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Federal Reserve, New York

[Pretty Vacant] Shoots of Green Are Blossoming In The Metaphor Business

April 13, 2009 | 12:57 am | |

The weather is improving and I’m feeling the “this time of year optimism” where we get out of our log cabins after a long cold winter and admire the greenery around us.

The first thing you notice is that 1 in 9 houses in the US are currently pretty vacant:

According to an article today in USAToday, census numbers show:

  • More than 14 million housing units are vacant. That number does not include an estimated 4.8 million seasonal or vacation homes, most of which are occupied part of the year. The combined vacancy rate of almost 15% is higher than during previous recessions: 11% in 1991 and 9.4% in 1984.
  • About 3% of owned homes are vacant. In normal times, “maybe 1% should be vacant,” Myers says.
  • More than 9% of homes built since 2000 are vacant compared with about 2% for older homes.
  • Homes priced at $500,000 or more are just as likely to be empty as homes that cost less than $100,000.

But the spring metaphor favorite is Shoots of Green or simply Green Shoots.

Here are some warnings about its use:

Caroline Baum at Bloomberg, one of my favorite economic columnists said in her Wall Street Swaps Zegna for Denim, Tool Belts piece:

Like crocuses poking their heads through the soil, straining toward the sun, the U.S. economy is sending out the slenderest of shoots.

Justin Lahart at WSJ, in his Fed Chairman Chauncey Gardiner: You Must Believe In Spring

The combination of signs that the economy may have begun to recover and the arrival of spring has led to the overuse of a metaphor that could use a little pruning. We’re talking about those “green shoots” (sometimes “shoots of green”) that keep showing up in policymakers’ speeches, economists’ notes and, unfortunately, reporters’ stories.

But more mundane, weed-like uses on the presentation of economic news are more like these (no offense meant to the authors):

Manufacturing, Retail Reports May Disappoint:

As economy-watchers everywhere continue their desperate search for green shoots — little signs that the recession won’t last too much longer — this week could bring some sobering news.

The shoots of recovery look pale green at best:

We have former Tory Chancellor Norman Lamont to thank for the term “green shoots” to describe the first signs of a post-recession return to growth. In the depths of the last downturn, in December 1991, he told a Tory party conference: “The green shoots of economic recovery are appearing once again” – only to be greeted with ridicule and contempt.

Dallas Fed chief points to ‘green shoots’: A few signs of life are sprouting in the U.S. economy, but it’s too soon to say whether these “green shoots” will lead to a sustained recovery, said Richard W. Fisher, president and chief executive of the Federal Reserve Bank of Dallas.

Green shoots and tea leaves

One is that even in the Great Depression, things didn’t head down all the time. The chart above, from Eichengreen and O’Rourke, shows world industrial production in months from the previous peak, in the Depression and in the current crisis. Notice that there were several upturns along the way; each of those could have been — and was! — heralded as the beginning of recovery.

I’m thinking a Green Jacket is even better than a Green Shoot – or shooting on the Green is better than being green with a regular jacket on.


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[Bracket This] Optimism Gains A Foothold Against Skepticism, But Not Against Madness

March 19, 2009 | 2:52 pm | |

One of the most useless housing metrics ever debated has been new home sales released by the Commerce Department. The data doesn’t consider contract recisions and has a wildly high margin of error.

Privately-owned housing starts in February were at a seasonally adjusted annual rate of 583,000. This is 22.2 percent (±13.8%) above the revised January estimate of 477,000, but is 47.3 percent (±5.3%) below the revised February 2008 rate of 1,107,000.

Housing starts were up 22% over the prior month plus or minus 13%. Crazy. Yet it’s widely covered.

Every year at this time the metric is always discussed in the context of its prior month change rather than the prior year result. It’s March and this metric is based on February data. Housing starts nearly always rise starting at the beginning of the year. In all the press coverage, little or no attention was placed on the fact that starts are 47% below last year at this time, providing an illusion to the uninformed that construction is booming.

So my initial takeaway from this announcement and the ensuing buzz was, predictably, skeptical.

Last week the Dow jumped, and even though it has no direct correlation with the housing market, people were noticeably upbeat about the improvement in the stock market. This week – more of the same.

My initial takeaway was again, predictably, skeptical.

Madoff pleads guilty and goes to jail.

This provided some closure (not to the victims) on this horrendous financial situation. Nothing to be skeptical about.

