Finding Unbiased Real Estate ‘Sources’?
With a writer from the Orange County Register due to reply to this blogs’ readers tomorrow, one topic suggestion may prove useful in that discussion. “I think I’d like a topic about Sources.”
“It occured to me yesterday that the media thinks the only Real Estate sources they can use for news articles are those people who have a vested interest in Real Estate.”
“What are these people going to say, when asked about the bubble? It’s predictable. So, my question- for all of us on the board is…”
“‘How Do We Help The Local & National Media Find Sources For News Stories Who Do Not Have Vested Interests In Real Estate?’”
I suspect some reporters have been using this blog as an unmentioned deep throat…
Here’s a couple you can always find in the links of my original HB blog:
http://www.demos-usa.org/home.cfm
http://www.cepr.net/
Here’s an article from the unbiased links above but it requires an open mind, i.e, no worshipping at the political altar of liars.
Since Cheney is slinging arrows at Americans for not properly saving, let me note what a perfectly miserable CEO was of Halliburton. It was Cheney who ‘masterminded’ (shades of the brilliant Iraq invasion) the takeover of Dresser Industries by Halliburton. Dresser, of course, had a huge liability of asbestos litigation, of which Cheney was well aware before the purchase. Amongst other mistakes, Cheney succeeded in driving down the share price of Halliburton from ~$60 to ~$10.
As a long suffering shareholder, however, I stuck with Halliburton, being pretty sure that Cheney would do much better by this company as Vice-President, than he ever did as CEO. And, what with all of these no-bid contracts in Iraq and Gitmo, Halliburton’s share price is doing better than ever.
Dick Cheney demonstrates where his true responsibilities lie: Halliburton, this Bud’s for you!
Math is hard, slogans are easy.
Tax break! Let the tenants pay the mortgage! Throwing money away!
Put some teeth into the regulations that govern the single largest transaction that 99% of people will ever make and maybe some sanity will return to the market. Until then, 6% of purchase prices and five figure hidden fees in mortgages has everyone bought & paid for….
Its the same with Business News like CNBC.
They always bring in the Realtor Stooge to keep the market pumped. Rarely do we get an unbiased view.
That reminds of The Liar of Liars, Larry Kudlow aka Lyin’ Larry. His daily opener on his CNBC program goes like this; “We still believe free markets is the best way to prosperity”.
The problem is, he never mentions whos prosperity.
Realtor Stooge. LOL
No unbiased sources from realestate. Probably only from places like our blog here, and other related blogs. When someone has a financial interest in what they are recommending, there will be no bias. They want the transaction to happen that puts money in their pocket. If someone has nothing to gain, then the advice will not be biased to a gain, but will reflect that person’s opinion.
Most folks on this site are biased, and non objective.
Most folks that often post are waiting for prices to drop so they can buy low…They have something to gain.
I agree with 95% of what is writen on this board…but don’t kid yourself. Its very biased.
When I first started blogging about the housing bubble, on a blog that doesn’t exist anymore, I tried the non-commital standpoint. It was really dull and I found I couldn’t challenge assumptions. So I decided to take a position and try to back it up. So I am biased about whether a bubble exists or not, and my interest is largely an economic one. That, and I felt at the time (fall 2004) that not enough press was being devoted to the dangers in the housing market.
What puzzles me is the way some media portray the idea of a housing price mania as some sort of conspiracy theory that undermines the true stellar nature of RE ‘investing.’ Congress won’t even acknowledge this mess, in between warnings of ’systemic risk’, and the like.
After reading your thoughts, IMHO there is no possibility of unbiased reporting. Whether pro appreciation or imminent bubble collapse, we are all fully involved. I think an objective view would have to come from a foreign economist familiar with the US housing/real estate/construction industry. I would no more trust a researcher from a US University than I would trust a realtor - neither has validity on this issue. The researcher is apt to have an inherent bias as a result of years of exposure to American advertising culture = flawed research. It is possible that the Federal Reserve economists recognize this flaw in their own research which is why many consider the Feds staements as a “CYA”.
