TheTucsonFoothills

have you heard, The Housing Crisis Is Over

Today's Wall Street Journal says so,
The Housing Crisis Is Over, so it must be so.
"The dire headlines coming fast and furious in the financial and popular press suggest that the housing crisis is intensifying. Yet it is very likely that April 2008 will mark the bottom of the U.S. housing market. Yes, the housing market is bottoming right now".

Although there's scant evidence to support it, either in this article or elsewhere, I'm glad we've finally got that cleared up - The Housing Crisis is Over.
We were going to pull out of this sometime, so we might as well get it over with now.

As you might expect, everyone's going to jump on this news as if it were the Holy Grail.
And despite the fact that the article doesn't refer to a particular city, or area, or part of the country where the 'Housing crisis is over', and by the way, whatever happened to 'all real estate is local', it instead seems to predict that as of today the national housing market is on the mend.
How can that be. Is Tucson going to climb back to a normal market in lock-step with Miami, Vegas and Sacramento.
Is the Los Angeles market going to suddenly fall in line so that it's in sync with Salt Lake and Seattle.

Or could this be the national media sensing the need for a change of tune, to keep their almighty drums beating loudly.
Check out your local market, and see if you see signs that the housing crisis is over.
I hope it is.

see my web site thefoothillsToday.com
to search for and learn more about Tucson Foothills Homes

every down cycle is the beginning of the next up cycle

so says John Burns Real Estate Consulting in this delightfully simple cartoon that brings some perspective to the current real estate cycle

herd behavior helps explain the housing debacle

Robert J. Schiller, Yale economist extraordinaire and author of Irrational Exuberance, who predicted both the stock market bubble of 2000, and the current housing bubble, holds forth in an interesting article in this past Sunday's  The New York Times 
How a Bubble Stayed Under the Radar

    We have to consider the   possibility that perfectly rational people
        can get caught up in a bubble

He talks about why even most experts didn't recognize the housing bubble as it was forming, the cascade of information that led people to make the wrong decisions, and how herd behavior helps to explain the housing debacle.                 

Interestingly, and in conclusion, he states, " it is now possible that a downward cascade will develop — in which rational individuals become excessively pessimistic as they see others bidding down home prices to abnormally low levels"

Flipping back to August 2005,  The New York Times did a piece on Mr Schiller back then titled, Be Warned: Mr. Bubble's Worried Again
where Mr. Schiller is described as follows, ' Mr. Shiller is sounding the same warning for real estate that he did for stocks. In speeches, in television and radio interviews and in a second edition of his prophetic 2000 book, "Irrational Exuberance," he is arguing that the housing craze is another bubble destined to end badly, just as every other real-estate boom on record has'.

NAR bashing

The NAR (the National Association of Realtors) has for some time now been getting creamed with criticism because of a perceived lack of candor on the part of the NAR regarding the downturn of the real estate market and the advice that the NAR has offered to consumers during that time. 
During the decline, which has been going on for about two years now, the NAR has relentlessly advocated that this is a great time to buy a home. And often during this time, according to the NAR, it has also been a great time to both buy and sell a home.
Time after time, this advice has proven to be way out of whack with the unfolding reality of the declining real estate markets across much of the country. But despite this, the NAR has persisted in pressing their agenda. And as a result of this overly sunny, and unrealistic self-serving advice regarding the state of the real estate market, the NAR has lost for itself, and very importantly for all it's members, a great deal of credibility.
A post in the Developments blog of today's Wall Street Journal,
NAR Campaign Touts Real Estate as a Great Investment
and the accompanying 70 comments (so far) by consumers, does a good job of dissecting this latest NAR fairy tale for what it is - which btw, is being touted by the NAR as a public awareness campaign.
What gall!
As one commenter put it, "I would expect a little spin, but these numbers are just dishonest. If anyone was thinking that a realtor is a trustworthy source of information, this will surely dissuade them."

