on this first, then they would want to tell you what news to run).
Articles on media influence seldom point out the number of times newspapers have taken a stand against an advertiser to the point that the advertiser drops out of the newspaper. Yes, sometimes when an advertiser can’t get what they want, they stomp their little feet and go out the door — and newspapers let them go. Does anyone ever report this? No…
But what happens when the advertiser (or industry group, i.e real estate related) represents a significant percentage of the revenues generated from advertising? Then walking away from the advertiser is not so easy. I’m from San Diego which is bubble central and just a casual scan of the Weekly Reader and the Union Tribune will tell one just how much reliance there is on real estate advertising.
I personally saw an $100K a week advertiser (back in the 1980s) leave over a dispute where the paper would not give them what they wanted.
The attitude was “Oh well…”
It shouldn’t be “news” if the press is doing what it is SUPPOSED to do, even though the press boasts its good behavior all of the time, by repeadetly pledging to print the news without fear or favor. Trouble is, it often fails to do this, and it seems more frequently lately.
Comedian Chris Rock had a great bit that applies to your post Claudia (ok I cleaned it up though) :
“N–s always want credit for some shit they’re supposed to do. They’ll brag about stuff a normal man just does. They’ll say something like, ‘Yeah, well, I take care of my kids.’ You’re supposed to, you dumb m—f. ‘I ain’t never been to jail.’ Whaddya want? A cookie? You’re not supposed to go to jail, you low-expectation-having m-f!”
LOL! That’s why it never gets reported.
I think people fail to see that advertisers need the paper as much as the papers need the advertisers. Companies advertise in hopes of getting sales or leads from their ads. If their competition is in the paper, it’s only logical that they should be in there too. As long as people shop for real estate in the newspapers, there is going to be real estate advertising. If Joe Blow’s Real Estate doesn’t want to advertise because he’s mad at the paper, who cares? Mary Smith’s company is still running ads because she isn’t stupid and she knows that while Joe Blow is away, she might be able to corner even more business.
The same thing happened to the $100K a week advertiser I mentioned above. I think they spent 4 years out of the paper trying to prove their point while all their competitors (who were still in the paper) got bigger and bigger and bigger. After 4 years, they finally gave up and started running ads again.
If newspaper advertising didn’t work, no one would run ads in the newspaper.
Exactly. I used to wonder why these silly 1-800-your-horoscope ads ran all the time on the TV; because they’re still hooking the fish!
I think it’s naive in the extreme to think that advertising dollars don’t have an impact on news coverage. It certainly doesn’t have to be overt (such as the cases you cite from the ’80’s) - it’s more the group think sort of thing, as in “Everyone knows what’s expected.”
By the way, twenty-year old experiences in journalism are out-of-date. Have you checked how much worse news coverage is now, in almost all media, than in the ’80’s? The pressure to turn a larger profit has had a huge, negative impact. You can hardly get through a local newscast without there being heavy cross-promotions with the entertainment side.
As to whether the print media is directly benefiting from the real estate advertising due to the housing bubble, there’s no doubt that it is. An analogous situation occurred with the stock bubble of the ’90’s, in which cable stations such as CNBC and CNNfn were among the greatest cheerleaders. Viewing and advertising was at an all-time high, and then with the bursting of the bubble, viewership tumbled. CNNfn is no more, and CNBC has been rapidly spinning off it’s high-priced, senior anchors (goodbye Ted David, Ron Insana, are you next?). Indeed, they’ve resorted to the old stock-market tout, Barnum & Bailey-type hucksters (see Jim Cramer’s ‘Mad Money’/booyaah) to drum-up interest in stocks.
So, I would argue that newspaper journalists are more than aware that if the housing boom goes bust, so too may their employment.
There are huge differences between the print media and radio and TV.
I think print advertising has been hurt by all the mega-mergers more than anything. It really hurt when Federated starting buying up all the department stores and when all the grocery chains started merging. Wal-Mart doesn’t run in print and that hurts too. (Or Wal-Mart runs preprints and those don’t generate much money for newspapers.)
Every time one type of advertising goes down the tubes, another one seems to come along to take it’s place. If RE goes down, financial advertising might make a comeback, along with bankruptcy attorneys, etc. You might start seeing more advertising from drug manufacturers pushing anti-depressants!
The other big thing that has affected print advertising (and circulation) is the Internet.
Sorry Claudia, but I’m skeptical of that premise because of the primarily real estate driven growth in the OC economy in the past several years. I don’t that revenue would get filled as quickly as you think. My background is in accounting and finance (CPA) and I know how even a relatively small gap in cash flow can affect a company. My question for Lanser is what % of the OCR’s annual advertising revenues for the past 5 years came from the Real Estate industry (not just realtors) meaning all businesses that are even tangentially realted to the RE business or dependant on it like Home Depot, Remodelers, Mortgage Brokers, etc. If it’s more than 20 to 25%, then you know damn well there is an influence on the editorials.
JWM,
Think about this… The OC Register is liable to sell MORE advertising to realtors while the bubble is popping than they would when the market is hot. Why? Because it’s not that hard to sell a house when everybody is buying them — but when the buyers stop coming around, then you have to start advertising to drum up some business. So real estate advertising should actually increase while housing sales are falling.
If you really want to figure this out, request rate cards from the Register. Get a months worth of newspapers from last year and the corresponding month from this year. Sit down and start measuring the ads then calculate how much each ad cost. You can then figure out how much real estate revenues have increased or decreased year over year. A reporter isn’t going to have access to this data and, as a private company, the Register doesn’t have to report it. In fact, the only people who are likely to know this are the Advertising Director, a few people in Accounting and whoever works on budgeting.
It’s very naive to believe major advertisers don’t influence editorial type stories carried by print media - Sounds like something from Journalism 101 class…
Print media operations are struggling for their very financial existence so they are more inclined to pay attention to the interests of their key advertisers. You will be seeing a lot more bubble bursting stories from less RE industry advertising sensitive media and the rest will be forced to carry the stories only after the bubble already bursts…
I don’t see these happening with many local newspapers like San Jose Mercury News etc. whose revenues depend on homebuilders ad. there’s obvious bias to inflate housing bubble and attempt create a panic among potential buyers that they are left out. and whenever there’s any bad news they either skip is totally or give a positive spin. very similar to realtwhores.
“stop HELOCopter money!”
Interesting story, and I’m sure your account applies to many newspapers. However, I cannot believe this “firewall” applies to our local newspaper, which to this date generally continues to pump local real estate, while other local newspapers have become far more cautionary. When such newspaper refuses to respond to our letters on a balanced journalistic approach, continuing to rely on “expert opinion” from realtors, it leaves me with no trust in their journalistic standards whatsoever.
Most papers are not like this, but others are simply poor reporting.