YOU WANT SOME UN(LESSER)BIASED SOURCES OF INFO?
You should see the views taken in the Nikkei Newspaper (Japanese Economic News). Not a DAY goes by that there isn’t info on crazy American RE attitudes, ridiculous lending, and builder zealousness. They invariably connect it to Japan’s bubble days. It basically is a mirror of the housingbubbleblog (maybe the editors are onto you, Ben!). This insanity has been COMMON KNOWLEDGE in Japan for the past 1.5 years, at the very least.
Now, is this unbiased? Doubtful, seeing as the Japanese economy is back in the dumps the second we stop buying 4Runners and Sony flatscreens.
Plenty of skeptics around. Most respected economists. Most bears.
Gary Shilling, UCLA Anderson Forecast, Warren Buffet… They don’t have an interest either way and they have a professional & academic interest in providing sound projections. The problem is, no one can predict how boneheads might behave. The housing market should have pulled back 2 years ago.
I heard it described like this once (I think by an Anderson economist)…
Predicting the how the RE Market might behave in this quarter is like predicting what the next thing a crazy person will say. No one knows.
The odds have been stacking up against RE prices for years. When the drop comes it’ll be spectacular…
Perhaps Ben should approach Lou Dobbs (yes, I admit, his tenacity can become tiring for the audience), but his major obsession is populist in nature (preservation of jobs for American worker) and the threat to working class and middle class workers from the combination of home price run-ups and I/O ARMs could catch his attention.
>>>>Congress won’t even acknowledge this mess, in between warnings of ’systemic risk’, and the like.
That’s not completely correct. VP Chaney told Americans they ought to start saving more money. Funny, huh.
Sorry, you said Congress. It’s even funnier coming from Cheney. Now he’s an economic advisor.
CNBC was the same way about the stock market bubble. They thought that their jobs would be lost if the bubble burst. General media jobs are not directly tied to the housing market. However, the advertizing dollars flowing in from house dependent businesses is huge. This is especially true for local newspapers.
95% agreement sounds pretty high; I guess you are acknowledging your own bias by saying this.
Good points about bias.
Everyone has a point of view and bias. It is pointless to look for unbiased sources. They don’t exist anywhere.
How should this fact be handled? Disclosure of economic interests and having a conflict of interest being a disqualification from being an RE expert.
Conflict of interest is a cleaner definition of most of the media’s problem with RE sources.
This is a GREAT idea, and I have absolutely no doubt reporters will use it — and if they don’t your readers will have a fantastic resource, Ben, you can gather these into a listing of some type.
Schiller, UCLA housing forecasters would be on my positive side - and maybe you can do a list of seemingly impeccable sources who blew it - Harvard Joint ctr for housing studies (with reports sponsored by freddie and fannie) comes front and center to mind. They sucked.
ou can also list common media sources who have a clear bias - Learah, etc etc.
I have had 4 reporters email me asking when the archives for HB2 will be back up, so I know they are reading what you guys post. I don’t know about the Harvard folks; they seem wishy-washy. Even the UCLA guys backed down recently.
I am hoping that a clearer discussion may emerge after Jon Lansner responds. It will put the matter in full focus.
I saw UCLA’s dec 2005 report - definitely backing down about recession, but still proclaiming a housing bubble -hey I’ll take what I can get - at least they were calling it a bubble last year amid much stronger naysing. And as for Harvard, their last report was painting a rosy housing picture for the next 10 years — unless they’ve backed of of that I’d call ‘em dead wrong
I read somewhere on the internet, maybe on Ben’s BLOG, that Harvard’s Housing Committee includes homebuilders, mortgage interests, housing supplies (i.e. Home Depot, etc…), and Association affiliations on thier housing “committee”. All the alumi of the universities in the Real Estate Complex, are part of the Committee too. Universities are not objective sources. Chris Thornberg at UCLA the most objective I know of, but he has politics to deal with too.