Thanks NAR, keep up the good work.

what's all the brouha about commissions

4%, 6%, 6.5%, what's the big deal. This is a free market country.
Who's to say that a buyers agent should get 3%. Why not 2%, or 4 or 6%, depending on the inclination of the seller. 
People can offer whatever commission- fee, incentive, prize, bonus, etc. - call it what you will, that they see fit in order to sell their house. And real estate agents are not thieves for accepting it.
They are only thieves when they put their own interests before those of their client's. And with just a bit of observation, that insidious little characteristic is usually quite obvious, long before anyone starts licking their chops over commissions.

Truth in lending

Here's the pitch;
"I want to be sure you are getting the best loan possible"
And the reality;
Countrywide’s entire operation, from its computer system to its incentive pay structure and financing arrangements, is intended to wring maximum profits out of the mortgage lending boom no matter what it costs borrowers, according to interviews with former employees and brokers who worked in different units of the company and internal documents they provided.
Today's New York Times features an in-depth expose' of how Countrywide Financial steered consumers away from lower cost loans to those that were more expensive to homeowners and more profitable to Countrywide. Inside the Countrywide Lending Spree

a ray of light

In an interview with Kelsey Hubbard of the WSJ, David Wyss, chief economist of Standard & Poors, speaking of the latest housing numbers says, "there are signs that things are bottoming out."
He adds some disclaimers and caveats, but he does say it,
"there are signs that things are bottoming out."

kick' em while they're down

There's an ugly little story in today's New York Times, front page stuff, about a little known side effect of foreclosure. May cause dizziness, nausea, vomiting... 
Here's the scenario; You lose your home to foreclosure and suffer the upheaval, indignity and financial repercussions that go along with it. Bruised, beaten and licking your wounds, you take some small comfort in the fact that at least it's over and done with, it's all behind you.
Not so fast. One day you go to the mailbox of your rented flat, and amidst the bills and junk is a letter from the IRS stating that you owe them $34,000 in back taxes. The letter explains that the debt that was canceled by such-and-such bank on your homes foreclosure, is subject to income taxes, as well as penalties and late fees.
Unbelievable! Read it here>  After Foreclosure, a Big Tax Bill From the I.R.S.

is FSBO for you

Last week in a post titled selling your home online I railed against an article that appeared in the Arizona Daily Star, Selling home online can net a hefty gain. My vehemence was directed at the glaring oversimplification and fairy tale nature of the Star article, which, to put it lightly, made light of what's involved in trying to sell your home on your own.
But in the course of deriding that article, I may have given the impression that I thought selling your home online, and on your own, is not feasible. That wasn't my intention. Selling your home online, and on your own, is feasible, because of the information and tools that are available on the internet. 
It's right for some, and not for others.
Are you internet savvy, are willing to do your homework, are you a good negotiator, do you have the time and patience, do you understand the pitfalls, and are you willing to hire a real estate attorney if necessary. If so, you may be a good candidate for putting your home up for sale on your own.
And if you sell it, although you'll surely save some money on commissions, you may or may not come out ahead in the end. 
And in the end - coming out of the deal with more money, while staying out of court - is what the whole debate is about.
San Francisco, usually on the leading edge of new trends, is one of the most liberal and tech savvy cities in the country, so when the San Francisco Chronicle publishes an article on the pros and cons of selling your home on your own, I brace myself for the inevitable beating that we real estate agents are about to take. 
As expected, these two articles from SFGATE.com, the online version of the San Francisco Chronicle, while not particularly flattering to real estate agents, they do offer a more thoughtful big-picture view of the pros and cons of selling your home, that others would have you believe is a no-brainer.
For Sale By Owner: Are real estate agents really necessary?  and
For Sale By Owner: How agentless transactions can turn into royal nightmares

