XTRA, XTRA, READ AAAALL ABOUT IT...Existing house sales plummet across the nation for the first time since 1989 (and here). The Western US is hurt the worst with a -16.8% drop (year-over-year; care of the BubbleMeter blog). The NAR is quick to avoid the truth and blames the weather and makes month-to-month comparisons (Feb to March) instead of the more honest season-adjusted year-over-year comparisons. And never mind the fact that we here in the West enjoyed some of the best weather ever.But seriously, this announcement really got me thinking... why the hell can't the real estate industry goons just tell the fricken truth for once in their lives? Would it really kill them? Why can't our own local agents? How bad does it need to get before these goof-ups finally admit they were wrong? I mean, this is a total non-event to us bloggers and to most other intelligent, perceptive, critically-thinking people as it was foreseen. Is this don't-think-for-yourself-just-believe-what-we-tell-you culture of ours so far gone that denial is now an officially sanctioned state of mind?
XTRA, XTRA, READ AAAALL ABOUT IT
And why is the main stream media so lame? I mean, why aren't they all over this? Why don't they engage in any critical investigative journalism? Why don't they question the practice of interviewing/quoting only paid shills and those with a vested interest in your believing one particular point of view? Why don't they ever run a story where a more critical analysis is performed and experts with opinions that possibly differ from those of the rent-a-RE-economists? Why doesn't our soporific media encourage readers to think? Are we so frightened as a people that the media believe that they must spoon feed us only feel-good, fuzzy-warm news and promote a makebelieve kindergarten world of rubberized playgrounds and colorfull, oversized, difficult to choke on environmentally friendly blocks?
Ah, but Charles Hugh Smith, as usual, is one step ahead of me and has already, and quite elegantly, answered the question (refer to the April 24, 2007 entry).
We need a new local news paper here in Marin. One that is not afraid to engage reality and tell the truth. One that doesn't discover honesty until after the fact. One that is not bought and owned by the local real estate industry. There's a business proposal for you. I know it's not high tech, does not involve Web 2.0 or social networking or whatever, and so is not hip and likely won't make you an over night stock gazillionaire. But I bet that such a paper would be extremely popular and sufficiently profitable and you would be doing an immense public service.
27 comments:
The NAR also pulled a fast one by using different seasonal adjustment factors last March compared to this March.
In March of 2005, they reported 6,900,000 seasonal annualized on sales of 554,000. The adjustment factor was 12.45.
In March of 2006, they reported 6,120,000 on sales of 482,000. The adjustment factor increased to 12.70. Why? They should keep the adjustment factors constant from year to year. Or, if they are changing their method, they should explain why.
This is why they were able to report YOY headline decline of -11.3 (annualized seasonal adjusted) when in fact sales dropped -13.0%.
If they kept the seasonal factor constant at 12.45, sales would have reported at 6.0 million dead on the nose. 6.12 sounds better.
The lack of credible reporting in the media regarding the current real estate market is sickening.
This is why bloggers have such a strong following; we appreciate the time you take to gather accurate information using credible statistics and sources.
Thank you.
The value of hard work, an honest buck and the importance of valuing the common man and his / her real contributions to society. That's what the media is missing in all of this. Housing today is not about hard work, an honest buck and the common man (which it should be!!!). It’s about sex, power, money, glitz, and Beamers. So, the pumped and spun housing news is what sells and is what brings in the bacon.
Everyone, ESPECIALLY the media, is so caught up in all the superficial BS all the time, that all this housing hype over the last 6+ years is no real surprise to me. My grandmother, a remarkable woman who raised 4 kids on her own, endured the loss of her dad (and husband), endured frozen winters and the depression in a tripple-decker back east, would have a field day if she were alive today. Check that, she’d probably have a heart attack.
When I see all the media spin on everything from housing, to Hollywood, to Wall Street, to the tragic deaths in Iraq or Afghanistan, I just shake my head and think about my grandmother. It’s all a bunch of fluff, and will all continue to unravel because, despite what is reported and spun, there are two sides to a business (or household) balance sheet. All he focus is on the left-hand side, which is all that sex, power and money thing.