Chris Thornberg
Ed Leamer
Dean Baker
Economist from Chapman University with a middle eastern name
Shiller, Case and Weiss now part of Fiserv
UCI professor that Ben blogged about last Summer that published a very well research bear case in the OCR.
CSU Fullerton professor that Ben blogged about also published bearish comments.
Humboldt State University professor published a bearish case for Arcata and environs.
OFHEO’s charts are pretty damning. They paint a very distinct picture of the end of the boom. It is also corrected for unit quality that median price cannot address.
How about fee only financial planners?
I know that many people that I talk to about the bubble are mystified but then do remember their accountant saying not to buy RE. I have two friends who didn’t know anything about the bubble other than their trusted accountant said not to buy.
Basically anyone with decent finance and economics credentials who earns their salary independent from the RE market or RE interested parties.
That rules out Harvard’s center, it rules out USC’s Lusk Center it rules out CSU Pomona’s RE center. The funding for those centers comes from the RE industry.
It rules out NAR/CAR economists, it rules out loan brokers, RE agents, title companies, escrow companies from opinions about the market. Their data might be OK if verified by a third party like Rich Toscano aka Prof Piggington. It probably rules out the reports from RE data companies like Dataquick and the others because RE agents and brokers are their customers.
Hell even newspapers are almost ruled out due to RE advertising that pays the bills and makes the profits.
How about standard warning language like past performance is no guarantee of future performance on loan docs and offer docs.
Another great one is the big boy letter. In the bond world, when a debt issuance has marginal credit ranking all potential investors are sent a big boy letter outlining in detail the risks associated with that debt issuance.
sorry that was a “you” and the UCLA is UCLA Anderson forcast
Ed Glaeser, Paul Krugman etc.
The problem with all these great sources is that they talk intelligently about a subject, with rational objective information which they try to analyze to get to the TRUTH. They don’t go for get rich quick schemes and their information requires a modicum of effort, both by the reporters interviewing them and the people who read or watch the interviews.
In this day and age people are inpatient and information has to be dispensed in 1 minute sound bites.
Pity.
Krugman said the bubble will pop. Do you consider this to be an unbiased opinion?
Gary Shilling - who is one of my favorite non-consensus thinkers - believes that the U.S. median priced home will fall by 20% in 2006.
Can you give me a link to Krugman’s opinion?
Hi Robert,
Here you go: http://tinyurl.com/hl5vu
Sorry, I mispoke; Shiller said the bubble would pop, Krugman said it would hiss. I actually think Krugman got it right — if you look at the changes in the housing market on a compressed (1 year = 1 minute) time scale, it is clearly crashing, but on a day-by-day basis, it seems more like a hiss than a pop.
GetStucco, thanks for the link. Krugman doesn’t like this whole mess much either. He leans toward the dark side.
More hissing than crashing, right now. You’re right. It’s a beautiful thing, isn’t it, watching human behavior in action. Front row seat, no less.
Krugman had a great NYTimes column in August, 2005, stating that the U.S. economy cannot be sustained entirely by selling houses to one another. Here’s a tease:
Safe As Houses
By PAUL KRUGMAN;
Published: August 12, 2005
“…I used to live next door to a Russian émigré. One day he asked me to explain something that puzzled him about his new country. ”This place seems very rich,” he said, ”but I never see anyone making anything. How does the country earn its money?”
The answer, these days, is that we make a living by selling each other houses. Since December 2000 employment in U.S. manufacturing has fallen 17 percent, but membership in the National Association of Realtors has risen 58 percent…”
This is in NYTimes Select, so I can’t link, but the remainder of the op/ed is describing how this is unsustainable for a growing U.S. economy
If a man decides to work on something seven days a week, I’d definately call that man an expert. If not an expert, than at least a source. That man is Ben Jones. For crying out loud- how many RE ‘Gurus’ work on real estatate seven days a week?