selling your home online

Yesterday the Arizona Daily Star online had an article titled
Selling home online can net a hefty gain. The author, Marshall Loeb, tells us ' Despite the recent housing market slump, many Americans are still paying a walloping 6 percent commission to real estate brokers'. He gets it wrong right out of the gate. It's not despite the recent housing market slump that many Americans are paying a walloping 6 percent - if anything, the slump has caused people to continue to use proven methods to try and sell their home & not experiment with methods that have been much less reliable, even in the best of times.
When many thousands of homes are listed for sale on MLS's all across the country, and sitting on the market for months, most home sellers would not choose to drastically reduce the amount of exposure that their home is getting to potential buyers on the chance that they may save a couple of percent in commission.
He then states that Many homeowners are now opting to market their property directly to the consumer using online services like Yahoo Real Estate and Craigslist. And he ties that in with- 80% of those searching for a home use the internet. Leaving you with the impression that it's simple to sell your home on the internet by using Yahoo and Craigslist, because, 80% of the home searches are being conducted on the internet, on sites like Yahoo and Craigslist.
In fact the great majority of the searches of those 80% searching online are doing so on real estate brokerage web sites and MLS's, not on Yahoo or Craigslist. Because those real estate brokerages and MLS's have made all their listings available for people to search on the internet. Yahoo and Craigslist are great sites, but they contain just a teeny tiny fraction of the homes for sale. 
Then, ' Six percent may not sound like much, but consider: According to the U.S. Census Bureau, the average price of a home is $313,000, which means the average seller has to pony up nearly $19,000 in broker fees. This is a hefty penalty for not selling your own home, one that more and more Americans are unwilling to pay'.
Mr. Loeb consistently uses 6 percent as the amount of commission charged by real estate brokers, leading you to believe - intentionally it seems since I'm sure he knows otherwise- that it's 6 percent, like it or not, with no choice for the consumer. 
In fact there is a whole range of choices in the services offered by various real estate brokerages and the cost of those services, just like in every other industry and business in this country.
But it's a very convenient omission on Loeb's part, since it allows him to tell the story the way he wants, without being hindered by the facts. And again simplifying beyond belief, the $19,000 savings is offered as a given, with no mention of the possible trade-offs involved, or the fact that this $19,000 savings assumes that the buyers are also not represented by an agent, hence no commission.
A very unlikely scenario.
And whether the commission is 6, 5 or 4 percent, or whatever it is, it's not a penalty, it's a fee that's paid for services rendered.
And the fee is only paid if the home sells. No sale, no fee.
In that same vein of characterizing a fee for services as a penalty, would it be correct to consider the cost of an ad in the Arizona Daily Star (which you pay for whether or not it works), or, the cost of a subscription to the Star, to be a penalty.
We can choose, and increasingly many of us do, to sell our cars, used furniture and other stuff on the internet for free, and not put an ad in the Star. And we can read the news all day long on the internet for free. Why pay a penalty to the Star to subsidize these fairy tales.
Then Mr Loeb talks with Colby Sambrotto, chief operating officer of ForSaleByOwner.com, a leading online home marketplace, who says
(surprise-surprise) "Selling your home online is simpler than you might think", and then goes on to list the three simple steps to sell your home online and on your own, and how to accomplish each of them. (For the details read the article HERE)
1. Find out what your home is worth
2. Market your property
and, 3. Transfer the title
That's it, it's childs play, easy as 1,2,3.
This article would be laughable really and it's hard to believe that anyone would take it seriously, nevertheless, the glaring omissions and blatant oversimplification misinform and mislead on a subject that's important to me and to lots of other people.

Flip This House

The folks at Flip This House have asked me to post this casting notice for the upcoming season. If you haven't seen the show it might seem counter intuitive to be flipping houses in the current climate, but when you see what goes into these flips it'll all make sense. Web Site: www.aetv.com/flipthishouse/

        Now Casting the New Season of
              Flip This House on A&E!

Flip This House, A&E's #1 rated lifestyle show, has been to Charleston, Atlanta, San Antonio, and New Haven. Which city will be next?!!

813 Casting and Departure Films are conducting a nationwide search for the new cast of characters who will be featured on the upcoming season of Flip This House! Will it be your team?

We're looking for confident, charismatic, motivated and opinionated people who "flip" residential properties for a living. We want real-estate adrenaline junkies who love the high risk, high reward nature of their jobs and who are devoted to doing a great job!