Here’s a ton of data on how much money comes in from what types of advertisers nationally. Real Estate advertising falls under “Classified” and it’s interesting to note that they actually spent less money advertising than Automotive and Help Wanted (Recruitment). Overall, Retailers spend more than anyone else (grocery stores, department stores, etc.).
http://www.naa.org/trends-and-numbers/market-databank/industry-statistics.aspx
Another website reported that Real Estate made up 9% of all newspaper advertising in 2004. Retailers made up 47%.
You know, if newspapers really cared about supporting their advertisers, why would they print stories about SUV rollovers? That had to have an effect on auto advertising!
And GM pulled all advertising from the LAtimes over bad reviews of their G6 sports sedan (2005).
Claudia, Claudia, Claudia. I didn’t ask about national numbers, I asked about the Orange County Register’s numbers. The national median house price is between $200 to $250K and what is it in glorious Orange County, California? Over $600K. All markets are local. Enough said.
I am an OC Register subscriber, and I look forward to Lansner’s writings on real estate. In my opinion, his musings seem to be 60/40 in favor of the RE industry/market, but he does manage to interject a dose of reality, as if to hint that the tide is changing.
However, I do hope that he will be one of the columnists who will be unafraid to present some of the arguments that frequently arise on the various housing bubble blogs. Issues I would want to see addressed:
1. growing inventory
2. freqent use of no-down/IO/ARM/neg-am broker incentivized loans that will eventually cripple the borrower
3. Gary Watts is delusional and should not be allowed to make bold claims that uninformed people will take as gospel. I know he called the last bust, but that does not make him omniscient.
4. RE industry needs to be regulated - brokers cannot make promises, do away with no-doc loans, etc.
5. The “this time its different” argument. I used to believe that, but anything the RE industry uses as justification has been picked apart, and it should be communicated to everyone, informed or not.
It’d be great if the articles could include some actual graphs, because the visual effect I feel will really demonstrate to the masses that yes, real estate does go down. Maybe he can contact Rich Toscano for an update on San Diego’s market, as they seem to be a year or two ahead of Orange County.
As an ex-journalist I can only say that I was never approached by any of my bosses to write a fluff story that would benefit any advertiser.
So why is this guy worried about what people on this blog think of him?
Q: why are you such a dumbass?
Oh chili, that’s a bit harsh.
Jon Lansner’s recent columns may not mention of the deep trouble lenders are in the OC. Being that many of the top sub prime lenders in the OC have been laid off employees and suffered poor forecasts, this issue should be front and center.
Perhaps, advertising revenues are having a chilling effect if not a overt impact on his choice of issues.
I agree - most newspapers are NOT like consumer magazines. I don’t see where Mr. Lansner’s reporting has ever been biased one way or another. I think he’s just smart enough not to make many hard predictions in order to not look like a fool when they don’t come true.
His column is excellent, and I wish it were syndicated nationally.
I do have one question for him: “Do you personally buy the theory (as expressed by Gary Watts and others) that the only factor keeping Orange County housing prices high is the county’s high rate of job creation? If so, do you think that the housing boom is the main contributing factor to that rate of job creation, in a kind of feedback loop?”
The answer to that ? needs to be backed up by hard stats, no off-the-cuff statements presented as fact.
having read most of his articles, i’d have to say he tries to present a very balanced view of real estate market here in orange county. if anything, i’d guess that deep down he’s a real estate bear and has been for quite awhile.
i’m not trying to cheerlead him either. i’m in real estate and i think we’re going to be having some problems here in the OC soon. at this point, average (mean) prices of resale homes sold through the MLS are stable to very slightly increasing over the last 6 or 8 months and are still up approx. 13% over the past year. but inventory is increasing as well and the number of sales is down 30%-40% over the last few months on a year over year basis.
it will be interesting to watch this play out here.
Amen…I’ve stated that I felt he was a bear back in June of 05′ If he ever was a bull then he’s been Neutered.
My wife is an OC Register subscriber.
Lansner did publish a bearish article in 2003. He was early like many bears.
He also published a re-hash of his bearish call in the last 6 months.
He published the yellow light flashing article on tax delinquencies and he also published the article on the sisyphean nature of OC housing in the last 90 days.
Why do those stand out?
Because they were exceptions to the glorious rising RE stories in the Register (not all written by Lansner). The tone of the glorious rising RE articles tends to be ebbullient in the OCR and the bearish articles are dispassionate passive voice articles. That is the reason for the backlash here.
Overall, I think he is a good writer and one of the better talents at the OCR.
I have to admit goading Auction Heaven in 07 and Lansner a bit in a previous thread/posting. But without a clash of ideas nothing really ever gets solved. IMO, too many journalists lurk on this blog for story ideas and don’t give credit.
Newspapers aren’t generally going to publish articles that are forward looking and really the housing bubble isn’t news yet. Even though everyone on this blog knows that the housing bubble will end in pain newspapers aren’t in the prediction business.
The OCR is not a civic organization they are a business. They don’t have an obligation to warn about future dangers. Even if they were right it would be a case of Cassandra’s dilemma and it would dilute the narrowly defined news that they use to get readers to sell advertising to show to the readers.
Generally, OCR gloss pieces on rising RE prices are infuriating for both renter and owner (that are paying attention) alike and that is the response on this blog. Bloggers here are anonymous and don’t get paid so who cares if we make forward looking comments.
I think that his is a case of once burned twice shy with bearish housing calls in OC.
That being said one, lucky bearish call in OC could make a RE demi-god out of you (Gary Watts).
As far as a question for Lansner. I would like to see on his blog or this blog a summary of the RE related articles he has published with the % bullish or bearish sentiment expressed.
I think that the ratio is around 65/35 RE bull.
Newspapers aren’t generally going to publish articles that are forward looking and really the housing bubble isn’t news yet. Even though everyone on this blog knows that the housing bubble will end in pain newspapers aren’t in the prediction business.
That’s a very good point. Newspapers generally report news “as it comes” versus making long-term predictions. However, I do wish they’d do a better job balancing realtor sales pitches with cautionary statements by other authorities, such as independent economists.
He was a bear in the past, but lately he seems a bit off. Maybe because he predicted too soon and now he’s being cautious. I wrote on his blog and I mentioned being bought out. I guess he wanted to defend himself and I can understand that.
I also think that they are trying to drum up traffic on their blogs by siphoning from Ben’s.
OC Real estate inventory is up almost 50% since January 2!!
http://tinyurl.com/qsjkb
Reading his quote carefully seems to reveal the problem. Perhaps his bosses *should* apply pressure “…to provide an even-handed discussion of the housing market.”
Likely he mispoke (mistyped); but that is not encouraging from someone who apparently writes for a living.
It would be interesting to know his personal stake in the RE market (himself, relatives, friends).
He did publish that several times. He owns, bought in 1993 in silverado or modjeska canyons.
You make a great point the syntax of being under zero pressure to present an even-handed discussion means he is under extreme pressure to present unbalanced reporting.