The AIG $165M bonus debacle became the next event to focus on. It certainly appears that these bonus payments were enabled by Congress and Treasury from the beginning and feeble attempts were made to say “gee, contracts were signed and therefore we need to honor them.”

The public isn’t that stupid and responded in outrage and now suddenly every government servant from the president on down now suffers from a case of righteous indignation. The AIG audacity of paying these bonuses, along with Thain’s bathroom renovation, is clearly the symptom of a larger reality distortion and one of the reasons we are in this mess. Yet if this is a crisis of confidence and the $165M represents peanuts relative to the trillions at play, its symbolism is far more important – at least for now. Merrill Lynch bonuses are next on the radar.

Bernanke announces that he sees the recession over by the end of this year and recovery beginning in 2010. By now, skepticism reigns with the Fed chief’s intentions since the Fed was so slow in reacting to the crises in 2007 and 2008, chimed in with Paulson’s panic message last summer and Ben has clearly radiated optimism in between bleak assessments.

It seems to me that the majority of economist do not believe the recovery will begin in 2010 so I’m skeptical.

The Federal Reserve is directing $1T at credit to alleviate the log jam which is met with euphoria (financially speaking of course). Now there are signs that liquidity is starting to return to the credit markets.

But I must say I am skeptical of the President with the confidence in his decisions on the Madness. I am picking UConn to beat North Carolina in the final and he is going with the Tar Heels.

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Too Big to Fail Meets Too Failed to be Saved

March 12, 2009 | 11:27 pm | |

It’s becoming apparent that several of the large institutions that are in the vortex of bailoutdom are teetering: namely AIG and Citi. They were deemed too big to fail, bit now we are wondering if they are too far beyond saving.

I am struggling with this concept and am rambling here, but now is the time to fix things for the long term benefit. I am sick of quick fixes.

The Too Big to Fail policy is the idea that in American banking regulation the largest and most powerful banks are “too big to (let) fail.” This means that it might encourage recklessness since the government would pick up the pieces in the event it was about to go out of business. The phrase has also been more broadly applied to refer to a government’s policy to bail out any corporation. It raises the issue of moral hazard in business operations.

The top 5 banks are showing significant signs of weakness.

Citibank, Bank of America, HSBC Bank USA, Wells Fargo Bank and J.P. Morgan Chase reported that their “current” net loss risks from derivatives — insurance-like bets tied to a loan or other underlying asset — surged to $587 billion as of Dec. 31. Buried in end-of-the-year regulatory reports that McClatchy has reviewed, the figures reflect a jump of 49 percent in just 90 days.

The industry never thought macro enough to consider systemic risk – as in “What happens if it all goes wrong?” Seems pretty basic.

The Federal Reserve appears to be trying to reform its ways and perhaps even the concept of too big to fail. Fed Chairman Bernanke just spoke to the Council on Foreign Relations

Until we stabilize the financial system, a sustainable economic recovery will remain out of reach. In particular, the continued viability of systemically important financial institutions is vital to this effort. In that regard, the Federal Reserve, other federal regulators, and the Treasury Department have stated that they will take any necessary and appropriate steps to ensure that our banking institutions have the capital and liquidity necessary to function well in even a severe economic downturn. Moreover, we have reiterated the U.S. government’s determination to ensure that systemically important financial institutions continue to be able to meet their commitments.

…while former Fed Chairman Greenspan has been attempting to re-write history.

David Leonhardt, in his piece “The Looting of America’s Coffers” said:

The investors had borrowed huge amounts of money, made big profits when times were good and then left the government holding the bag for their eventual (and predictable) losses.

In a word, the investors looted. Someone trying to make an honest profit, Professors Akerlof and Romer said, would have operated in a completely different manner. The investors displayed a “total disregard for even the most basic principles of lending,” failing to verify standard information about their borrowers or, in some cases, even to ask for that information.

The investors “acted as if future losses were somebody else’s problem,” the economists wrote. “They were right.”

Last week, Sheila Bair of FDIC told 60 Minutes she would like to see Congress attempt to set boundaries for banks to remain as banks. In other words, they grow beyond a certain level, they become some other entity but can’t be bailed out if something goes wrong. Perhaps this implies a higher risk which is understood by investors, forcing the institution to decide whether it can afford to be bigger.

Let’s get our act together real quick or we also too big to fail?