If you would like your team to be featured on the upcoming season of Flip This House, send an email to fth@813casting.com. Include your contact info, bios on you and your team, and some reasons why your team should be the next to be featured on Flip This House! Teams should consist of four or more people.
Web Site: www.aetv.com/flipthishouse/

$3000 vs 6%

I'm sure there's been more than enough said on this subject, and I'm a little late getting to it, but,
The recent 60 Minutes segment on traditional Realtor fees vs those of the new internet based real estate company  Redfin, only served to misinform the public -through glaring omission- about the facts of what it costs to list your home with Redfin, and all of it to Redfin's immediate advantage.
You might expect Redfin, who only serves to benefit, to go along with this sort of thing, but one wonders, what's in it for 60 minutes.
here's an excerpt where Glenn Kelman of Redfin is explaining to a smiling Leslie Stahl of 60 Minutes, just how it works;
'....we’re able to pass on a lot of savings to them," he says. (them being the buyers) And he does mean "a lot" of savings. Usually, a seller's agent and a buyer's agent split the commission, so they each get three percent. But when Redfin represents the seller, it charges a flat fee of just $3,000, and that’s it. That alone drives the traditional agents crazy. But then, when Redfin represents the buyers, they give them money back'.
Kelman said that they charge $3000, and that's it. But that's not it.
They too tack on 3%, which they give the agent representing the buyer, just like traditional Realtors do. If Redfin didn't collect 3% in addition to their $3000 fee, they wouldn't have any money to refund to the buyer. So on the sale of a $500,000 house- with a traditional Realtor, the seller would pay a total of $30,000 in commissions- $15,000 to the listing agent, and $15,000 to the buyers agent.
With Redfin the seller would pay a total of $18,000 in commissions-$3,000 to Redfin, and $15,000 to the buyers agent. The difference between the two is $12,000, not $27,000, as portrayed - through glaring omission - by 60 Minutes.
And it's worth noting, that Redfin gets their $3,000 up front, whether or not your home sells.
And the seller gets to do most of the work and most of the selling.
So much for investigative journalism, and Leslie Stahl, and CBS, and where's Andy Rooney when we need him.

Desperate Housebuyers

Todays Wall Street Journal carries a very sad story of the desperation that has taken hold as a result of the fallout in the housing market. According to this story By MICHAEL CORKERY and RUTH SIMON, "disputes are breaking out between builders and buyers who signed contracts for new homes and condos when the market was hot -- and now want to get out of them."
"They were willing to ride the real-estate boom on the way up, but some are not willing to ride it on the way down." said Larry Sorsby, chief financial officer of Hovnanian Enterprises Inc. Read it here, WSJ.com - As Market Cools, Home Buyers Seek a Way Out
It's about capitalism, supply and demand, greed, the importance of timing, and the desperation that results when you get it wrong.
**Unless you subscribe to the WSJ online, this story will only be available for 7 days from today. 

Open House

I've always been a strong proponent of doing Open Houses for my listings, but I enjoy Open Houses, for me they're fun. I get to talk with a lot of different people who are out shopping or maybe just browsing for a home, and I listen to what they say about the house that I'm holding Open, other houses that they've seen, what they think about the neighborhood, the state of the market here in the Tucson Foothills and anything else that comes up. It's the best way that I know of to see how people feel about that house I just listed for sale and get a handle on what buyers are thinking about the real estate market. Do the people linger and talk amongst themselves and pause and go back to the kitchen or family room, do they go through the house two or three times and ask a lot of questions. Or are they in and out in a flash with a muttered 'thank you'. You can learn a lot at an Open House, and it's a great way to get your listing exposed to people who are just beginning to look and don't yet have an agent. And occasionally you get lucky, and sell your listing from that Open House.
But here in Tucson it's fairly easy and generally very pleasant to do an Open House on a Sunday afternoon. Neighbors drop by and introduce themselves and I've never heard any complaints from neighbors or been discouraged in any way from doing an Open House. Apparently the Open House thing is a different ball game in New York City, as the New York Times describes the travails of Open Houses in Closing the Door on Open Houses  '...to many other residents in buildings with open houses, a Sunday afternoon with a mob of potential buyers clogging their lobbies and monopolizing their elevators is tantamount to having strangers walk in off the street and invite themselves up for dinner'.
I assumed that agents didn't do Open Houses in New York City, it just seems too ripe for problems, I couldn't imagine it. The New York Times article talks about some those problems, and some of it's pretty funny, "Mr. Miller had vivid memories of a 2002 open house that drew about 90 people in an hour and a half in a Greenwich Village building that had an escort rule. “When I went down and saw the first horde of people, I didn’t know whether to laugh, cry or call the police,” he said. “I was alone. I felt helpless. I felt like Pauline having a peril.” - And the article also makes some good points about why Open Houses are a very valuable marketing tool. Read it here - Closing the Door on Open Houses