That syntax is simply too strange to chalk up to poor writing skills.
Which is why I posit that he lately has been reporting on bad RE news in euphemisms like flashing yellow light and sisyphean nature of OC housing.
Something’s fishy here. The Register today looks like a bubble blog — but only one month ago…??? I think Mr. Lansner should’ve reported what he knew rather than coming on here and trying to save face *after* it became fashionable to implement honesty into reports about bubble markets such as his own. Sure…now that the New York Times is all over it he wants to play “journalist.” It’s cute, but I don’t buy it. Ask Mr. Lansner if he owns a home in Orange County.
Q: have you ever questioned/reported on the commissions and fees structure? The kickbacks/finders fees/prefered providers situation?
Not sure I understand, sorry. Have people on this blog been badmouthing this guy in particular? I checked out his blog and wasn’t particularly impressed. Sounds like a company man blog, no creativity or independently risky thinking that I could see. In any case, “ZERO” pressure from his bosses? That is delusional or else he is in so deep he might as well be his boss.
But still, I find it interesting that he doesn’t say anything about his challenge to you on his blog or link back to your site. Whereas you are giving him and his advertisers a huge boost by linking to his site on your very successful high-traffic site. Hope he gets reciprocal and soon, especially since he started it.
In any case congrats on raising the hair on the back of the neck of mainstream media!
No, Auction Heaven in 2007 started it with goading from me.
Maybe Ben could dig that out of the last OC posting.
Hey, i had to cancel my OC Register a couple years ago due to fact I could no longer take seriously a paper that carries “Mallard Fillmore” on the editorial page. But I seem to remember Lasner being one of the few people worried about the RE bubble long before i found this blog.
what % of Ad revenue is from RE ?
I’m thniking 20-25 for most newspapers
Depends on the paper and the market.
I don’t know either but our non-profit newspaper is full of bubble stories, the even hired a real estate analyst to do a weekly article. The for profit, full of real estate, furniture, mortgage ads has far fewer articles.
Possibly a coincidence but then again…
I have questions for him:
1) How will the slowing housing market affect OC employment in the real estate, mortgage lending, and construction areas? How much recent new employment in OC is directly tied to real estate?
2) What percentage of real estate loans made recently in OC are ARM loans?
3) If faced with soaring defaults and foreclosures, does he think mortgage lenders will act quickly to push people out of their ex-homes and try to resell the properties marked down ASAP, or will they try renting out these properties for steady income, possibly to the same people who were unable to make their ARM mortgage payments (and who otherwise might be good renters)?
Just curious.
Additonal questions:
4) if you survey recent (last 2 years) homebuyers, what was their avg debt/income #?
5) same group–if their arm reset today, how much would their rate/payment go up….and could they reasonably afford it?
Note, I didn’t ask the arm/io percentages. I believe that he ran a column a while back that hit this– something like 85% (OMG). He also talked about the totally bogus down payment number. Only time I’ve seen it addressed. Where if you include both 1st & 2nds’ the real avg down is like 3%. …..Plenty of cushion for a dip.
I’d love to see some research into this one:
What percentage of the real estate speculation comes from people who are otherwise employed in the real estate/finance/construction industries?
Lansner has done plenty of pieces on OC job growth in these fields. Anecdotally, it seems like everyone who is speculating on OC homes also has a day job that is dependant on continued RE growth.
I posted on his blog last Friday. I heckled him that he used to be pretty balanced and fair but was wondering why there has been a lack of any hint of rising inventories in the OC being written about on his part. Just trying to give him a little PUSH.
Looks like I got to him along with the others here.
Good job everyone.
I read through Mr. Lanser’s blog, and would have to say he is picking up on many of the stories of slowdown and weakness in the market reported here. The respondants are given a shot at providing color to it as well, so I have to compliment him for permitting this. I’m not really picking up that he especially appears to be a shill and canard for the debt enabling or real estate industry either. Naturally no journalist wants to be accused of shouting fore in a crowed theator.
I think though that the perception of a shill may appear, when he “interviews” someone in the industry. Judge for yourself, but this “insider” Q&A example (and there are others) with lender Fred Ferill are mostly soft tosses,
http://blogs.ocregister.com/lansner/archives/2006/03/insider_qa_this_lenders_not_wo.html#more
with Mr. Ferill “giving his opinion”, and not really backing it up with anything remotely factual. I just fail to see what the reader gets from a fluff piece like this, other than reassurances from someone who benefits directly from perpetutating a complacent “business as usual” scenario, that in fact deserves serious challenge now. My advice to Mr. Lanser. Challenge these “insiders” to back it up their “opinions”. I’d like to know for instance the following:
1. How many transactionss are falling out of escrow in OC so far this year?
2. How many cancellations are being seen in pre-construction contracts?
3. How are appraisals being conducted now? How are comps put together, 60 days old, 120? In what locations?
4. Are lenders lowering or raising their standards for loans, and who, and in what way?
5. There are layoffs in the large OC mortgage industy going on now in real time. Is there fallout in the local economy, and are these people paying their mortgages?
And a dozen other questions thinking people on Ben’s blog ask every day.
I am mostly intrested in his background in relation to housing. Dose he own? Has he been involved in speculation?
Here’s a question: why are the opinions of realtors and realtor association spokespeople so often tagged as being from “real estate experts” when they have so strong a vested interest in one side of the picture?
This should be QUESTION NUMBER ONE.
Why wouldn’t these people be classified as experts. Especially if they are on the frontline doing business in the field everyday. Question #1 I don’t think so. Or maybe I should ask who would be better suited to be cited as an expert. Your local 7/11 clerk. Come’on
Rather than deeming these people experts, perhaps it would be more appropriate to call them “sources” and to ask questions — meaningful questions — instead of letting them get away with making ludicrous and baseless statements which they are never asked to back up. Asking David Lereah if there is a bubble is like asking Ken Lay if there is a problem with Enron stock. It’s a waste of time. And I think that’s what frustrates people when they open their local newspapers and see the latest rise in median price touted in bold numbers on the front page, with no mention of rising inventory or slowing sales or increasing days on the market or layoffs in the mortgage industry.
By my question then becomes if they are not experts why deem them as sources ?? Why would you use the checker at Ralph’s as a source on the Real Estate market doesn’t make much sense to me. I do agree with your other assesments though. Would like to see more of an interpretation of historical data then wild hair up the ass statements. Ex: Something along the lines of why do u think the market is going to continue at a 15% clip when historically the market has proven to do this and can you provide me with solid data that’s shows it’s not going to tank this time damn what history says. If they can’t prove then don’t print it.
Exactly. Everytime I read an article regarding RE, I always look at the source to determine its’ merit. I understand they would be considered the “experts”, however, for an expert to represent an un-biased opinion, they first must be un-biased. With so much of their livelyhood at stake, how can they possibly be.