Speaking of ‘gurus’- Lanser talked to one the other day, a guy from UCI.
What he had to say was interesting, especially since he predicted single digit appreciation and even some negative appreciation for the coming year. We on this blog would call falling from double digit appreciation to that a ‘crash’, but he chose to spin it positively. I liked what he was saying until he got to the part where Lansner asked him about INVENTORY. Said he believes all these thousands of homes on the market are just people ‘testing the water’- not really flippers.
That’s where we parted company.
His logic seems to defy reality, in my opinion, so I began to wonder why.
The answer was right there, though. Right up above. He is a new ‘guru’ at UCI. Which means- he probably just bought a HOUSE.
Thus, his obvious bias on the question of ‘hey! What the Hell are all these homes doing laying around unsold!’ was predictable, based on his purchase.
All this being said, it did seem the guy was shooting from the heart, rather than spouting some stupid rhetoric, and he did at least, admit to buying a house recently- or it least that’s what I picked up.
So, maybe Ben, and people who work at colleges could be ’sources’.
Who else?
The new UCI guru replaced the bearish professor that published last summer.
It was also on Lansner’s RE blog and his prediction was pointless.
RE in OC is priced for perfection. That is everything else remains perfect for the benefit of RE.
We don’t live in a perfect world.
See above for my list of sources.
It’s called RESEARCH, kids, and no, not everything in the world is on the internet. Reporters nowadays simple do not like to hit the bricks and go track down real data and documents. Example: we had a local problem with a mayor who was in bed with developers (surprise!) and I met with a reporter who was allegedly “investigating.” She just wanted to quote me, didn’t want to know where to look in the land records to see where the mayor had bought property and had it rezoned - across the street from the new development that is supposed to “help” a downtown area that never asked for help. The deal just happens to kill all of the parking for the existing businesses in the area and provide a new parking deck on the far side of the developer’s project. As part of the deal, the mayor gave the developer the old library, then set a city bond for $31 million to build a new library at taxpayer expense, then allowed the builder to take the old site for 85 new condos, priced at $400k each. Are you doing the math? This reporter wouldn’t. She also wouldn’t report on the mayor’s acquisition, wouldn’t do simple FOIA requests to City Hall to get confirming documents, wouldn’t interview the developer to get their position or confirmation of their side-deal(s) with the mayor. She basically didn’t want anything other than quotes from people and taglines for stories. Investigative journalism might not be dead, but the coma has persisted for a long time now.
Many people here provide anecdotal evidence and links to evidence of major oversupply, relisting practices that effectively undercount days on the market and distort supply reports, evidence of appraisal and loan fraud, extensive and rising builder discounts and rebates and so on. Others provide macro data on rising gold, the government’s decision to stop reporting crucial economic data, the failing carry trade, the foreign debt finance, rising foreclosure listings, and other data that is effectively “writing on the wall.” For that, we are called “biased.” Perhaps it is the fact that there is no support for current market trends using any objective, rational measure. When we criticize the cheerleaders and ask for proof to support their position, however, we are called Cassandras.
This. Has. Happened. Before. Read Galbraith. The sheer number of similarities and the repetition of patterns and events is shocking, even down to the drought in the midwest and the hurricanes across Florida and the derision directed toward naysayers. The biggest “I told you so” in all of history is coming. Stay tuned.
Well said!…
Great job KIA! I still (maybe too optimistically) persist in wanting to do this source list because news outlets—as much as they seem to want to avoid investigative journalism like the plague, and hire reporters who do the “he said she said” dance without the research—they don’t like to be caught publishing bogus info. Blogs like Ben’s have caught them red-handed and held them up into a big burning light — so you better believe reporters are reading this -and their bosses are too. It’s a bummer to have to spoon feed them sources, they should know better, but at least we could say we made our position absolutely clear and fact-based - - so no excuses for avoiding better sources!