Real Estate USA, today

Kenneth R. Harney has a piece in todays Washington Post titled 'The Tide is Turning'
Armed with data from the National Association of Realtors and the Commerce Department he explains 'that the 18-month market correction that followed the four-year housing boom has just about run its course'. He then goes on to give some very good advice to both buyers and sellers in the midst of a 'post-bubble, post-correction real estate market'. And whether or not you agree with Mr. Harney's somewhat upbeat conclusions about the market correction having run its course, this is a thoughtful and encouraging slant on the state of the market and a welcome antidote to the blare of gloomers and doomers.
WashingtonPost.com - The Tide is Turning

growth, state by state

From CNNMoney.com A look at the population of each state in 2006 and the population change that occurred from 2005. Fascinating stuff, I didn't realize that there are entire states with populations of less than 1 million, and in fact there are 7 of them. Or that Idaho is the 3rd fastest growing state, Idaho, or that 579,275 people moved to Texas in one year, that's more people than the entire population of Wyoming. But the big story here is Arizona, now the fastest growing state in the nation. William Frey, a demographer with the Brookings Institution in Washington noted, Arizona’s in-migration is visible at motor vehicle offices. In 2005, 117,500 people surrendered California driver’s licenses, with Illinois licenses a distant second with 23,200, followed by Texas with 22,800.“Arizona used to be merely a retirement magnet for Midwest seniors,” Mr. Frey said. “Now it’s also a front door for immigrants from Mexico and an escape hatch for Californians seeking affordable housing. Add the retiree population, which will be soon bubbling with baby boomers, and you have America’s demographic success story — or nightmare, depending on how you see the challenges of rapid growth.” From CNNMoney.com, Growth states: Arizona overtakes Nevada State                  2006      2005     Change  %

Arizona	6,166,318	5,953,007	213,311	3.58%
Nevada	2,495,529	2,412,301	83,228	3.45%
Idaho	1,466,465	1,429,367	37,098	2.60%
Georgia	9,363,941	9,132,553	231,388	2.53%
Texas	23,507,783	22,928,508	579,275	2.53%
Utah	2,550,063	2,490,334	59,729	2.40%
North Carolina	8,856,505	8,672,459	184,046	2.12%
Colorado	4,753,377	4,663,295	90,082	1.93%
Florida	18,089,888	17,768,191	321,697	1.81%
South Carolina	4,321,249	4,246,933	74,316	1.75%
Oregon	3,700,758	3,638,871	61,887	1.70%
Washington	6,395,798	6,291,899	103,899	1.65%
New Mexico	1,954,599	1,925,985	28,614	1.49%
Delaware	853,476	841,741	11,735	1.39%
Tennessee	6,038,803	5,955,745	83,058	1.39%
Arkansas	2,810,872	2,775,708	35,164	1.27%
Wyoming	515,004	508,798	6,206	1.22%
Alabama	4,599,030	4,548,327	50,703	1.11%
Montana	944,632	934,737	9,895	1.06%
Virginia	7,642,884	7,564,327	78,557	1.04%
Alaska	670,053	663,253	6,800	1.03%
Oklahoma	3,579,212	3,543,442	35,770	1.01%
Hawaii	1,285,498	1,273,278	12,220	0.96%
South Dakota	781,919	774,883	7,036	0.91%
California	36,457,549	36,154,147	303,402	0.84%
Kentucky	4,206,074	4,172,608	33,466	0.80%
Minnesota	5,167,101	5,126,739	40,362	0.79%
Missouri	5,842,713	5,797,703	45,010	0.78%
Indiana	6,313,520	6,266,019	47,501	0.76%
New Hampshire	1,314,895	1,306,819	8,076	0.62%
Kansas	2,764,075	2,748,172	15,903	0.58%
Nebraska	1,768,331	1,758,163	10,168	0.58%
Iowa	2,982,085	2,965,524	16,561	0.56%
Wisconsin	5,556,506	5,527,644	28,862	0.52%
Illinois	12,831,970	12,765,427	66,543	0.52%
Maryland	5,615,727	5,589,599	26,128	0.47%
Pennsylvania	12,440,621	12,405,348	35,273	0.28%
New Jersey	8,724,560	8,703,150	21,410	0.25%
Maine	1,321,574	1,318,220	3,354	0.25%
West Virginia	1,818,470	1,814,083	4,387	0.24%
Vermont	623,908	622,387	1,521	0.24%
North Dakota	635,867	634,605	1,262	0.20%
Connecticut	3,504,809	3,500,701	4,108	0.12%
Mississippi	2,910,540	2,908,496	2,044	0.07%
Massachusetts	6,437,193	6,433,367	3,826	0.06%
Ohio	11,478,006	11,470,685	7,321	0.06%
New York	19,306,183	19,315,721	-9,538	-0.05%
Michigan	10,095,643	10,100,833	-5,190	-0.05%
District of Columbia	581,530	582,049	-519	-0.09%
Rhode Island	1,067,610	1,073,579	-5,969	-0.56%
Louisiana	4,287,768	4,507,331	-219,563	-4.87%

