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Posts Tagged ‘Radar Logic’

Inside Football: Optimistic Contrarian Views On Housing

December 30, 2007 | 8:25 pm |

Ok, I was watching the New York Giants actually beating the New England Patriots last night. I felt a glimmer of hope for humanity and even the housing market by seeing the extra effort being played in a game that means nothing to the Giants playoff spot while the Patriots vied for an undefeated season. Of course the Giants lost and my optimism for the housing (and humanity) market dimmed.

With the housing market weakening in many markets, its easy to pile on with “grim” news. Here are a few attempts at contrarian reporting from sources other than the NAR.

Daniel McGinn at Newsweek provides some optimism in his article: Housing Optimism: Why the year in real estate wasn’t all bad news.

  • Some Numbers Are Strong
  • Things Aren’t Tough All Over
  • Long-Term Owners Are Still Way Ahead
  • Even Pessimists Admit to Uncertainty

Holden Lewis at Bankrate makes a defense of low-doc loans (sort of) by responding to a reader’s optimistic response to his quote: “Limited-doc mortgages exist mostly to allow people to cheat on their taxes” (I wholeheartedly agree with the cheating angle Holden mentions):

  • Lenders sold themselves on convenience
  • Inexperienced underwriters suffered a mental “blue screen of death” when confronted with complex tax returns, because they’re trained to process loans assembly-line style.

Megan McArdle of Atlantic Monthly in her post Who cheated who? she:

  • Questions whether bankers are to blame
  • Believes subprime borrowers will not default en masse
  • Feels we are over reacting and that will cause more problems

Felix Salmon of Seeking Alpha in his post Are Subprime Losses Being Exaggerated? sort of teases us with this title but he’s really questioning the optimistic stance of many:

  • Middle-class homeowners out there suffering under the burden of enormous non-recourse mortgages
  • Its not just losses of subprime mortgages, its industries ranging from homebuilders to diswasher manufacturers

Confused? Join the rest of humanity – you’re not alone.


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There Is No National Housing Market

December 2, 2007 | 1:47 am | Milestones |

The use of national housing statistics has been a key source of confusion for consumers, real estate brokers, lenders, media, financial markets and government agencies among others. The statistics are often applied to local markets and properties. The reliance on these numbers for ground level use has a pet peeve of mine for many years.

When Radar Logic rolled out its first RPX Monthly Housing Report on October 2, 2007, we made sure that the focus was geographical housing patterns.

The report effort was based on the premise that there is no national housing market; rather, each of the MSAs, while having some economic influences in common like mortgage rates, is influenced primarily by local conditions.

I was encouraged by the release of the latest batch of market reports this week that have begun to make this point more clear in their press releases. When the market was rising, press release jargon tended to be much more focused on national numbers. I suspect we will see a shift in orientation since this is really a false premise.

Office Of Housing Enterprise Oversight [OFHEO] – November 29, 2007

The figures were released today by OFHEO Director James B. Lockhart, as part of the quarterly report analyzing housing price appreciation trends.

“While select markets still maintain robust rates of appreciation, our newest data show price weakening in a very significant portion of the country,” said Lockhart. “Indeed, in the third quarter, more than 20 states experienced price declines and, in some cases, those declines are substantial.

National Association of Realtors – November 28, 2007

NAR President Richard Gaylord, a broker with RE/MAX Real Estate Specialists in Long Beach, Calif., emphasized that all real estate is local. “Keep in mind that home prices are up in 93 out of 150 metro areas, and there is a lot of confusion in the market from reports about national data. Broadly speaking, home prices in most areas are up modestly or fairly stable,” he said. “Areas with population or job growth are seeing the strongest home price gains.”

National Association of Home Builders [NAHB] – November 27, 2007

Their comments on the release of the S&P/Case-Shiller numbers this month…

“We need to put these numbers in proper historical context by analyzing them over the long term, rather than in one-year increments,” said Brian Catalde, president of the National Association of Home Builders (NAHB) and a home builder from El Segundo, Calif. “The statistics released today also reaffirm that all housing markets are local, and conditions in them are dictated by the local economy and job market.




UPDATE: Economist Humor: A friend of mine, who happens to be a well respected economist, mentioned to me last week:

…there are 3 kinds of economists: the kind that can count and the kind that can’t.


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