And again, it’d be a great resource. But I’d also say let’s post a rogue’s gallery of bad sources with it — to add xtra pressure when reporters decide to use them.
Rogue’s gallery nominees of bad sources…
Gary Watts - one correct bearish call almost 20 years ago apparently turns a RE commentator with no prior economic training into a demi-god.
David Lereah - He whose bread I eat is the song that I sing.
Leslie Appleton-Young - He whose bread I eat is the song that I sing
Almost all mortgage brokers, almost all RE agents and their brokers - cornered and starving animals will do or say almost anything to get fed and uncornered.
It’s true for RE as industry.
And It’s true for ALL others as well.
What you(we) are gonna do ????
I work in energy and energy efficiency. There is no shortage of high priced energy that people need to use more efficiently. There will be work for me for the foreseeable future.
However, re-training to update RE skills into something else like debt counselors, BK lawyers, bill collectors and foreclosure specialists is what RE should be looking at today.
Relocalization is a key strategy. Read about it here.
http://www.postcarbon.org/relocalize/network
Manufacture and use what you can locally because long and just in time supply chains from China are vulnerable.
Off topic, have you seen any verification of the recent claims out of Germany about a vastly improved solar power array? I just thought the energy field would be watching that closely…
It is part of my job to watch those things closely.
The most recent news out of Germany is fresnel lens concentrating Photovoltaic (PV).
We have companies in So Cal having already mfd many of these.
http://www.amonix.com/
PV doesn’t like hot temps guess what you get when you concentrate the sun. High temps which are a bit of a fundamental problem.
There is a shortage of silicon refining capacity in the world and it takes 5 years or so to get the 3-4 Billion dollar refineries built.
I know that there are a couple in Prescott, AZ and Pomona, CA. These are very much in the R&D phase still. The automotive industry scale of millions of units compares to wind industry scale of under 100,000 per year is the real problem.
For unbiased sources, I would recommend looking at:
a) any serious academic economist (one that has work reviewed, etc.), especially if their department/job isn’t industry funded (ex. some of the Harvard scholars). Better yet if they live outside of bubble areas and thus have no direct interest in the outcome of the debate.
b) foreign analysis of the US market. I know I’ve seen some pieces recently by Chinese and Europeans. Foreign analysts or economists would probably be the most unbiased as they are on the outside and can comment on the mania without being surrounded by it. One of the characteristics of past manias is that so many otherwise rational people often get swept up in the hysteria.
The CAR and NAR economists (and I use this term very loosely) are not acting as economists but as PR people for an association that makes it’s money when more homes are sold at higher prices. What does anyone expect them to say? I suppose that most on this blog agree with this.
I guess the other ’sources’ complaint I have has to do with INVENTORY.
If we’re going to rely on Dataquick for everything, how come Dataquick won’t give INVENTORY figures?
I mean, isn’t a large part of the equation about how many homes are on sale?
Shouldn’t there be a Dataquick chart showing INVENTORY changes in Orange County? And if not, shouldn’t the Register FIND an inventory source?
The ABSCENCE of an INVENTORY chart makes this whole thing seem suspicious.
Doesn’t it seem a bit odd that we all drive around passing For Sale sign after For Sale sign- yet the paper only talks about Median Price and Sales Volume?
For the person getting ready to buy- they aren’t really getting all the facts if they don’t know HOW MANY homes are on sale.
Yes, we could propose using the MLS as a source of inventory- but what about FSBO’s?
Aren’t FSBO’s a large part of the equation, since everyone in California seems to have a real estate license, and is trying to sell each of their 10 homes by themselves?
Without an accurate INVENTORY chart, all the average Joe and Jane has to go on is Median Price and Sales Volume.
Problem is, with only these numbers to reference, the Real Estate Industrial Complex can always write things off as ‘it’s because it’s winter’, or ‘it’s because it was raining’ or ‘it’s because aliens may be visiting.’