Aside: Why make billions, when you can make millions? – Austin Powers

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[Time to Blame] Because It Feels Good

February 14, 2009 | 12:02 pm | |

Time magazine is starting to kick some online posterior these days reversing a slow erosion into irrelevance. I think it started with Justin Fox of Curious Capital and their expansion online has been worth following. (No, I am not a shareholder).

The financial crisis we are enduring is systemic and there is no one specifically to blame because nearly everyone is to blame, including my 2 cats, the mailbox and my old ipod. Rather than individuals, I think its better to look at the problems by industry and agency.

Still, it feels good to point the finger.

Here’s my take on it as ranked by overall impact. Nothing scientific here.

  1. Rating Agencies
  2. Investment Banks [Tie]
  3. Subprime Lenders [Tie]
  4. SEC
  5. American Consumer
  6. Investors of CDOs
  7. Bush Administration [Tie]
  8. US Treasury [Tie]
  9. Congress [Tie]
  10. Fannie Mae/Freddie Mac
  11. Commercial Banks/Mortgage Banks
  12. Federal Reserve
  13. Mortgage Brokers [Tie]
  14. Real Estate Appraisers [Tie]
  15. Clinton Administration
  16. FDIC, OTS, OCC
  17. Real Estate Brokers [Tie]
  18. Developers [Tie]
  19. Big Media
  20. Blogosphere

Did I miss anyone?

In their 25 People to Blame for the Financial Crisis piece, Time readers can vote for their favorites.

To vote for your favorites to blame as listed by Time.

To see the rankings from the Time survey.

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[100% US LTV] Why Housing Matters Within the Solution

February 11, 2009 | 11:46 am | |

In Q1 08 there was $22T in US residential real estate value and $15T in debt per the Fed (68% LTV). Based on CSI decline trends this year, its probably more like $18T in value now with a 83% LTV. If the prognosticators are accurate and we are halfway through the decline in housing values, it approach 100% LTV in the next two years.

Result: refi wiggle room, more vulnerability to resets (despite lower rates), higher probability of foreclosure and bankruptcy.

Translation: Bad.

There is a fascinating paper published by the San Francisco fed by John Krainer, a senior economist there that sheds more light on the linkage between mortgage lending and the stability of the banking system. Conventional (no pun intended) wisdom is the exclusive domain (no pun intended) of subprime and shoddy Alt-A and prime lending. Of course this is a significant component, but it is also about exposure to and dependence on mortgage lending in its relation to other loan products.

Krainer says

Over the past several decades, the commercial bank share of total real estate lending has slowly declined as other lenders have entered the market. At the same time, however, the percentage of total bank assets exposed to real estate has increased for banks of all sizes (see Figure 1). In the mid-1980s, for most banks, about 20% of total bank assets were exposed to real estate, and today the exposure is about 50% for small banks (under $500 million in year 2000-level dollars) and medium-sized banks ($500 million to $1 billion in 2000-level dollars) and just under 40% for large institutions. This basic trend is even more pronounced when considering real estate loans as a share of the total loan portfolio: banks now devote about three-quarters of their total loan portfolios to real estate lending.

The evidence suggests that spillovers of real estate shocks into bank performance are strongest for those types of loans where the collateral is some type of real estate. Spillover effects are strongest for residential loans and construction loans, followed by nonresidential loans. Importantly, all measured effects appear to be much stronger in the 1990s than in the 2000-2007 period. Given that we are currently in a period of declining house prices, it may be reasonable to assume that loan performance will behave more like the observable relationships from the 1990s.

The linkage between mortgage defaults and bank performance is widely understood. Small and mid sized banks were much more aggressive in residential lending since 1980. My guess is that the proliferation of mortgage backed securities in the early 1980s leveled the playing field allowing small banks to grow rapidly this way (remember Countrywide?).

With most of the large banks applying for TARP money, it makes me worry how many small banks didn’t have the legal know how to react as quickly to get on the receiving line of the bailout or more importantly, were a lower priority by the former administration’s Treasury department.

I haven’t digested the whole thing yet, but here is a speech by Fed Governor Elizabeth A. Duke at the Global Association of Risk Professionals’ Risk Management Convention in New York today: Stabilizing the Housing Market: Next Steps.

UPDATE: In response to the 24-7 whining and gloom/doom by many economists (and an appraiser I know), consumers should say: “Well, then what good are you if you can’t tell me what I should do”?