Ok where would you find an unbiased expert in any industry. Comments like “real estate never goes down” or “they are not making anymore land” yes I can understand the frustation. But if an “expert” is telling you that the current market is being overbid by 15%. I’ve got 10 offers in my hand to prove it damn what the numbers and history say. Well it would be kind of hard ot dispute that. Everything is based on a historical perspective even with the questions being asked here today it’s going to take time to gather the info and present it by the time it makes the paer it may longer be truth. I think people need to be more accomadating in understanding that.
Ok where would you find an unbiased expert in any industry.
You’re not. That’s why reporters should balance the voices of these insiders with independent experts, such as economists with experience in housing issues. This strikes me as a no-brainer, but of course it’s just easier to repeat what the NAR says.
Proposed questions:
A) There appears to be a debate over whether the real estate industry and the mortgage lending industry need to be more strictly regulated. Does your research and investigation lead you to believe that more regulation is necessary and appropriate or do you believe that the free market system will self-correct?
B) What form do you think either more regulation or self-correction will take, and what potential side-effects do you see? What proposals are currently under consideration in CA or at other State or Federal levels relating to these scenarios?
C) Do you think current home-buyers have been adequately informed of the real costs of home ownership, including taxes, insurance, interest, debt service, homeowners’ fees, maintenance, etc.? Should that be anything other than a buyer’s own burden?
D) Do you think the current Truth-In-Lending disclosure requirements sufficiently inform the average home buyer of the cost of their loan over time?
E) Will you concede that a RE market collapse and credit collapse is plausible whether or not you think it likely?
The OCR editorial position is somewhere between libertarian and Republican crony capitalism. The answer to #1 would be the market will take care of itself.
How many ARMs are being reset in OC this year and 2007? What is the average mortgage increase for these ARMs? What part of the OC foreclosure rate is due to people being “strong-ARMed” out of their homes?
Jon Lansner is a shill! A shill! A shill! Burn him! Burn him!
My general impression of Mr. Lanser’s writing on the RE market is that he understands the potential downside a lot better than the majority of journalists.
My first question would be this:
After dropping from $621,000 to $582, the median price has rebounded to $602,000. Is there any way of controlling for the mix of houses being sold?
I spent a few minutes this morning going over the Sunday Register’s table of ZIP codes, with price and sales numbers and percentage changes for each. Using some very fuzzy statistical analysis, I noticed that declines in sales volume were, generally speaking, greater in “cheap” ZIP codes like most of Anaheim and Santa Ana than in more expensive areas.
I’m not a statistician, and there are a lot of variables in whatever equation I’d have to set up, but it seems to me that if you lose a lot of sales on the low end, and fewer on the high end, the median sales price will shift higher even if the median price in the actual ZIP codes themselves are stable or falling.
What I need to start doing, I guess, is to start using the Sunday paper tables consistently to track a broad sample of ZIP codes.
The OFHEO house price index numbers are for same house sales. The downside is that they come out only quarterly and that they include REFI data (which is bogus since the house doesn’t actually change hands). Even so if the appraisers get back to doing their jobs then this number will only improve.
Everyone has a bias, regardless of how “evenhanded” they purport to be.
Question: Mr Lansner, in talking with your closest friends, say, over coffee or a cocktail, do you admit you are now a real estate bear or bull? Do you find yourself defending an ongoing real estate price escalation or do you argue for a “deflation” of the obvious real estate bubble?
Question: What specific event or monetary policy would absolutely convince you that the real estate industry is in trouble?
Question: What do you hear from real estate professionals (you must rely on several for your stories) that you trust, about the current situation?
Question: What changes in the way NAR operates do you see coming as a result of a real estate…slide?
Question: What do you think of David Leahry?
Oh you guys have got to be kidding me. You’ve been give a golden opportunity. And these softball questions are the best you can do. You guys sound like your at an open house not hard core bubble believers. Come’on Sheesh
My questions for Jon Lansner:
How are the governments preparing for the coming slide/softening? [Property tax non-payment, lower appraisals, bankruptcy of taxpayers, etc.] Will we get O.C. bankruptcy round # 2? Or just many cities in O.C. going broke instead? Or will there be layoffs of gov jobs? Will gov retirees be affected [lower benefits, lower payments]? Or all the above? Also, state and educational funding would not escape unscathed, no?
Question for Jon Lansner:
What data are you seeing that would indicate a growth outlook for OC housing / Southern CA housing, taking into account all of the negative inputs that have surfaced recently (inventory, MBA purchase activity, rising interest rates, tougher loan policies, rising debt service ratios, etc.) As posted all over housing bubble blogs, the case for a down-turn is presented. What would be the fundamental driver of Real Estate in the next 3 years?
this is just a gimmick to get more readers for the pathetic OC register, a third tier paper. no amount of discussion on this blog will change their writing. the oc register is an extension of the RE industry. while we were talking ad nauseum about the housing bubbles and the underlying frauds, stupidity, lack of fundamentals etc of the RE market for many months, there was hardly any reporting of such in the OC registers. the fact that this guy is coming around now only means that the facts are indisputable and he is just embracing the obvious- hardly cutting edge journalism. haha. what a loser.
oh, and another ?….Name to the nearest month when OC, SD, and CA declare bankruptcy.
Mr. Lansner
Thank you for your interest in this blog.
I have 2 different but interrelated questions.
QUESTION #1
Many individuals on this blog and other sites have often posed the
general question: “How can a typical family in OC now actually
afford to purchase a home”
We have read of many horror stories.
(see http://anotherfuckedborrower.blogspot.com)
What would be most interesting is for the Register to solicit
a typical family who have recently purchased a home willing
to devulge the smallest nuances of their finances.
(Authors Comment: The LA times used to run a column called
“Money Makover” with similar criteria)
Then hire a CPA to perform a certified “forensic accounting” of
subject families finances. Your CPA would provide to your
readership basic information as:
Exact family income.
Type, nature and amount of all debt.
A cash flow statement. What % of income stream is really
used to service debt? What are future risks?
A net worth statement
A opinion as to the longterm financial health of homeowner. Are
they making fundamentally flawed assumptions about the
future value of their RE investment? What are best/worst
case scenarios? Are they failing to contribute to an emergency
savings acount and/or retirement fund in order to purchase
a home?
Do a cost/benefit analysis of renting vs. owning.
QUESTION #2
Many individuals on this blog and other sites have often posted the
general observation: “Many existing homeowners suddenly feel
wealthy by the recent increases in RE prices. Many of these
same owners are ‘extracting equity’ from their RE using
a variety of mehods, ie, cash out refi”, HELOCS, etc.
What would be most interesting is for the Register to solicit
a typical family who have recently ‘extracted equity’ from
their home willing to devulge the smallest
nuances of their finances.
As before, hire a CPA to perform a certified “forensic accounting”
of subject families finances. Your CPA would provide to your
readership basic information as:
Exact family income.