The USA used to be all about the underdog. Hell, that’s how we were founded for heaven’s sake, by a bunch of rebels and underdogs. I believe we’ll relearn these lessons again when all of this unravels. As they say, every dog has it’s day, and I am certain the pragmatic, sensible thinkers and savers amongst who understand the value of an honest buck will endure in the end.
50+ % housing price drop across the board..
35-40% drop here in Marin…
Bank on it..
Matt..
And another thing the media and RE machine has yet to figure out, but will..
This bubble that they helped fuel, will be their own undoing in the end. The pink slips have just started flowing and more will follow.
Talk about irony..
It would be like the UAW cheering and receivng bonuses while the price of GM cars skyrocketed only to see their jobs cut with crashing car sales when the consumer finally called it quits..
The short-term mentality of these people amazes me..
Matt..
I don't understand either why real estate agents would try to prop prices. They make money on transactions, so the quicker things get back to normal (drop) then the quicker people start buying houses again, and they can soak up the transactions.
Trying to prop prices will only prolong the downturn and hurt the realitors more due to less transactions.
Go figure.
It would be interesting to see a psychological study of succesful (financially)real estate sales people.my unscientific observation is that there are a lot of manic depressives,a lot of alcoholics,and that as in all sales fields, a lot of delusional people.every top sales person i have met in any sales field has been both driven,and delusional.I know a lot of folks in real estate who have bought the party line,and are waaaaayyyy overextended with multiple properties and neg-am loans.while it is a lot easier to get a real estate license than a cosmetologists license,it takes hard work,and serious study to become a real estate professional...and there are ethical standards implied in the term professional,even for sanitation engineers.god,i am tired of these morally bankrupt delusional liars...especially lereah,who deserves to catch a social disease from his dog.
And why is the main stream media so lame? I mean, why aren't they all over this? Why don't they engage in any critical investigative journalism? Why don't they question the practice of interviewing/quoting only paid shills and those with a vested interest in your believing one particular point of view?
I think you just answered your own questions.
Why the hell is George W. so lame? Old news, but I'm watching him on Charlie Rose and getting so f-ing angry again - I don't know how I'll get to sleep. What a complete moron. I suspect Karl Rove has been pulling his "mental" strings via a certain transmitter behind his right ear.
A very smart and consistent blogger on Ben's blog (Mr. "Got Popcorn" Neil) made a very astute (and funny) observation that I thought was worth sharing on this board..
Neil's post yesterday...
"The best part is that this “Mexican Standoff” is happening in the minds of the sellers, Realtors ™, and mortgage vendors. The rest of us are inside ordering dinner wondering why some “village people” reject is standing in the middle of the street, staring straight ahead, ready to draw a pair of water pistols."
Thought you might enjoy that one over here in Marin, as I certainly did..
Matt
Years ago, (1980's) I lived next door to two Hungarian nationals, who had lived under a very oppressive government. After asking what was the chief difference between the US and Hungarian people, they told me, without missing a beat, "Americans believe everything in the news and whatever their government tells them. In Hungary, citizens read the news, then we discuss it amongst ourselves and share stories to find out what the real truth is."
This observation hit me hard, and since that day, I have looked at news far more critically.
Seems that now, with blogging technology, we are just at the fringe of catching up to the Hungarian's discerning eye.
Marinite: I am a part-time journalist, and have just begun to write for an online journal. I have 3 close friends who have published print journals, 2 here in the Bay Area, and it's a very tough job, no doubt tougher what with ad revenues dropping. I think the future of news is online, but first, technology geeks must get off their pretentious ever-so-hip-cool ass and make tech for Everyone––hardware and software that doesn't cost a fortune or need replacing every other year.
I think if E-Ink can get their tech into the mainstream, we might see a great change. In the meantime, blogs like yours are our best bet. Too bad that most Americans only have access to Fox News and local newspapers dependent upon RE ads.
PS...I have loved Ben's HB Blog, but the incendiary sexist commentary (and Ben's refusal to allow incendiary rebuttal to such––what's good for the goose, etc.) has driven me away. Too bad.
I'll be up front and say that while the media can be biased, there is a LOT of reporting in the major publications that are discussing the housing market in negative terms. Good news thrives on bad news, like some afternoon soap opera.