Facing The Nation, Washington Doesn’t Really Get It (Hint: It’s Not Housing)

February 3, 2009 | 2:47 pm | |

I really enjoy Bob Schieffer’s Face the Nation program and listen to the podcast on a regular basis. I was particularly interested in the discussion this past week with senators Mitch McConnell and Chuck Schumer, as well as New York Times reporter columnist David Brooks because they discussed the stimulus plan passed by the House of Representatives and now making its way through the Senate.

I was a bit taken aback by the “non-stimulus” earmarks thrown in for good measure but both Senators seem to be interested in the rapid passage of the bill after modifications are made.

However, the main theme in all this and frankly in most political discussions on the economy seems to point to housing as the root of all our problems and therefore lower mortgage rates and tax credits are the answer.

Download the transcript to see what I mean. Housing is not understood.

Perhaps this is semantics, but the housing crisis was not the cause of the problem, it was the straw that broke the camel’s back (that phrase really looks weird in actual text). Home buyers and home owners looking to refinance, won’t be helped much by these solutions.

Because it is all about underwriting.

Look at the Fed’s Senior Loan Officer Survey above – underwriting restrictions are up significantly in the past two years.

Think of a bank making the decision to lend right now – applicants have rising jeopardy for job loss and housing markets are declining – future losses loom for lenders as well. Not a comfortable environment for making a loan without very difficult terms. That is what is choking off the housing demand. It’s not because buyers need a bigger tax deduction or need a lower mortgage rate to qualify. They need to qualify for mortgages within reason.

Housing is a lagging indicator not a leading indicator.

Focus on credit and the financial system. And I think we need to let some of the financial institutions fail – as painful as it can be.

The problem is, with house prices still in free fall and unemployment rising, tight lending standards, as evidenced by the latest survey of Senior Loan Officers, make sense.

The bigger conundrum for Washington, however, is that, just as the banking sector appears to have suddenly found religion, consumers are also unhelpfully doing the same. Almost half of loan officers surveyed reported weaker demand for consumer loans. Demand for mortgages, while having improved from December’s nadir, remains weak. Meanwhile, demand for commercial and industrial loans has plummeted.

Unfortunately, this is largely unavoidable. Plunging stock markets and property prices blew a $5.6 trillion hole in households’ net worth in the first nine months of 2008. That surely worsened in the fourth quarter.

Consumers simply don’t have all the money in the world, even if retailers are offering 70% discounts.

[Financial Trust Index] Apparently Trust is both an Asset and a 4-Letter Word

January 29, 2009 | 1:30 am | |

The missing ingredient today in the housing market, the economy and the financial system is trust.

  • Banks won’t lend to each other because each thinks the other is going under.
  • Bank won’t lend to conumers because they don’t think they can pay the loan back.
  • Consumers don’t trust the government because just 6 months ago they pronounced that the economy has strong fundamentals.
  • Buyers don’t trust the local housing market because they think it is going to collapse.
  • No one trusts anyone.

Like consumer confidence, trust is a key factor in all that is wrong with the economy.

While trust is fundamental to all trade and investment, it is particularly important in financial markets, where people depart with their money in exchange for promises. Promises that aren’t worth the paper they’re written on if there is no trust.

Kellogg School of Management at Northwestern University and The University of Chicago Booth School of Business have developed the Chicago Booth Kellogg School Financial Trust Index.

A Trust Crisis Paola Sapienza and Luigi Zingales1

If a modern Rip Van Winkle had fallen asleep two years ago and woken up now, he would wonder what had happened to the U.S. economy. Two years ago, we were in the middle of an economic boom. Banks were eager to lend even at the cost of forgoing important covenants, and corporate America (and the entire world) was producing at full steam, so much so that commodities prices were rising in anticipation of a future scarcity. Today we are quickly sliding into a deep recession. Banks are not lending and commodity prices are plummeting in expectation of a dramatic slowdown of production throughout the world.

Neoclassical economic models cannot explain this dramatic change. There was no apparent shock to productivity nor a clear slowdown in innovation. The government has kept taxes low. The Federal Reserve has kept interest rates low and cut them even further. What happened?

Everyone agrees that this crisis originated in the financial system. When Lehman Brothers defaulted and AIG had to be rescued by the government in September, the economy was still doing all right. The rate of growth during the second quarter was still a comfortable +2.8 percent. How could the default of an investment bank, with very limited lending to the real economy, have had such a disastrous effect?