Type, nature and amount of all debt.
A cash flow statement. What % of income stream is really
used to service debt? What are future risks?
A net worth statement
A opinion as to the longterm financial health of homeowner. Are
they making fundamentally flawed assumptions about the
future value of their RE investment? (ie. endless annual appreciation) What are best/worst case scenarios? Are they living an
unsustainable lifestyle?
I am sure other fellow bloggers could add additional discussion points.
Thank you very much for your interest.
And thanks to Ben for making this blog possible.
This is good stuff excellent question
What would be most interesting is for the Register to solicit
a typical family who have recently purchased a home willing
to devulge the smallest nuances of their finances.
This is a sound idea. However, I think doing so we a couple of (anonymous if need be) families from various economic/income ranges would be even more revealing. I always hear people say “how are they doing it?”. This would paint a much larger landscape, and perhaps give readers a better perspective.
I think doing so we a couple
I think doing so with a couple
Contrary to popular belief, Mr. Lansner has pointed out a couple of times the issue of rising inventories. Each of those times there were certainly spikes in hits to my blog, Bubble Markets Inventory Tracking.
The question I have for him is: has anyone in OC Register decided to do some serious investigational journalism into the numbers of folks already in foreclosure due to zero down ARM loans, and evaluate how many OC properties are under the same risky loan situation. What I am MOST concerned about are people that managed to secure near $1 million dollar loans with zero money out of pocket. I’m seeing quite a few of these already defaulting on RealtyTrac.
A little prospective: I’m currently in Taiwan right now and there certainly have been a “bubble” with real estate prices here as well. However, the degree of the rise is significantly blunted by the 33% down payment requirement. Real estate is cyclical, and unfortunately, the higher the rise, the deeper the fall.
“I’m trying to figure how to tell people on your blog that I operate under ZERO pressure from my bosses or the real-estate crowd to produce an even-handed discussion of the housing market.”
I don’t read Jon Lansner or the OC Register (I’m in Vegas), with that said:
Q. Since you rely on RE industry to give you input as to what is going on in the market place, if you were to write an unfavorable article, would these insiders then shun you and no longer give you the information you need to write future articles?
Q. Are you simply a mouthpiece for the RE industry by repeating their lies they tell, or do you dig further and question their statements by getting outside information from economists etc. who have no financial gain from telling the truth?
Q. Why don’t you prove that you are not “pressured”…go dig out the last 3 or so years and quote all those realtors and NRA reps etc. and call them on the lies (or liars) they are? If you need help getting started just go to http://patrick.net/housing/crash.html.
Mr. Lasner, only when one reads your articles and receives BOTH sides of a story will one feel as though they received a fair and balanced article…simple as that! Remember, perception IS reality!
A quote from this blog from a realtor in FLA
I have a feeling the mortgage payments of journalists may occasionally take precedence over their ideals. We have a right to be sceptical, and I agree with Gene that you should state your current housing situation. If you’re upsidedown on a mortgage you might unconsciously hope for a turnaround.
Oh and the question… Does this also occur in the OC and if not, why not?
I don’t really have a comment for the reporter, whether he is pumping real estate or not I have no idea. I just have a suggestion, I would like to see more articles about the risks of investing in real estate, especially with the exotic loans, and the negative effects the bubble has had on young families.
I would also like to see an article, like a close up expose’, disclosing the cash flow (negative or positive) of an investor who bought rental property in the past 1 or 2 years.
Jon,
On your blog dated March 3, you have a headline that states “Back Above 600k!” that to me seemed a bit too enthusiastic, almost like your shouting from the top of the mountain. I understand the figures from DataQuick reflect those numbers, but the overall tone I get from that headline conveys excitement and does a disservice to your readers.
The subsequent sentence “If that price holds — and that’s 7.9% above a year ago — January’s sharp price dip below the magical six-hundred grand might qualify as a blip”, doesn’t help a whole lot either. It tells the existing homeowner to ignore the possible “blip” and count your money, and the prospective buyer to get in now or else you’ll be priced out of the market forever.
A more balanced approach to the story of the median rising above the 600k mark for Feb might have included a paragraph or two stating how less than 10% of the households in OC could actually AFFORD to get into a median priced home without some creative mumbo jumbo financing. That to me would show me a journalist covering ALL angles of the story.
Just my opinion.
Why don’t median-income-to-home-price or rent-to-home-price ratios matter any more?
“I’m trying to figure how to tell people on your blog that I operate under ZERO pressure from my bosses or the real-estate crowd to produce an even-handed discussion of the housing market.”
Strange syntax here. Are you under EXTREME pressure from your bosses or the real estate crowd to produce an unbalance discussion of the housing market?
While you may not write rosy stories about the pleasures of real estate investing, do you refrain from writing negative stories? When I read ‘Letters to the Editor’ in any newspaper, I can’t help but wonder what the true mix of sentiments were expressed on a topic, only to be published as fits the political slant of paper. Often, it’s not what you can see, but what you can’t see that’s important.
1) Do you feel a person should be able to lie about income on a loan application?
2) Do you feel a person should be able to borrow 10x annual earnings to buy real estate with no money down?
3) Do you think real estate agents and “flippers” leave a sea of FB(s) in their wake for the sake of short-term profit?
4) Do you feel that housing prices are sustainable in your area?
5) Have you purchased real estate personally within the last two years?
First of all, thanks Jon Lansner for looking for feedback & Ques.
Tell us what you think the multiplier effect of a valuation decline would be for the overall OC region? As prices settle (and possibly dip), the “fuel” for new vehicles, plasma TV’s, boats, granite countertop, fine dining, disney seasons passes etc… will dissipate.
These secondary & tertiary industries employ many people and will have to adjust, but by how much? Have you had a chance to put any numbers on it, or would you be willing to? It’s a bit of legwork, but it may be very enlightening. Folks who own or rent would be affected by this.
I look at my old place on Zillow in Rancho Santa Marg which I bought for 172k, sold for 1/2 mil is now valued at 700k. I can’t imagine that the temptation to “liberate equity” has not occured there, putting those folks into a perilous position if rates increase on their HELOC’s, ARM’s, NegAms or whatever they used to buy or refinance.
How will their adjustments to discretionary income affect the economy, en masse? They will pay their new loan before they buy “stuff” (if they are a recent buyer). If they refi’d or HELOC’d they”ll buy less “stuff” and possible need to unload “stuff” in the pennysaver to make end meet.
From Bestbuy employee, to waiteress in a restaurant, to movie theatre usher, to grocery store clerk, to construction worker, to engineer may feel these events.
Maybe his own interest in the matter is getting in his way. Maybe he’s one of these “investors” or pulled out alot of home equity.
Good point james, Perhaps real estate columnists need to provide full disclosure of their real estate holdings just like stock market columnists. It certainly can influence objective thinking. Which leads to a question ho w deep in is he to be objective ?.