What better a story than that of the former football star of a housing market and all those that blindly followed it into its current bout of a dramatic downfall? resetting loans? Foreclosure? Prices that rose to dizzying heights only now to start an equally breathless depreciation?
News thrives on sensationalism and the news I hear from the big boys- CNN, Money, MSN, and ABC repeatedly casts a gloomy picture of the housing market. Who cares if some crappy little local paper belittles the facts? I think most people know that local publications are sort of a joke anyway. The damage is already done and nothing the little tabloids can say will reverse it.
In regards to ben's blog, I think that blog is one of the more influential ones out there. It is one of the most popular blogs on the web and carries a HUGE following. The amount of work he puts into it is astounding and worthy of a medal or some wort of award. It is a never-ending stream of unbiased raw data that shows the naked truth behind housing market.
I love the fact that the blog has changed dramatically over the years, starting with posts that questioned the current success of the housing market and it's seemingly shaky foundation-something many who bought were clueless of then and only starting to see now. It has from that to now showing the aftermath and consequences of acting irresponsibly. Hopefully someone will document that site for all that it has done to show truth in an important situation.
I don't understand either why real estate agents would try to prop prices. They make money on transactions, so the quicker things get back to normal (drop) then the quicker people start buying houses again, and they can soak up the transactions.
I believe it is because if a seller cannot sell for a profit then they won't sell unless they have to. The number of people who have to sell is a subset of the number of people who do sell in an up market. So lower prices translates into fewer sales for agents. If I am wrong, please correct me.
Re Ben's blog:
The intention of his site from day one was to document what was being printed in the MSM re housing. I believe he wanted to be objective but the slant, IMO, has always been towards the negative side of coverage. That's not a fault to my mind.
Further, for some time now Ben has been able to collect revenue for his blogging efforts which is why he can devote so much time to it. I used to devote more time to my blog but that was when I had a sleepy job with lots of time on my hands...not so anymore.
I am curious about the "sexist incendary comments" on Ben's blog. I have not noticed that. Granted, I only read the posts that relate to CA in general and the Bay Area in parcitular and I don't often wade through all of the comments.
Marinite:
Regarding the sexist comments: A regular poster (you would know him if I named him) made a comment last week in regards to a comment by a woman accountant in an article posted by Ben. She said something like "these ARMs are scary..." ––not what I'd call a particularly stupid comment, just stating the truth.
Ben's poster went on a rant about how WOMEN (his caps, not mine) should NEVER be accountants because, as he and another male accountant buddy saw, they didn't understand fundamentals, blah blah blah.
A couple of women responded to his comment, rather gently, I think. I was incensed, perhaps overly so, and tried to post a response which basically suggested that LL's wrath against women accountants probably stemmed from his withering inability to get into their pants. This did not post.
I suspect Ben intervened before war broke out.
Also, guys at THHB tend to make jokes about FB's selling their daughters' sexual services (why not their sons? Not that I'm advocating this..) and, while I do find much sexual humor to be funny, this just isn't, to me, probably because my best friend actually was sold to a perv by her father at age 10, and I see the bad result. Many people have commented on the sexist and racist posts. In my view, this may ultimately keep the blogging community white and male––maybe they want it that way. What a great place for a misogynistic bigot to rant, safe behind the anonymity of his screen name.
I am not fond of flamers or flaming (David Lereah and the NAR aside). I think it disrupts an otherwise useful and fun dialogue by diverting attention from the issues discussed to the issue of prejudice within public commentary, and we can see from the Imus fallout that this is both a hot button and something that we Americans are uncertain how to contend with at juncture in time.
So, what's more important; Free speech at any cost (that cost being polarization, ill will, and homogeneous communities), or an agreement for public civility that supports a safe place for diverse dialogue and allows for unity even in disagreement?
Ms hawks,
No offense, but I think you might be reading too much into these comments. Think of who is commenting there and on many other " housing bubble blogs". They are people who are frustrated and angry over the housing situation.Many are coming there to vent.
This isn't an excuse to be a racist, sexist bigot, but in all actuality, blogging brings out the worst in people because of the veil of anonymity. Some people fail to see how that real life ethics should pertain to all forms of communication- even anonymous blogging.