mobile homes for sale: $1 million each

From CNNMoney.com
488 mobile homes for sale: $1 million each
Nearly 500 mobile home owners must decide whether to sell their 43-acre oceanfront park to real estate developer.
Residents of a Florida trailer park could soon be millionaires if they approve their community board's decision to sell the oceanfront property.
The board of Palm Beach County's Briny Breezes has decided to sell its coveted 43-acre oceanfront property to Ocean Land Investments for $510 million. But the final decision on whether or not the sale will go through will be turned over to the inhabitants of the 488 mobile homes near Palm Beach.
Its residents - who co-own the shares of Briny Breezes corporation - will now have to vote on the deal. The results will be known on January 10, 2007.
The sale would generate an average of $1 million for each of the owners and would be the county's largest property deal ever, according to Palm Beach County officials.
The parcel of land was the subject of much competition from developers nationwide because it is arguably the last of its kind in all of Florida.
The buyer, Ocean Land, is known for redeveloping prime waterfront properties with neighborhood support and plans to develop a mixed-use community in phases over the next 15 years.

average sale price $40 million

“I have multiple clients who want to buy $50 or $60 million properties, but we can’t find them one right now,” “When you’re going to spend that much money, you have to find the perfect property.” says Mauricio Umansky, a broker at Hilton & Hyland. Oh, such are the trials and tribulations that we Realtors® have to deal with.
From Forbes.com a peek at the Most Expensive Home Sales of 2006
'What’s driving the market’s top tier? High-end luxury sales can remain out of synch with market trends because this sector of the market is volume volatile and not price volatile. This means that sales are less affected by general market forces--because potential buyers always have enough money--but more by whether or not rare properties are available'

housing rebound by end of 2007

Here's an uncharacteristically sober prediction for housing in 2007 from David Lereah of the National Association of Realtors, from MSNBC.com
WASHINGTON - Next year will likely bring a second annual decline in existing-home sales, the National Association of Realtors predicted Monday.
About three-quarters of the country will see a sluggish expansion of existing home sales next year, Lereah said.
The health of housing markets across the country will vary, he said, but “general gains in value next year will be modest by historic standards.”
Read it here Drop in existing-home sales seen for 2nd year