He does. He owns bought in 1993.
I would like him to do an article that exposes all the fraud that occurs in the real estate industry. I would also like him to give examples of different types of mortgage fraud and the length of time that people go to jail for committing fraud.
I am a longtime reader of the OC Register and Mr. Lanser’s articles. I doubt he is pressured to be an industry shill. The criticism I have is that it the reporting lacks depth and cohesiveness.
Sure, there are sporatic mentions of inventory, affordability, interest rates, and other topics discussed here. But when the NAR or DQ puts out new numbers, the OC Register seems to parrot the release. There is little to no attempt to get behind the numbers or challenge the bias of the real estate industry. The questions raised in one article simply aren’t asked in the next.
I don’t frequent these blogs because I have some deep seeded desire to see the housing market crash. I’m here because I don’t understand how prices can be maintained at this level. I see inventory figures, affordability figures, mass speculation and the financing terms today’s buyers are taking on. I have read up on other housing bubbles and crashes and see historical parallels. Step outside the real estate industry and most economic analysts agree that this cannot continue.
The market right now is emotional and speculative. Housing bubble blogs have included many discussions of how the mere mention of the possibility of housing prices going down causes people to become defensive, emotional and angry. This reminds me of Enron where no one could explain what Enron did and how they made so much money, but the stock price was going up so they were hailed by the media as a success. When a reporter at Fortune had the audacity to ask probing questions, Enron CEO Skilling became angry and responded that “The people who ask questions don’t understand the company.”
My Questions for Mr. Lanser:
Do you understand the OC real estate market? Does it make sense to you that prices will keep going up 15% per year? Can you explain it to us and if you can’t, then why aren’t you asking relevant questions and presenting that perspective to your readers?
To echo KirkH above, if I had 3 questions, they would be:
1. Why do median-income-to-home-price ratios not matter anymore?
2. Why do rent-to-home-price ratios not matter anymore?
3. Why don’t most of your reports about the crazed prices and appreciation levels include information about 1 & 2 above, to create a more balanced (even-handed? I know; you’re under ZERO pressure to provide ‘even-handedness’ somehow, but a journalist is supposed to be at least reasonably conscientious, if not the fox-worthy “fair and balanced”!) and informative view for your readers who might be in a position to make some sort of move vis a vis real estate transactions? That’s one of the points of providing information about real estate to readers, isn’t it?
And I guess I have the 4th question
4. do you think it’s reasonable to start treating Realtors whom you ask about market conditions as, say, we’ve begun to treat stock picking folks–we ask if they hold any of the issues they’re talking up, we ask about the “fundamentals” behind their opinions, etc. Doesn’t it seem that realtor “experts” are merely asked softball questions, allowed to give self-serving answers, and get showcased as people whom we should trust with very little media-provided challenges so that *your * constituents–the readers of your news–can best be served?
cheers!
Jonathan…
Thanks again for publishing my little satire.
Here’s my question:
INVENTORY?
Doesn’t it appear to be obvious that Orange County is attempting to ‘cash out’ all at the same time?
And doesn’t that precipitate an oversupply?
And wouldn’t an oversupply cause prices to head one direction?
Why doesn’t the Register talk about INVENTORY?
I mean, if there’s 17,000 homes on the market, and only ONE sells for $800,000- because ONE FOOL bought one-
-it makes the ‘Median Price’ go up…
So, is the ‘Median Price’ really the ONLY indicator of a real estate market?
In my opinion, if that scenario was the case, the headline would be:
‘From 17,000 OC Homes, Only One Sells- Median Price Goes Up, Inventory at All-Time Record Levels’
INSTEAD OF
‘The Median Price Goes Back Up!’
It’s the leaving out of the Inventory Issue that makes people suspect you of being bought by RE, Jonathan.
Please address this issue…
…and thanks again for being a good sport.
How many current homeowners in Orange County have taken equity out of their current home to finance a rental in another state? I personally know of 5 families in my inner circle of friends that have bought in Idaho, Vegas, and Arizona. All cash flow NEGATIVE and I/O loans.
My questions include:
What percentage of the OC Register’s annual advertising revenue comes from the real estate industry? How does this compare with other industries?
What day of the week does the OC Register provide the monthly report on housing sales (median/average) by zip code and type of dwellign unit? What day of the week has the largest amount of advertising space devoted to it?
Do you understand the OC real estate market? Does it make sense to you that prices will keep going up 15% per year? Can you explain it to us and if you can’t, then why aren’t you asking relevant questions and presenting that perspective to your readers?
————————————————————————–
Here, here….BubbleAnalyst said it best.
My question for Mr. Lansner: Why are RE agents (Gary Watts) and CAR reps (Leslie Applegate-Young) constantly being referred to as “experts” and allowed to present their opinions in the Register without ANY counter point arguments or analysis from non-RE interests?
Why isn’t the newspaper attempting to dig deeper and provide more of an investigative service for readers instead of just transmitting the party line from the NAR?
Yep, what is his value add if he is just a wire service for the NAR/CAR
What non-RE interest source would actually be credible enough to speak on the real estate industry. What should Bill Gates or the C.E.O. of American Express be given that honor?? Who is not vested in Real Estate if you own it you always want it to go up I don’t care who you are. If your a renter and can’t afford or don’t want to afford of whatever reason your renting you want it to go down. So just who is credible enough unbiased enough to speak on real estate.
Thornberg from UCLA
The UCI professor that Ben blogged about, who published an affordability analysis and outlook for continued appreciation.
Chapman University economist that is bearish.
Anyone with a finance and economics background not on RE payroll.
BINGO SUNSET…..
How about the Countrywide CEO who in Mar 6 issue of Businessweek stated that some bubble markets may fall 20-30% and that Countrywide will not lend to investors in some cities.
As a 25 year veteran of OC real estate and the host of a nationally broadcast real estate radio Show, I have to give Lansner his due for being pretty straight forward in his real estate projections. No one can foresee with 100% accuracy the TRUE direction of the market, and like him, I am cautiously Bearish on the future.
As someone who started doing Pre-foreclosure work in the early 90’s, I saw the bloodbath personally, but I don’t see the same signs. We share with OUR radio listeners that there is no “bubble”, but there will be a market correction, worse in some areas, not as bad in others.
I really don’t see any bias in his stories and I’ve been quoted there before. Let’s face it, we ALL have rights to our opinion, some might be better grounded in reality or experience, but I don’t believe anyone is 100% accurate all the time. I’ve known Gary Watts personally for 25 years, too, and I’d say I doubt him more often than not, including today’s predictions of 15% increases.
QUESTION: Do you concur that the run up in home prices has been greatly fueled by loose lending standards, wild appraisals, collusion of mortgage brokers with Realtors (for fostering an unhealthy and possibly illegal level of transactions)? If so what is the responsibility of a journalist in reporting this type of activity to accurately inform readers of the true risks and dangers in the current climate and challenge pat statements from industry insiders?