[Getting Graphic] When charting the US economy, the trend is your friend

January 23, 2009 | 1:43 am | |

The Federal Reserve Bank of New York has a nifty summary of all the major economic indicators that are incessantly belched out by business news networks. All can be viewed here, but I parsed out my favorites below:


[Capital Legacy] not a V or an I, but a Dubya

January 21, 2009 | 2:15 am | |

With all the optimism of the day, certain things have not changed. One of them is the requirement that the credit crunch ease first in order for home sales to begin to flow at a more elevated level.

One of the ways I have been describing (as have many others) the unwinding of housing has been an “L” shaped recovery rather than a “V”. With the credit contraction, once liquidity returns, the excess housing inventory will likely keep the housing market tame for a number of years, rather than bounce back up.

Paul L. Kasriel of Northern Trust characterizes the economic recovery as more of a “W” with a lot of volatility in the next 4-5 years.

The current economic environment is indeed bleak and there are precious few signs of a recovery. But we believe that if the massive fiscal stimulus package being worked up in Congress is financed largely by the banking system and the Federal Reserve, there is a good chance the economy will begin to grow by the fourth quarter of this year and continue to do so throughout 2010. And if we are correct on this, we also believe there is a good chance that the consumer price index will be advancing at a fast enough pace by the second half of 2010 to induce the Federal Reserve to become more aggressive in draining credit from the financial system. This could set the stage for another recession commencing in 2012, or perhaps some time in 2011. So, the shape of the path of economic activity we see over the next few years is not a “V”, a “U”, or an “L”, but a “W” – down, up, down, up, all within four or five years.

Although the stock market fell 4% today, seemingly the only damper on what was an historic and euphoric day, the last president to see the stock market rise on inauguration day was JFK.

Still we look for clues for economic recovery and accurate characterizations of the state of the financial markets.

And Randall Forsyth in Barrons moves the Great Depression comparisons forward from 1932 to 1938.

A better analog may be the 1938-42 period, says Louise Yamada, the eponymous head of Louise Yamada Technical Research Advisors…Investors would be quite pleased if the pundits were right and if this were 1932 all over again. That year marked the bottom after the 89% collapse that only began with the Great Crash of 1929. From its 1932 low, the Dow would rebound and more than quadruple by 1937. Fortunes could have been made in that rally, for those who had capital to commit to the market by then….In 2004, Yamada offered what she called an Alternative Hypothesis, that 2002-2007 would resemble 1932-37. And the market has tracked the pattern of 70 years earlier closely, even eerily. From a double bottom in late 2002 and early 2003, the market rallied strongly into early 2004, which was a year of correction. Then came a renewed uptrend from 2005 until a double top in 2007, into the great debacle of 2008.

While we can all learn from history, and the always exaggerated crowd counts on the Mall, the Obama Inauguration set a record for the number of private jets that flew in to see the festivities.

At least jet fuel prices are lower than my expectations for a quick economic recovery.

[Market Report Pulse] Sales Contract Data Can Mean Nothing

January 16, 2009 | 2:44 am | |

One of the most sought after trending tools for housing markets is contract data. Not listing data, not closed data. Contract data.

Compile a lot of data across all regions, property types and price strata and you are golden. You are observing the market as close to the “meeting of the minds” as is humanly possible – you have its proverbial pulse.

I thought to write about the concept of reporting contract data after I got a call from The Real Deal about a new contract-based real estate market report. Their founder is a very creative, very smart and very successful marketer of real estate, first as an agent and then as a marketing expert for new developments. Visually, the report is beautifully done, consistent with the quality of their firm’s marketing materials and online presence. However, they might consider dropping the name of “real-time” from the report. It’s monthly. I understand the intention, but the use of the phrase “real-time” infers a live feed, which this report is not. Isn’t “monthly real-time” an oxymoron?

A quote from The Real Deal article:

It tracks contracts info. To me, that’s what reflects the marketplace and where we are currently, not closed information, which is actually a look back in history.

Another company attempted “real-time” a few years ago by treating real estate listings like the stock market and began publishing a “ticker” type interface. I have to give them credit for the innovation, but it never really got people’s attention.

But I digress

What is contract data exactly?

It’s a property sale with an executed (both parties signed) contract – It is usually 45-60 days ahead of a closing date if new development data is excluded. Actually this 45-60 day time frame is currently expanding as lenders become more difficult to deal with. New development data in the mix could lag the market by 1 to 2 years.

I sort of dealt with contract activity in the most recent market report numbers in my 4Q 2008 Manhattan Market Overview but not in the traditional sense of aggregating contract data and trending it.