If the average Joe or Jane could SEE how many homes are currently on sale- with a one year chart showing the increases…
Wouldn’t they be better informed?
I mean, if we can find water on a moon on Saturn-
-why the Hell can’t we get a Dataquick Inventory Chart?
The leaving out of this information allows the RE Industry to SPIN.
Thus an INVENTORY SOURCE would certainly balance things out.
Why couldn’t it be dated, just like everything else?
For example:
‘Dataquick’s Inventory Chart for the period ending February 27th, in Orange County, California’.
Wouldn’t this pretty much solve the problem, along with using some of the sources you guys have mentioned?
I agree the only numbers that I have seen are the ones compiled by bloggers like OC Renter and Ben E’s inventory and asking price tracker.
Most journalists discount those as being less than reliable. But they are the only ones that are available.
It would be interesting to get Prof Piggington to weigh in on the price and quality of Dataquick (et. al.) types of pay to play data.
BTW:
Great job on getting a rise out of the OCR!
YES! I would love to have MLS listings data by zip. If anyone has any sources of inventory, let us know!
That’s interesting. I’m not real familiar with DQ. But when I asked an OC broker why the Register never reports on inventory, he quickly said, ‘oh, that’s because Dataquick doesn’t report it.’
Here are a couple of more unbiased sources but good luck getting their time.
Warren Buffett and Charlie Munger
Richard Rainwater
Who was the billionaire out of Santa Barbara divesting of RE?
They have all been featured on this blog.
One more. Templeton thinks prices are going to crash 90%, like the stock market after the 1929 peak. Kinda extreme, don’t you think?
The evidence is very strong that an irrational property price bubble has formed for a good portion of US markets. One can never be sure, however, since housing demand depends on buyer expectation, and we can’t observe that.
1. P/E ratios (price to rent) is the MOST convincing evidence, to me, that we are in a bubble. The P/E ratio has skyrocketed to unchartered heights in some markets. Unless something fundamental has changed in the economy, something will move P/E back to historic levels. Many academics/consultants have looked at historical P/E ratios for many areas.
2. Other persuasive evidence of a bubble is the price to income ratio, or more sophisticated methods that control for other factors. See evidence from academics/consultants.
3. I would also look at Affordability Index numbers from local markets, often provided by local realtor or home builder associations. According to many of these, affordability has absolutely fallen through the floor. In some areas of California, it has fallen from about 50% to 10%.
As to whether or not the market has turned, look at changes in market amounts from the last six months to a year. Month to month comparisons are too volatile. Year on year changes are good to get rid of seasonal variation.
4. look at median prices in their local markets, and compare to about six months ago. Do not even bother with “national” prices, since this number is irrelevant to local conditions. Provided by local realtor associations.
5. look at MLS for sale listings in local markets. I’m not sure where to get the historical data for this (any suggestions?). But some people on this blog are providing it.
6. look at number of homes sold in local markets from local realtor associations.
Again, get LOCAL amounts.
Im getting bugged at the Realtors saying “We have a 5 month supply of homes” ,”We have a 71/2 month supply of homes “,”The houses are just taking longer to sell “. This is just ambigious horseshit. I would like to see a interview with a Flipper who just bit the dust . THe flipper could describe how he was lead down the golden path to ruin , yes by his own greed , but also by all the forces that supported his dellusions ,( the brokers, the media, the banks , etc. etc.
Another good source would be a follow up interview with the chief economist for the Mortgage Bankers Association (MBA) sold his house and rents.
His explanation at the time was too much of his total net worth was in his house and he wanted to take some money off the table.
Actions speak louder than words.
Again Ben blogged about it and there is a regular reader of Ben’s blog that knows him personally.