I realize everyone involved in the process has responsibilities but this is directed toward journalists. NEWS is not just about spitting out opinions and giving equal paragraph space to opposing viewpoints, but analyzing those viewpoints and reporting THAT, regardless of how the chips fall. Given the current environment, it’s hard to justify some of the things that even now many journalists are turning a blind eye to.
Thanks
Give Lansner a break! He doesn’t have a magic ball and no way could he answer all the questions listed on this blog. He would have to hire someone just to run all the statistics that people are asking. If you want to know about loan fraud then contact Robert Simpson who is an attorney that specializes in loan fraud and located somewhere in OC. No one can predict exactly what is or isn’t going to happen in the real estate market. The only thing people can do is to take responsibility for their own finances. If someone is buying a house then it is their responsibility to know what they can or can’t afford, if they get in over their head well then it is a tough way to educate yourself. Defaults are very slow right now. I have worked in a law firm representing mortgage companies for years and it has never been this slow. With the current prices of homes, someone would have to be crazy to lose their house. If you’re stupid enough to take equity out of your house to buy fancy cars and etc., then they deserve to lose their house should they ever reach that point. No matter how much money someone takes out against their house, one way or another they will have to pay it back. Maybe the only way they could afford that fancy car was to finance it over 15 years via an equity loan. If someone is buying a house in the current market then I would assume that they feel comfortable enough financially to make the purchase; otherwise, I doubt that they would be buying.
Maybe what Lanser could do is interview people that have recently purchased homes, and people that have sold their homes to see what real people are doing and what brought them to the decisions to buy/sell, not just those blogging and complaining about prices. This site has a lot of complainers. If you have a house that you paid $250,000 over 12 years ago and now the going rate is $800,000 for the same house, you can’t tell me that you would say, oh, I feel that $800,000 is out of the question, so, let me sell it for a lower price of say $500,000. No way! Everytime someone goes to sell something regardless if is a house, a car or anything else they are going to try to get as much money for the item as possible. It’s the American way!
“This site has a lot of complainers.”
MOST people who contribute to this website, contribute VALUBLE information. Some own their own home and some do not…this is BIGGER than just house prices…..YOU “Missy in Texas” need to take or re-take ECON 101
Funny, I re-read the posts again, up until yours, and I wouldn’t say anyone was complaining. (maybe a little from you) We are trying to compile a group of questions for Jon to answer. Which he volunteered to do.
What % of OC homeowners at current market have what % of equity, broken down by SFR vs. condo. Prediction of % who would be underwater if the OC market drops 5%, 10%, 15%, etc.
Here is my 2 cents…
The focus (Due too historical low rates) has been on the payment and not the principal in ALL ASSET CLASSES…I.E. you can buy a H2 for 399./Mo BUT, you borrowed 40K…Your payment is only $2666./Mo….Yeah but, you borrowed 800K on the house…
Interest rates are riseing, if they go too much further (7%-8%) all hell could break loose….
6) After all the mortgage lenders go broke what percentage of people will have enough money to pay all cash for a house?
7) Will widespread foreclosures drive house prices back 15 years?
Ben,
You don’t have to send Jon anything. He is reading this blog. I want him to participate. So Jon, if you’re there, please respond.
Hey Melody, I just went to his website, I think he’s just jealous that he has no action over there and he’s trying to drum some up from over here…
As a person who is tied to the OC real estate industry, it would appear to me that due to the low affordability levels, the only way we have continued to see price appreciation is due to some funny financing all the way from the RE agents who say get in now, to the the loan brokers who say, dont worry, you can afford it, to the appraiser who is on the take. What the OC Register needs to do is conduct a sting operation and release findings in a Special Report. First, create a (ghost borrower) and go around OC shopping for a loan, then reveal results. Do the same approaching agents looking to get the (ghost buyer) into a home, reveal the results, and then more importantly, call up some local appraisers as a (ghost lender) and reveal the results. Take a large enough sample and trust me when I tell you, the lid will fly completely off the OC housing market. This is the only way to get true results. Report the results as such: 50% of buyers (in our sample) with limited incomes were encouranged to falsify income statements by broker x,y,z.
50% of potential buyers (in our sample) were encouraged by agents x,y,z to buy now or risk losing out for ever. And finally, 90% of appraisers asked to pump value and give guarantees of values (in our sample) before even seeing a property were more than happy to ablidge. This is real data that I think the public needs to hear about and the OC Register should report on. It would be intersting to read the results.
Great idea, with hidden video cameras, etc. it’d be pretty damning stuff.
I nominate this one but I would think the OCR doesn’t have that kind of research budget for their writers.
You may want to suggest this to the Channel 2 News. They would do it. Especially now that the market is heading to the downside.
I think this is an excellent topic idea.
To the comment about budget to conduct such a sting, perhaps
OCR could partner up with Channel 2 and share expenses.
Perhaps even “60 minutes” would be interested, now that the
RE bubble has national scope.
Great idea but OCR will not do that because it will piss off their advertisers and all but destroy the myths about real estate always being a money maker in the OC. Despite what Claudia is claiming about no influence on the editorials, there would be a major financial impact on them and seeing as how most of the economic growth has been in real estate, what other business would fill that revenue void?
I would ask why they don’t present two sides of the issue? They let the NAR and CAR folks offer their “expert” opinions. Why not get the opinion of housing bears?
For example.
Leslie Appleton Young says Housing prices are softening and this is a healthy market. prices will go up 10% this year. There is too much demand. Well Leslie has changed her tune. She was predicting something was going to go up much higher, now it is revised. Can’t we point out her prediction from several months ago and show how it has changed? See a pattern here.
Then we can have housing bears say the demand is all phantom based. It’s rampant speculation and people financing with exotic mortgages. The fraud in the mortgage industry. How this ponzi scheme and house of cards will come tumbling down. How we can poke holes in their predictions. Just because they say it doesn’t mean it’s true. You need to offer a “balanced” view of the market. Arguing points, not just one article that says it is going to go up or down. But one that says both and why.
That is what I want to know. They don’t have balanced sources and why?
I’m not familiar with Lansner’s writing, but having lived in the OC for 20+ years, I’m curious as to his take on the effect, if any, he believes the Irvine Cartel, oops, I mean the Irvine Company, has on the control, price, sale, and development of land, commercial and residential (as well as rentals). Since they basically seem to control Orange County, what effect do they have on prices? If OC is truly different than other bubble areas, it seems to me that they may be the hidden 6,000 lb. elephant in the room.
What are the appreciation/depreciation predictions that he believes personally will happen?
2006 +/- %
2007 +/- %
2008 +/- %
2009 +/- %
2010 +/- %
If his quote is accurate….
Why isn’t he under extreme pressure to be even handed in his treatment of real estate?
A: Because RE advertising revenues are the only thing propping up OCR.