Our appraisal firm began to see a pattern in late September 2008 where current contracts of properties we were appraising, were clearly lower than contracts signed in the summer of 2008. The range was roughly 15% to 20%. My 20% number has been widely referenced by the Fed, Goldman Sachs and others, and in fact, page one of AM New York published the number “20%” in red on the entire cover. But our conclusions were based on more of a case by case analysis, similar to a repeat sales analysis.

I don’t currently issue contract reports but I certainly aspire to, but only when I have credible results. Periodically I’ll see one of my appraisal competitors distribute a press release with their own contracts tabulated. I’ll see real estate brokers and marketing agents issue contract reports.

Readers oooh and ahhhh over the relevancy of contracts because the data is perceived to be fresh and current. In principle it is current, but in practice it is much more subject to skew than other data.

I also wonder why methodologies are never fully provided, especially those prepared by marketing groups or departments.

Here are the issues that make much market analysis of contract reports suspect, despite perhaps the best intentions of the authors.

  • Quantity of data — the key issue that makes much analysis unreliable – absent from the public domain.
  • Location of the data — contract data tends to be sourced from a few institutions or entities so its availability and the potential for skew is very serious.
  • Unit mix of the data — This is subject to skew depending on the source of the data – what type of business they have – who their customers are (low end, high end, studios, 3-bedrooms, etc.)
  • Source of the data — The four largest real estate brokerage firms probably account for 80% of all sales in Manhattan. I know each of the senior management teams so I am fairly confident they will not release contract data in bulk to anyone outside their company, especially to a competitor.

I have never met a broker that will share contract data in bulk because it can jeopardize their company’s sales and commissions. We are able to get contract data periodically, but not in bulk. If producers of contract reports can win me over on these key issues, I am ready to jump in with two feet. NAR publishes a pending contract index and frankly, not many people I know believe the results.

In other words, contract data is the Holy Grail, but I am not convinced it’s yet achievable as a reporting tool.

Now give me a sales contract specific to the appraisal we are working on and I am happy ’cause that’s a whole ‘nother story.

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[Investor Position] Somewhere Between Cash and Fetal

January 12, 2009 | 11:53 pm | |

A few weeks ago, I was watching CSPAN (I know, I know) and really enjoyed a speech given by Richard W. Fisher, president of the Dallas Federal Reserve. It’s a great recap of the events leading up to the current financial crisis and he is an eloquent speaker.

One of the funniest items in the first clip was his recollection of seeing a conversation on TV where an investor asked a pundit what “position” the investor should take (hence the name of this post). I have twittered this phrase and have mentioned it in no less than 3 speeches I have given in the past two weeks. For those of you who have already heard my feeble attempt at humor, I apologize.

Here is the speech, in all its YouTube glory in 3 parts. It’s worth a listen.

Part I

Part II

Part III

[Quadrillions In Indebtedness] 4Q 2008 Manhattan Market Overview Available For Download

January 8, 2009 | 2:25 am | | Public |

The 4Q 2008 Manhattan Market Overview that I author for Prudential Douglas Elliman was released on Tuesday.

Other reports we prepare can be found here.

The 4Q 2008 data and a series of updated charts are also available.

All in all, well over 100 media hits covering the report (that we know about, but who’s counting) without a formal press release. Apparently there is interest in the Manhattan housing market.

An excerpt

…At the close of the prior quarter, there was significant turmoil in the financial markets and unprecedented intervention by federal government agencies. The bailout of Fannie Mae, Freddie Mac and insurance giant AIG, the investor run on the money market Reserve Primary Fund and the bankruptcy of Lehman Brothers, marked a significant change in the Manhattan housing market as well as the US housing market. The fourth quarter was characterized by a sharp decline in contract activity and a downward correction in contract price levels. Sales contract activity showed evidence of a decline in activity of 40% to 75% compared to the same period last year. Contract price levels showed an average decline of 20% from August 2008. As a result of the 45-60 day lag between contract and closing date, a decline is anticipated in both the number of sales and closing price levels in the first quarter of 2009…

In 2005, I began posting the links of the coverage of each report to see how each media outlet reports the market using the exact same data. I find it to be an interesting way to look at how this information is interpreted and presented.

The media coverage of the report was provided here as they were released (in no particular order). The headlines selected below provide an interesting media perspective of the report contents since every outlet was working off the same information. I didn’t include all the wire stories from AP, Bloomberg or Reuters.



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