Interview a flipper ,who just bit the dust . The flipper could tell a sad tale about all the influences that supported his delusions ,(brokers, media, banks , advertising , his own greed). The piece could be called ” THE GOLDEN ROAD TO RUIN “. …or “THE FLIP THAT BROKE MY WINNING STREAK”
“THE FLIP THAT BROKE MY WINNING STREAK”
LMAO!!! That’s a classic. I know a realtor (his kid’s on my kid’s soccer team), and he’s been flipping for a while. He’s got an inventory built up now, most of it with renters cash flow negative. He can’t get the renters out and now with all the competition on the market, somewhat trashed homes you can’t get into without “disturbing” renters, don’t garner a lot of calls. Let’s say he’s swimming in red ink and alligators are chasing him since he took these places on ZERO-DOWN teasers all resetting this year. He’s f%cked.
Why don’t they show a unsucessful flipper on FLIP THAT HOUSE
instead of all those re-runs that are outdated by a year .
You and AZ bubble should have you’re own TV show, you know.
Very funny. Thanks
Sorry I think I posted this twice
Talk to REAL economists. Any good real economist, such as at a university, can see that prices are way out of line, and can do some history to back it up.
Not close to true unless you know the economist personally has no interest in the outcome. Harvard settled a (agreed settlement with no criminal penalties) fraud suit with the Government by paying back $31 million in 2004. Seems the grant funds were taken to support an economist in helping Russia become a capitalist country in the early 90s — his wife was an investment banker. They manipulated the market for personal gain….. he still is tenured with a job… I somehow lack much real faith in believing anything he ‘proves’.
You know, I wouldn’t mind the media approaching the same sources if they’d simply challenge their ludicrous statements. Rare is the journalist that forces these blowhards to provide facts to back up even their most outrageous assertions (e.g., “real estate never goes down!”).
Never happen, of course. Such a brave reporter would quickly find himself blacklisted and quickly off the RE beat (if not out of a job).
Bias should not be confused with having a point-of-view. I don’t knock the real estate industry for predicting a never ending cycle of appreciation. I knock them because they cannot offer a grounded basis for supporting their positions. It’s empty spin.
What I find confusing here is why anyone other than the real estate and mortgage industry would have a biased opinion on this (I’m know there are others but that’s not the point). They profit by volume transactions so as long as other people are buying and selling, they’re happy.
I suspect that most people on this Board do not benefit by being biased one way or another. It makes no difference to me whether people believe in a bubble or not. I will only benefit if I am right, and I could be hurt financially if I am wrong. So I am trying to be right.
If there was solid evidence that real estate prices will continue to rise 15-20% per year over the next 5 years then I would buy tomorrow. But right now, the evidence appears to pointing in the other direction.
I want to media to present any well-supported position of which they are aware, but they need to follow up and ask intelligent questions to get to the strengths and weaknesses of each position.
The Realtors do not have a well supported position . Its simply the position of I wish Real Estate will continue to rise 20% per year because I will make big money as long as this gravy-train continues .
Its just math. 10% can afford ave. priced house in S. Ca. , where are the buyers going to come from? Mars……the ocean …..France
Maybe the Fed will start lowering rates again, printing money, and stepping on the credit-expansion gas pedal even more. Maybe we could get affordability down to 5% … or 1% … before the whole thing explodes. I don’t think so. I’m with you. The trend has already turned, at least in Southern California … and I expect CA as well.
Sorry OC affordability is in single digits already.
Look, if only 10 or 15% of the population could afford steak either they would quit producing more steak or they would lower the price .
Oh hell ,why dont you just interview a 6 year old and ask him if 2+2=4 , (only one left that isnt bias ). There is a massive amount of inventory out there that isnt moving . You dont need a expert to confirm that .
It’s not to be found on this column as it’s biased towards a housing bubble.So why expect others to be any different.Everyone slants information in a way that suits them same applies here.
When you get excess inventory in many cities like that it usually the tell-tale sign of lack of demand which suggest housing bubble .