zillowed

I just went through the whole zillow 'Post for Sale' process for a listing of mine and I found it to be very easy to do (or so I thought) - I read all the instructions, filled in all the info, uploaded the photos, answered all the questions, agreed to all the terms, clicked Submit and - zap, zilch, nothing. Apparently zillow didn't like my listing. It didn't take and it's lost somewhere in the zillow vapor. Then I got a little paranoid and started wondering if getting zapped was pay-back for my past criticism of zillow. Who knows.
As an interesting aside though, the zestimate for this property is $542,806 and my list price is $535,000 (which I believe is right-on). And, I originally listed this property at $549,000 , which puts the zestimate almost dead-center between my original and revised list prices. The atypical accuracy of this particular zestimate is one of the reasons why I went ahead and listed - or tried to list - the property on zillow? But I thought it was odd and awfully coincidental for the zestimate to suddenly be this accurate, and on a listing of mine, which is by far the closest I've seen a zestimate come to real world values since I started criticizing zillow for its lack of accuracy, amongst other things. Or, wait a minute, could it be the other way round, and zillows zestimate is based on my list prices? 

up, down

Is real estate heating up, cooling down, headed for a deeper freeze or just hanging in there despite the challenges?
Kenneth R. Harney of the WashingtonPost.com very coolly deciphers the latest fed report on residential real estate price appreciation across the nation, in Support for Any Theory
Also from WashingtonPost.com the latest on falling interest rates, 30-Year Rates Fall to 6.11%

Is the Worst Over for the Housing Bust

From Realty Times via Yahoo.com a commentary on the recent Wall Street Journal article- "Is the Worst Over for the Housing Bust?" According to the author of this commentary,
"After scaring homeowners, buyers and sellers witless for the last three years, the financial press and stock analyst economists contributed mightily to the decline of housing in 2006,.." "...inventories have built up largely due to the shock of interest rates moving up, to a seven and a half month supply, but the steady drumbeat of print and broadcast media has had just as much of an inhibiting effect on homebuyers"
I wrote about this same WSJ article in my post quick turn around and that's what I found and find so incredible, the quick turnaround. 'The worst of the housing bust is over, economists said by nearly 2-to-1 in the latest WSJ.com economic forecasting survey'.
But the writer of this Realty Times piece goes into more detail about interest rates and this and that and picks the article apart more than I did. It's a good read. And I agree completely that the gloom & doom media blitz has had a numbing effect on the real estate market, but now, as I said 'the media just needs a new angle, because the gloom and doom angle has been worn thin, it's just not selling news anymore'. But this latest effort is lukewarm news, reported half-heartedly, and I don't expect they'll make much headway with it.

quick turn around

Wasn't it just yesterday that we were being bombarded with endless gloom and doom stories from the media about the bubble the bust the crash of the real estate market.
Well suddenly there's sunshine, from the Wall Street Journal Online

Is the Worst Over for the Housing Bust?
Economists Say 'Yes' in New WSJ.com Survey
But Their Views on Home Prices Vary Wildly
Subscription Required for access.
'The worst of the housing bust is over, economists said by nearly 2-to-1 in the latest WSJ.com economic forecasting survey. But they still predict that the average selling price of a house will fall next year.'
"We're nearing the end of the slowdown for most markets," said Ethan S. Harris at Lehman Brothers.
Richard DeKaser, an economist at National City Corp., a big mortgage provider, said he thinks the worst is over. "We're starting to see inventories topping out and possible declining," he said.
Allen Sinai, at Decision Economics Inc., believes the worst of the bust is over, but he feels housing remains a big risk to the economy.
How does this big ship turn around so quickly. Makes you wonder. Or is it that it was just never so, and David Lereah had it pegged from the beginning, in which case a lot of us owe Mr. Lereah an apology, he took all that poo-pooing with such good humor.
Or is it that the media just needs a new angle, because the gloom and doom angle has been worn thin, it's just not selling news anymore. So they dig up a bunch of economists who'll put a fresh spin on the situation. But where were these guys a month ago. Stay tuned.