After reading the Artcile on the top. I could only think of 1 question that i wanted an answer, from Mr Lancer.
Can he print/ post the list of Stocks that was referred to in the column about the CAL housing market INDEX.{’that was approaching a Intermediate term SELL}? I am already short HOV / BZH & KBH in the sector !
Questions:
Recently, the accuracy of RE sales data has been questioned due to it being input by agents/brokers with a percieved conflict of interest in reporting truthful sales figures. Do you trust the figures? Has your publication ever given any thought to investigating the accuracy of the figures? And, is there a better third party source for real estate market quotes other than salesmen with a vested interest in the market?
Now that we have had several years of easy money and real estate appreciation. What do you believe have been the results of the steep appreciation in home values in terms of demographics? Do you believe that the appreciation over the past 3 to 5 years has been supported by fundamental economics? If yes, explain please. What is the risk of price declines in the next 3 years? Do you believe that the abnormal appreciation and speculation have had positive, neutral or negative impacts on our communities? And finally, having some sense that many people have no clear idea of how to manage their risk in real estate and look to “experts” like yourself, why is it that as a weekly reader I have no clear sense that you have used the power you have to raise the flag about the risks of using the ARMs and IO loans?
Man, am I proud to be here on Ben Jones’ Blog.
Ben, you’ve gotta be proud too.
Heck, maybe Jonathan should be proud as well.
Apparently Jonathan, you have an audience here.
See, we’re not a bunch of nutcases who worship comets or something.
We’re simply a group of people who have witnessed something that didn’t make sense, and we’re all trying to make sense of it.
There’s been a TON of great posts- and I do hope Ben will weigh in too…
But I think there are THREE MAIN POINTS that stick out, in regards to having questions for Jonathan Lansner.
1. I think we ALL agree the Register should make inventory part of the statistics.
2. I think we ALL agree that the Register needs to talk to other NON RE sources- who do not have a vested interest in real estate- when publishing ‘how the industry is doing’ articles.
I, for one, think BEN JONES would make a great ’source’ or ‘industry expert’- why not interview Ben for the next ‘how are we doing’ story?
Everyday, Ben works his butt off compiling articles, and making comments here on this INCREDIBLE blog…why can’t he be an ‘expert’?
Or at least a ’source’?
3. Here’s another great web site for you, Jonathan. It is comprised of people who ‘flip’ for a living.
http://www.websitetoolbox.com/tool/mb/sdcia
Take a look at that web site.
Exactly NONE of the folks over there are talking about BUYING California Real Estate.
Speculators, Investors, Flippers- whatever you want to call them- made up a HUGE part of this bubble.
Is it possible that many of the Register’s ‘experts’ miscalculated how much of the artificial increase in housing prices- a BUBBLB- was created by flipping?
And-
What happens when the ‘Flippers’ stop buying other ‘Flippers’ properties?
Isn’t it possible this is what we’re seeing now, with the massive increase in inventory?
After having said all that, I really do give you props for coming here, Jonathan.
You can post here using your name if you’d like, we don’t bite.
Heck- I think the guy from Mad Money is here, along with Mr. Buffet, and I’m pretty sure ‘The Donald’ has stopped by- as well as a few folks from the Federal Reserve-
So jump on in!
Nice job today, folks.
Sure is a whole lotta good brains on Ben’s Blog.
Chill everyone. He is a reporter not an economist. The human interest questions/stories theme is the best idea. The SD Union Tribune has occasional pieces on RE where they showcase a family who bought recently. BUT they dont list their income levels, etc. They stated one couple had a mortage payment of $3600 but didnt state the interest rate. A full story with numbers will be enlightening and may increase readership!!
Five Questions for Mr. Lansner:
1. When it first came out, did you prefer New Coke to Old Coke?
2. Have you ever experienced “selective gravity”?
3. When did you first develop a taste for Kool-Aid?
4. What’s the best way to transport a megaphone and pom-poms?
5. If bread is buttered on one side, what’s on the other?
Well, awright…
Sometimes we ain’t all that.
Sometimes we’re just downright silly.
They found water on one of Saturn’s moons, ya know.
It could mean there might be life out there in space.
It could also mean-
…there might be water on Uranus…
(not mine.)
Is there life on Uranus?
(I really don’t need to know.:)
And now back to Jonathan Lanser…and Ben Jones.
Ben?
Say something, man- for God’s sake! Speak!
Will you be a ’source’ for Mr. Lansner- for the sake of ‘balance’?
What if there’s life on Uranus?
NOT MINE!
My question would be: Why are rising home prices reported as a positive thing, and declining prices as negative? If we are all so concerned about “affordable housing,” shouldn’t low prices be a good thing?
When the RE industry and the various govt agencies try to address affordability, why do they always take the approach of increasing debt loads instead of lowering prices?
Want more affordable housing? Require 20% downpayments, 28% debt-to-income on PITI costs, 3 to 6 months of reserves **after** closing. Oh, yeah…and income must be verified (2 years, minimum).
**THAT’S** how to get affordable housing.
You need to clarify your question Mort; Do you meaan the cost of the structure itself or the total cost to deliver the product to market ??
Why are the winter sales and inventory numbers not an indication of the state of the RE market and, “We’ll have to wait until spring to find this out”? Using simple comparisons to previous Dec & Jan numbers is entirely valid — Just as valis as comparing June to June. There are perfectly good seasonality adjustments that can be used to draw annual numbers from Dec & Jan performance.
When numbers are not favorable to the NAR they are summarily dismissed and media should call them on it!
scdave, I mean, if the total cost of the project is divided by the sq. footage of all the condos combined what did the condos cost to build on a square footage basis? If consumers had this information going in then they would know where to start on prices. Say for example I know a certain 900 sq. ft. condo cost an average of $200/sq. ft. to build. Then I see that they are trying to charge me $300/sq. ft. In this case I would probably keep looking because I know that the condo was just built and they are trying to make a 50% profit on me and I don’t feel like being that generous. High rises are okay when underlying land is very expensive (say Manhattan). It makes more sense to go up than sideways, however, land has to be pretty high priced for this approach to be feasible. If, on the other hand, it is just a way to speculate on more units per acre of land it will not succeed in the long run because underlying rents will not cover taxes, insurance, and maintenance.
First, higher density is almost always more valuable..I could see situations where it would not..Lets say, very rural area where demand is light…
To your question on the cost per square foot for the entire project…First Caveat is; “IT DEPENDS ON LOCATION”…primarly due to land, labor & govermental costs…
I will answer as if it were located in Silicon Valley…Very high cost for the above three…Construction costs for high density are much higher than low or middle desity…Mainly because of the post tension slab construction required to support the structure…Construction of the units is also more expensive due to fire & access (I.E. two exits & Elevators)…
In my area, I would think that the units would cost between $350 & $400 per square foot “Turn Key”…Hope this helped…