I never read the comments anyway. How much can you say about housing anyway if you're just commenting? the prices go up, or down, or you think they will go this direction or that because of A, B, and C. That's really about it. So when the topic goes off into the weeds, I usually stop reading and venture back to the core topic.
Just because someone is ugly on a blog shouldn't make you stop reading it.
Ms. Hawks:
I agree with you 100%. Anonymity is both a curse and a boon. There have always been, since the earliest days of the internet, anonymous cowards who use anonymity as a shield to say things they would not otherwise say in public and that do not serve any constructive purpose. Anonymity is a good thing when done for constructive reasons -- to discuss delicate topics or to express valid opinions that could not otherwise be expressed in the "real world" due to real world politically-correct censorship -- but it is all too easily taken too far to sate the individual's hate, anger, whatever.
For my part I try to simply and unceremoniously delete comments that serve little or no purpose other than to inflame people's ire. If there is some redeeming content in the otherwise inflammatory comment, I'll let it stand. But fortunately, it has not been much of a problem here no doubt because of the highly localized focus of this blog and so the smaller number of readers.
To Anon & Marinite:
Thanks for responding.
I agree that those demented posters shouldn't deter me. Some days we can let the inconsiderate behavior of imbeciles roll off like water on a duck's back, but then there are those days when they jump out of nowhere with their pointy sticks and we find ourselves, against our will, bleeding and angry.
There are those who will say someone can't make you angry unless you let them, and while I agree with that to a certain extent, I also think that those who post inflamatory comments, and those who aren't the target of those inflamatory comments, sometimes have no idea how unsafe and unwelcome it makes the targets feel.
So, Marinite, I do appreciate that you are able to delete unacceptable comments. Yours was the first housing bubble blog I found, about this time last year, and I can say that I've been able to prevent at least a couple of disastrous RE decisions for folks because of it.
As to Ben's blog, while is certainly no dearth of egocentric nitwits posting there, there is also a sprinkling of people far more savvy than myself about the RE, mortgage and general financial worlds, and that's why I like to read the comments. I also think that some of the anecdotal RE stories coming in from regular folks who aren't RE cheerleaders are worth listening to.
I know that no amount of soapboxing is going to deter someone dedicated to their anti-human idiocy. But if just one person reads this and perhaps takes a modicum of consideration before upchucking bilious text across the page, then this is a good discussion.
Now, let's move on to talking about the housing bubble...
Amen folks.. back to housing... and more specifically, the media on housing for this thread..
Well, I will say that I am seeing improvements lately with the mass media. However, I've only seen a few scattered analysts or economists say that this crash will take many years to play out. Everone, including many of the baby housing bears, are still saying 12 or so more months before the bottom.
In fact, CNBC had a guy on the other day that said most RE cycles are only 24-27 months long, which would put the bottom (in his mind) sometime mid next year.
I, of course, say hogwash to it all and all that wishfull BS. This correction will play out until we have realignment with wages because that's how housing has always been priced and always will be priced.
50+ % haircut across the board.
35-40% haircut here in Marin
Bank on it.
Matt..
I have an honest media question...
Can someone reading this blog who is employed in the media industry (radio, news, paper etc) explain to me why lower housing prices is not a good thing ?
Besides some unsavory lenders, wall street businesses and other members of this machine taking a bath, why is lower housing prices a bad thing ?
Would lower housing prices be bad for our communities ?
Bad for our children ?
Bad for savings and consumption habits ?
I still say this bubble has brought out the absolute worst in this country and the popping of it and subsequent price crashes is a VERY VERY good thing for this country over the long haul.
The RE machine needs to take it's hits. They (and we) certainly deserve them. Afterwards, we can devote our attention (and resources) elsewhere.
Matt..
Besides some unsavory lenders, wall street businesses and other members of this machine taking a bath, why is lower housing prices a bad thing ?
I asked this very question on this blog in a big way. I agree with you, lower prices are a good thing not just for buyers but for our communities as well. But the fact is that 70% of the population are owners and there is a long cultural expectatation that one should make money when selling one's house. So increasing prices are viewed as a good thing but that is only from the seller's perspective.