one more move for the NAR

Over the last 8 or 10 months the leadership of the National Association of Realtors® has become a target of much criticism for their lack of candor and insistence on glossing over the facts about the seriousness of the downturn in the residential real estate market. This criticism, and the resulting lack of credibility it has garnered for the NAR, has come from the national media, local news sources, snickering amongst neighbors over the backyard fence, and ranted about in the blog world. And David Lereah the chief economist of the NAR, has taken a lot of abuse as the spokesperson for these reports.
And while I would not expect the NAR to announce that the real estate market is dead and that everyone should go home, lock their doors and wait til' 2008 to make a move. I do believe that the NAR has 'a responsibility to provide timely, accurate information and frank and honest assessments and guidance in good times and bad' - just like all Realtors® are supposed to do- this from an earlier post of mine Who said that?  The NAR has that responsibility, both to the public and to it's Realtor® members across the country. But the NAR seems determined to turn their back on that responsibility in favor of the old rah-rah, sis-boom-ba. Witness the new multi-million dollar national ad campaign from the NAR and it's inspirational headline.
It’s a great time to buy or sell a home.
At the very least they are engaging in painting the entire real estate market across the USA with a big, cheerful, brightly colored broad brush. It's a great time to buy or sell a home. Please! Is that Everywhere USA, is it Anywhere USA, Where is it a great time to buy AND sell a home. This is just the kind of sweeping misrepresentation and misinformation that the NAR correctly accused the media of engaging in when overstating the gloom and doom of the market.
It's probably a pretty good time to buy a home in some places, maybe it's even a great time in some places. But a great time to buy and sell, who's going to buy that? And if someone did buy it, would it be good advice.
Why couldn't the NAR just stop at 'It's a great time to buy a home'. Although still a gereralization, it's a lot closer to the truth of the current situation. And if somehow it did encourage people to buy homes, that would be a step toward remedying the current backlog of homes on the market.
So why at this time, with the hefty oversupply of homes for sale (way too much supply-not nearly enough demand) would the NAR be trying (however feebly) to encourage more sellers to list their homes. I don't get it. Even David Lereah has acknowledged that inventory levels need to come down to more normal levels.
At best this campaign comes off as pure fluff, but if you get beyond that, the 'It's a great time to sell ...' message is so blatantly out of whack with reality that I'm afraid that the NAR has moved beyond mere criticism and into the realm of caricature.

tweeners, stuck with 2 homes

In Tucson we get a lot of people who move here from someplace else. And whether the move is for retirement, a change in lifestyle, or a job, people usually have a home to sell back in San Diego, Chicago, Boston or wherever. During the last few years when real estate markets in many parts of the country were doing well, Tucson was one of the really hot markets, with home prices rising rapidly and homes flying off the shelf in bidding wars.
So many of these transferees jumped in and bought a home in Tucson, before selling their home back in Boise. The thinking was that home prices in Tucson were going through the roof, and it seemed like a smart move to buy soon, lock in a decent deal here in Tucson, then sell the Colonial in Chicago, and make out on both ends. And that strategy worked pretty well for a while. But then the real estate market turned, and homes were suddenly (and it happened very suddenly) sitting on the market for extended periods, despite price reductions and other creative selling inducements. Things continued to get worse and worse. And those who were late to the game found that they couldn't, and still can't, sell their home back home. And in what I'm sure was a very painful and difficult decision, a few of my clients ended up having me turn around and sell their new Tucson home just so they could get out from under the quagmire.

shakin' up the MBA

From RealtyTimes via Yahoo
Robbins Calls for Personal Commitment
The new chairman of the Mortgage Bankers Association has called for an "industry-wide commitment to personal responsibility." John Robbins said the "industry must take a leadership role so our customers receive the best information possible, allowing them to make an educated decision on the mortgage program they have selected."
The 34-year veteran on the mortgage business has established a special task force to develop recommendations for an industry-wide disclosure document.
I wrote about the need for a disclosure document last month in Confessions of an Ex-Mortgage Lender. This seems like a simple, no-brainer first step on the road to a better informed consumer and more accountability by lenders.
And Robbins doesn't duck the responsibility for the negative publicity lenders have received, ...the new MBA leader said the real culprits are those wrote the loans.
Read on- Robbins Calls for Personal Commitment
I wish this guy luck, he's saying the right things.

an Open House watchout

Bill Quick over at the San Francisco Real Estate Blog did a post called Better Safe than Sorry on the dangers of theft related to Open Houses. It's on eye-opener for agents and owners.