Will excess inventory be absorbed with time , or will it just get bigger and bigger and bigger ,
Look, I have everything to gain to not see a bubble because I bought a house in mid 2005 . I know Im going to loose money or equity when the tides turn . The only good thing was I bought the place to live in long term , actually retire in .
Like Newton is biased toward gravity? I came to this blog a year ago knowing something was up with the market, but not being able to define or understand it. Back then large numbers of people here were bubble pooh-poohers, but I’d notice something peculiar — their anti-bubble posts were largely made without data backing them up, but lots of emotion– whereas the pro-bubble contingent offered lots of historical examples, economic support data, real world examples and just plain good reasoning for their arguments.
One can be biased on any side of an argument — so we can be lazy and dismiss every side, or we can examine the arguments to see whose bias is backed up with substance. And what we ought to be pushing reporters on is not to just pit one bias against another, but to really take a look at which arguments are more accurate, more rational, more supportable, more sensible– and report accordingly.
I guess I don’t want to single out the real estate writers for using real estate industry people as their main sources, because it seems that’s the way it is in all subject areas. Rather than getting the story right and the pertinent viewpoints represented, journalists tend to go for what sounds right. For example, in reporting a partisan political story of some kind, CNN will often go to party “spokespeople” (i.e., political spin hacks) for their viewpoints, which of course are the last people you would want to go to if you want to hear the truth. In the end, the “news” becomes an infomercial.
Of course, at least in those cases they are presenting opposing viewpoints. In the case of real estate reporting, you often only get the
smoke and mirrorsviewpoint from the RE hacks. I’m not inclined to believe this is just due to a bias in the media however. I credit a lot of it to sheer journalistic laziness, which is a real problem nowadays.The bubble pumpers argument…
Paradigm shift whereby money devoted to home ownership should now be considered to be much greater than at any previous time in American history… so 40%, 50%… to housing or whatever.
This is a perfect argument if you are a bubble supporter. There’s no historical numbers, nothing quantitative to use to back it up or refute - pure speculation…
Suppose the owner of a housing bubble blog is sued on the grounds that comments on the blog caused a housing price crash. (Cattlemen were trying to sue Oprah some years back that comments made on her show caused the price of beef or some other commodity to crash.) How easy is it going to be to find a jury and a judge not biased by home ownership?
When a coworker a few years back went to see about renting a house he mistakenly mentioned offhand something about the possibility of real estate declining. The owner got very upset - obviously my friend did not get the rental!
People do not like hearing bad news about the real estate market, and will do what they have to do to tune it out. Newspapers and TV want to report what people want to read and hear, which has nothing to do with presenting all the facts in an unbiased way and being accurate. And it’s just the opposite at the other extreme. When things are bottoming and about to get better every media outlet keeps trumpeting about how bad things are and how much worse they’ll get. Because people are in a negative mood and want to read and hear things that will justify their feeling that way.
Actually, Dick Cheney is now giving private gun shooting lessons. He is well qualified, and now has a famous name.
As for the 10% affordability in CA. I figured it out just now. 10% actually own the homes. Each one of them own 10 homes, and rent out the other 9 and have a neg am (low teaser loan), and are still at a negative cashflow loss. When they bail, CA is going to have the bovine fecal matter connecting with the oscillating device.
I found this blog last year, and was happy to have someone else agree with the funny crap I was thinking. Thank you Ben, for all of your hard work, and glad to be a part of this blogging community. It converted me to getting the H$LL out of CA.
My first comment didn’t seem to take. Dick Cheney is now giving private shooting lessons. Better qualified for that.
Thank you Ben for your hard work. This site has validated what I was thinking for years. I found this site about a yr ago. Wonderful information. FInally got fed up with CA and the insane crap there, and left. Waiting to watch it blow up big time.
I am eternally grateful for all Ben has done for us , but realize that thanks don’t pay the rent. Maybe its time to remind folks to hit that donate button !!!