No one (including home owners/sellers) likes to see people live poorer and poorer to own, live further and further away dumping more and more pollution into the air to get their more and more distant job sites, fewer kids being born in the more expensive areas, dwindling school enrollments, families split up, etc. But all of that takes a back row seat behind a seller's profit.
IMO, seller priorities are all screwed up.
Another point re why less expensive house prices are not seen as a good thing, especially relevant here in Marin, is that I think house prices are deeply tied to ego and one's sense of self-worth. Furthermore, here in Marin having a mortgage is treated as if it is some sort of a requirement to joing the "Marin Club". Vanity runs deep here.
Someone sent me a very personal email recently demonstrating how the choice to buy or rent caused a tragic divorce of a Marin couple. All because of housing. The sender told me if I can tie it in with this blog in any way then I am free to post it. This is the tie-in. So maybe I'll start another post on this topic.
You all said it. If 70% own, then you want them to lose money so you can stop renting and squeak into a house . Most owners would disagree
One reason the real estate prices stay artifically high might have to do tax revenues. High property values generate high tax payments. This helps the local as well as state government.
To me, the absolute dumbest thing about housing in the BA is that MOST people who buy these days rarely even stay in their homes for more than 5-10 years MAX. I can honestly say from my own observations that most of the people I know who " own" do not have long-term plans for staying in their homes or the area for that matter. Fully half have aspirations of moving to somewhere cheaper by cashing out, or moving up with the sale of their current place.
This is faulty logic these days because if you make a 6 figure income, you will actually be able to save more in the form of plain old fashioned CD's and the simple fact that housing appreciation is at the bare minimum stagnate, if not starting to slide downward.
In fact, I could go on and suggest that in increasingly transient places like SF, NYC, and LA, it makes zilch sense to even buy. Most jobs are temporary endeavors. Few offer retirement options and golden watches. I have been renting the house I live in for longer than most of the people who I knew who bought and have subsequently sold in the same period.
Is it possible to suggest that housing as a permanent idea as defunct when it comes to the national modern economy? People pay a load of money so their tots can go to a certain school when they could do the same just renting.
I think we need to re investigate the long-implanted, outdated, outmoded American perception of the " American Dream"
To All (esp Stopwhining.. )
I acknowledge all those reasons, but none of them hold water in the longer term.. Taxes can be gotten any number of ways, including raising rates when property values fall.. or, better still, cut back on unnecessary expenses..
I roger fully the vanity and the ego's tied to this bubble, esp here in Marin.. As I've posted before, this bubble has done more to damage the sense of hard work, community and value than anything else I've seen in my adult lifetime.. It's a bunch of BS..
Regarding the 70% comment on home ownership.. well, hogwash on that... as the percent of home ownership did not increase 2 and 3 fold with this run up like the prices have.. It ran up just several percentage points from historic norms..
No, much of hype and bubble was built on investment property purchases and and unqualified buyers and unsavory lenders.. Tell me ripping that down and removing those artificial inflaters is not healthy thing. It sure as hell is and I'm glad it's unraveling..
Oh yes, I don't rent just for clarity and I know others who post here are of the same mindset... so, another bubble burst for you Mr/Mrs Stopwhining.. so sorry.. It's certainly not whining, it's common sense, which this market sorely needs for it to remain healthy over the long term..
Matt..
"This correction will play out until we have realignment with wages because that's how housing has always been priced and always will be priced."
Amen. I think we've had a once-in-a-lifetime blip on the screen in terms of prices escalating way beyond income.
But once voodoo financing goes by the wayside, housing will have to go back to fundamentals - namely income & ratio to rents. If lending standards reverted back to just 10 years ago, hardly anyone would be able to "afford" these prices.
And I agree, having people massively in debt with no hope of paying off their mortgage is NOT a good thing. Neither is having teachers or emergency service workers having to live many miles away because they can't afford to live where they work.
need a local newspaper, one that is not afraid to tell the truth...
got me thinking, i've always thought that single rich persons should put their names boldly out front and control their own newspapers or magazines and TV channels... like Oprah does (How about the "R" network for Rosie?)
this way people can't hide behind crap.
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